Exhibit
10.1


 


THIRD
AMENDED AND RESTATED


NOTE
PURCHASE AGREEMENT


 


Dated
as of October 27, 2022


 


by
and among


 


STAFFING
360 SOLUTIONS, INC.,


as
the Company,


 


and


 


FARO
RECRUITMENT AMERICA, INC.,


MONROE
STAFFING SERVICES, LLC,


LIGHTHOUSE
PLACEMENT SERVICES, INC.,


KEY
RESOURCES, INC., 


HEADWAY
WORKFORCE SOLUTIONS, INC., 


HEADWAY
EMPLOYER SERVICES, LLC, 


HEADWAY
PAYROLL SOLUTIONS, LLC,


HEADWAY
HR SOLUTIONS, INC., 


NC
PEO HOLDINGS, LLC


and


the
other SUBSIDIARY GUARANTORS from time to time party hereto,


 


as
the Subsidiary Guarantors,


 


and


 


Jackson
Investment Group, LLC,


as
the Purchaser


 




    	 



    	 



    

 


TABLE
OF CONTENTS


 




	Article
    1.	DEFINITIONS	2
	 	Section
    1.1	Definitions	2
	 	 	 	 
	Article
    2.	ISSUANCE
    AND PURCHASE OF SENIOR NOTE	20
	 	Section
    2.1	Existing
    Senior Notes; Issuance of Third Amended and Restated Note	20
	 	Section
    2.2	Interest
    on the Senior Notes	21
	 	Section
    2.3	Maturity
    of Senior Note; Voluntary Prepayments; Mandatory Prepayment	21
	 	 	 	 
	Article
    3.	OTHER
    PROVISIONS RELATING TO THE SENIOR NOTE	22
	 	Section
    3.1	Making
    of Payments	22
	 	Section
    3.2	Increased
    Costs	22
	 	Section
    3.3	Tax
    Gross Up and Indemnity	22
	 	Section
    3.4	Default
    Rate of Interest	23
	 	Section
    3.5	Calculation
    of Interest	23
	 	Section
    3.6	Usury	23
	 	 	 	 
	Article
    4.	GUARANTY	23
	 	Section
    4.1	The
    Guaranty	23
	 	Section
    4.2	Obligations
    Unconditional	24
	 	Section
    4.3	Reinstatement	24
	 	Section
    4.4	Certain
    Additional Waivers	25
	 	Section
    4.5	Remedies	25
	 	Section
    4.6	Guarantee
    of Payment; Continuing Guarantee	25
	 	Section
    4.7	Limitations
    on Guaranty	25
	 	Section
    4.8	Contribution	26
	 	 	 	 
	Article
    5.	CONDITIONS
    PRECEDENT TO EFFECTIVENESS AND CLOSING	26
	 	Section
    5.1	26
	 	 	 
	Article
    6.	REPRESENTATIONS
    AND WARRANTIES	29
	 	Section
    6.1	Representations
    and Warranties Generally	29
	 	Section
    6.2	Corporate
    Existence; Subsidiaries	29
	 	Section
    6.3	Organization
    and Governmental Authorization; No Contravention	29
	 	Section
    6.4	Binding
    Effect	29
	 	Section
    6.5	Capitalization	30
	 	Section
    6.6	Financial
    Information	30
	 	Section
    6.7	Litigation	30
	 	Section
    6.8	Ownership
    of Property	30
	 	Section
    6.9	No
    Default	30
	 	Section
    6.10	Labor
    Matters	31
	 	Section
    6.11	Regulated
    Entities	31
	 	Section
    6.12	[Reserved]	31
	 	Section
    6.13	Compliance
    With Laws; Anti-Terrorism Laws	31
	 	Section
    6.14	Taxes	31
	 	Section
    6.15	Compliance
    with ERISA	32
	 	Section
    6.16	Consummation
    of Transaction Documents; Brokers	32



 






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	 	Section
    6.17	[Reserved]	32
	 	Section
    6.18	Material
    Contracts	33
	 	Section
    6.19	[Reserved]	33
	 	Section
    6.20	Intellectual
    Property	33
	 	Section
    6.21	Solvency	33
	 	Section
    6.22	Full
    Disclosure	34
	 	Section
    6.23	Interest
    Rate	34
	 	Section
    6.24	Subsidiaries	34
	 	Section
    6.25	[Reserved]	34
	 	Section
    6.26	Approvals	34
	 	Section
    6.27	Insurance	34
	 	Section
    6.28	Continuing
    Business of Company	34
	 	Section
    6.29	[Reserved]	35
	 	Section
    6.30	No
    General Solicitation	35
	 	Section
    6.31	Representations
    and Warranties of the Purchaser	35
	 	 	 	 
	Article
    7.	AFFIRMATIVE
    COVENANTS	36
	 	Section
    7.1	Financial
    Statements and Other Reports	37
	 	Section
    7.2	Payment
    and Performance of Obligations	38
	 	Section
    7.3	Maintenance
    of Existence	38
	 	Section
    7.4	Maintenance
    of Property; Insurance	38
	 	Section
    7.5	Compliance
    with Laws and Material Contracts	38
	 	Section
    7.6	Inspection
    of Property, Books and Records	39
	 	Section
    7.7	Use
    of Proceeds	39
	 	Section
    7.8	[Reserved]	39
	 	Section
    7.9	Notices
    of Litigation and Defaults	39
	 	Section
    7.10	Further
    Assurances; Additional Guarantors	39
	 	Section
    7.11	[Reserved]	40
	 	Section
    7.12	Maintenance
    of Management	40
	 	Section
    7.13	Certain
    Post-Closing Items	40
	 	Section
    7.14	Registration
    Rights; Indemnification	41
	 	Section
    7.15	Fees	42
	 	Section
    7.16	Segregated
    Account Covenant	42
	 	 	 	 
	Article
    8.	NEGATIVE
    COVENANTS AND FINANCIAL COVeNANTS	43
	 	Section
    8.1	Debt;
    Contingent Obligations	43
	 	Section
    8.2	Liens	43
	 	Section
    8.3	Restricted
    Distributions	43
	 	Section
    8.4	Restrictive
    Agreements	43
	 	Section
    8.5	Payments
    and Modifications of Subordinated Debt	44
	 	Section
    8.6	Consolidations,
    Mergers and Sales of Assets; Change in Control	44
	 	Section
    8.7	Purchase
    of Assets, Investments	44
	 	Section
    8.8	Transactions
    with Affiliates	45
	 	Section
    8.9	Modification
    of Organizational Documents	45
	 	Section
    8.10	Modification
    of Certain Agreements	45
	 	Section
    8.11	Conduct
    of Business	45
	 	Section
    8.12	Lease
    Payments	46
	 	Section
    8.13	Limitation
    on Sale and Leaseback Transactions	46
	 	Section
    8.14	Deposit
    Accounts and Securities Accounts; Payroll and Benefits Accounts	46



 






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	 	Section
    8.15	Compliance
    with Anti-Terrorism Laws	46
	 	Section
    8.16	Sale
    or Discount of Receivables	46
	 	Section
    8.17	Financial
    Covenants	46
	 	Section
    8.18	Excluded
    Subsidiaries	49
	 	 	 	 
	Article
    9.	EVENTS
    OF DEFAULT	50
	 	Section
    9.1	Events
    of Default	50
	 	Section
    9.2	Remedies
    on Default	52
	 	 	 	 
	Article
    10.	MISCELLANEOUS	53
	 	Section
    10.1	Notices	53
	 	Section
    10.2	No
    Waiver	54
	 	Section
    10.3	Expenses	54
	 	Section
    10.4	Amendments,
    Etc	54
	 	Section
    10.5	Successors
    and Assigns	54
	 	Section
    10.6	Governing
    Law	55
	 	Section
    10.7	Survival
    of Representations and Warranties	55
	 	Section
    10.8	Severability	55
	 	Section
    10.9	Counterparts	55
	 	Section
    10.10	Set-Off	55
	 	Section
    10.11	Termination
    of Agreement	55
	 	Section
    10.12	Consent
    to Service of Process	55
	 	Section
    10.13	Waiver
    of Jury Trial	56
	 	Section
    10.14	Entire
    Agreement	56
	 	Section
    10.15	Publicity	56
	 	Section
    10.16	Further
    Assurances	56
	 	Section
    10.17	Subordination
    of Intercompany Indebtedness and Management Fees	56
	 	Section
    10.18	Effect
    of Amendment and Restatement	57


 


Exhibits
and Schedules


 


	Exhibit
    A	-	Form
    of Third Amended and Restated Note
	Exhibit
    B	-	Form
    of Compliance Certificate
	Exhibit
    C	-	Financial
    Projections
	Exhibit
    D	-	Form
    of Joinder Agreement
	 	 	 
	Schedule
    6.2	-	Subsidiaries
	Schedule
    6.3	-	No
    Violation
	Schedule
    6.5	-	Capitalization
	Schedule
    6.7	-	Litigation
	Schedule
    6.16	-	Taxes
	Schedule
    6.16	-	Brokers
    Fees
	Schedule
    6.18	-	Material
    Contracts
	Schedule
    6.20	-	Intellectual
    Property
	Schedule
    6.24	-	Joint
    Ventures/Minority Equity Interests
	Schedule
    7.9	-	Disputes
	Schedule
    8.1	-	Existing
    Debt and Contingent Obligations
	Schedule
    8.2	-	Permitted
    Liens
	Schedule
    8.7	-	Permitted
    Investments
	Schedule
    8.8	-	Transactions
    with Affiliates
	Schedule
    8.11	-	Conduct
    of Business
	Schedule
    8.14	-	Deposit
    Accounts/Securities Accounts




 




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THIRD
AMENDED AND RESTATED NOTE PURCHASE AGREEMENT


 


THIS
THIRD AMENDED AND RESTATED NOTE PURCHASE AGREEMENT, dated as of October 27, 2022, by and among STAFFING 360 SOLUTIONS, INC., a Delaware
corporation (the “Company”), as issuer of the Senior Notes (as defined below), Faro
Recruitment America, Inc., a New York corporation (“Faro”), Monroe
Staffing Services, LLC, a Delaware limited liability company (“Monroe”), Lighthouse
Placement Services, Inc., a Massachusetts corporation (“Lighthouse”), Key
Resources, Inc., a North Carolina corporation (“Key Resources”; together with Faro, Monroe and Lighthouse,
referred to herein collectively as the “Existing Guarantors”), HEADWAY WORKFORCE SOLUTIONS, INC., a Delaware corporation
(“Headway Workforce”), HEADWAY EMPLOYER SERVICES, LLC, a Delaware limited liability company (“Headway Employer”),
HEADWAY PAYROLL SOLUTIONS, LLC, a Delaware limited liability company (“Headway Payroll”), HEADWAY HR SOLUTIONS, INC.,
a New York corporation (“Headway HR”), and NC PEO HOLDINGS, LLC, a Delaware limited liability company (“NC
PEO”; together with Headway Workforce, Headway Employer, Headway Payroll and Headway HR referred to herein collectively as
the “Guarantors”), any Subsidiary of the Company added hereto from time to time as a Subsidiary Guarantor, and Jackson
Investment Group, LLC, as the Purchaser.


 


WHEREAS,
the Purchaser, the Company and the Existing Subsidiary Guarantors are party to the certain Amended and Restated Note Purchase Agreement
dated as of September 15, 2017 (the “Prior Note Purchase Agreement”), as amended by that certain (i) First Omnibus
Amendment, Joinder and Reaffirmation Agreement dated as of August 27, 2018 (the “First Omnibus Amendment”), (ii) Second
Omnibus Amendment and Reaffirmation Agreement dated as of November 15, 2018 (the “Second Omnibus Amendment”), (iii)
Third Omnibus Amendment and Reaffirmation Agreement dated as of February 7, 2019 (the “Third Omnibus Amendment”),
(iv) Fourth Omnibus Amendment and Reaffirmation Agreement dated as of August 29, 2019 (the “Fourth Omnibus Amendment”),
(v) Consent and Amendment Agreement dated as of June 28, 2018 (the “2018 Amendment”), (vi) Consent and Amendment Agreement
dated as of September 15, 2020 (the “2020 Amendment”), (vii) Omnibus Amendment and Reaffirmation Agreement, dated
as of October 26, 2020 (the “October 2020 Amendment”), and (viii) Second Amended and Restated Note Purchase Agreement,
dated as of October 26, 2020 which amended and restated the Prior Note Purchase Agreement in its entirety (the “Second A&R
NPA”), pursuant to which, among other things, the Company issued to the Purchaser the Amended and Restated Note, the Second
Senior Note and the Third Senior Note. The Prior Note Purchase Agreement, as amended by the First Omnibus Amendment, the Second Omnibus
Amendment, the Third Omnibus Amendment, the Fourth Omnibus Amendment, the 2018 Amendment, the 2020 Amendment, the October 2020 Amendment
and the Second A&R NPA, is referred to herein as the “Existing Note Purchase Agreement”; capitalized terms used
but not otherwise defined herein shall have the meanings assigned thereto in the Existing Note Purchase Agreement); and


 


WHEREAS,
the entire principal amount of the Amended and Restated Note, the Second Senior Note and the Second Amended and Restated Note (referred
to herein collectively as the “Existing Senior Notes”) remains outstanding as of the date hereof, and the obligations
of the Company to Purchaser under the Existing Senior Notes and the Note Documents (as defined in the Existing Note Purchase Agreement)
are (a) guaranteed by the Existing Guarantors pursuant to the provisions of Article 4 of the Existing Note Purchase Agreement
(such guarantee being referred to herein as the “Existing Guarantee”), and (b) secured pursuant to (i) that certain
Amended and Restated Security Agreement, dated as of September 15, 2017 (as amended prior to the date hereof, the “Existing
Security Agreement”), by and among the Company, the Existing Guarantors and the Purchaser, (ii) that certain Amended and Restated
Pledge Agreement, dated as of September 15, 2017 (as amended prior to the date hereof, the “Existing Pledge Agreement”),
by and among the Company, the Existing Guarantors and the Purchaser, (iii) that certain Mortgage over shares dated February 2, 2018,
by the Company in favor of the Purchaser in respect of the shares of S360 Holdings Ltd. Pledged pursuant thereto (as amended prior to
the date hereof, the “Existing Share Mortgage”), and (iv) the other Existing Security Documents;


 






    	 



    	 



    

 


WHEREAS,
the Company has requested that the Purchaser extend the stated maturity date of the Existing Senior Notes and amend certain terms of
the Existing Note Purchase Agreement, and the parties desire to enter into this Agreement to amend and restate the Existing Note Purchase
Agreement (including, without limitation, the Existing Guarantee) in its entirety as more fully described below, and in connection therewith
to (i) amend and restate the Existing Senior Notes on the terms as set forth in the Third Amended and Restated Note to among, other things,
extend the stated maturity date thereof, and (ii) amend or amend and restate certain of the Existing Security Documents as further described
herein and in the Security Documents executed in connection herewith; and


 


WHEREAS,
the parties hereto agree that the Existing Note Purchase Agreement (including, without limitation, the Existing Guarantee) shall be and
hereby is amended and restated in its entirety as set forth herein.


 


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


 


Article
1.


 




DEFINITIONS


 


Section
1.1 Definitions. In addition to the other terms defined herein, the following terms used herein shall have the meanings herein
specified (such meanings to be equally applicable to both the singular and plural forms of the terms defined):


 


“Affiliate”
shall mean, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified; provided that the holding by the Purchaser of the Existing Warrant
(or the Equity Interests into which such Existing Warrant is converted) or the Commitment Fee Shares shall not be deemed to constitute
the Purchaser as an Affiliate of the Company hereunder. The term “Control” means the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting
power, by contract or otherwise. The terms “Controlling” and “Controlled” have meanings correlative
thereto.


 


“Agreement”
means this Third Amended and Restated Note Purchase Agreement, as the same may be amended, restated, supplemented or modified from time
to time in accordance with the terms hereof.


 


“Amended
and Restated Note” means that certain Amended and Restated 12.00% Senior Secured Promissory Note due October 15, 2020, dated
November 15, 2018, in the principal amount of $27,312,000, issued by the Company to the Purchaser on November 15, 2018, and each other
senior promissory note now or hereafter delivered to the Purchaser in substitution, replacement or exchange thereof, in each case as
amended, restated, supplemented or modified from time to time pursuant to the provisions of this Agreement.


 


“Amendment
Fee” has the meaning set forth in Section 5.1(H).


 






    	2



    	 



    

 


“Amendment
No. 4 to Warrant Agreement” has the meaning specified in the definition of Existing Warrant Agreement.


 


“Anti-Corruption
Laws” means all laws, rules and regulations of any jurisdiction applicable to any of the Obligors or their respective Subsidiaries
from time to time concerning or relating to bribery or corruption, including without limitation, the United States Foreign Corrupt Practices
Act of 1977, as amended.


 


“Anti-Terrorism
Laws” means any laws with respect to terrorism or money laundering, including Executive Order No. 13224 on Terrorist Financing
effective September 24, 2001 (the “Executive Order”) and the PATRIOT Act.


 


“Applicable
Law” means all applicable provisions of constitutions, statutes, rules, regulations and orders of all governmental bodies and
all orders and decrees of all courts, tribunals and arbitrators including, without limitation, all Environmental Laws.


 


“Asset
Disposition” means any sale, lease, license, transfer, assignment or other consensual disposition by any Obligor or any Subsidiary
thereof of any asset.


 


“Bankruptcy
Code” means The Bankruptcy Code of 1978, as amended and in effect from time to time (11 U.S.C. § 101 et seq.).
Section references to the Bankruptcy Code are to the Bankruptcy Code, as in effect at the date of this Agreement, and any subsequent
provisions of the Bankruptcy Code, amendatory thereof, supplemental thereto or substituted therefor.


 


“Blocked
Person” means any Person that is a blocked person described in Section 1 of the Executive Order.


 


“Business
Day” means any day on which commercial banks located in New York, New York are required or permitted by law to be open for
the purpose of conducting a commercial banking business other than a Saturday or Sunday.


 


“Change
in Control” means any of the following events: (a) any Person or two or more Persons acting in concert shall have acquired
beneficial ownership, directly or indirectly, of, or shall have acquired by contract or otherwise, or shall have entered into a contract
or arrangement that, upon consummation, will result in its or their acquisition of or control over, voting stock of the Company (or other
securities convertible into such voting stock) representing forty percent (40.00)% or more of the combined voting power of all voting
stock of the Company or (b) the Company ceases to own, directly or indirectly, one hundred percent (100.00%) of the outstanding capital
stock of any Subsidiary Guarantor, S360 Holdings Ltd., S360 Ltd. Or any other Subsidiary, except in connection with any merger or consolidation
in respect of any such Person expressly permitted under Section 8.6; or (c) the occurrence of any “Change of Control”,
“Change in Control”, or terms of similar import under any document or instrument governing or relating to Debt of or equity
in such Person. As used herein, “beneficial ownership” shall have the meaning provided in Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934.


 


“Closing”
means the closing of the transactions contemplated by this Agreement and the other Transaction Documents required to be executed and
delivered on the Closing Date pursuant to Section 5.1, including, without limitation, the issuance of the Senior Notes and the
acquisition thereof by the Purchaser on the Closing Date and the amendment and restatement of the Existing Purchase Agreement pursuant
to this Agreement on the Closing Date.


 






    	3



    	 



    

 


“Closing
Date” means October 27, 2022 or, if later, the date upon which all conditions in Section 5.1 have been satisfied (or
waived in writing by the Purchaser in its sole discretion).


 


“Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this Agreement, and any subsequent provisions of the Code,
amendatory thereof, supplemental thereto or substituted therefor.


 


“Collateral”
shall mean all of the property and assets of the Obligors now or hereafter securing the Obligations pursuant to the Security Agreement,
the Share Mortgage, the Pledge Agreement, the Intellectual Property Security Agreements and the other Security Documents.


 


“Commitment
Fee Shares” means, collectively, the Commitment Fee Shares (as defined in the Prior Note Purchase Agreement), the New Commitment
Fee Shares (as defined in the First Omnibus Amendment), the New Commitment Fee Shares (as defined in the Second Omnibus Amendment), and
the 100,000 shares of Common Stock issued to Purchaser on the Closing Date pursuant to this Agreement.


 


“Common
Stock” means the Company’s common stock, par value $0.00001 per share.


 


“Company”
has the meaning set forth in the introductory paragraph hereof and shall include the Company’s successors and permitted assigns.


 


“Compliance
Certificate” means a certificate, duly executed by a Responsible Officer of the Company, appropriately completed and substantially
in the form of Exhibit B hereto.


 


“Consolidated
Subsidiary” means, at any date, any Subsidiary the accounts of which would be consolidated with those of the Purchaser (or
any other Person, as the context may require hereunder) in its consolidated financial statements if such statements were prepared as
of such date.


 


“Contingent
Obligation” means, with respect to any Person, any direct or indirect liability of such Person: (a) with respect to any Debt
of another Person (a “Third Party Obligation”) if the purpose or intent of such Person incurring such liability, or
the effect thereof, is to provide assurance to the obligee of such Third Party Obligation that such Third Party Obligation will be paid
or discharged, or that any agreement relating thereto will be complied with, or that any holder of such Third Party Obligation will be
protected, in whole or in part, against loss with respect thereto; (b) with respect to any undrawn portion of any letter of credit issued
for the account of such Person or as to which such Person is otherwise liable for the reimbursement of any drawing; (c) under any Swap
Contract, to the extent not yet due and payable; (d) to make take-or-pay or similar payments if required regardless of nonperformance
by any other party or parties to an agreement; or (e) for any obligations of another Person pursuant to any Guarantee or pursuant to
any agreement to purchase, repurchase or otherwise acquire any obligation or any property constituting security therefor, to provide
funds for the payment or discharge of such obligation or to preserve the solvency, financial condition or level of income of another
Person. The amount of any Contingent Obligation shall be equal to the amount of the obligation so Guaranteed or otherwise supported or,
if not a fixed and determinable amount, the maximum amount so Guaranteed or otherwise supported.


 


“Controlled
Group” means all members of any group of corporations and all members of a group of trades or businesses (whether or not incorporated)
under common control which, together with any Obligor, are treated as a single employer under Section 414(b), (c), (m) or (o) of the
Code or Section 4001(b) of ERISA.


 






    	4



    	 



    

 


“Debt”
of a Person means at any date, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person to pay the deferred purchase
price of property or services, except trade accounts payable arising and paid on a timely basis and in the Ordinary Course of Business,
(d) all capital leases of such Person, (e) all non-contingent obligations of such Person to reimburse any bank or other Person in respect
of amounts paid under a letter of credit, banker’s acceptance or similar instrument, (f) all equity securities of such Person subject
to repurchase or redemption other than at the sole option of such Person, (g) all obligations secured by a Lien on any asset of such
Person, whether or not such obligation is otherwise an obligation of such Person, (h) profit sharing arrangements, deferred purchase
money amounts and similar payment obligations or continuing obligations of any nature of such Person arising out of purchase and sale
contracts, (i) all Debt of others Guaranteed by such Person, (j) off-balance sheet liabilities and/or Pension Plan or Multiemployer Plan
liabilities of such Person, (k) obligations arising under non-compete agreements, and (l) all obligations arising under bonus, deferred
compensation, incentive compensation or similar arrangements in each case under this clause (l) other than those arising in the Ordinary
Course of Business. Without duplication of any of the foregoing, Debt of Obligors as of any date of determination shall include the outstanding
principal amount of the Senior Notes.


 


“Default”
shall mean any event that, with notice or lapse of time or both, would constitute an Event of Default.


 


“Deposit
Account Control Agreement” shall mean any and all deposit account control agreements entered into on or after January 25, 2017
by the applicable depository bank, the applicable Obligor, and the Purchaser (or by any Person acting as bailee for perfection on behalf
of the Purchaser), as may be amended, restated, supplemented or otherwise modified from time to time.


 


“Designated
Person” means (a) a Person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order;
(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, the Executive Order; (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 the Executive Order; or (e) a Person that is named as a “specially designated national and blocked person”
on the most current list published by OFAC at its official website or any replacement website or other replacement official publication
of such list.


 


“Dollar”
and the sign “$” shall mean the lawful money of the United States of America.


 


“Domestic
Subsidiary” means any Subsidiary that is organized under the Laws of any state of the United States or the District of Columbia.


 


“Environmental
Laws” means any present and future federal, state and local laws, statutes, ordinances, rules, regulations, standards, policies
and other governmental directives or requirements, as well as common law, pertaining to the environment, natural resources, pollution,
health (including any environmental clean-up statutes and all regulations adopted by any local, state, federal or other Governmental
Authority, and any statute, ordinance, code, order, decree, law rule or regulation all of which pertain to or impose liability or standards
of conduct concerning medical waste or medical products, equipment or supplies), safety or clean-up that apply to any Obligor and relate
to hazardous materials.


 


“Equity
Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests
in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock
of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital
stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from
such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership,
member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests
are outstanding on any date of determination.


 






    	5



    	 



    

 


“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA as in effect at the date of this Agreement and any subsequent provisions
of ERISA amendatory thereof, supplemental thereto or substituted therefor.


 


“ERISA
Plan” means any “employee benefit plan”, as such term is defined in Section 3(3) of ERISA (other than a Multiemployer
Plan), which any Obligor maintains, sponsors or contributes to, or, in the case of an employee benefit plan which is subject to Section
412 of the Code or Title IV of ERISA, to which any Obligor or any member of the Controlled Group may have any liability, including any
liability by reason of having been a substantial employer within the meaning of Section 4063 of ERISA at any time during the preceding
five (5) years, or by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.


 


“Event
of Default” means any of the events specified in Section 9.1.


 


“Excluded
Accounts” means any of the following deposit accounts (i) deposit accounts exclusively used for payroll, payroll taxes and
other employee wage and benefit payments to or for the benefit of Obligors’ employees and identified to the Purchaser by the Company
as such on Schedule 8.14 or otherwise identified in a writing delivered by the Company to the Purchaser after the Original Closing
Date, and (ii) for so long as the MidCap Intercreditor Agreement remains in effect, any deposit accounts that constitute ABL Priority
Deposit Accounts (as such term is defined in the MidCap Intercreditor Agreement).


 


“Excluded
Subsidiaries” means, collectively, Control Solutions International Inc., a Florida corporation, and Canada Control Solutions
International, Inc., a company organized under the laws of British Columbia.


 


“Executive
Order” has the meaning specified in the definition of Anti-Terrorism Laws.


 


“Existing
Guarantors” has the meaning set forth in the preamble to this Agreement.


 


“Existing
Note Purchase Agreement” has the meaning set forth in the first Whereas clause of this Agreement.


 


“Existing
Pledge Agreement” has the meaning set forth in the second Whereas clause of this Agreement.


 


“Existing
Security Agreement” has the meaning set forth in the second Whereas clause of this Agreement.


 


“Existing
Senior Secured Debt Documents” means, collectively, (a) the Existing Senior Secured ABL Credit Agreements, and (b) any promissory
notes or other instruments, guarantees, security agreements, pledge agreements, mortgages or other documents or agreements evidencing,
guaranteeing or securing the obligations of any Obligors under any of the Senior Secured ABL Credit Agreements.


 






    	6



    	 



    

 


“Existing
Senior Secured ABL Credit Agreements” means, collectively, (a) the MidCap ABL Credit Agreement, (b) the HSBC Agreements for
the Purchase of Debt, and (c) the HSBC Term Loan, in each case, as amended, restated, supplemented or otherwise modified from time to
time.


 


“Existing
Security Documents” means the Security Documents as such term is defined in the Existing Note Purchase Agreement.


 


“Existing
Senior Notes” has the meaning set forth in the second Whereas clause of this Agreement.


 


“Existing
Share Mortgage” has the meaning set forth in the second Whereas clause of this Agreement.


 


“Existing
Warrant” shall mean, collectively, (i) the Warrant to purchase Common Stock of the Company, together with the exhibits thereto,
dated on or about January 25, 2017 issued by the Company to the Purchaser on January 25, 2017 pursuant to the Original Note Purchase
Agreement, and (ii) any warrant issued and delivered by the Company to the Purchaser (or any successors or assigns of the Purchasers)
on or after the Closing Date (as such term is defined in the Original Note Purchase Agreement) in substitution, replacement or exchange
of the Existing Warrant referred to in clause (i) of this definition, in each case as amended, restated, supplemented or modified from
time to time.


 


“Existing
Warrant Agreement” shall mean that certain Warrant Agreement, dated January 26, 2017, by and between the Purchaser and the
Company, as amended and restated by that certain Amended and Restated Warrant Agreement dated as of April 25, 2018, as amended by that
certain Amendment No. 1 dated as of August 27, 2018, as amended by that that certain Amendment No. 2 dated as of the Second Amendment
Effective Date, as amended by that certain Amendment No. 3 dated as of October 26, 2020 and as amended by that certain Amendment No.
4 dated as of the Closing Date (the “Amendment No. 4 to Warrant Agreement”), and as further amended, restated, supplemented
or modified from time to time.


 


“Existing
Warrant Documents” shall mean, collectively, the Existing Warrant and the Existing Warrant Agreement.


 


“Faro”
has the meaning set forth in the preamble to this Agreement.


 


“First
Anniversary” means the date 12 months after the Closing Date.


 


“First
Omnibus Amendment” has the meaning set forth in the second Whereas clause of this Agreement.


 


“Fiscal
Month” means, with respect each Fiscal Year of the Company and each of its Consolidated Subsidiaries, each of twelve calendar
fiscal months.


 


“Fiscal
Quarter” means, with respect each Fiscal Year of the Company and each of its Consolidated Subsidiaries, each calendar quarter
ending on the Saturday closest to March 31st, June 30th, September 30th and December 31st in each year. For example, the fourth calendar
quarter of 2017 shall be deemed to have ended on December 30, 2017 (the Saturday immediately preceding Sunday, December 31, 2017).


 






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“Fiscal
Year” means with respect to the Company and each of its Consolidated Subsidiaries, a fiscal year ending on December 31st in
each year.


 


“Foreign
Subsidiary” means any Subsidiary that is organized under the laws of a jurisdiction other than the United States, a State thereof
or the District of Columbia.


 


“Fourth
Amendment Effective Date” means August 29, 2019.


 


“Fourth
Omnibus Amendment” has the meaning set forth in the second Whereas clause of this Agreement.


 


“GAAP”
shall mean 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 any successor authority) that are applicable to the circumstances as of the date of determination, consistently applied and maintained
through the periods indicated.


 


“Governmental
Authority” shall mean the government of the United States, any foreign country or any multinational authority, or any state,
commonwealth, protectorate or political subdivision thereof, and any entity, body or authority exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government, including the Pension Benefit Guaranty Corporation and other quasi-governmental
entities established to perform such functions.


 


“Guarantors”
shall mean, collectively, (a) the Subsidiary Guarantors and (b) any other Person that now or hereafter executes a guaranty in favor of
the Purchaser in connection with the transactions contemplated by this Agreement and the other Note Documents. For the avoidance of doubt,
none of the Foreign Subsidiaries are Guarantors.


 


“Guarantee”
by any Person means any obligation, contingent or otherwise, of such Person directly or indirectly guaranteeing any Debt or other obligation
of any other Person and, without limiting the generality of the foregoing, any obligation, direct or indirect, contingent or otherwise,
of such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation (whether
arising by virtue of partnership arrangements, by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay,
or to maintain financial statement conditions or otherwise), or (b) entered into for the purpose of assuring in any other manner the
obligee of such Debt or other obligation of the payment thereof or to protect such oblige against loss in respect thereof (in whole or
in part), provided, however, that the term Guarantee shall not include endorsements for collection or deposit in the Ordinary Course
of Business. The term “Guarantee” used as a verb has a corresponding meaning.


 


“Headway
Employer” has the meaning set forth in the preamble to this Agreement.


 


“Headway
HR” has the meaning set forth in the preamble to this Agreement.


 


“Headway
Payroll” has the meaning set forth in the preamble to this Agreement.


 


“Headway
Workforce” has the meaning set forth in the preamble to this Agreement.


 


“HSBC
Agreements for the Purchase of Debt” means, collectively, (a) that certain Agreement for the Purchase of Debts, dated February
8, 2018, between HSBC Invoice Finance (UK) Ltd. And S360 Ltd., and (b) that certain Agreement for the Purchase of Debts, dated June 28,
2018, between HSBC Invoice Finance (UK) Limited and Clement May Limited, a company organized under the laws of England and Wales, with
company number 7061321.


 






    	8



    	 



    

 


“HSBC
Term Loan” shall mean, collectively, (a) that certain term loan in the original principal amount of £1,550,000 made available
by HSBC Bank plc to S360 Holdings Ltd., pursuant to that certain term loan facility agreement, dated June 26, 2018, between HSBC Bank
plc and S360 Holdings Ltd., as amended pursuant to (i) that certain letter agreement dated April 20, 2020, between HSBC Bank plc and
S360 Holdings Ltd., and (ii) that certain letter agreement dated September 20, 2020, between HSBC Bank plc and S360 Holdings Ltd., and
(b) that certain term loan in the original principal amount of £1,000,000 made available by HSBC UK Bank plc to S360 Ltd., pursuant
to that certain term loan facility agreement, dated May 15, 2020, between HSBC UK Bank plc to S360 Ltd.


 


“Intellectual
Property” means, with respect to any Person, all patents, patent applications and like protections, including improvements
divisions, continuation, renewals, reissues, extensions and continuations in part of the same, trademarks, trade names, trade styles,
trade dress, service marks, logos and other business identifies and, to the extent permitted under applicable law, any applications therefore,
whether registered or not, and the goodwill of the business of such Person connected with and symbolized thereby, copyright rights, copyright
applications, copyright registrations and like protections in each work of authorship and derivative works, whether published or unpublished,
technology, know-how and processes, operating manuals, trade secrets, computer hardware and software, rights to unpatented inventions
and all applications and licenses therefore, used in or necessary for the conduct of business by such Person and all claims for damages
by way of any past, present or future infringement of any of the foregoing.


 


“Intellectual
Property Security Agreements” means, collectively, each Intellectual Property Security Agreement entered into by any Obligors
in favor of the Purchaser as security for the Obligations, as may be amended, restated, supplemented or otherwise modified from time
to time.


 


“Investment”
means any investment in any Person, whether by means of acquiring (whether for cash, property, services, securities or otherwise), making
or holding Debt, securities, capital contributions, loans, time deposits, advances, Guarantees or otherwise. The amount of any Investment
shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases
in value, or write-ups, write-downs or write-offs with respect thereto.


 


““Joinder
Agreement” means a Joinder Agreement and Pledge Agreement Supplement substantially in the form of Exhibit D hereto.


 


“Key
Resources” has the meaning set forth in the preamble to this Agreement.


 


“Lien”
means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind, in respect of such
asset. For the purposes of this Agreement and the other Transaction, any Obligor shall be deemed to own subject to a Lien any asset which
it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.


 


“Lighthouse”
has the meaning set forth in the preamble to this Agreement.


 


“Litigation”
means any action, suit or proceeding before any court, mediator, arbitrator or Governmental Authority.


 






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“Longbridge
Intercompany Note” means that certain Promissory Note, dated as of even date herewith, issued by S360 Ltd. To the Company in
the approximate principal amount of $16,245,337, as amended, restated, supplemented or otherwise modified from time to time.


 


“Material
Adverse Effect” means with respect to any event, act, condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding), whether singly or in conjunction with any other event or
events, act or acts, condition or conditions, occurrence or occurrences, whether or not related, (a) a material adverse change in, or
a material adverse effect upon, any of (i) the financial condition, operations, business or properties of the Obligors, taken as a whole,
(ii) the rights and remedies of the Purchaser under any of the Transaction Documents or the ability of the Purchaser to enforce the Obligations
or realize upon the Collateral, or the ability of the Obligors to perform any of their obligations under any Transaction Document, (iii)
the legality, validity or enforceability of any Transaction Document, (iv) the existence, perfection or priority of any security interest
granted in any Note Document, (v) the value of any material Collateral; or (b) the imposition of a fine against or the creation of any
liability of any Obligor to any Governmental Authority in excess of $200,000 which is not satisfied or discharged in full within thirty
(30) days after the imposition thereof.


 


“Material
Contract” means (a) the Existing Senior Secured Debt Documents, (b) the Longbridge Intercompany Note, (c) the other agreements
described on Schedule 6.18, and (d) any other agreement or instruments to which any Obligor now or hereafter is a party if the
breach, nonperformance or cancellation of which, or the failure of which to renew, could reasonably be expected to have a Material Adverse
Effect.


 


“Maturity
Date” means the earlier of (a) October 14, 2024, or (b) the date of acceleration of the maturity of any of the Senior Notes
pursuant to Section 9.2 hereof.


 


“MidCap
ABL Credit Agreement” means that certain Credit and Security Agreement dated as of April 8, 2015, by and among Faro, Lighthouse,
and Monroe, as borrowers, any additional borrowers from time to time party thereto, the Company, MidCap Funding IV Trust (as successor
by assignment to MidCap Funding X Trust), as administrative agent and a lender, and the financial institutions or other entities from
time to time party thereto as lenders, providing for revolving and term loan credit facilities to the borrowers thereunder, as amended
on or prior to the date hereof and as further amended, restated, supplemented or otherwise modified from time to time.


 


“MidCap
Intercreditor Agreement” means Intercreditor Agreement dated as of September 15, 2017, as amended by (a) that certain First
Amendment to Intercreditor Agreement dated as of August 27, 2018, (b) that certain Second Amendment to Intercreditor Agreement dated
as of February 7, 2019, (b) that certain Third Amendment to Intercreditor Agreement dated as of Fourth Amendment Effective Date, (d)
Fourth Amendment to Intercreditor Agreement dated as of October 26, 2020 and (e) Fifth Amendment to Intercreditor Agreement dated as
of October 27, 2022, and as further amended, restated, supplemented or otherwise modified from time to time.


 


“MidCap
Priority Collateral” means the “ABL Priority Collateral” as such term is defined in the MidCap Intercreditor Agreement.


 


“MidCap
Senior Agent” means, collectively, MidCap Funding IV Trust (as successor by assignment to MidCap Funding X Trust) in its capacity
as administrative agent under the MidCap ABL Credit Agreement, together with its successors and assigns in such capacity.


 


“Monroe”
has the meaning as set forth in the first recitals to this Agreement.


 






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“Multiemployer
Plan” means “Multiemployer Plan” means a multiemployer plan within the meaning of Section 4001(a)(3) of ERISA to
which any Obligor or any other member of the Controlled Group (or any Person who in the last five years was a member of the Controlled
Group) is making or accruing an obligation to make contributions or has within the preceding five plan years (as determined on the applicable
date of determination) made contributions.


 


“NC
PEO” has the meaning set forth in the preamble to this Agreement.


 


“New
Pay Proceeds Letter” means that certain Pay Proceeds Letter, dated the Fourth Amendment Effective Date, executed by the Company
and addressed to the Purchaser.


 


“Note
Documents” shall mean, collectively, each of the Transaction Documents (other than the Existing Warrant Documents, the Certificate
of Designation and the Exchange Shares), in each case either as originally executed or as the same may from time to time be supplemented,
modified, amended, restated, extended or supplanted.


 


“Obligations”
shall mean all present and future debt, liabilities and obligations of the Company owing to the Purchaser, or any Person entitled to
indemnification hereunder, or any of their respective successors, permitted transferees or permitted assigns, arising under or in connection
with this Agreement, each Senior Note or any other Note Document, including, without limitation, all principal and interest now or hereafter
owing by the Company under each Senior Note.


 


“Obligors”
means, collectively, the Company and the Subsidiary Guarantors.


 


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


 


“Omnibus
Amendment and Reaffirmation Agreement” means that Omnibus Amendment and Reaffirmation Agreement, dated as of the Closing Date,
by and among the Obligors and the Purchaser.


 


“Ordinary
Course of Business” means, in respect of any transaction involving any Person, the ordinary course of business of such Person,
as conducted by such Person in a manner consistent in all material respects with past practices.


 


“Organizational
Documents” means, with respect to any Person other than a natural person, the documents by which such Person was organized
(such as a certificate of incorporation, certificate of limited partnership or articles of organization, and including, without limitation,
any certificates of designation for preferred stock or other forms of preferred equity) and which relate to the internal governance of
such Person (such as by-laws, a partnership agreement or an operating, limited liability company or members agreement), including any
and all stockholder agreements or voting agreements relating to the capital stock or other equity interests of such Person.


 


“Original
Closing Date” means September 15, 2017.


 


“Original
Note Purchase Agreement” means the Existing Note Purchase Agreement (as such term is defined in the Existing Note Purchase
Agreement).


 


“Original
Senior Note” has the meaning assigned to such term in the Second Omnibus Amendment.


 






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“Pay
Proceeds Letter” means, collectively or individually, as the context may require (a) that certain Pay Proceeds Letter, dated
the Original Closing Date, executed by the Company and addressed to the Purchaser, (b) the Second Pay Proceeds Letter, and (c) the New
Pay Proceeds Letter.


 


“Pension
Plan” means any ERISA Plan that is subject to Section 412 of the Code or Title IV of ERISA.


 


“Permits”
means all governmental licenses, authorizations, provider numbers, supplier numbers, registrations, permits, drug or device authorizations
and approvals, certificates, franchises, qualifications, accreditations, consents and approvals of a Obligor required under all applicable
laws and required for such Obligor in order to carry on its business as now conducted.


 


“Permitted
Acquisition Other Debt” means Debt, incurred by a Foreign Subsidiary in connection with a Permitted Acquisition.


 


“Permitted
Acquisitions” means (a) those acquisitions as the Purchaser and Company may mutually agree upon in writing from time to time,
(b) Permitted Foreign Acquisitions and (c) Permitted Domestic Acquisitions; provided that, in respect of the foregoing clauses (b) and
(c), (i) immediately prior to the consummation of such acquisition, no Default or Event of Default then exists or would result therefrom,
(ii) with respect to each such acquisition, prior to the closing thereof, the Purchaser has received pro forma financial statements,
(iii) with respect to each such acquisition, Obligors shall be in compliance on a pro forma trailing twelve month basis with the Total
Leverage Ratio covenant and each of the other financial covenants in Section 8.17, and the Purchaser shall have received a certificate
from a Responsible Officer of the Company, dated the consummation date of such acquisition, certifying and demonstrating that (A) after
giving effect to such acquisition (and taking into account any and all Debt incurred, issued or assumed by any Obligor or Subsidiary
thereof in connection therewith, and any continuing Debt of any target entity being acquired in connection therewith, including, without
limitation, any Debt of the type described under clauses (m) through (p), inclusive, of the definition of Permitted Debt), the Obligors
are in compliance on a pro forma trailing twelve month basis with the Total Leverage Ratio covenant and each other financial covenant
in Section 8.17, and (B) no Default or Event of Default exists as of such date or would result after giving effect to such acquisition,
and (iv) in the case of any Permitted Domestic Acquisition, compliance with Section 7.10(c).


 


“Permitted
Asset Dispositions” means the following Asset Dispositions: (a) dispositions of furniture, fixtures and equipment in the Ordinary
Course of Business that the applicable Obligor or Subsidiary thereof determines in good faith is no longer used or useful in the business
of such Obligor or Subsidiary; provided, however, that at the time of such Asset Disposition, no Default or Event of Default exists or
would result from such Asset Disposition, and (b) dispositions approved in writing by the Purchaser.


 


“Permitted
Contest” means, with respect to any tax obligation or other obligation allegedly or potentially owing from any Obligor or its
Subsidiary to any governmental tax authority or other third party, a contest maintained in good faith by appropriate proceedings promptly
instituted and diligently conducted and with respect to which such reserve or other appropriate provision, if any, as shall be required
in conformity with GAAP shall have been made on the books and records and financial statements of the applicable Obligor; provided, however,
that (a) compliance with the obligation that is the subject of such contest is effectively stayed during such challenge; (b) such Obligor’s
and its Subsidiaries’ title to, and its right to use, the Collateral is not adversely affected thereby and the Purchaser’s
Lien and priority on the Collateral are not adversely affected, altered or impaired thereby; (c) Company has given prior written notice
to the Purchaser of an Obligor’s or its Subsidiary’s intent to so contest the obligation; (d) the Collateral or any part
thereof or any interest therein shall not be in any danger of being sold, forfeited or lost by reason of such contest by such Obligor
or its Subsidiaries; (e) the Company has given the Purchaser notice of the commencement of such contest and upon request by the Purchaser,
from time to time, notice of the status of such contest by the applicable Obligors and/or confirmation of the continuing satisfaction
of this definition; and (f) upon a final determination of such contest, such Obligor and its Subsidiaries shall promptly comply with
the requirements thereof.


 






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“Permitted
Contingent Obligations” means, without duplication: (a) Contingent Obligations arising in respect of the Debt under the Note
Documents; (b) Contingent Obligations resulting from endorsements for collection or deposit in the Ordinary Course of Business; (c) Contingent
Obligations outstanding on the date of this Agreement and set forth on Schedule 8.1 (including any refinancings, extensions, increases
or amendments to the indebtedness underlying such Contingent Obligations to the extent constituting (i) Refinancing Debt or (ii) extensions
of the maturity thereof without any other change in terms); (d) Contingent Obligations incurred in the Ordinary Course of Business with
respect to surety and appeal bonds, performance bonds and other similar obligations not to exceed $250,000 in the aggregate at any time
outstanding; (f) Contingent Obligations arising under indemnity agreements with title insurers to cause such title insurers to issue
to the Purchaser mortgagee title insurance policies; (g) Contingent Obligations arising with respect to customary indemnification obligations
in favor of purchasers in connection with dispositions of personal property assets permitted under Section 8.6; (h) [Reserved];
(i) so long as there exists no Event of Default both immediately before and immediately after giving effect to any such transaction,
Contingent Obligations existing or arising under any Swap Contract, provided, however, that such obligations are (or were) entered into
by an Obligor or an Affiliate in the Ordinary Course of Business for the purpose of directly mitigating risks associated with liabilities,
commitments, investments, assets, or property held or reasonably anticipated by such Person and not for purposes of speculation; and
(j) other Contingent Obligations not permitted by clauses (a) through (i) above, not to exceed $250,000 in the aggregate at any time
outstanding.


 


“Permitted
Debt” means, without duplication: (a) the Obligors’ Debt to the Purchaser under this Agreement and the other Note Documents;
(b) Debt incurred as a result of endorsing negotiable instruments received in the Ordinary Course of Business; (c) purchase money Debt
not to exceed $1,000,000 at any time (whether in the form of a loan or a lease) used solely to acquire equipment used in the Ordinary
Course of Business and secured only by such equipment; (d) Debt existing, or contemplated on the date of this Agreement and described
on Schedule 8.1 (other than any items otherwise expressly set forth in this definition), including any refinancings, extensions,
increases or amendments to the indebtedness underlying such Debt to the extent constituting (i) Refinancing Debt or (ii) extensions of
the maturity thereof without any other change in terms); (e) so long as there exists no Event of Default both immediately before and
immediately after giving effect to any such transaction, Debt existing or arising under any Swap Contract, provided, however, that such
obligations are (or were) entered into by any Obligor or an Affiliate in the Ordinary Course of Business for the purpose of directly
mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person
and not for purposes of speculation; (f) Debt in the form of insurance premiums financed through the applicable insurance company; (g)
trade accounts payable arising and paid on a timely basis and in the Ordinary Course of Business; (h) Debt (other than Debt for borrowed
money) that is a Permitted Intercompany Transaction; (i) Subordinated Debt and any Subordinated Debt Permitted Refinancing with respect
thereto; (j) Permitted ABL Senior Debt (as defined below in the definition); (k) unsecured intercompany Debt between any Obligors; (l)
unsecured intercompany Debt owing from any Obligor to any Foreign Subsidiary or Excluded Subsidiary, provided that such Debt is
at all times on and after the Closing Date subordinated to the Obligations pursuant to a subordination agreement satisfactory to Purchaser;
(m) Permitted Acquisition Other Debt that is incurred in connection with the consummation of one or more Permitted Acquisitions, provided
that (i) no Default or Event of Default exists or would result therefrom, (ii) Obligors shall be in compliance on a pro forma trailing
twelve month basis with the Total Leverage Ratio covenant and each of the other financial covenants in Section 8.17 after giving
effect to such Debt, and the Purchaser shall have received a certificate from a Responsible Officer of the Company demonstrating such
compliance in form and with the accompanying detail as described in clause (iii) of the definition of Permitted Acquisition, and (iii)
the principal amount of such Debt may not be repaid prior to the repayment in full of the Obligations except in the case of such repayments
thereof that, together with any repayments of the principal amount of any Debt incurred pursuant to clauses (n) and (o) of this definition
prior to the payment in full of the Obligations, do not exceed an amount equal to $3,000,000 (less the amount of any Series A Catch-up
Payment made on or after January 25, 2017) in the aggregate; (n) unsecured Debt of any Person that becomes a Subsidiary after the Original
Closing Date in connection with any Permitted Acquisition; provided that (i) such Debt exists at the time such Person becomes
a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary, (ii) no Default or Event
of Default exists or would result therefrom, (iii) Obligors shall be in compliance on a pro forma trailing twelve month basis with the
Total Leverage Ratio covenant and each of the other financial covenants in Section 8.17 after giving effect to such Debt, and
the Purchaser shall have received a certificate from a Responsible Officer of the Company demonstrating such compliance in form and with
the accompanying detail as described in clause (iii) of the definition of Permitted Acquisition, (iv) such Debt is at all times on and
after the Closing Date subordinated to the Obligations on terms satisfactory to the Purchaser, and (v) the principal amount of such Debt
may not be repaid prior to the repayment in full of the Obligations, except in the case of such repayments thereof that, together with
any repayments of the principal amount of any Debt incurred pursuant to clauses (m) and (o) of this definition prior to the payment in
full of the Obligations, do not exceed an amount equal to $3,000,000 (less the amount of any Series A Catch-up Payment made on or after
the Original Date) in the aggregate; (o) unsecured Debt owing to sellers of assets or Equity Interests that is incurred in connection
with the consummation of one or more Permitted Acquisitions so long as (i) such Debt is subordinated is at all times on and after the
Closing Date subordinated to the Obligations on terms satisfactory to the Purchaser, (ii) no Default or Event of Default exists or would
result therefrom, (iii) Obligors shall be in compliance on a pro forma trailing twelve month basis with the Total Leverage Ratio covenant
and each of the other financial covenants in Section 8.17 after giving effect to such Debt, and the Purchaser shall have received
a certificate from a Responsible Officer of the Company demonstrating such compliance in form and with the accompanying detail as described
in clause (iii) of the definition of Permitted Acquisition, and (iv) the principal amount of such Debt may not be repaid prior to the
repayment in full of the Obligations except in the case of such repayments thereof that, together with any repayments of the principal
amount of any Debt incurred pursuant to clauses (m) and (n) of this definition prior to the payment in full of the Obligations, do not
exceed an amount equal to $3,000,000 (less the amount of any Series A Catch-up Payment made on or after the Original Date) in the aggregate;
(p) secured Debt of a target entity acquired in connection with a Permitted Acquisition, provided that (i) such Debt is incurred
pursuant to an asset based working capital facility (“ABL Facility”) provided by a bank or other financial institution
to such target entity and existing at the time such target entity was acquired and which ABL Facility continues following such Permitted
Acquisition, (ii) the facility amount of such ABL Facility and the advance rates and eligibility requirements under such ABL Facility
are not modified following the date of such Permitted Acquisition or in contemplation thereof in a manner which results in an increase
in borrowing availability thereunder, (iii) neither the Company nor any other Obligor (other than the target entity) shall be liable,
directly or indirectly, for any such Debt or other obligations and liabilities under such ABL Facility, (iv) no assets of the Company
or any other Obligor (other than the target entity) shall be subject to any Liens or otherwise be used to secure, repay, guarantee or
otherwise provide credit support for such ABL Facility or any such Debt or other obligations and liabilities under such ABL Facility,
(v) no Default or Event of Default exists or would result therefrom, (vi) Obligors shall be in compliance on a pro forma trailing twelve
month basis with the Total Leverage Ratio covenant and each of the other financial covenants in Section 8.17 after giving effect
to such Debt, and the Purchaser shall have received a certificate from a Responsible Officer of the Company demonstrating such compliance
in form and with the accompanying detail as described in clause (iii) of the definition of Permitted Acquisition, and (vii) the repayment
of such ABL Facility shall be made solely from the cash flow of the target entity so acquired or, in the case of any default thereunder,
solely from the cash flow and other assets of the target entity so acquired, and (q) Refinancing Debt.


 






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As
used above in this definition, the term “Permitted ABL Senior Debt” means Debt incurred pursuant to the Existing Senior
Secured Debt Documents, provided that:


 


(a)
the outstanding principal amount of such Debt (other than Debt incurred under the MidCap ABL Credit Agreement) does not at any time exceed
the lesser of:


 


		(i)	the
                                            applicable maximum applicable facility limit set forth in such Existing Senior Secured
                                            Debt Documents from time to time (without giving effect to any accordion or similar
                                            options to increase the maximum facility, unless such option has been validly exercised and
                                            become effective), and



 


		(ii)	any
                                            applicable borrowing base or similar borrowing availability limit (or receivables purchase
                                            availability limit, in the case of any receivables purchase or factoring arrangement that
                                            constitutes Debt); provided that any waiver, change or other modification to any eligibility
                                            criteria, advance rates or other component used in calculating any such borrowing base or
                                            similar borrowing availability limit (or any receivables purchase limit, in the case of any
                                            receivables purchase or factoring arrangement that constitutes Debt) from that as set forth
                                            in the Existing Senior Secured Debt Documents as in effect on the date hereof shall
                                            require the prior written consent of Purchaser if any such waiver, change or other modification
                                            would result in any increased borrowing availability (or increased receivables purchase availability
                                            in the case of any receivables purchase or factoring arrangement that constitutes Debt);



 


(b)
the outstanding principal amount of all such Debt shall not at any time violate the financial covenants set forth in Section 8.17;
and


 


(c)
in the case of any such Debt incurred under the MidCap ABL Credit Agreement or Loan Documents (as defined thereunder) the principal amount
of ABL Loans (as such term is defined in the MidCap Intercreditor Agreement as in effect on the date hereof) must not exceed the “ABL
Debt Cap” as such term is defined in the MidCap Intercreditor Agreement as in effect on the date hereof.


 


“Permitted
Distributions” means the following Restricted Distributions: (a) dividends payable solely in common stock and preferred stock;
(b) repurchases of stock from individuals who were, but are no longer, employees, directors or consultants pursuant to stock purchase
agreements entered as part of their compensation so long as an Event of Default does not exist at the time of such repurchase and would
not exist after giving effect to such repurchase, provided, however, that such repurchases do not exceed $250,000 in the aggregate per
Fiscal Year; (c) dividends or distributions paid by (i) a Subsidiary to the Company or another Obligor that is the direct or indirect
parent of such Subsidiary or (ii) by a Foreign Subsidiary to an Obligor or to another Foreign Subsidiary that is the direct parent company
of such Foreign Subsidiary; (d) dividends, distributions, management fees or other fees or compensation payable solely by an Obligor
or a Subsidiary thereof to the Company or another Obligor; (e) dividends and distributions that are Permitted Intercompany Transactions
so long as no Event of Default exists at the time thereof or would result therefrom, and (f) in respect of the Series A Preferred Stock
of the Company, provided that the aggregate monthly amount of all such Series A Preferred Stock dividends shall not exceed $17,000 (excluding
any catch-up payment amount in respect of the delinquent dividend payments currently outstanding as of the Original Closing Date in an
aggregate amount not to exceed $400,000; the payment of any such catch-up amount being referred to herein as the “Series A Catch-up
Payment”) and at the time of the making of such dividend no Event of Default shall exist or would result therefrom.


 






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“Permitted
Domestic Acquisitions” means the collective reference to each acquisition by the Company (directly or indirectly by new wholly-owned
direct or indirect Domestic Subsidiaries), (a) of substantially all of the assets, or all of the capital stock, of a Person in the line
of business in which the Obligors are engaged on the Closing Date or that is incidental thereto and (b) involving assets and operations
domiciled inside of the United States.


 


“Permitted
Foreign Acquisitions” means the collective reference to each acquisition by the Company (directly or indirectly by new wholly-owned
direct or indirect Foreign Subsidiaries), (a) of substantially all of the assets, or all of the capital stock, of a Person in the line
of business in which the Obligors are engaged on the Closing Date or that is incidental thereto and (b) involving assets and operations
domiciled outside of the United States.


 


“Permitted
Intercompany Transaction” has the meaning set forth in Section 8.8.


 


“Permitted
Investments” means: (a) Investments shown on Schedule 8.7 and existing on the Closing Date; (b) cash and cash equivalents;
(c) Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar transactions in the Ordinary
Course of Business; (d) 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 Obligors pursuant to employee stock purchase plans or agreements approved by such Obligors’ Board of Directors (or other governing
body), but the aggregate of all such loans outstanding may not exceed $250,000 at any time; (e) 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; (f) 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, however, that this subpart (f) shall not apply to Investments of Obligors in any Subsidiary; (g) Investments consisting of
deposit accounts in which the Purchaser has received a Deposit Account Control Agreement; (h) Investments by any Obligor in any other
Obligor; (i) Investments made by Obligor in any Foreign Subsidiary in connection with Permitted Acquisitions, provided that the aggregate
of all such Investments, together with the outstanding principal amount of all Permitted Acquisition Other Debt, may not at any time
exceed $1,000,000; (j) Permitted Acquisitions; and (k) other Investments in an amount not exceeding $250,000 in the aggregate.


 


“Permitted
Liens” means: (a) deposits or pledges of cash to secure obligations under workmen’s compensation, social security or
similar laws, or under unemployment insurance (but excluding Liens arising under ERISA) pertaining to an Obligor’s employees, if
any; (b) deposits or pledges of cash to secure bids, tenders, contracts (other than contracts for the payment of money or the deferred
purchase price of property or services), leases, statutory obligations, surety and appeal bonds and other obligations of like nature
arising in the Ordinary Course of Business; (c) carrier’s, warehousemen’s, mechanic’s, workmen’s, materialmen’s
or other like Liens on Collateral arising in the Ordinary Course of Business with respect to obligations which are not due, or which
are being contested pursuant to a Permitted Contest; (d) Liens on Collateral for taxes or other governmental charges not at the time
delinquent or thereafter payable without penalty or the subject of a Permitted Contest; (e) attachments, appeal bonds, judgments and
other similar Liens on Collateral, for sums not exceeding $250,000 in the aggregate arising in connection with court proceedings; provided,
however, that the execution or other enforcement of such Liens is effectively stayed and the claims secured thereby are the subject of
a Permitted Contest; (f) [reserved]; (g) Liens and encumbrances in favor of the Purchaser under the Transaction Documents; (h) Liens
on Collateral existing on the date hereof and set forth on Schedule 8.2 (other than items otherwise expressly set forth in this
definition); (i) (A) Liens on receivables of Foreign Subsidiaries and any related rights or proceeds thereof (but not on any equity interests
of any Foreign Subsidiary) granted pursuant to the applicable Existing Senior Secured Debt Documents to secure any Permitted ABL Senior
Debt incurred thereunder or any other obligations of such Foreign Subsidiary under the HSBC Agreement for the Purchase of Debt, as applicable,
and (B) Liens granted on the assets of Domestic Subsidiaries to secure any Permitted ABL Senior Debt incurred thereunder and any other
obligations (not constituting Debt) of the Company and the Domestic Subsidiaries under the MidCap ABL Credit Agreement and related Financing
Documents (as defined in the MidCap ABL Credit Agreement), provided such Liens in favor of MidCap are at all times subject to
the MidCap Intercreditor Agreement, and such Liens in favor of any other secured creditor are at all times subject to an intercreditor
agreement in form and substance satisfactory to Purchaser; (j) Liens on the property of a Foreign Subsidiary (but not on any equity interest
of any Foreign Subsidiary), which Liens secure only Permitted Acquisition Other Debt not to exceed $1,000,000 in the aggregate at any
time; (k) Liens on Refinancing Debt permitted hereunder to the extent and only to the extent that the original Debt being so refinanced
was secured by a Permitted Lien; (l) any Lien on any equipment securing Debt permitted under subpart (c) of the definition of Permitted
Debt, provided, however, that such Lien attaches concurrently with or within twenty (20) days after the acquisition thereof;
and (m) Liens securing Debt permitted to be incurred under clause (p) of the definition of Permitted Debt, provided that such
Liens do not at any time extend to any assets of the Company or any other Obligor (other than the target entity which is being acquired
and which is party to the applicable ABL Facility described in clause (p) of the definition of Permitted Debt).


 






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“Permitted
Modifications” means (a) such amendments or other modifications to an Obligor’s or Subsidiary’s Organizational
Documents (other than those involving a change in the name of an Obligor or Subsidiary or involving a reorganization of a Obligor or
Subsidiary under the laws of a different jurisdiction) as are required by applicable Law and fully disclosed to the Purchaser within
thirty (30) days after such amendments or modifications have become effective, and (b) such other amendments or modifications to an Obligor’s
or Subsidiary’s Organizational Documents (other than those involving a change in the name of an Obligor or Subsidiary or involving
a reorganization of a Obligor or Subsidiary under the laws of a different jurisdiction) that would not adversely affect the rights and
interests of the Purchaser and fully disclosed to the Purchaser within thirty (30) days after such amendments or modifications have become
effective.


 


“Person”
shall mean an individual, corporation, limited liability company, partnership, joint venture, trust, unincorporated association, or other
entity, or a government or any political subdivision or agency thereof.


 


“Pledge
Agreement” means that certain Amended and Restated Pledge Agreement, dated as of September 15, 2017, by and among the Company,
the Domestic Subsidiaries party thereto and the Purchaser, as amended by the First Omnibus Amendment, the Second Omnibus Amendment, the
Fourth Omnibus Amendment, and the Omnibus Amendment and Reaffirmation Agreement, and as the same may hereafter be amended, restated,
supplemented or otherwise modified from time to time.


 


“Principal
Office” means the office of the Purchaser at the address as specified in Section 10.1.


 


“Prior
Note Purchase Agreement” has the meaning set forth in the first Whereas clause of this Agreement.


 


“Purchaser”
means Jackson Investment Group, LLC, together with its successors and assigns and including, without limitation, any Transferee.


 


“Refinancing
Debt” means Debt which represents extensions, renewals, refinancing or replacements of any Debt described in clauses (c), (d),
(j), (n), or (p) in the definition of “Permitted Debt” hereunder (such Debt being referred to herein as the “Original
Debt”); provided that (i) such Refinancing Debt does not increase the principal amount of the Original Debt (except by an
amount equal to unpaid accrued interest and premium thereon, plus original issue discount and upfront fees plus other fees and expenses
reasonably incurred in connection with such extensions, renewals, refinancing or replacement plus an amount equal to any existing commitments
unutilized thereunder to the extent such commitments are otherwise permitted hereunder, plus an amount equal to any incremental facilities
unutilized thereunder to the extent such amount is otherwise permitted hereunder), (ii) if the Original Debt is unsecured, such Refinancing
Debt shall be unsecured, and if the Original Debt was permitted to be secured hereunder, then any Liens securing such Refinancing Debt
are not extended to any additional property of an Obligor or any of its Subsidiaries (other than replacement Liens so long as the replacement
Liens only encumber those assets or classes of assets that the original Lien encumbered), (iii) no Obligor or any of its Subsidiaries
that is not originally obligated with respect to repayment of such Original Debt is required by the terms thereof to become obligated
with respect to such Refinancing Debt, (iv) such Refinancing Debt does not result in a shortening of the average weighted maturity of
such Original Debt, (v) the terms of such Refinancing Debt are not, taken as a whole, materially more burdensome or restrictive to the
Obligors or materially more adverse to the interests of the Purchaser than the original terms of the Original Debt; it being understood
that in the case of any refinancing of any Permitted ABL Senior Debt (as such term is defined in the definition of Permitted Debt), such
refinancing shall require the prior written consent of the Purchaser if the applicable borrowing base or similar borrowing availability
limit (or receivables purchase availability limit, in the case of any receivables purchase or factoring arrangement that constitutes
Debt) in respect of such Refinancing Debt, including any eligibility criteria, advance rates or other components used in calculating
such borrowing base or similar borrowing availability limit (or any receivables purchase limit, in the case of any receivables purchase
or factoring arrangement that constitutes Debt) would result in any increased borrowing availability (or receivables purchase availability
in the case of any receivables purchase or factoring arrangement that constitutes Debt) from that set forth in the applicable Existing
Senior Secured Debt Documents as in effect on the date hereof, and (vi) if such Original Debt was subordinated in right of payment
to the Obligations, then the terms and conditions of such Refinancing Debt must include subordination terms and conditions that are at
least as favorable to the Purchaser as those that were applicable to such Original Debt (and in the case of Original Debt subject to
the MidCap Intercreditor Agreement, the holder of such Refinancing Debt shall agree to be bound by the terms of the MidCap Intercreditor
Agreement or otherwise shall enter into a new intercreditor agreement with Purchaser having terms and conditions at least as favorable
to the Purchaser as those applicable to the MidCap Intercreditor Agreement).


 


“Responsible
Officer” means any of the Chairman (with respect the Company), Chief Executive Officer, Chief Financial Officer or any other
officer of the applicable Obligor acceptable to the Purchaser.


 


“Restricted
Distribution” means as to any Person (a) any dividend or other distribution (whether in cash, securities or other property)
on any equity interest in such Person (except those payable solely in its equity interests of the same class), (b) any payment by such
Person on account of (i) the purchase, redemption, retirement, defeasance, surrender, cancellation, termination or acquisition of any
equity interests in such Person or any claim respecting the purchase or sale of any equity interest in such Person (except in connection
with the Existing Warrant), or (ii) any option, warrant or other right to acquire any equity interests in such Person (excluding, however
the Existing Warrant), (c) any management fees, salaries or other fees or compensation to any Person holding an equity interest in an
Obligor or a Subsidiary of an Obligor (other than (i) payments of compensation to individuals, (ii) customary directors fees, and (iii)
advances and reimbursements to employees or directors, all in the Ordinary Course of Business), or to any Affiliate of an Obligor or
an Affiliate of any Subsidiary of an Obligor, (d) any lease or rental payments to an Affiliate or Subsidiary of an Obligor other than
such payments made in the Ordinary Course of Business and in compliance with Section 8.8, or (e) repayments of or debt service on loans
or other indebtedness held by any Person holding an equity interest in an Obligor or a Subsidiary of an Obligor, an Affiliate of an Obligor
or an Affiliate of any Subsidiary of an Obligor unless permitted under and made pursuant to a Subordination Agreement, in form and substance
reasonably satisfactory to Purchaser, applicable to such loans or other indebtedness.


 






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“S360
Holdings Ltd.” means Staffing 360 Solutions (Holdings) Limited, a company organized under the laws of England and Wales (formerly
known as Staffing 360 Solutions Limited), with company number 07116112, and shall include S360 Holdings Ltd.’s successors and permitted
assigns.


 


“S360
Ltd.” means Staffing 360 Solutions Limited, a company organized under the laws of England and Wales (formerly known as Longbridge
Recruitment 360 Ltd.), with company number 06745176, and shall include S360 Ltd.’s successors and permitted assigns.


 


“SEC”
means the United States Securities and Exchange Commission.


 


“Second
Amendment Effective Date” means November 15, 2018.


 


“Second
Closing” has the meaning set forth in the Second Omnibus Amendment.


 


“Second
Closing Date” means August 27, 2018.


 


“Second
Omnibus Amendment” has the meaning set forth in the second Whereas clause of this Agreement.


 


“Second
Pay Proceeds Letter” means that certain Second Pay Proceeds Letter, dated the Second Closing Date, executed by the Company
and addressed to the Purchaser


 


“Second
Senior Note” shall mean that certain 12% Senior Secured Promissory Note due September 15, 2020, dated August 27, 2018, in the
principal amount of Eight Million Four Hundred Twenty-Seven Thousand Seven Hundred Ninety-Four Dollars ($8,427,794) issued by the Company
to the Purchaser on August 27, 2018 pursuant to Section 2.1(b) of the Existing Note Purchase Agreement, as amended prior to the
date hereof.


 


“Securities
Account Control Agreement” shall mean any and all securities account control agreements entered into on or after the Closing
Date by the applicable securities intermediary, the applicable Obligor, and the Purchaser (or by any Person acting as bailee for perfection
on behalf of the Purchaser), as may be amended, restated, supplemented or otherwise modified from time to time.


 


“Securities
Act” shall mean the Securities Act of 1933, as amended, or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.


 


“Security
Agreement” means that certain Amended and Restated Security Agreement, dated as of September 15, 2017, by and among the Company,
the Domestic Guarantors and the Purchaser, as amended by the First Omnibus Amendment, the Second Omnibus Amendment, the Fourth Omnibus
Amendment, and the Omnibus and Reaffirmation Agreement, and as the same may hereafter be amended, restated, supplemented or otherwise
modified from time to time.


 


“Security
Documents” means, collectively, the Security Agreement, the Share Mortgage, the Pledge Agreement, Intellectual Property Security
Agreements, the Deposit Account Control Agreements, the Third Party Waiver Agreements and all other security agreements, pledge agreements,
collateral assignments, financing statements, powers of attorney, stock transfer powers and other instruments, documents or agreements
now or hereafter executed and delivered by any of the Obligors to the Purchaser for the purposes of creating, perfecting, or preserving
the Purchaser’s Liens in, to and under any of the Collateral, in each case, as the same may hereafter be amended, restated, supplemented
or otherwise modified from time to time.


 






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“Segregated
Account” has the meaning set forth in Section 7.16(b).


 


“Senior
Note” or “Senior Notes” means, individually or collectively, as the context may require (a) the Third Amended
and Restated Note and (b) each other senior promissory note now or hereafter delivered by the Company to the Purchaser in substitution,
replacement or exchange of the Third Amended and Restated Note, in each case as amended, restated, supplemented or modified from time
to time pursuant to the provisions of this Agreement.


 


“Series
A Catch-up Payment” has the meaning set forth in the definition of Permitted Distributions.


 


“Share
Mortgage” shall mean the Existing Share Mortgage, as amended by the Share Mortgage Amendment, and as the same may hereafter
be further amended, restated, or otherwise modified in accordance with its terms.


 


“Share
Mortgage Amendment” has the meaning set forth in Section 5.1(B)(4).


 


“Solvent”
shall mean, with respect to any Person at any time, that (i) each of the fair value and the present fair saleable value of such Person’s
assets (including any rights of subrogation or contribution to which such Person is entitled, under any of the Transaction Documents
or otherwise) is greater than such Person’s debts and other liabilities (including contingent, unmatured and unliquidated debts
and liabilities) and the maximum estimated amount required to pay such debts and liabilities as such debts and liabilities mature or
otherwise become payable; (ii) such Person is able and expects to be able to pay its debts and other liabilities (including, without
limitation, contingent, unmatured and unliquidated debts and liabilities) as they mature; and (iii) such Person does not have unreasonably
small capital to carry on its business as conducted and as proposed to be conducted.


 


“Subordinated
Debt” means any Debt of any Obligor or Subsidiary thereof that by its terms is expressly subordinated to the Obligations and
is incurred pursuant to the terms of the Subordinated Debt Documents and with the prior written consent of the Purchaser, all of which
documents must be in form and substance reasonably acceptable to the Purchaser in its good faith discretion.


 


“Subordinated
Debt Documents” means any documents evidencing and/or securing Subordinated Debt governed by a subordination agreement, all
of which documents and subordination agreement must be in form and substance reasonably acceptable to the Purchaser in its good faith
discretion.


 


“Subordinated
Debt Permitted Refinancing” means the assignment or refinancing of Subordinated Debt if (a) that Subordinated Debt was incurred
solely with respect to borrowed money, (b) the assignee or refinancer thereof has given the Purchaser not less than ten (10) Business
Days’ prior written notice of such assignment or refinancing, (c) prior to the consummation of any such assignment or refinancing,
the assignee or refinancer thereof shall execute and deliver to the Purchaser a joinder to the applicable subordination agreement (or
to a replacement thereof) in form and substance satisfactory to the Purchaser in its good faith discretion pursuant to which such assignee
or refinancer agrees to be bound by and subject to the terms the Subordination Agreement, (d) the assignee or refinancer specifically
acknowledges and agrees in that joinder that no provision of any Subordinated Debt Documents with respect such Subordinated Debt shall
contain any provision, and that no action shall be taken, that causes or that would cause a violation of Section 8.5 and (e) there
exists no Default or Event of Default.


 






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“Subsidiary”
shall mean, as to any person, any corporation, limited liability company, partnership or joint venture, whether now existing or hereafter
organized or acquired: (i) in the case of a corporation, of which at least a majority of the outstanding shares of stock having by the
terms thereof ordinary voting power to elect a majority of the board of directors of such corporation (other than stock having such voting
power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person and/or
one or more of its Subsidiaries or (ii) in the case of a limited liability company, partnership or joint venture, in which such Person
or a Subsidiary of such Person is a member, general partner or joint venturer or of which a majority of the partnership or other ownership
interests are at the time owned by such Person or one or more of its Subsidiaries. Unless otherwise specified herein, all references
to a “Subsidiary” shall be deemed to refer to “Subsidiaries” of the Company.


 


“Subsidiary
Guarantors” means, collectively, (a) each Subsidiary of the Company identified as a “Subsidiary Guarantor” on the
signature pages hereto, (b) each other Subsidiary that now or hereafter becomes a guarantor party to this Agreement and bound by the
provisions of Article 4 hereof, by executing and delivering a Joinder Agreement in favor of Purchaser, including without limitation,
any other Subsidiary of the Company that joins as a Guarantor pursuant to Section 7.10(c) hereof or otherwise.


 


“Swap
Contract” means any “swap agreement”, as defined in Section 101 of the Bankruptcy Code, that is obtained by the
Company or any other Obligor to provide protection against fluctuations in interest or currency exchange rates, but only if the Purchaser
provides its prior written consent to the entry into such “swap agreement”.


 


“Taxes”
shall mean any present or future taxes, levies, imposts, duties, fees, assessments, deductions, withholdings or other charges of whatever
nature, including without limitation, income, receipts, excise, property, sales, transfer, license, payroll, withholding, social security
and franchise taxes now or hereafter imposed or levied by the United States, or any state, local or foreign government or by any department,
agency or other political subdivision or taxing authority thereof or therein and all interest, penalties, additions to tax and similar
liabilities with respect thereto.


 


“Third
Amended and Restated Note” shall mean that certain Third Amended and Restated 12% Senior Secured Promissory Note due October
14, 2024, dated as of the Closing Date, in the principal amount of $9,016,249.00 plus any interest now or hereafter deemed added to the
principal balance of such Note, issued by the Company to the Purchaser on the date hereof pursuant to Section 2.1(a), and each
other senior promissory note now or hereafter delivered to the Purchaser in substitution, replacement or exchange thereof, in each case
as amended, restated, supplemented or modified from time to time pursuant to the provisions of this Agreement.


 


“Third
Omnibus Amendment” has the meaning set forth in the second Whereas clause of this Agreement.


 


“Third
Party Waiver Agreement” shall mean any waiver agreement, executed on or after the Original Closing Date, by the applicable
landlord, bailee, warehousemen, processor or other third party operator of premises on which any Collateral is located and the applicable
Obligor in favor of the Purchaser, in each case in form and substance reasonably satisfactory to the Purchaser.


 






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“Third
Senior Note” means that certain 18% Senior Secured Promissory Note due December 31, 2019, dated the Fourth Amendment Effective
Date, in the principal amount of Two Million Five Hundred Thirty-Eight Thousand Dollars ($2,538,000) issued by the Company to the Purchaser
on the Fourth Amendment Effective Date pursuant to Section 2.1(c) of the Existing Note Purchase Agreement, which note has previously
been paid in full by the Company and is no longer outstanding.


 


“Transaction
Documents” means collectively, this Agreement, each Senior Note, the Security Documents, the Existing Warrant Documents, Warrant
Agreement, the MidCap Intercreditor Agreement, the Pay Proceeds Letter, together with any other guaranty now or hereafter executed by
any Obligor in favor of the Purchaser, and all consents, notices, documents, certificates and instruments heretofore, now or hereafter
executed by or on behalf of any Obligor, and delivered to the Purchaser in connection with this Agreement, the Security Documents, the
Warrant or the transactions contemplated thereby, each as amended, restated, supplemented or otherwise modified from time to time.


 


“Transferee”
shall mean any permitted direct or indirect transferee of all or any part of any of the Senior Note issued pursuant to this Agreement.


 


“UCC”
means the Uniform Commercial Code as in effect in the State of New York, unless the context requires application of the Uniform Commercial
Code as in effect in another State, in which case such term means the Uniform Commercial Code as in effect in such State. For purposes
of this Agreement, “UCC” also means the equivalent, similar or analogous statutes, regulations and other laws of any foreign
country or jurisdiction as the same may be applicable and the context requires, and any successor statute, regulation or law thereto.


 


“Warrant
Agreement” means that certain Warrant Agreement, dated October 27, 2022, by and among the Company and Purchaser.


 


Article
2.






 


ISSUANCE
AND PURCHASE OF SENIOR NOTE


 


Section
2.1


 


(a)
Existing Senior Notes; Issuance of Third Amended and Restated Note. The Company previously sold to the Purchaser and, upon the
terms and conditions set forth in the Existing Note Purchase Agreement and in reliance upon the representations and warranties of the
Company contained therein, the Purchaser purchased from the Company, the Existing Senior Notes and the Third Senior Note, in exchange
for a senior secured debt investment previously made by the Purchaser in the Company as described in the Existing Senior Note Purchase
Agreement. The Third Senior Note was previously fully repaid by the Company and is no longer outstanding as of the date hereof. As of
the date hereof, the total outstanding principal balance of the Existing Senior Notes is nine million sixteen thousand two hundred forty
nine and 00/100 ($9,016,249.00). In connection with the entering into of this Agreement and as a condition to the effectiveness of this
Agreement, the Company is required to issue to the Purchaser on the date hereof the Third Amended and Restated Note, pursuant to which,
among other things, the Existing Senior Notes will be amended and restated in their entirety and the outstanding principal balances of
the Existing Senior Notes will be consolidated into and evidenced by the Third Amended and Restated Note. Subject to the satisfaction
of all conditions precedent set forth in Sections 5.1 and 5.2 hereof, on the Closing Date the Company shall issue to the
Purchaser, and the Purchaser shall acquire, the Third Amended and Restated Note, which note upon such issuance shall be considered issued
and outstanding hereunder in accordance with its terms.


 






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(b)
[Intentionally deleted].


 


Section
2.2 Interest on the Senior Notes.


 


(a)
Interest on the Third Amended and Restated Note. Interest on the outstanding principal balance of the Third Amended and Restated
Note shall be paid in cash and continue to accrue at a rate per annum equal to twelve percent (12.00%) on and at all times after the
date hereof until the principal amount of such Third Amended and Restated Note has been paid in full. In the event that the Company has
not repaid in cash at least fifty percent (50.00%) of the outstanding principal balance of the Third Amended and Restated Note as of
the date hereof on or before the First Anniversary, then the interest on the outstanding principal balance of the Third Amended and Restated
Note shall continue to accrue at an increased rate per annum equal to sixteen percent (16.00%) of the outstanding principal balance of
the Third Amended and Restated Note until the Note is repaid in full. For the avoidance of doubt, any accrued and unpaid interest on
the principal balance of the Existing Senior Notes which is not paid in full in cash on the Closing Date, shall on and after the Closing
Date continue to remain an obligation of the Company and shall be treated as accrued and unpaid interest on the outstanding principal
balance of the Third Amended and Restated Note, and such interest shall be due and payable in cash on each Interest Payment Date in accordance
with the terms set forth below in this Section and the terms of the Third Amended and Restated Note. All accrued and unpaid interest
on the outstanding principal balance of the Third Amended and Restated Note shall be due and payable in arrears in cash on a monthly
basis on the first day of each month in each year on and after the date hereof (with the first such monthly payment due on November 1,
2022; each such monthly payment date being referred to herein as an “Interest Payment Date”) and on the Maturity Date.


 


(b) [Intentionally
deleted]


 


(c) Default
Interest. On and at all times after the occurrence and during the continuance of any Event of Default (other than any Event of Default
resulting solely from the failure of the Company to comply with any financial covenant in Section 8.17 for any period through
and including September 30, 2021), and at all times after the Maturity Date, whether by acceleration or otherwise, interest shall accrue
on the unpaid principal amount of the Senior Notes and on any past due interest, fees or other Obligations at the Default Rate specified
in Section 3.4 and shall be payable on demand. For the avoidance of doubt (A) the imposition of the Default Rate of interest,
and (B) the above specified exception to the imposition of the Default Rate of interest in the case of any Event of Default resulting
solely from the failure of the Company to comply with any financial covenant in Section 8.17 for any period through and including
September 30, 2021, is not intended to, nor shall it be construed, as limiting any rights or remedies of the Purchaser in respect of
the occurrence of any Event of Default, including, without limitation any rights or remedies set forth in Section 9.2 or in any
other Note Document.


 


Section
2.3 Maturity of Senior Notes; Voluntary Prepayments; Mandatory Prepayment.


 


(a) The
entire unpaid principal amount of each of the Senior Notes, together with all accrued and unpaid interest on the Senior Notes, shall
be due and payable on the Maturity Date, unless sooner accelerated in accordance with the terms hereof.


 


(b) Optional
Prepayments. The Company may prepay principal on any of the Senior Notes in whole or in part from time to time, without penalty or
premium, upon five (5) Business Days’ prior notice to Purchaser, provided that (i) any partial prepayment hereunder shall
be in a principal amount of not less than $100,000 or, if greater than $100,000, then in integral multiples of $100,000, and (ii) such
prepayment is accompanied by all accrued and unpaid interest on the amount prepaid through the date of prepayment.


 






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(c) Mandatory
Prepayment. Until all principal, interest and fees due pursuant to the Note Documents are paid in full by the Company and are no
longer outstanding, Purchaser shall have a first call over fifty percent (50.00%) of the net proceeds from all Common Stock equity raises,
which shall be used to paydown any outstanding Obligations under the Note Documents. Any failure by the Company to make such mandatory
prepayment shall constitute an immediate Event of Default hereunder immediately upon receipt by the Company of notice thereof from the
Purchaser.


 


Article
3.


 




OTHER PROVISIONS RELATING TO THE SENIOR NOTES


 


Section
3.1 Making of Payments. The Company shall make each payment hereunder and under the Senior Notes not later than 1:00 p.m. (New
York, New York time) on the day when due in Dollars in same day funds to the Purchaser at its Principal Office, free and clear of any
defenses, rights of set-off, counterclaim, or withholding or deduction of taxes. All payments received after that hour shall be deemed
to have been received by the Purchaser on the next following Business Day.


 


Section
3.2 Increased Costs. In the event that any change in any applicable law, treaty or governmental regulation, or in the interpretation
or application thereof, or compliance by the Purchaser with any guideline, request or directive (whether or not having the force of law)
from any central bank or other U.S. or foreign financial, monetary or other governmental authority, shall: (a) subject the Purchaser
to any tax of any kind whatsoever with respect to this Agreement, the Senior Notes or the Existing Warrant or change the basis of taxation
of payments to the Purchaser of principal, interest, fees or any other amount payable hereunder (except for changes in the rate of tax
on the overall net income of the Purchaser); (b) impose, modify, or hold applicable any reserve, special deposit, assessment or similar
requirement against assets held by, or deposits in or for the account of, advances or loans by, or other credit extended by or committed
to be extended by any office of the Purchaser, including, without limitation, pursuant to Regulation D of the Board of Governors of the
Federal Reserve System; or (c) impose on the Purchaser any other condition with respect to this Agreement, the Senior Notes or the Existing
Warrant; and the result of any of the foregoing is to increase the cost to the Purchaser of making or maintaining the Senior Notes or
the Existing Warrant or to reduce the amount of any payment (whether of principal, interest or otherwise) in respect of the Senior Notes
or the Existing Warrant, THEN, IN ANY CASE, the Company shall pay, within five (5) Business Days following the demand of the Purchaser,
such additional amounts as will compensate the Purchaser for such additional cost or such reduction, as the case may be, so long as such
amounts have accrued on or after the date which is 270 days prior to the date of demand by the Purchaser. The Purchaser shall certify
the amount of such additional cost or reduced amount to the Company, and such certification shall be conclusive absent manifest error.


 


Section
3.3 Tax Gross Up and Indemnity. (a) Subject to clause (b) below, any payment to be made by any Obligor under this Agreement, the
Senior Notes and under any other Note Document, shall be made to the Purchaser free and clear of and without deductions or withholdings
of Taxes, unless the Obligor is required by law to make such deduction or withholding, in which case the Obligor shall, to the extent
permitted by law, increase the sum due to the Purchaser to the extent necessary to ensure that the Purchaser receives a sum equal to
the sum which it would have received if no such deduction or withholding had been made or required to be made. In addition, the Obligors
shall indemnify the Purchaser, within 10 days after demand therefor, for the full amount of any such Tax payable or paid by the Purchaser
or required to be withheld or deducted from a payment to the Purchaser and any reasonable expenses arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Government Authority. A certificate
as to the amount of such payment or liability delivered to the Obligors by the Purchaser shall be conclusive absent manifest error.


 






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(b)
On or before the Closing Date, Purchaser shall deliver to the Company (or to its legal counsel for forwarding to the Company) an IRS
Form W-9 establishing its exemption from certain federal income tax withholding. Failure to deliver such Form W-9 shall result in the
inapplicability of clause (a) above to the extent any withholding of tax is required as a result of such failure.


 


Section
3.4 Default Rate of Interest. The default rate is a rate per annum that is five percent (5.00%) in excess of the rate of interest
otherwise payable hereunder or under the Senior Notes (the “Default Rate”). Interest calculated at the Default Rate
shall be due and payable upon demand by the Purchaser. For the avoidance of doubt (A) the imposition of interest accruing at the Default
Rate, and (B) the exception to the imposition of interest at the Default Rate in the case of an Event of Default arising as a result
of noncompliance with any financial covenant in Section 8.17 hereof as provided for in Section 2.2(c), is not intended
to, nor shall it be construed, as limiting any other rights or remedies of the Purchaser in respect of the occurrence of any Event of
Default, including, without limitation any rights or remedies set forth in Section 9.2 or in any other Note Document.


 


Section
3.5 Calculation of Interest. Interest payable on the Senior Notes shall be calculated on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed. If the date for any payment of principal is extended (whether by operation of this
Agreement, any provision of law or otherwise), interest shall be payable for such extended time at the rates provided herein. Whenever
any payment hereunder or under any Senior Note shall be stated to be due on a day other than a Business Day, such payment shall be due
on the next succeeding Business Day and interest shall continue to accrue on such obligation until so paid.


 


Section
3.6 Usury. In no event shall the amount of interest due or payable on any Obligation, when aggregated with all amounts payable
by the Company under any of the Transaction Documents that are deemed or construed to be interest, exceed the maximum rate of interest
allowed by Applicable Law and, in the event any such payment is paid by the Company or received by the Purchaser, then such excess sum
shall be credited as a payment of principal, unless the Company, as applicable, shall notify the Purchaser in writing that it elects
to have such excess sum returned to it forthwith. It is the express intent of the parties hereto that the Company not pay, and the Purchaser
not receive, directly or indirectly, in any manner whatsoever, interest in excess of that which may be lawfully paid by the Company under
Applicable Law.


 


Article
4.





 


GUARANTY


 


Section
4.1 The Guaranty. Each Subsidiary Guarantor hereby, jointly and severally, guarantees to the Purchaser, as primary obligor and
not as surety, the prompt payment of the Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration,
as a mandatory cash collateralization or otherwise) strictly in accordance with the terms thereof. Each Subsidiary Guarantor hereby further
agrees that if any of the Obligations are not paid in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration,
or otherwise), the Subsidiary Guarantors will promptly pay the same, without any demand or notice whatsoever, and that in the case of
any extension of time of payment or renewal of any of the Obligations, the same will be promptly paid in full when due (whether at extended
maturity, as a mandatory prepayment, by acceleration, as a mandatory cash collateralization or otherwise) in accordance with the terms
of such extension or renewal.


 






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Section
4.2 Obligations Unconditional. The obligations of the Subsidiary Guarantors under this Article 4 are joint and several, absolute
and unconditional, irrespective of the value, genuineness, validity, regularity or enforceability of any of the Note Documents, or any
other agreement or instrument referred to therein, or any substitution, release, impairment or exchange of any other guarantee of or
security for any of the Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor (other than the payment in full of
the Obligations), it being the intent of this Section 4.2 that the obligations of the Subsidiary Guarantors hereunder shall be
absolute and unconditional under any and all circumstances. Each Subsidiary Guarantor agrees that it shall have no right of subrogation,
indemnity, reimbursement or contribution against the Company or any other guarantor for amounts paid under this Article 4 until
such time as the Purchaser has been paid in full in respect of all Obligations, and no Person or Governmental Authority shall have any
right to request any return or reimbursement of funds from the Purchaser in connection with monies received under the Note Documents.
Without limiting the generality of the foregoing, it is agreed that, to the fullest extent permitted by law, the occurrence of any one
or more of the following shall not alter or impair the liability of each Subsidiary Guarantor hereunder which shall remain absolute and
unconditional as described above:


 


(a) at
any time or from time to time, without notice to any Subsidiary Guarantor, the time for any performance of or compliance with any of
the Obligations shall be extended, or such performance or compliance shall be waived;


 


(b) any
of the acts mentioned in any of the provisions of any of the Note Documents, or any other agreement or instrument referred to in the
Note Documents shall be done or omitted;


 


(c) the
maturity of any of the Obligations shall be accelerated, or any of the Obligations shall be modified, supplemented or amended in any
respect, or any right under any of the Note Documents, or any other agreement or instrument referred to in the Note Documents shall be
waived or any other guarantee of any of the Obligations or any security therefor shall be released, impaired or exchanged in whole or
in part or otherwise dealt with; or


 


(d) any
of the Obligations shall be determined to be void or voidable (including, without limitation, for the benefit of any creditor of any
Subsidiary Guarantor) or shall be subordinated to the claims of any Person (including, without limitation, any creditor of any Subsidiary
Guarantor).


 


With
respect to its obligations hereunder, each Subsidiary Guarantor hereby expressly waives diligence, presentment, demand of payment, protest
and all notices whatsoever, and any requirement that the Purchaser exhaust any right, power or remedy or proceed against any Person under
any of the Note Documents, or any other agreement or instrument referred to in the Note Documents, or against any other Person under
any other guarantee of, or security for, any of the Obligations.


 


Section
4.3 Reinstatement. The obligations of the Subsidiary Guarantors under this Article 4 shall be automatically reinstated
if and to the extent that for any reason any payment by or on behalf of any Person in respect of the Obligations is rescinded or must
be otherwise restored by any holder of any of the Obligations, whether as a result of any proceedings in bankruptcy or reorganization
or otherwise, and each Subsidiary Guarantor agrees that it will indemnify the Purchaser on demand for all reasonable costs and expenses
(including, without limitation, the reasonable and documented out of pocket fees and expenses of counsel) incurred by the Purchaser in
connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging
that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law.


 






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Section
4.4 Certain Additional Waivers. Each Subsidiary Guarantor further agrees that it shall have no right of recourse to security for
the Obligations except, following the payment in full of all Obligations, through the exercise of rights of subrogation pursuant to Section
4.2 and through the exercise of rights of contribution pursuant to Section 4.7.


 


Section
4.5 Remedies. Each Subsidiary Guarantor agrees that, to the fullest extent permitted by law, as between the Subsidiary Guarantor,
on the one hand, and the Purchaser, on the other hand, the Obligations may be declared to be forthwith due and payable as provided in
Section 9.2 (and shall be deemed to have become automatically due and payable in the circumstances provided in said Section
9.2) for purposes of Section 4.1 notwithstanding any stay, injunction or other prohibition preventing such declaration (or
preventing the Obligations from becoming automatically due and payable) as against any other Person and that, in the event of such declaration
(or the Obligations being deemed to have become automatically due and payable), the Obligations (whether or not due and payable by any
other Person) shall forthwith become due and payable by the Subsidiary Guarantors for purposes of this Article 4.


 


Section
4.6 Guarantee of Payment; Continuing Guarantee. The guarantee in this Article 4 is a guaranty of payment and not of collection,
is a continuing guarantee, and shall apply to all Obligations whenever arising.


 


Section
4.7 Limitations on Guaranty.


 


(a) Each
Guarantor and the Purchaser hereby confirms that it is its intention that the guarantee provided for in this Article 4 not constitute
a fraudulent transfer or conveyance for purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act or any similar Federal
or state law. To effectuate the foregoing intention, each Guarantor and the Purchaser hereby irrevocably agrees that the guarantee of
the Obligations by each such Guarantor provided for in this Article 4 shall be limited to an amount as will, after giving effect
to such maximum amount and all other (contingent or otherwise) liabilities of such Guarantor that are relevant under such laws and after
giving effect to any rights to contribution provided in Section 4.7 or pursuant to any agreement providing for an equitable contribution
among such Guarantor and the other Guarantors, result in the Obligations guaranteed by such Guarantor in respect of such maximum amount
not constituting a fraudulent transfer or conveyance under Section 548 of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act
or any comparable Federal or state law.


 






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Section
4.8 Contribution. At any time a payment in respect of the Obligations guaranteed by the Guarantors under the Article 4
(the “Guaranteed Obligations”) is made under this Article 4, the right of contribution of each Guarantor against
each other Guarantor shall be determined as provided in the immediately following sentence, with the right of contribution of each Guarantor
to be revised and restated as of each date on which a payment (a “Relevant Payment”) is made on the Guaranteed Obligations
under this Article 4. At any time that a Relevant Payment is made by a Guarantor that results in the aggregate payments made by
such Guarantor in respect of the Guaranteed Obligations to and including the date of the Relevant Payment exceeding such Guarantor’s
Contribution Percentage (as defined below) of the aggregate payments made by all Guarantors in respect of the Guaranteed Obligations
to and including the date of the Relevant Payment (such excess, the “Aggregate Excess Amount”), each such Guarantor
shall have a right of contribution against each other Guarantor who has made payments in respect of the Guaranteed Obligations to and
including the date of the Relevant Payment in an aggregate amount less than such other Guarantor’s Contribution Percentage of the
aggregate payments made to and including the date of the Relevant Payment by all Guarantors in respect of the Guaranteed Obligations
(the aggregate amount of such deficit, the “Aggregate Deficit Amount”) in an amount equal to (x) a fraction the numerator
of which is the Aggregate Excess Amount of such Guarantor and the denominator of which is the Aggregate Excess Amount of all Guarantors
multiplied by (y) the Aggregate Deficit Amount of such other Guarantor. A Guarantor’s right of contribution pursuant to the preceding
sentences shall arise at the time of each computation, subject to adjustment to the time of each computation; provided that no
Guarantor may take any action to enforce such right until the Guaranteed Obligations have been paid in full in cash, it being expressly
recognized and agreed by all parties hereto that any Guarantor’s right of contribution arising pursuant to this Section 4.7
against any other Guarantor shall be expressly junior and subordinate to such other Guarantor’s obligations and liabilities
in respect of the Guaranteed Obligations and any other Obligations owing under this Agreement or the other Note Documents. As used in
this Section 4.7, (i) each Guarantor’s “Contribution Percentage” shall mean the percentage obtained by
dividing (x) the Adjusted Net Worth (as defined below) of such Guarantor by (y) the aggregate Adjusted Net Worth of all Guarantors; (ii)
the “Adjusted Net Worth” of each Guarantor shall mean the greater of (x) the Net Worth (as defined below) of such
Guarantor and (y) zero; and (iii) the “Net Worth” of each Guarantor shall mean the amount by which the fair saleable
value of such Guarantor’s assets on the date of any Relevant Payment exceeds its existing debts and other liabilities (including
contingent liabilities, but without giving effect to any Guaranteed Obligations arising under this Article 4) on such date. All
parties hereto recognize and agree that, except for any right of contribution arising pursuant to this Section 4.7, each Guarantor
who makes any payment in respect of the Guaranteed Obligations shall have no right of contribution or subrogation against any other Guarantor
in respect of such payment until all of the Obligations have been irrevocably and paid in full in cash. Each of the Guarantors recognizes
and acknowledges that the rights to contribution arising hereunder shall constitute an asset in favor of the party entitled to such contribution.
In this connection, each Guarantor has the right to waive its contribution right against any Guarantor to the extent that after giving
effect to such waiver such Guarantor would remain solvent, in the determination of the Purchaser.


 


Article
5.





 


CONDITIONS
PRECEDENT TO EFFECTIVENESS AND CLOSING


 


Section
5.1 This effectiveness of this Agreement, including the issuance by the Company of the Senior Notes and the acquisition thereof by the
Purchaser, are subject to the satisfaction (or waiver by the Purchaser in its sole discretion, which such waiver must be in writing signed
by Purchaser and specifically reference this Section 5.1) to Purchaser’s satisfaction of each of the following conditions:


 


(A) No
Injunction, etc. No action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed
before any court, governmental agency or legislative body to enjoin, restrain, or prohibit, or to obtain substantial damages in respect
of, or which is related to or arises out of, this Agreement or any other Transaction Document, or the consummation of the transactions
contemplated hereby or thereby, or which, in Purchaser’s sole discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement.


 


(B) Documentation.
Purchaser shall have received, on or prior to the Closing Date, the following, each in the form and substance satisfactory to Purchaser
and its counsel:


 


(1)
duly executed counterparts of this Agreement by each of the Obligors and the Purchaser, together with all Exhibits and Schedules hereto
updated as of the Closing Date;


 


(2)
the Third Amended and Restated Note in the form of Exhibit A hereto, duly executed, delivered and issued by the Company to the
Purchaser;


 






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(3) duly
executed counterparts of the Omnibus and Reaffirmation Agreement, by each of the Obligors and the Purchaser, together with updated Schedules
to the Existing Security Agreement and the Existing Pledge Agreement;


 


(4) duly
executed counterparts to Amendment No. 4 to Warrant Agreement by the Company and the Purchaser;


 


(5) duly
executed Warrant Agreement by the Company and the Purchaser;


 


(6) a
Closing Certificate, duly executed by the Company, certifying as to no default and certain other matters, and attaching true, correct
and complete copies of all Existing Senior Secured Debt Documents;


 


(7) [intentionally
deleted];


 


(8) [intentionally
deleted];


 


(9) UCC-1
Financing Statements for filing in each appropriate jurisdiction naming each of the Obligors as “debtor” and the Purchaser
as “secured party” covering the Collateral;


 


(10) [intentionally
deleted];


 


(11) Lien
search results with respect to each Obligor, from all appropriate jurisdictions and filing offices as requested by the Purchaser, with
results satisfactory to the Purchaser, together with executed originals of such termination statements, releases and cancellations of
mortgages required by the Purchaser in connection with the removal of any Liens (other than Permitted Liens) against the assets of the
Obligors;


 


(12) Secretary
Certificate by each Obligor, or by the Company on behalf of itself and each other Obligor, together with attached copies of the certificate
of formation, organization or jurisdictional equivalent of each Obligor and all amendments thereto, together with the bylaws, operating
agreement or equivalent document, in each case, certified by the relevant secretary or manager of such Obligor as of a recent date; and
(b) good standing certificates or jurisdictional equivalent for each Obligor, issued by the relevant Secretary of State and or equivalent
governmental authority in which such Obligor is organized, in each case as of a recent date; (c) a copy of resolutions adopted by the
governing board of each Obligor, authorizing the execution, delivery and performance of this Agreement and the other Transaction Documents
to which such Obligor is a party certified as true, complete and correct by the relevant secretary of manager of such Transaction as
of a recent date; and (d) specimen signatures of the officers or members of each Obligor executing the Agreement and the other Transaction
Documents, certified as genuine by the relevant secretary or manager of such Obligor;


 


(13) favorable
legal opinion of Haynes & Boone, LLP, counsel to the Obligors addressed to the Purchaser, covering such matters relating to the transactions
contemplated hereby as the Purchaser may reasonably request, and in form and scope reasonably satisfactory to Purchaser and its counsel;


 


(14) copies
of all consents and waivers, if any, required by any Governmental Authorities or required under any of the Company’s Material Contracts
in connection with the transactions contemplated hereby, including, without limitation, consents or waivers with respect to any agreements
prohibiting (A) the grant of any security interest on any Collateral and (B) the issuance of the Senior Notes, the incurrence of the
Obligations, any guaranty thereof by any Guarantor, and any security or pledge by the Obligors in favor of Purchaser;


 






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(15) certified
copies of (A) the audited annual consolidated financial statements of the Company for the fiscal year ending 2021, (B) the internally
prepared quarterly financial statements of the Company for the period from January 1, 2022 through and including the fiscal quarter ended
June 30, 2022, and (C) updated financial projections for the Company and its consolidated subsidiaries, each in form and substance satisfactory
to the Purchaser, copies of which are attached as Exhibit C hereto;


 


(16) a
duly executed solvency certificate from the Company as to solvency of each the Obligors, taken as a whole, after giving effect to the
transactions contemplated hereunder to occur on the Closing Date; and


 


(17) each
other Transaction Document and closing item specified as an item to be delivered on or prior to the Closing Date on the Closing Checklist
prepared by Purchaser’s counsel and furnished to the Company and its counsel shall have been executed and delivered to Purchaser
or otherwise satisfied, as applicable, in each case, as determined by the Purchaser.


 


(C) No
Material Adverse Effect. No Material Adverse Effect has occurred since December 31, 2019.


 


(D) No
Default, Etc. No Default or Event of Default shall exist;


 


(E) Representations
Accurate. All representations and warranties made by the Obligors contained herein or in any other Transaction Document shall be
true and correct in all material respects on and as of the Closing Date.


 


(F) MidCap
Related Items.


 


(i) Delivery
of Note Documents to MidCap. The Company shall have furnished to Purchaser evidence satisfactory to Purchaser that (A) Company has
delivered true, correct and complete copies of this Agreement, the Third Amended and Restated Note and all other Note Documents executed
in connection herewith to MidCap Senior Agent and (B) MidCap Senior Agent has acknowledged (by electronic email or otherwise) receipt
of same.


 


(ii) Extension
of MidCap Credit Facility. The Company shall have furnished to Purchaser evidence satisfactory to Purchaser that the stated maturity
date under the MidCap ABL Credit Agreement has been extended to September 6, 2024 or later; and


 


(iii)
 MidCap Approvals. The Purchaser shall have received (A) an amendment to the MidCap Intercreditor Agreement, and (B) evidence
that any required consent or approval of MidCap Senior Agent or the lenders under MidCap ABL Credit Agreement to the terms of this Agreement
or the related Note Documents, the Senior Notes, the guarantees by the Guarantors and the grant of Liens in favor of the Purchaser, shall
have been obtained, in each case, in form and substance satisfactory to Purchaser and its counsel;


 


(G) [Intentionally
deleted].


 






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(H) Payment
of Fees and Expenses. The Company shall have paid to the Purchaser in cash all fees and other amounts due and payable to the Purchaser,
including but not limited to the payment of all reasonable and documented out-of-pocket fees and expenses of legal counsel and other
advisors to the Purchaser in connection with the transactions contemplated by this Agreement and the other Transaction Documents and
the preparation, negotiation, execution and delivery of this Agreement and the other Transaction Documents, as well as the fees related
to any prior amendment, consent or waiver with respect to the Existing Note Purchase Agreement.


 


(I) Payment
of Accrued Interest. The Company shall have paid to the Purchaser in cash all accrued and unpaid interest on the Existing Senior
Notes that has become due for any period on or prior to the Closing Date pursuant to the terms of the Existing Senior Notes or the Existing
Note Purchase Agreement.


 


Article
6.



 


REPRESENTATIONS
AND WARRANTIES


 


Section
6.1 Representations and Warranties Generally. Each Obligor hereby represents and warrants to the Purchaser that the following
statements set forth in Section 6.2 through and including Section 6.30 are true and correct:


 


Section
6.2 Corporate Existence; Subsidiaries. Each Obligor is an entity as specified on Schedule 6.2, is duly organized, validly
existing and in good standing under the laws of the jurisdiction specified on Schedule 6.2 and no other jurisdiction, has the
same legal name as it appears in such Obligor’s Organizational Documents and an organizational identification number (if any),
in each case as specified on Schedule 6.2, and has all powers and all Permits necessary or desirable in the operation of its business
as presently conducted or as proposed to be conducted, except where the failure to have such Permits could not reasonably be expected
to have a Material Adverse Effect. Each Obligor is qualified to do business as a foreign entity in each jurisdiction in which it is required
to be so qualified, which jurisdictions as of the Closing Date are specified on Schedule 6.2, except where the failure to be so
qualified could not reasonably be expected to have a Material Adverse Effect. Except as set forth on Schedule 6.2, no Obligor
(a) has had, over the five (5) year period preceding the Closing Date, any name other than its current name, or (b) was incorporated
or organized under the laws of any jurisdiction other than its current jurisdiction of incorporation or organization.


 


Section
6.3 Organization and Governmental Authorization; No Contravention. The execution, delivery and performance by each Obligor Party
of the Transaction Documents (including, without limitation, the issuance, on the terms and subject to the conditions set forth herein,
of the Senior Notes), to which it is a party are within its powers, have been duly authorized by all necessary action pursuant to its
Organizational Documents, require no further action by or in respect of, or filing with, any Governmental Authority and, except as set
forth on Schedule 6.3, do not violate, conflict with or cause a breach or a default under (a) any law applicable to any Obligor
or any of the Organizational Documents of any Obligor, (b) any Existing Senior Secured Debt Document, or any other material indenture,
agreement or other to which any Obligor is a party or by which the Obligors or any of their respective properties is bound, except for
such violations, conflicts, breaches or defaults as could not, with respect to this clause (b), reasonably be expected to have a Material
Adverse Effect. The execution, delivery and performance of the Transaction Documents by the Obligors will not result in or require the
creation of any material Lien upon or with respect to any of the properties of any Obligor, other than Liens granted in favor of Purchaser
pursuant to the Transaction Documents.


 


Section
6.4 Binding Effect. Each of the Transaction Documents to which any Obligor is a party constitutes a valid and binding agreement
or instrument of such Obligor, enforceable against such Obligor in accordance with its respective terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency or other similar laws relating to the enforcement of creditors’ rights generally
and by general equitable principles.


 






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Section
6.5 Capitalization.


 


(a)
The authorized equity securities of each of the Obligors as of the Closing Date are as set forth on Schedule 6.5. All issued and
outstanding equity securities of each of the Obligors are duly authorized and validly issued, fully paid, nonassessable, free and clear
of all Liens other than those in favor of the Purchaser and Permitted Liens, and such equity securities were issued in compliance with
all applicable laws. With the exception of the Existing Warrant Documents, the identity of the holders of the equity securities of each
of the Obligors and the percentage of their fully-diluted ownership of the equity securities of each of the Obligors as of the Closing
Date is set forth on Schedule 6.5. The common shares reserved for issuance by the Company pursuant to any existing contractual
commitment is as set forth on Schedule 6.5. No shares of the capital stock or other equity securities of any Obligors, other than
those described above, are issued and outstanding as of the Closing Date. Except as set forth on Schedule 6.5, as of the Closing
Date there are no (i) preemptive or other outstanding rights, options, warrants, conversion rights or similar agreements or understandings
for the purchase or acquisition from any Obligor of any equity securities of any such entity, and (ii) stockholder agreements (or equivalent),
subscription agreements, voting trust agreements or any other similar agreements relating to the Equity Interests of any of the Obligors.


 


(b)
The Common Stock of the Company underlying the Existing Warrant and the Commitment Fee Shares have been duly and validly authorized and
when issued, will be duly and validly issued, fully paid and non-assessable, and such shares of Common Stock of the Company will not
be issued in violation of any preemptive or other rights of stockholders of the Company and will be free from all taxes, liens, and charges
with respect to the issuance thereof.


 


Section
6.6 Financial Information. All information delivered to the Purchaser and pertaining to the financial condition of any Obligor
fairly presents the financial position of such Obligor as of such date in conformity with GAAP (and as to unaudited financial statements,
subject to normal year-end adjustments and the absence of footnote disclosures). Since December 31, 2021, there has been no material
adverse change in the business, operations, properties, prospects or condition (financial or otherwise) of any Obligor.


 


Section
6.7 Litigation. Except as set forth on Schedule 6.7 as of the Closing Date, and except as hereafter disclosed to the Purchaser
in writing, there is no Litigation pending against, or to such the Company’s knowledge threatened against or affecting, any Obligor
or, to the Company’s knowledge, any party to any Transaction Document other than an Obligor. There is no Litigation pending in
which an adverse decision could reasonably be expected to have a Material Adverse Effect or which in any manner draws into question the
validity of any of the Transaction Documents.


 


Section
6.8 Ownership of Property. Each Obligor and each of its Subsidiaries is the lawful owner of, has good and marketable title to
and is in lawful possession of, or has valid leasehold interests in, all properties and other assets (real or personal, tangible, intangible
or mixed) purported or reported to be owned or leased (as the case may be) by such Person.


 


Section
6.9 No Default. No Event of Default, or to the Company’s knowledge, Default, has occurred and is continuing. No Obligor
is in breach or default under or with respect to any contract (including any Material Contract), agreement, lease or other instrument
to which it is a party or by which its property is bound or affected, which breach or default could reasonably be expected to have a
Material Adverse Effect.


 






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Section
6.10 Labor Matters. As of the Closing Date, there are no strikes or other labor disputes pending or, to the Company’s knowledge,
threatened against any Obligor. Hours worked and payments made to the employees of the Obligors have not been in violation of the Fair
Labor Standards Act or any other applicable law dealing with such matters. All payments due from the Obligors, or for which any claim
may be made against any of them, on account of wages and employee and retiree health and welfare insurance and other benefits have been
paid or accrued as a liability on their books, as the case may be. The consummation of the transactions contemplated by the Transaction
Documents will not give rise to a right of termination or right of renegotiation on the part of any union under any collective bargaining
agreement to which it is a party or by which it is bound.


 


Section
6.11 Regulated Entities. No Obligor is an “investment company” or a company “controlled” by an “investment
company” or a “subsidiary” of an “investment company,” all within the meaning of the Investment Company
Act of 1940.


 


Section
6.12 [Reserved].


 


Section
6.13 Compliance With Laws; Anti-Terrorism Laws.


 


(a)
Each Obligor is in compliance with the requirements of all Applicable Laws, except for such laws the noncompliance with which could not
reasonably be expected to have a Material Adverse Effect.


 


(b)
None of the Obligors and, to the knowledge of the Company, no Affiliate of any Obligor (i) is in violation of any Anti-Terrorism Law,
(ii) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts
to violate, any of the prohibitions set forth in any Anti-Terrorism Law, (iii) is a Blocked Person, or is controlled by a Blocked Person,
(iv) is acting or will act for or on behalf of a Blocked Person, (v) is associated with, or will become associated with, a Blocked Person
or (vi) is providing, or will provide, material, financial or technical support or other services to or in support of acts of terrorism
of a Blocked Person. No Obligor nor, to the knowledge of the Company, any of Affiliates of any Obligor or agents acting or benefiting
in any capacity in connection with the transactions contemplated by this Agreement, (A) 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 (B) deals in, or otherwise engages
in any transaction relating to, any property or interest in property blocked pursuant to the Executive Order, any similar executive order
or other Anti-Terrorism Law.


 


Section
6.14 Taxes. All federal, state and local tax returns, reports and statements required to be filed by or on behalf of each Obligor
have been filed with the appropriate Governmental Authorities in all jurisdictions in which such returns, reports and statements are
required to be filed and, except as set forth in Schedule 6.14 and except to the extent subject to a Permitted Contest, all Taxes
(including real property Taxes) and other charges shown to be due and payable in respect thereof have been timely paid prior to the date
on which any fine, penalty, interest, late charge or loss may be added thereto for nonpayment thereof. Except as set forth in Schedule
6.14 and except to the extent subject to a Permitted Contest, all state and local sales and use Taxes required to be paid by each
Obligor have been paid. All federal and state returns have been filed by each Obligor for all periods for which returns were due with
respect to employee income tax withholding, social security and unemployment taxes, and, except as set forth in Schedule 6.14
and except to the extent subject to a Permitted Contest, the amounts shown thereon to be due and payable have been paid in full or adequate
provisions therefor have been made.


 






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Section
6.15 Compliance with ERISA.


 


(a)
Each ERISA Plan (and the related trusts and funding agreements) complies in form and in operation with, has been administered in compliance
with, and the terms of each ERISA Plan satisfy, the applicable requirements of ERISA and the Code in all material respects. Each ERISA
Plan which is intended to be qualified under Section 401(a) of the Code is so qualified, and the United States Internal Revenue Service
has issued a favorable determination letter with respect to each such ERISA Plan which may be relied on currently. No Obligor has incurred
liability for any material excise tax under any of Sections 4971 through 5000 of the Code.


 


(b)
Except as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, each Obligor and each
Subsidiary is in compliance with the applicable provisions of ERISA and the provision of the Code relating to ERISA Plans and the regulations
and published interpretations therein. During the thirty-six (36) month period prior to the Closing Date, (i) except as set forth in
Schedule 6.15, no steps have been taken to terminate any Pension Plan, and (ii) no contribution failure has occurred with respect
to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA. No condition exists or event or transaction has
occurred with respect to any Pension Plan which could result in the incurrence by any Obligor of any material liability, fine or penalty.
No Obligor has incurred liability to the PBGC (other than for current premiums) with respect to any employee Pension Plan. All contributions
(if any) have been made on a timely basis to any Multiemployer Plan that are required to be made by any Obligor or any other member of
the Controlled Group under the terms of the plan or of any collective bargaining agreement or by applicable Law; no Obligor nor any member
of the Controlled Group has withdrawn or partially withdrawn from any Multiemployer Plan, incurred any withdrawal liability with respect
to any such plan or received notice of any claim or demand for withdrawal liability or partial withdrawal liability from any such plan,
and no condition has occurred which, if continued, could result in a withdrawal or partial withdrawal from any such plan, and no Obligor
nor any member of the Controlled Group has received any notice that any Multiemployer Plan is in reorganization, that increased contributions
may be required to avoid a reduction in plan benefits or the imposition of any excise tax, that any such plan is or has been funded at
a rate less than that required under Section 412 of the Code, that any such plan is or may be terminated, or that any such plan is or
may become insolvent.


 


Section
6.16 Consummation of Transaction Documents; Brokers. Except for fees payable to the Purchaser or as set forth on Schedule 6.16,
no broker, finder or other intermediary has brought about the obtaining, making or closing of any of the transactions contemplated by
this Agreement or any of the other Transaction Documents, and no Obligor has or will have any obligation to any Person in respect of
any finder’s or brokerage fees, commissions or other expenses in connection herewith or therewith.


 


Section
6.17 [Reserved].


 






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Section
6.18 Material Contracts. Except for the Existing Senior Secured Debt Documents and the other agreements set forth on Schedule
6.18 as of the Closing Date, there are no (a) employment agreements covering the management of any Obligor, (b) collective bargaining
agreements or other similar labor agreements covering any employees of any Obligor, (c) agreements for managerial, consulting or similar
services to which any Obligor is a party or by which it is bound, (d) agreements regarding any Obligor, its assets or operations or any
investment therein to which any of its equity holders is a party or by which it is bound, (e) real estate leases, Intellectual Property
licenses or other lease or license agreements to which any Obligor is a party, either as lessor or lessee, or as licensor or licensee
(other than licenses arising from the purchase of “off the shelf” products), (f) customer, distribution, marketing or supply
agreements to which any Obligor is a party, in each case with respect to the preceding clauses (a) through (e) requiring payment of more
than $250,000 in any year, (g) partnership agreements to which any Obligor is a general partner or joint venture agreements to which
any Obligor is a party, (h) third party billing arrangements to which any Obligor is a party, or (i) any other agreements or instruments
to which any Obligor is a party, and the breach, nonperformance or cancellation of which, or the failure of which to renew, could reasonably
be expected to have a Material Adverse Effect. Each of the Material Contracts is in full force and effect on the date hereof and the
consummation of the transactions contemplated by the Transaction Documents will not give rise to a right of termination in favor of any
party (other than any Obligor) to any Material Contract, except for such Material Contracts the noncompliance with which would not reasonably
be expected to have a Material Adverse Effect.


 


Section
6.19 [Reserved].


 


Section
6.20 Intellectual Property. Each Obligor owns, is licensed to use or otherwise has the right to use, all Intellectual Property
that is material to the condition (financial or other), business or operations of such Obligor. All Intellectual Property existing as
of the Closing Date which is issued, registered or pending with any United States or foreign Governmental Authority (including, without
limitation, any and all applications for the registration of any Intellectual Property with any such United States or foreign Governmental
Authority) and all licenses under which any Obligor is the licensee of any such registered Intellectual Property (or any such application
for the registration of Intellectual Property) owned by another Person are set forth on Schedule 6.20. Such Schedule 6.20
indicates in each case whether such registered Intellectual Property (or application therefor) is owned or licensed by such Obligor,
and in the case of any such licensed registered Intellectual Property (or application therefor), lists the name and address of the licensor
and the name and date of the agreement pursuant to which such item of Intellectual Property is licensed and whether or not such license
is an exclusive license and indicates whether there are any purported restrictions in such license on the ability to such Obligor to
grant a security interest in and/or to transfer any of its rights as a licensee under such license. Except as indicated on Schedule
6.20, the applicable Obligor is the sole and exclusive owner of the entire and unencumbered right, title and interest in and to each
such registered Intellectual Property (or application therefor) purported to be owned by such Obligor, free and clear of any Liens and/or
licenses in favor of third parties or agreements or covenants not to sue such third parties for infringement. All registered Intellectual
Property of each Obligor is duly and properly registered, filed or issued in the appropriate office and jurisdictions for such registrations,
filings or issuances, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect. No Obligor
is party to, nor bound by, any material license or other agreement with respect to which any Obligor is the licensee that prohibits or
otherwise restricts such Obligor from granting a security interest in such Obligor’s interest in such license or agreement or other
property. To the Company’s knowledge, each Obligor conducts its business without infringement or claim of infringement of any Intellectual
Property rights of others and there is no infringement or claim of infringement by others of any Intellectual Property rights of any
Obligor, which infringement or claim of infringement could reasonably be expected to have a Material Adverse Effect.


 


Section
6.21 Solvency. After giving effect to the incurrence of Debt under the Senior Notes, the consummation of the transactions under
the Transaction Documents on the Closing Date, the liabilities and obligations of the Company and each Obligor under the Transaction
Documents, taken as a whole, are Solvent.


 






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Section
6.22 Full Disclosure. None of the written information (financial or otherwise) furnished by or on behalf of any Obligor to the
Purchaser in connection with the consummation of the transactions contemplated by the Transaction Documents, contains any untrue statement
of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading in light
of the circumstances under which such statements were made. All financial projections delivered to Purchaser by the Company (or their
agents) have been prepared on the basis of the assumptions stated therein. Such projections represent the Company’s best estimate
of the future financial performance of the Company and the other Obligors, as applicable, and such assumptions are believed by the Company
to be fair and reasonable in light of current business conditions; provided, however, that the Company can give no assurance that such
projections will be attained.


 


Section
6.23 Interest Rate. The rate of interest paid under the Senior Notes and the method and manner of the calculation thereof do not
violate any usury or other law or Applicable Laws, or any of the Organizational Documents.


 


Section
6.24 Subsidiaries. Except as set forth on Schedule 6.24, the Company does not own any stock, partnership interests, limited
liability company interests or other equity securities or Subsidiaries except for Permitted Investments. As of the Closing Date, (i)
there is no Subsidiary of the Company that is not an Obligor other than the Excluded Subsidiaries, and (ii) the Company does not own
any Subsidiaries other than the Subsidiaries identified on Schedule 6.24.


 


Section
6.25 [Reserved].


 


Section
6.26 Approvals. No consent of any Person and no authorization or approval or other action by, and no notice to or filing with,
any governmental authority or regulatory body is required in connection with the borrowings hereunder or with the execution, delivery,
performance, validity or enforcement of any Transaction Document (including, without limitation, the issuance of the Senior Notes, the
Existing Warrant and the Commitment Fee Shares) which has not been obtained or made as of the date hereof. No approval of the stockholders
of the Company shall be required under Nasdaq rules and regulations or otherwise due to the execution and performance under the Transaction
Documents, including, without limitation, the issuance of any Commitment Fee Shares pursuant to the Existing Note Purchase Agreement.


 


Section
6.27 Insurance. Each Obligor has in place, with financially sound and reputable insurance companies or associations, casualty,
public liability and other insurance, including without limitation, product liability insurance, in such amounts and covering such risks
as are customarily maintained by other companies operating similar businesses in similar locations and will furnish to the Purchaser
on the Closing Date, information presented in reasonable detail as to the insurance so carried, including (i) endorsements to (A) all
“All Risk” policies naming the Purchaser as loss payee and (B) all general liability and other liability policies naming
the Purchaser as additional insured and (ii) legends providing that no cancellation, material reduction in amount or material change
in insurance coverage thereof shall be effective until at least thirty (30) days after receipt by the Purchaser of written notice thereof.


 


Section
6.28 Continuing Business of Company. There exists no actual or, to the knowledge of any Obligor, threatened in writing termination,
cancellation or material limitation of, or any material modification or change in, (i) the business relationships of any Obligor with
any customer or group of customers of such Obligor whose business individually or in the aggregate is material to the operations or financial
condition of such Obligor, (ii) the business relationships of any Obligor with any of its material suppliers or (iii) any Material Contract;
and each Obligor reasonably anticipates that after the consummation of the transactions contemplated by this Agreement, all such customers
and suppliers will continue a business relationship with such Obligor on a basis no less favorable to such Obligor than as heretofore
conducted.


 






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Section
6.29 [Reserved].


 


Section
6.30 No General Solicitation. Except as set forth in Schedule 6.16, neither the Company, nor any of its officers, employees,
agents, directors, stockholders or partners has engaged the services of a broker, investment banker or finder to contact any potential
investor nor has the Company or any of the Company’s officers, employees, agents, directors, stockholders or partners, agreed to
pay any commission, fee or other remuneration to any third party to solicit or contact any potential investor, in either case with respect
to the issuance of the Senior Notes or the Existing Warrant. The Company and its officers, directors, employees, agents, stockholders
and representatives have not published, distributed, issued, posted or otherwise used or employed, and shall not publish, distribute,
issue, post or otherwise use or employ, any form of general solicitation or general advertising, including, without limitation, via mass
publication (including via mass e-mail to persons or entities with whom the Company has no substantial and pre-existing relationship),
television, radio, the Internet or any other form of mass media (“General Solicitation”) within the meaning of Rule
502(c) under the Securities Act or any General Solicitation that constitutes a written communication within the meaning of Rule 405 under
the Securities Act in connection with the offer and sale of the Senior Notes and the Existing Warrant. The Company shall conduct the
offering of the Senior Notes, and has conducted the offering of the Existing Warrant, in a manner so as to allow the offering to qualify
for a private placement exemption from registration under the Securities Act, including Rule 506(b) thereunder.


 


Section
6.31 Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Company as of the Closing
Date that:


 


(a)
Authorization. The Purchaser has the requisite legal capacity, power and/or authority to enter into and perform under the Transaction
Agreements. The Transaction Agreements, when executed and delivered by each Purchaser, will constitute valid and legally binding obligations
of such Purchaser, enforceable in accordance with their terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally,
and as limited by laws relating to the availability of a specific performance, injunctive relief, or other equitable remedies, or (b)
to the extent the indemnification provisions contained in any Existing Warrant Documents may be limited by applicable federal or state
securities laws.


 


(b)
Purchase Entirely for Own Account. The Senior Notes to be issued and acquired by the Purchaser on the Closing Date are being acquired
for investment for the Purchaser’s own account, not as a nominee or agent, and not with a view to the resale or distribution of
any part thereof; it being understood that Purchaser may after the Closing Date assign or transfer all or any part of the Senior Notes
in accordance with the terms of this Agreement.


 


(c)
Disclosure of Information. The Purchaser further represents that it has had an opportunity to ask questions of and receive answers
from the Company regarding the terms and conditions of the offering of the Senior Notes and the business, properties, prospects and financial
condition of the Company. The foregoing, however, does not limit or modify the representations and warranties of the Company in Article
6 of this Agreement or the right of the Purchaser to rely on such representations and warranties.


 


(d)
Restricted Securities. The Purchaser understands that the Senior Notes, the Commitment Fee Shares may be characterized as “restricted
securities” under the federal securities laws, inasmuch as they are being acquired from the Company in a transaction not involving
a public offering, and that under such laws and applicable regulations they may not be resold without registration under the Securities
Act, except in certain limited circumstances. In this connection, the Purchaser represents that it is familiar with Rule 144 promulgated
under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act. The
Purchaser acknowledges that the Company shall have no obligation to register or qualify any of the Senior Notes, except as set forth
in this Agreement. The Purchaser further acknowledges that if an exemption from registration or qualification is available, it may be
conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the applicable
securities, and on requirements relating to the Company that are outside the Purchaser’s control, and which the Company is under
no obligation (except as otherwise set forth in Section 7.14 hereof) and may not be able to satisfy.


 






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(e)
Legends. The Purchaser understands that the Existing Warrant, and any securities issued in respect of or exchange for the Existing
Warrant, may bear one or all of the following legends:


 


(i)
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”


 


(ii)
Any legend set forth in or required by the other Transaction Agreements.


 


(iii)
Any legend required by the securities laws of any state to the extent such laws are applicable to the shares represented by the certificate
so legended.


 


(f)
Accredited Investor. The Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities
Act.


 


(g)
ERISA. The Purchaser is not acquiring any of the Senior Notes and warrant with the assets of any employee benefit plan, which
is subject to Title I of ERISA or any “plan” which is subject to Section 4975 of the Code.


 


Each
of the foregoing representations and warranties shall be deemed made by each Obligor on and as of the Closing Date and shall survive
the execution and delivery of this Agreement and the Closing.


 


Article
7.


 


AFFIRMATIVE
COVENANTS


 


So
long as any of the Senior Notes or any other Obligations (other than contingent obligations to the extent that no claim giving rise thereto
has been asserted) shall remain outstanding pursuant to the Note Documents, unless the Purchaser shall otherwise consent in the manner
set forth in Section 10.4, each Obligor shall, and shall cause each of its Subsidiaries to, comply with each of the following
covenants:


 






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Section
7.1 Financial Statements and Other Reports. The Company will deliver to the Purchaser: (a) as available, but no later than thirty
(30) days after the last day of each month, a company prepared “flash report” covering the Company’s and its Consolidated
Subsidiaries’ consolidated operations during the period, prepared in a manner, scope and detail satisfactory to the Purchaser,
certified by a Responsible Officer and in a form acceptable to the Purchaser, (b) as available, but no later than forty five (45) days
(unless further extended to sixty (60) days pursuant to the grant of a valid extension to the filing deadline of the related 10-Q from
the SEC) after the last day of each Fiscal Quarter of the Company, a company prepared consolidated balance sheet, cash flow and income
statement (including year-to-date results) covering the Company’s and its Consolidated Subsidiaries’ consolidated operations
during the period, prepared under GAAP, consistently applied, setting forth in comparative form the corresponding figures as at the end
of the corresponding Fiscal Quarter of the previous Fiscal Year and the projected figures for such period based upon the projections
required hereunder, all in reasonable detail, certified by a Responsible Officer and in a form acceptable to the Purchaser; (c) together
with the flash reports described in (a) above, evidence of payment and satisfaction of all payroll, withholding and similar taxes due
and owing by all Obligors with respect to the payroll period(s) occurring during such month, subject to Section 7.2; (d) as soon as available,
but no later than one hundred five (105) days after the last day of the Company’s Fiscal Year, audited consolidated financial statements
prepared under GAAP, consistently applied, together with an unqualified opinion on the financial statements from an independent certified
public accounting firm acceptable to the Purchaser in its reasonable discretion; (e) within five (5) days of delivery or filing thereof,
copies of all statements, reports (other than borrowing base reports delivered pursuant thereto) and notices made available to the Company’s
security holders or to any agents or lenders under any Existing Senior Secured Debt Documents and copies of all reports and other filings
made by the Company with any stock exchange on which any securities of any Obligor are traded and/or the SEC; (f) a prompt written report
of any legal actions pending or threatened against any Obligor or any of its Subsidiaries that could reasonably be expected to result
in damages or costs to any Obligor or any of its Subsidiaries of One Hundred Fifty Thousand Dollars ($150,000) or more; (g) prompt written
notice of an event that materially and adversely affects the value of any Intellectual Property; (h) budgets, sales projections, operating
plans and other financial information and information, reports or statements regarding the Obligors, their business and the Collateral
(including, without limitation, copies of any borrowing base reports delivered pursuant to any of the Existing Senior Secured Debt Documents)
as the Purchaser may from time to time reasonably request. The Company will, within thirty (30) days after the last day of each month,
deliver to the Purchaser (i) with the first two monthly flash reports described in clause (a) above and (ii) with quarterly financial
statements described in clause (b) above, a duly completed Compliance Certificate signed by a Responsible Officer setting forth calculations
showing compliance with the financial covenants set forth in this Agreement; (i) promptly upon receipt thereof, copies of all financial
statements of, and all reports and management letters submitted by, independent public accountants to any of the Obligors in connection
with each annual, interim, or special audit of any Obligor’s financial statements; (j) within sixty (60) days following the end
of the Company’s Fiscal Year, the Company shall deliver to the Purchaser the annual budget for both the Company and any of its
Subsidiaries, including forecasts of the income statement, the balance sheet and a cash flow statement for the immediately succeeding
year on a quarterly basis and thereafter, shall promptly deliver any amendment thereto; (k) promptly upon their becoming available, the
Company shall deliver to the Purchaser copies of all Material Contracts or material amendments thereto entered into after the Closing
Date.


 






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Section
7.2 Payment and Performance of Obligations. Each Obligor (a) will pay and discharge, and cause each Subsidiary to pay and discharge,
on a timely basis as and when due, all of their respective obligations and liabilities, except for such obligations and/or liabilities
(i) that may be the subject of a Permitted Contest, and (ii) the nonpayment or nondischarge of which could not reasonably be expected
to have a Material Adverse Effect or result in a Lien against any Collateral, except for Permitted Liens, (b) without limiting anything
contained in the foregoing clause (a), pay all amounts due and owing in respect of Taxes (including without limitation, payroll and withholdings
tax liabilities) on a timely basis as and when due, and in any case prior to the date on which any fine, penalty, interest, late charge
or loss may be added thereto for nonpayment thereof, other than in connection with any tax payment plan with the applicable Governmental
Authority on terms consistent with past practices, provided that Purchaser has been furnished with a copy of such payment plan (or if
such payment plan is not in writing, the Company shall either (i) provide the Purchaser with a certificate of a Responsible Officer setting
forth the material terms and conditions of such payment plan or (ii) for any such plans existing on the Closing Date, disclose the material
terms and conditions of such plan on Schedule 6.14), (c) will maintain, and cause each Subsidiary to maintain, in accordance with
GAAP, appropriate reserves for the accrual of all of their respective obligations and liabilities, and (d) will not breach or permit
any Subsidiary to breach, or permit to exist any default under, the terms of any lease, commitment, contract, instrument or obligation
to which it is a party, or by which its properties or assets are bound, except for such breaches or defaults which could not reasonably
be expected to have a Material Adverse Effect.


 


Section
7.3 Maintenance of Existence. Each Obligor will preserve, renew and keep in full force and effect and in good standing, and will
cause each Subsidiary to preserve, renew and keep in full force and effect and in good standing, their respective existence and their
respective rights, privileges and franchises necessary or desirable in the normal conduct of business.


 


Section
7.4 Maintenance of Property; Insurance.


 


(a) Each
Obligor will keep, and will cause each Subsidiary to keep, all property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted. If all or any part of the Collateral useful or necessary in its business becomes damaged
or destroyed, each Obligor will, and will cause each Subsidiary to, promptly and completely repair and/or restore the affected Collateral
in a good and workmanlike manner.


 


(b) Upon
completion of any Permitted Contest, Obligors shall, and will cause each Subsidiary to, promptly pay the amount due, if any, and deliver
to the Purchaser proof of the completion of the contest and payment of the amount due, if any, following which the Purchaser shall return
the security, if any, deposited with the Purchaser pursuant to the definition of Permitted Contest.


 


(c) Each
Obligor will maintain with financially sound and reputable insurance companies or associations casualty, public liability and other insurance
in such amounts and covering such risks as are customarily maintained by other companies operating similar businesses in similar locations,
and, at the written request of the Purchaser, provide evidence of compliance with this covenant to the Purchaser in the form of certificates
of insurance naming the Purchaser as an additional insured, assignee and lender loss payee, as applicable, on each insurance policy required
to be maintained pursuant to this Section 7.4 pursuant to endorsements in form and substance reasonably acceptable to the Purchaser.


 


Section
7.5 Compliance with Laws and Material Contracts. Each Obligor will comply, and cause each Subsidiary to comply, with the requirements
of all Applicable Laws and Material Contracts, except to the extent that failure to so comply could not reasonably be expected to (a)
have a Material Adverse Effect, or (b) result in any Lien upon a material portion of the assets of any such Obligor in favor of any Governmental
Authority.


 






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Section
7.6 Inspection of Property, Books and Records. Each Obligor will keep, and will cause each Subsidiary to keep, proper books of
record substantially in accordance with GAAP in which full, true and correct entries shall be made of all dealings and transactions in
relation to its business and activities; and will permit, and will cause each Subsidiary to permit, at the sole cost of the applicable
Obligor or any applicable Subsidiary, representatives of the Purchaser to visit and inspect any of their respective properties, to examine
and make abstracts or copies from any of their respective books and records, to conduct a collateral audit and analysis of their respective
operations and the Collateral, to verify the amount and age of the accounts, the identity and credit of the respective account debtors,
to review the billing practices of Obligors and to discuss their respective affairs, finances and accounts with their respective officers,
employees and independent public accountants as often as may reasonably be desired. Notwithstanding the foregoing, in the absence of
a Default or an Event of Default, the Purchaser exercising any rights pursuant to this Section 7.6 shall give the applicable Obligor
or any applicable Subsidiary commercially reasonable prior notice of such exercise and (ii) Obligors shall only be required to reimburse
the costs of the Purchaser for one such audit, inspection, verification or examination per Fiscal Year. No notice shall be required during
the existence and continuance of any Default or Event of Default or any time during which the Purchaser reasonably believes a Default
or an Event of Default exists.


 


Section
7.7 [Intentionally deleted].


 


Section
7.8 [Reserved].


 


Section
7.9 Notices of Litigation and Defaults. Obligors will give prompt written notice to the Purchaser (a) of any litigation or governmental
proceedings pending or threatened (in writing) against any Obligor which would reasonably be expected to have a Material Adverse Effect
or which in any manner calls into question the validity or enforceability of any Transaction Document, (b) upon any Obligor becoming
aware of the existence of any Default or Event of Default together with a certificate of a Responsible Officer of the Company setting
forth the details thereof and the action which the Company is taking or proposes to take with respect thereto, (c) if any Obligor is
in breach or default under or with respect to any Material Contract, or if any Obligor is in breach or default under or with respect
to any other contract, agreement, lease or other instrument to which it is a party or by which its property is bound or affected, which
breach or default in each case or in the aggregate could reasonably be expected to have a Material Adverse Effect, (d) of any strikes
or other labor disputes pending or, to the Company’s knowledge, threatened against any Obligor, (e) if there is any infringement
or claim of infringement by any other Person with respect to any Intellectual Property rights of any Obligor that could reasonably be
expected to have a Material Adverse Effect, or if there is any claim by any other Person that any Obligor in the conduct of its business
is infringing on the Intellectual Property Rights of others, and (f) of all returns, recoveries, disputes and claims that involve more
than $250,000. Obligors represent and warrant that Schedule 7.9 sets forth a complete list of all matters existing as of the Closing
Date for which notice could be required under this Section and all litigation or governmental proceedings pending or threatened (in writing)
against any Obligor as of the Closing Date.


 


Section
7.10 Further Assurances; Additional Guarantors.


 


(a) Each
Obligor will, and will cause each Subsidiary to, at its own cost and expense, promptly and duly take, execute, acknowledge and deliver
all such further acts, documents and assurances as may from time to time be necessary or as the Purchaser may from time to time reasonably
request in order to carry out the intent and purposes of the Transaction Documents and the transactions contemplated thereby, including
all such actions to establish, create, preserve, protect and perfect a first priority Lien (subject only to Permitted Liens) in favor
of the Purchaser on the Collateral (including Collateral acquired after the date hereof).


 


(b) Upon
receipt of an affidavit of an authorized representative of the Purchaser as to the loss, theft, destruction or mutilation of any Senior
Note or any other Transaction Document which is not of public record, and, in the case of any such mutilation, upon surrender and cancellation
of such Senior Note or other applicable Transaction Document, Obligors will issue, in lieu thereof, a replacement Senior Note or other
applicable Transaction Document, dated the date of such lost, stolen, destroyed or mutilated Senior Note or other Transaction Document
in the same principal amount thereof and otherwise of like tenor.


 






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(c) Within
ten (10) Business days (or such later date as the Purchaser may agree in its sole discretion) after any Person becomes a direct or indirect
Domestic Subsidiary of the Company or any other Obligor (other than any the Excluded Subsidiaries), whether by formation, acquisition
or otherwise, the Company shall cause such Person to (i) become a Subsidiary Guarantor and to grant a lien on its assets by becoming
a “Debtor” party to the Security Agreement and a “Pledgor” party to the Pledge Agreement, by executing and delivering
to the Purchaser a Joinder Agreement in form and substance satisfactory to the Purchaser, (ii) the Company shall, and shall cause the
applicable direct parent company of such new Domestic Subsidiary, to execute and deliver to the Purchaser a Joinder Agreement to such
new Domestic Subsidiary as a “Pledged Entity” under the Pledge Agreement and pledge all of the equity interests of such new
Domestic Subsidiary as security for the Obligations, in form and substance satisfactory to the Purchaser, and (iii) deliver to the Purchaser
such charter documents, resolutions and favorable opinions of counsel reasonably requested by the Purchaser with respect to such new
Domestic Subsidiary (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation
referred to in the immediately preceding clauses (i) through (ii)), all in form, content and scope reasonably satisfactory to Purchaser.


 


Section
7.11 [Reserved]


 


Section
7.12 Maintenance of Management. The Company will cause its business to be continuously managed by its present executive chairman,
chief executive officer and chief financial officer or such other individuals serving in such capacities as shall be appointed by the
board of directors of the Company. The Company will notify the Purchaser promptly in writing of any change in its board of directors
or executive officers.


 


Section
7.13 Certain Post-Closing Items.


 


(a)
As soon as possible, but in any case within 30 days after the Closing Date, or such longer period as agreed to by the Purchaser, the
Company shall deliver or cause to be delivered to Purchaser fully executed Deposit Account Control Agreements, in form and substance
satisfactory to Purchaser, with the bank with which each of Headway Workforce, Headway HR, Headway Payroll and Headway Employer maintains
account(s) as required by Section 8.14.


 


(b)
Within 7 days of delivery of an invoice from Kilpatrick Townsend & Stockton LLP, the Company shall pay all legal fees due to Kilpatrick
Townsend & Stockton LLP.


 


(c)
As soon as possible, but in any case within 30 days after receipt of lien search results, the Company shall terminate all unpermitted
liens, if any, with respect to the Company, Faro, Monroe, Lighthouse and Key Resources.


 






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Section
7.14 Registration Rights; Indemnification.


 


(a)
Registration Rights. The Company hereby represents, warrants and covenants that all of the Commitment Fee Shares previously issued
have been included in an existing Form S-3 Shelf Registration Statement with a resale prospectus through an amendment to such registration
statement (or through a new resale registration statement), which has previously been filed by the Company with the SEC at the Company’s
sole expense. The Company further covenants and agrees that the (i) 100,000 Commitment Fee Shares to be issued and delivered to Purchaser
on the Closing Date pursuant to this Agreement and (ii) 24,332 shares to be issued on the Closing Date pursuant to the Warrant Agreement
will be included in a new resale registration statement, which shall be filed by the Company with the SEC at the Company’s sole
expense not later than sixty (60) days after the Closing Date. The Company shall use its reasonable best efforts to cause each such amendment
to be declared effective by the SEC at the earliest practicable time and to remain effective for the period of the distribution contemplated
thereby. The Company shall also (i) prepare and file with the SEC such amendments and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary to keep such registration statement effective for the period of the distribution
and to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration
statement in accordance with the Purchaser’s intended method of disposition, (ii) use its commercially reasonable efforts to register
or qualify the securities covered by such registration statement under the securities or blue sky laws of such jurisdictions as the sellers
of securities or, in the case of an underwritten public offering, the managing underwriter, may reasonably request; and (iii) notify
each seller when the prospectus or any prospectus supplement or post-effective amendment has been filed, and, with respect to such registration
statement or any post-effective amendment, when the same has become effective, of any request by the SEC for amendments or supplements
to such registration statement or to amend or to supplement such prospectus or for additional information, of the issuance by the SEC
of any stop order suspending the effectiveness of such registration statement or the initiation of any proceedings for that purpose.


 


(b)
Indemnification. To the extent permitted by law, the Company shall indemnify and hold harmless the Purchaser, and any of its members,
officers, managers, legal counsel and accountants, underwriter (as defined in the Securities Act), against any expenses, losses, claims,
damages or liabilities (joint or several) to which they may become subject under the Securities Act or other applicable federal or state
law, insofar as such expenses, losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon
any of the following statements, omissions or violations (each a “Violation”):


 


(i)
any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or supplements thereto;


 


(ii)
the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements
therein not misleading;


 


(iii)
any violation or alleged violation by the Company of the Securities Act, any federal or state securities law or any rule or regulation
promulgated under the Securities Act or any federal or state securities law in connection with the offering covered by such registration
statement;


 






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and
the Company shall reimburse the Purchaser and/or its applicable members, officers, managers, underwriter or controlling person for any
legal or other expenses reasonably incurred by it, as incurred, in connection with investigating or defending any such loss, claim, damage
liability or action; provided, however, that the Company shall not be liable in any such case to the extent that any such expense, loss,
claim, damage or liability arises out of or is based upon an untrue statement or omission made in any such registration statement in
reliance upon and in conformity with written information furnished to the Company by the Purchaser expressly for use in preparation thereof.
Lender agrees to promptly notify the Company in writing of any such claim or suit that the pleading, demand letter, or other notice is
served upon Lender; and agrees to cooperate in a reasonable manner with the Company and at the Company’s expense, with respect
to the defense and disposition of such claim. The Company shall have control of the defense or settlement of any such claim; provided,
however, that the Company shall not enter into any settlement that obligates the Purchaser and/or its applicable members, officers, managers,
underwriter or controlling person to take any action or incur any expense without such person’s prior written consent, and further
provided that the Purchaser and/or its applicable members, officers, managers, underwriter or controlling person shall have the right
to be represented by independent counsel of their own choosing, at their own expense, in connection with such claim or suit. If the Company
fails to defend such suit, then the Purchaser and/or its applicable members, officers, managers, underwriter or controlling person, through
counsel of their own choice, shall, at the expense of the Company, have the right to conduct the defense of such claim; provided however
that the Purchaser and/or its applicable members, officers, managers, underwriter or controlling person shall not enter into any settlement
that obligates the Company to take any action or incur any expense without the Company’s prior written consent.


 


Section
7.15 Fees. [Intentionally deleted].


 


Section
7.16 Segregated Account Covenant. On or prior to the Closing Date, the Company shall have established and shall maintain at all
times thereafter a deposit account with a bank reasonably acceptable to the Purchaser (together with any replacement deposit account
or additional deposit account of the Company approved in writing by the Purchaser, referred to herein the “Segregated Account”),
which account shall not at any time be subject to any deposit account control agreement in favor of any Person (other than the Purchaser)
and shall not be an account designated as an ABL Priority Deposit Account (as such term is defined in the MidCap Intercreditor Agreement
or otherwise subject to a deposit account control agreement in favor of MidCap Senior Agent or any other Person (other than the Purchaser)).
The Company and the applicable depository bank shall have entered into the entry into a Deposit Account Control Agreement in favor of
the Purchaser with respect to the Segregated Account, and such Deposit Account Control Agreement shall remain in effect at all times
after the date of execution and delivery by all parties thereto. On and at all times after the establishment of the Segregated Account
as required above, the Company will, and will cause each Subsidiary to, deposit into the Segregated Account (i) any and all dividends
or distributions made by any Subsidiary to the Company or to any other Obligor on or after the date such Segregated Account is established,
(ii) any and all payments of principal or interest under of the Longbridge Intercompany Note received by the Company on or after the
date such Segregated Account is established, (iii) any and all cash proceeds received by the Company or any Subsidiary from the sale
or issuance of any Equity Interests on or after the date such Segregated Account is established, (iv) any and all cash proceeds received
by the Company or any other Obligor from the sale of any assets or equity interests of the Company or any Subsidiary on or after the
date such Segregated Account is established, other than ABL Priority Subsidiary Asset Sale Proceeds (as such term is defined in the MidCap
Intercreditor Agreement), it being understood that the items described in the immediately preceding clauses (i) through (iv) inclusive
shall not at any time on or after the date hereof be (A) deposited into any deposit account which is subject to a deposit account control
agreement with MidCap Senior Agent or (B) otherwise commingled with any proceeds or other collateral in which MidCap has a first priority
Lien in pursuant to the terms of the MidCap Intercreditor Agreement. The Company will promptly upon request furnish Purchaser with copies
of all bank statements with respect to the Segregated Account. The Company shall have the right to make withdrawals from the Segregated
Account from time to time to pay expenses in the Ordinary Course of Business, to make payments of principal and interest due under the
MidCap ABL Credit Agreement and otherwise to use such monies for lawful purposes not otherwise prohibited under this Agreement, in each
case, so long as no Event of Default has occurred and is continuing or would result therefrom. This Section 7.16(b) is in addition
to and not in limitation of Section 8.14. Upon the establishment of the Segregated Account (or any additional Segregated Account
which has been approved by the Purchaser in writing), the Parent shall promptly (and in any event within two (2) Business Days thereafter)
deliver notice thereof to the MidCap Senior Agent in accordance with the terms of the MidCap Intercreditor Agreement, together with a
supplement to Schedule 2 to the MidCap Intercreditor Agreement designating and/or adding such Segregated Account as a “Term Debt
Priority Deposit Account” (as such term is defined in the MidCap Intercreditor Agreement), in a form and substance reasonably satisfactory
to the Purchaser; it being understood that the Company shall not deliver any such notice to MidCap Senior Agent of the designation of
any Segregated Account or any supplement to Schedule 2 to the MidCap Intercreditor Agreement adding or changing any Segregated Account,
in each case without the prior written consent of the Purchaser.


 






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Upon
the exercise by the Purchaser at any time of any purchase option under the MidCap Intercreditor Agreement, the Company shall promptly
(and in any event within five (5) Business Days following demand therefore by the Purchaser) reimburse the Purchaser in full for any
prepayment fee or premium paid by the Purchaser to the MidCap Senior Agent in connection with the exercise of any such purchase option.
Nothing in the immediately preceding sentence is intended to obligate, nor shall it be construed as obligating, the Purchaser at any
time and under any circumstances to exercise such purchase option, it being understood that any decision by the Purchaser to exercise
such purchase option shall be made by the Purchaser in its sole and absolute discretion.


 


Article
8.





 


NEGATIVE
COVENANTS AND FINANCIAL COVeNANTS


 


For
so long as any of the Senior Notes or any other Obligations shall remain outstanding (other than contingent obligations to the extent
that no claim giving rise thereto has been asserted), unless the Purchaser shall otherwise consent in the manner set forth in Section
10.4, each Obligor agrees to comply with the following covenants:


 


Section
8.1 Debt; Contingent Obligations. No Obligor will, or will permit any Subsidiary to, directly or indirectly, create, incur, assume,
guarantee or otherwise become or remain directly or indirectly liable with respect to, any Debt, except for Permitted Debt. No Obligor
will, or will permit any Subsidiary to, directly or indirectly, create, assume, incur or suffer to exist any Contingent Obligations,
except for Permitted Contingent Obligations.


 


Section
8.2 Liens. No Obligor will, or will permit any Subsidiary to, directly or indirectly, create, assume or suffer to exist any Lien
on any asset now owned or hereafter acquired by it, except for Permitted Liens.


 


Section
8.3 Restricted Distributions. No Obligor will, or will permit any Subsidiary to, directly or indirectly, declare, order, pay,
make or set apart any sum for any Restricted Distribution, except, provided there exists no Default or Event of Default, for Permitted
Distributions.


 


Section
8.4 Restrictive Agreements. No Obligor will, or will permit any Subsidiary to, directly or indirectly (a) enter into or assume
any agreement (other than (w) the Transaction Documents (x) any agreements for purchase money debt permitted under clause (c) of the
definition of Permitted Debt and (y) the Existing Senior Secured Debt Documents as in effect on the date hereof) prohibiting the creation
or assumption of any Lien upon its properties or assets, whether now owned or hereafter acquired, or (b) create or otherwise cause or
suffer to exist or become effective any consensual encumbrance or restriction of any kind (except as provided by the Existing Senior
Secured Debt Documents) on the ability of any Subsidiary to: (i) pay or make Restricted Distributions to any Obligor or any Subsidiary;
(ii) pay any Debt owed to any Obligor or any Subsidiary (other than to another Excluded Subsidiary); (iii) make loans or advances to
any Obligor or any Subsidiary; or (iv) transfer any of its property or assets to any Obligor or any Subsidiary.


 






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Section
8.5 Payments and Modifications of Subordinated Debt. No Obligor will, or will permit any Subsidiary to, directly or indirectly
(a) unless all amounts due and payable to Purchaser are paid in full, declare, pay, make or set aside any amount for payment in respect
of any Subordinated Debt, except for (i) payments made in full compliance with and expressly permitted under a subordination agreement
in form and substance satisfactory to Purchaser (other than by a Subordinated Debt Permitted Refinancing) and (ii) with the prior written
consent of Purchaser, (b) amend or otherwise modify the terms of any Subordinated Debt, except for amendments or modifications made in
full compliance with the Subordination Agreement, (c) declare, pay, make or set aside any amount for payment in respect of any Debt hereinafter
incurred that, by its terms, or by separate agreement, is subordinated to the Obligations, except for payments made in full compliance
with and expressly permitted under the subordination provisions applicable thereto, or (d) amend or otherwise modify the terms of any
such Debt if the effect of such amendment or modification is to (i) increase the interest rate or fees on, or change the manner or timing
of payment of, such Debt, (ii) accelerate or shorten the dates upon which payments of principal or interest are due on, or the principal
amount of, such Debt, (iii) change in a manner adverse to any Obligor or the Purchaser any event of default or add or make more restrictive
any covenant with respect to such Debt, (iv) change the prepayment provisions of such Debt or any of the defined terms related thereto,
(v) change the subordination provisions thereof (or the subordination terms of any guaranty thereof), or (vi) change or amend any other
term if such change or amendment would materially increase the obligations of the obligor or confer additional material rights on the
holder of such Debt in a manner adverse to any of the Obligors or the Purchasers. The Obligors shall, prior to entering into any such
amendment or modification, deliver to the Purchaser reasonably in advance of the execution thereof, any final or execution form copy
thereof. For the avoidance of doubt, nothing contained in this Section is intended to restrict the Company from making payments of principal
and interest with respect to any Permitted ABL Senior Debt in accordance with the terms of the Existing Senior Secured Debt Documents
and the Midcap Intercreditor Agreement; it being understood that Permitted ABL Senior Debt is not Subordinated Debt.


 


Section
8.6 Consolidations, Mergers and Sales of Assets; Change in Control. No Obligor will, or will permit any Subsidiary to, directly
or indirectly (a) consolidate or merge or amalgamate with or into any other Person (provided that (i) any Subsidiary may merge into the
Company so long as the Company is the surviving entity, (ii) any Domestic Subsidiary may merge with and into any Obligor, provided that
in the case of any merger with the Company, the Company is the surviving entity, and (iii) any Foreign Subsidiary may merge with and
into any other Foreign Subsidiary of the Company or any Obligor, provided that in the case of a merger of a Foreign Subsidiary with and
into any Obligor, such Obligor is the surviving entity, or (b) consummate any Asset Dispositions other than Permitted Asset Dispositions.
No Obligor will suffer or permit to occur any Change in Control with respect to itself, any Subsidiary or any Guarantor, except any Change
of Control with respect to a Subsidiary resulting from a merger or consolidation of the type expressly permitted under clauses (i) through
(ii) of the proviso above in this Section 8.6.


 


Section
8.7 Purchase of Assets, Investments. No Obligor will, or will permit any Subsidiary to, directly or indirectly (a) acquire or
enter into any agreement to acquire any assets (other than in the Ordinary Course of Business), or acquire all or substantially all of
the assets or Equity Interests of any Person (whether by merger, asset purchase, stock purchase or otherwise), except as permitted under
clause (h) or clause (i) of the definition of Permitted Investments; (b) engage or enter into any agreement to engage in any joint venture
or partnership with any other Person; or (c) acquire or own or enter into any agreement to acquire or own any Investment in any Person
other than Permitted Investments.


 






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Section
8.8 Transactions with Affiliates. Except as otherwise disclosed on Schedule 8.8 or as otherwise expressly permitted pursuant
to this Agreement with respect to transactions between any Subsidiary and any other Subsidiary or the Company, no Obligor will, or will
permit any Subsidiary to, directly or indirectly, enter into or permit to exist any transaction (including the purchase, sale, lease
or exchange of any property or the rendering of any service) with any Affiliate of any Obligor except, provided there exists no Default
or Event of Default, for transactions that are disclosed to the Purchaser in advance of being entered into and which contain terms that
are no less favorable to the applicable Obligor or any Subsidiary, as the case may be, than those which might be obtained from a third
party not an Affiliate of any Obligor (collectively, “Permitted Intercompany Transactions”). Notwithstanding anything
to the contrary herein or in any Schedule, the Company and the Obligors may not pay any management fees to any Subsidiary or other Person
that is not an Obligor.


 


Section
8.9 Modification of Organizational Documents. No Obligor will, or will permit any Subsidiary to, directly or indirectly, amend
or otherwise modify any Organizational Documents of such Person, except for Permitted Modifications. The Company shall not at any time
amend, restate, supplement or otherwise modify the Certificate of Designation without the prior written consent of the Purchaser.


 


Section
8.10 Modification of Certain Agreements. (a) No Obligor will, or will permit any Subsidiary to, directly or indirectly, amend
or otherwise modify any Existing Senior Secured Debt Documents (other than the MidCap ABL Credit Agreement) or any other Material Contract,
which amendment or modification in any case: (i) is contrary to the terms of this Agreement or any other Transaction Document; (ii) could
reasonably be expected to be materially adverse to the rights, interests or privileges of the Purchaser or their ability to enforce the
same; (iii) results in the imposition or expansion in any material respect of any obligation of or restriction or burden on any Obligor
or any Subsidiary; or (iv) reduces in any material respect any rights or benefits of any Obligor or any Subsidiaries (it being understood
and agreed that any such determination shall be in the discretion of the Purchaser). Each Obligor shall, prior to entering into any amendment
or other modification of any of the foregoing documents, deliver to the Purchaser reasonably in advance of the execution thereof, any
final or execution form copy of amendments or other modifications to such documents, and such Obligor agrees not to take, nor permit
any of its Subsidiaries to take, any such action with respect to any such documents. No Obligor will, or will permit any Subsidiary to,
(i) forgive any Debt evidenced by, or extend, postpone, defer or waive any required payments to be made under the Longbridge Intercompany
Note as in effect on the Original Closing Date, (ii) amend or otherwise modify any of the terms of the Longbridge Intercompany Note as
in effect on the Original Closing Date, (iii) sell, assign, transfer or otherwise dispose of the Longbridge Intercompany Note or any
rights, duties or obligations thereunder, (iv) or pledge or grant a Lien upon the Longbridge Intercompany Note or any rights to payment
thereunder (other than Liens in favor of (x) Purchaser or (y) MidCap Senior Agent so long as any such Lien in favor of MidCap Senior
Agent is subject to the MidCap Intercreditor Agreement) in each case under clauses (i) through (iv) hereof, without the prior written
consent of the Purchaser.


 


(b) No
Obligor will, or will permit any Subsidiary to, directly or indirectly, amend or otherwise modify any MidCap ABL Credit Agreement or
any related document thereto except for amendments or modifications made in full compliance of the MidCap Intercreditor Agreement.


 


Section
8.11 Conduct of Business. No Obligor will, or will permit any Subsidiary to, directly or indirectly, engage in any line of business
other than those businesses engaged in on the Closing Date and described on Schedule 8.11 and businesses reasonably related thereto.


 






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Section
8.12 Lease Payments. No Obligor will, or will permit any Subsidiary to, directly or indirectly, incur or assume (whether pursuant
to a Guarantee or otherwise) any liability for rental payments except in the Ordinary Course of Business.


 


Section
8.13 Limitation on Sale and Leaseback Transactions. No Obligor will, or will permit any Subsidiary to, directly or indirectly,
enter into any arrangement with any Person whereby, in a substantially contemporaneous transaction, any Obligor or any Subsidiaries sells
or transfers all or substantially all of its right, title and interest in an asset and, in connection therewith, acquires or leases back
the right to use such asset.


 


Section
8.14 Deposit Accounts and Securities Accounts; Payroll and Benefits Accounts. No Obligor will, or will permit any Subsidiary (except
in the case of any Foreign Subsidiary in the Ordinary Course of Business) to, directly or indirectly, establish any new deposit account
or securities account without prior written notice to the Purchaser, and, subject to the terms of the MidCap Intercreditor Agreement,
unless the Purchaser, such Obligor or such Subsidiary and the bank, financial institution or securities intermediary at which the account
is to be opened enter into a Deposit Account Control Agreement or Securities Account Control Agreement concurrently with the establishment
of such deposit account or securities account. Each Obligor represents and warrants that Schedule 8.14 lists all of the deposit
accounts and securities accounts of each Obligor as of the Closing Date. The provisions of this Section requiring Deposit Account Control
Agreements shall not apply to any Excluded Accounts; provided, however, that at all times that any Obligations remain outstanding,
the Obligors shall maintain one or more separate deposit accounts to hold any and all amounts to be used for payroll, payroll taxes and
other employee wage and benefit payments, and shall not commingle any monies allocated for such purposes with funds in any other deposit
account.


 


Section
8.15 Compliance with Anti-Terrorism Laws. No Obligor will, or will permit any Subsidiary to, directly or indirectly, knowingly
enter into any Material Contracts with any Blocked Person or any Person listed on the OFAC Lists. Each Obligor shall immediately notify
the Purchaser if such Obligor has knowledge that any Obligor or any of their respective Affiliates or agents acting or benefiting in
any capacity in connection with the transactions contemplated by this Agreement is or becomes a Blocked Person 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. No Obligor will, or will permit any Subsidiary 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, 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.


 


Section
8.16 Sale or Discount of Receivables. No Obligor shall sell with recourse or discount or otherwise sell for less than the face
value thereof, any of its notes or accounts receivable, except for up to $100,000 in the aggregate in discounts in any Fiscal Year of
the Company.


 


Section
8.17 Financial Covenants. Each of the Obligors shall at all times during the term of this Agreement and for so long as any of
the Senior Notes or any other Obligations shall remain outstanding (other than contingent obligations to the extent that no claim giving
rise thereto has been asserted), comply with the following financial covenants and ratios as at the dates and for the fiscal periods
indicated below:


 






    	46



    	 



    

 


(a)
[Reserved].


 


(b)
Minimum Adjusted EBITDA. Commencing with the Fiscal Month ending September 30, 2022 and until such time as all Obligations are
paid, satisfied and discharged in full, the Obligors shall, as of the end of each Fiscal Month, have Adjusted EBITDA, calculated on a
trailing three-month basis, of not less than the Minimum Adjusted EBITDA for the corresponding Fiscal Month end as set forth in the table
below:


 


	Fiscal Month
    End Test Date	 	Minimum
    Adjusted EBITDA	 
	 	 	 	 
	September 30, 2022	 	$	3,027,000	 
	October 31, 2022	 	$	3,838,000	 
	November 30, 2022	 	$	3,387,000	 
	December 31, 2022	 	$	3,821,000	 
	January 31, 2023	 	$	4,221,000	 
	February 28, 2023	 	$	4,621,000	 
	March 31, 2023	 	$	5,021,000	 
	April 30, 2023	 	$	5,521,000	 
	May 31, 2023 through Maturity Date	 	$	5,521,000	 



 


(c)
Total Leverage Ratio. Commencing with the Fiscal Month ending March 31, 2021 and until such time as all Obligations are paid,
satisfied and discharged in full, the Obligors will not, as of the end of any Fiscal Month, permit the Total Leverage Ratio, calculated
on a trailing twelve-month basis, to be greater than the ratio set forth in the table below for the corresponding Fiscal Month end set
forth in the table below:


 


	Fiscal
    Month End 	 	Total
    Leverage Ratio 
	 	 	 
	March
    31, 2021	 	13.1
    to 1.00
	April
    30, 2021	 	11.6
    to 1.00
	May
    31, 2021	 	10.2
    to 1.00
	June
    30, 2021	 	9.8
    to 1.00
	July
    31, 2021	 	9.3
    to 1.00
	August
    31, 2021	 	8.9
    to 1.00
	September
    30, 2021	 	8.0
    to 1.00
	October
    31, 2021	 	7.9
    to 1.00
	November
    30, 2021	 	7.8
    to 1.00
	December
    31, 2021	 	7.1
    to 1.00
	January
    31, 2022	 	8.0
    to 1.00
	February
    28, 2022	 	6.7
    to 1.00
	March
    31, 2022	 	7.4
    to 1.00
	April
    30, 2022	 	6.1
    to 1.00
	May
    31, 2022	 	7.0
    to 1.00
	June
    30, 2022	 	5.8
    to 1.00
	July
    31, 2022	 	6.8
    to 1.00
	August
    31, 2022	 	5.7
    to 1.00
	September
    30, 2022	 	6.5
    to 1.00
	October
    31, 2022 through Maturity Date	 	6.5
    to 1.00


 






    	47



    	 



    

 


(c)
Evidence of Compliance. Commencing with the Fiscal Month ending March 31, 2021, Obligors shall furnish to the Purchaser, together
with the monthly financial reporting required of Obligors in Section 7.1 hereof, a monthly Compliance Certificate as evidence
of Obligors’ compliance with the covenants in this Section 8.17 and evidence that no Event of Default has occurred. The
Compliance Certificate shall include, without limitation, (a) a statement and report, on a form approved by the Purchaser, detailing
Obligors’ calculations, and (b) if requested by the Purchaser, back-up documentation (including, without limitation, invoices,
receipts and other evidence of costs incurred during such fiscal period as the Purchaser shall reasonably require) evidencing the propriety
of the calculations.


 


(d)
Additional Defined Terms. The following additional definitions are hereby appended to Section 1.1 of this Agreement:


 


“Adjusted
EBITDA” means, for any specified fiscal period, EBITDA for such period, plus (a) without duplication and to the extent
deducted in calculating such EBITDA, (i) any non-cash compensation for such period, (ii) any financing costs, legal costs, incremental
costs related to refinancings/restructurings incurred and payable for such period, (iii) any restructuring costs related to people/office
closures incurred during such period, (iv) any non-cash foreign exchange impact of intercompany loans between any US and UK entity, for
such period, (v) any exceptional bad debts from clients that result primarily from the impact of the COVID-19 pandemic for such period,
(vi) any merger or acquisition costs in connection with any merger or acquisition to the extent permitted under this Agreement, incurred
during such period, and (vii) any specific COVID-19 pandemic related costs incurred during such period, minus (b) without duplication
and to the extent included in calculating such EBITDA, any PPP loan forgiveness/additional stimulus gains or income obtained during such
period; provided, however, that with respect to each of the items described in the immediately preceding clauses (i) through
(vii), (A) such items must be reasonably identifiable and factually supportable (in the good faith determination of the Company, as certified
by the Company in the Compliance Certificate delivered by the Company for such period, and (B) upon the request by the Purchaser, the
Company hereby covenants and agrees that it shall promptly (and in any event not later than five (5) Business Days’ following such
request by the Purchaser) furnish to the Purchaser all appropriate information and supporting documentation in form and scope reasonable
satisfactory to the Purchaser as is necessary in the good faith judgment of the Purchaser to demonstrate that such items do in fact meet
the condition specified in the immediately preceding Clause (A).


 


“Consolidated
Net Income” means, for any specified fiscal period, the net income (or loss) for the Company and its Consolidated Subsidiaries
for such fiscal period as reflected on the consolidated financial statements of the Company and its Subsidiaries prepared in accordance
with GAAP (except, as to any interim unaudited financial statements, such interim unaudited financial statements are subject to normal
year-end adjustments and the absence of footnote disclosures), but excluding (A) the income (or loss) of any Person (other than
Subsidiaries of Company) in which Company or any of its Subsidiaries has an ownership interest unless received by Company or any of its
Subsidiaries in a cash distribution; and (B) the income (or loss) of any Person accrued prior to the date it became a Subsidiary of Company
or is merged into or consolidated with the Company).


 






    	48



    	 



    

 


“EBITDA”
means, for any specified fiscal period, Consolidated Net Income for such period, plus (a) without duplication and to the
extent deducted in calculating such consolidated net income (or loss) for such period, (i) consolidated interest expense, net of any
interest income, during such period, (ii) any provision for (or minus any benefit from) income and franchise taxes payable for such period,
and (iii) depreciation and amortization expense for such period, minus (b) without duplication and to the extent included
in calculating such consolidated net income (loss) for such period, any income from activities unrelated to the recurring business activities
of the Company and its Consolidated Subsidiaries.


 


“Total
Net Debt” means, as of any date of determination, (a) an amount equal to the total aggregate principal amount of Debt of the
Company and its Subsidiaries for borrowed money (including, without limitation, the principal amount of Obligations hereunder, the principal
amount of Debt under the Existing Senior Secured Debt Documents, Debt of the type described under clauses (a) through (e) of the definition
of Debt, and clauses (m) through (p) of the definition of Permitted Debt, capitalized leases and the outstanding balance of the Subordinated
Debt, and all earnouts, deferred and contingent consideration and seller financing with respect to any acquisition) as of such date,
less (b) any unrestricted cash and cash equivalents that are (i) owned by any Obligor or any direct or indirect Foreign Subsidiary
thereof as of such date, and (ii) not subject to any Lien (other than a Lien in favor of the MidCap Senior Agent or Purchaser, but excluding,
however, any cash and cash equivalents in a specified amount pledged to or held by the MidCap Senior Agent or the Purchaser to secure
a specified obligation in that amount), as of such date. For purposes of calculating Total Net Debt, the amount of any revolving Debt
outstanding as of any Fiscal Month end test date shall be deemed to be outstanding on the last day of such Fiscal Month.


 


“Total
Leverage Ratio” means, for any specified measurement period, the ratio of (a) Total Net Debt of Company and its Subsidiaries
as of the last day of such measurement period to (b) Adjusted EBITDA, for such period, calculated on a trailing twelve-month basis ending
on the last day of such measurement period.


 


Section
8.18 Excluded Subsidiaries. Unless an Excluded Subsidiary becomes a Guarantor hereunder in accordance with terms of Section
7.10, no Obligor shall make any additional Investment (other than any Investments otherwise expressly permitted to be made to an
Excluded Subsidiary in the definition of “Permitted Investments”) in or to or other transfer, assignment or conveyance of
any type of asset of any kind whatsoever to such Excluded Subsidiary.


 






    	49



    	 



    

 


Article
9.





 


EVENTS
OF DEFAULT


 


Section
9.1 Events of Default. Each of the following shall constitute an Event of Default, whatever the reason for such event and whether
or not it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment or order of any court or any
order, rule, or regulation of any governmental or nongovernmental body:


 


(a)
(i) failure of the Company to pay any principal on any of the Senior Notes when due; or (ii) failure of the Company to pay any interest
on any of the Senior Notes or to pay any other amount payable hereunder or under any other Note Documents and such failure to pay continues
for three days after the due date thereof; or


 


(b)
failure on the part of any Obligor to perform or observe any covenant contained in Article 4, Article 8, Sections 7.1,
7.2(b), 7.3, 7.6, 7.7, 7.10, 7.13, 7.14, 7.15 or 7.16 hereof; or


 


(c)
failure on the part of any Obligor to perform or observe any other term, covenant or agreement contained in this Agreement or in any
other Note Document to which it is a party, not specifically referred to elsewhere in this Article 9, and any such failure remains unremedied
for thirty (30) days after the earlier of (i) the discovery thereof by the Company or any other Obligor, or (ii) written notice thereof
to the Company by the Purchaser; or


 


(d)
any warranty, representation or other written statement made by or on behalf of any Obligor contained herein or in any other Transaction
Document or in any instrument furnished in compliance with or in reference to this Agreement is false or misleading in any material respect
on the date as of which made; or


 


(e)
any Obligor shall fail to pay its debts generally as they come due, or shall file any petition or action for relief under any bankruptcy,
reorganization, insolvency or moratorium law, or any other law or laws for the relief of, or relating to, debtors; or


 


(f)
an involuntary petition shall be filed under any bankruptcy statute against any Obligor, or a custodian, receiver, trustee, assignee
for the benefit of creditors (or other similar official) shall be appointed to take possession, custody, or control of the properties
of any Obligor, unless such petition or appointment is set aside or withdrawn or ceases to be in effect within sixty (60) days from the
date of said filing or appointment or an order for relief shall be entered in any such involuntary action; or


 


(g)
any Obligor: (i) fails to may any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise)
in respect of any principal, interest or other amount under any of the Existing Senior Secured Debt Documents, taking into account any
applicable grace and cure periods provided for therein (provided, however, if (1) any such failure to pay relates to a borrowing base
or appraisal deficiency or to the repurchase of assigned accounts and (2) the applicable creditor is permitting the repayment of such
deficiency or repurchase over time, no Event of Default shall arise on account of such failure unless the Obligor subsequently fails
to make such repayment when due); or (ii) breaches or fails to maintain compliance with any financial covenant contained in, or fails
to perform or observe any other agreement, term or condition contained in, any Existing Senior Secured Debt Documents, or if any other
event shall occur and be continuing thereunder, and the effect of such failure or other event as described above in this clause (ii)
results in the holders thereof causing the maturity date of the Debt thereunder to be accelerated and become due prior to any stated
maturity except to the extent waived by the holders thereof; or


 






    	50



    	 



    

 


(h)
a Change of Control shall occur; or


 


(i)
any order or judgment for the payment of money (unless fully covered by insurance as to which the relevant insurance company has not
denied coverage) in excess of $250,000 shall be rendered against any Obligor, and such order or judgment shall continue unsatisfied and
unstayed for more than the time permitted by applicable law for an appeal of such judgment to be filed; or


 


(j)
any Obligor shall disavow, revoke or terminate any Transaction Document to which it is a party or shall otherwise challenge or contest
in any action, suit or proceeding in any court or before any arbitrator or governmental body the validity or enforceability of this Agreement,
any Senior Note, any other Note Document or any other Transaction Document; or


 


(k)
a warrant or writ of attachment or execution or similar process shall be issued against any property of any Obligor which exceeds, individually
or together with all other such warrants, writs and processes since the Original Closing Date, $250,000 in amount and such warrant, writ
or process shall not be discharged, vacated, stayed or bonded for the time permitted by applicable law for an appeal of such judgment
to be filed; provided, however, that in the event a bond has been issued in favor of the claimant or other Person obtaining such
attachment or writ, the issuer of such bond shall execute a waiver or subordination agreement in form and substance satisfactory to the
Purchaser pursuant to which the issuer of such bond subordinates its right of reimbursement, contribution or subrogation to the Obligations
and waives or subordinates any Lien it may have on the assets of the Obligors; or


 


(l)
any Obligor is enjoined, restrained or in any way prevented by the order of any court or any administrative or regulatory agency from
conducting all or any material part of its business and such order continues for more than the time permitted by applicable law for an
appeal of such judgment to be filed; or


 


(m)
the loss, suspension or revocation of, or failure to renew, any license, permit or Material Contract now held or hereafter acquired by
any Obligor, if such loss, suspension, revocation or failure to renew could reasonably be expected to have a Material Adverse Effect;
or


 


(n)
any order, judgment or decree is entered against any Obligor decreeing the dissolution or split up of such Obligor and such order remains
undischarged or unstayed for a period in excess of sixty (60) days; or


 


(o)
the occurrence of (i) any material default or event of default under the terms of any of Existing Warrant Documents, or (ii) any default
or event of default under the terms of any Material Contract (other than the Existing Senior Secured Debt Documents), to the extent such
default or event of default would give the non-defaulting party thereto the right to terminate, cancel, or suspend its performance under,
such contract and such default or event of default under such Material Contract, as the case may be, could reasonably be expected to
have a Material Adverse Effect; or


 






    	51



    	 



    

 


(p)
[Intentionally deleted].


 


Section
9.2 Remedies on Default. Upon the occurrence and continuation of an Event of Default (other than an Event of Default described
in Section 9.1 (e) and (f)), the Purchaser may, in its sole discretion, but shall not be obligated to, declare all amounts payable under
the Senior Notes and the other Note Documents to be forthwith due and payable, including, without limitation, costs of collection (including
reasonable attorneys’ fees if collected by or through an attorney at law or in bankruptcy, receivership or other judicial proceedings)
and the same shall thereupon become immediately due and payable without demand, presentment, protest or further notice of any kind, all
of which are hereby expressly waived, and may exercise all of its rights and remedies under the Transaction Documents or under applicable
law. In addition to, and not in limitation of any of the foregoing, upon the occurrence and continuation of any Event of Default, (A)
the Purchaser shall have the right by written request to the Company to require the Company (at the Company’s sole cost and expense)
to engage a financial advisor reasonably satisfactory to the Purchaser to provide valuation analyses of the Company as a going concern,
and analyses of strategic alternatives that may be available to the Company, and all such report(s) shall promptly (and in any event
by the end of the third Business Day following the date of delivery of any such report to the Company or its management) be shared with
the Purchaser, (B) not later than thirty (30) days following such written request by the Purchaser as described in the immediately preceding
clause (A), the Company shall have engaged such financial advisor as described above in the immediately preceding clause (A), and thereafter
shall provide information and resources as reasonably requested by, and shall otherwise cooperate in all reasonable respects with, such
financial advisor during the entirety of its engagement, and shall not terminate such advisor until its analyses and related reports
are completed, and (C) the Company shall promptly (and in any event within three (3) Business Days’) following the request of the
Purchaser provide the Purchaser with periodic updates on the status of compliance with the immediately preceding clause (A), including
the status of any valuation and the status of any strategic alternatives that are being considered or pursued by the Company; it being
understood that nothing in this sentence is intended to, nor shall be construed as, constituting the Purchaser’s consent to or
approval of any such valuation or strategic alternatives.


 


(a)
Upon the occurrence of any Event of Default set forth in Section 9.1(e) or (f) above, without any notice to the Company or any other
act by the Purchaser, all amounts payable under the Senior Notes and the other Note Documents, including, without limitation, all costs
of collection (including reasonable attorneys’ fees if collected by or through an attorney at law or in bankruptcy, receivership
or other judicial proceedings) shall be immediately due and payable, without presentment, demand, protest or notice of any kind, all
of which are hereby expressly waived by the Company and each other Obligor.


 


(b)
No remedy herein conferred or reserved is intended to be exclusive of any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement and each other Transaction Document
or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any
default, omission or failure of performance hereunder shall impair any such right or power or shall be construed to be a waiver thereof,
but any such right or power may be exercised from time to time and as often as may be deemed expedient. In order to exercise any remedy
reserved to the Purchaser in this Agreement or any other Transaction Document, it shall not be necessary to give any notice, other than
such notice as may be herein expressly required.


 






    	52



    	 



    

 


Article
10.


 


MISCELLANEOUS


 


Section
10.1 Notices. All notices, requests and other communications to any party hereunder shall be in writing (including telecopier)
and shall be effective (a) if given by mail, when deposited in the mails or (b) if given by telecopier, when so telecopied. Notices hereunder
shall be mailed or telecopied as follows:


 


If
to the Company or any other Obligor:


 


Staffing
360 Solutions, Inc.


3A
London Wall Buildings


London
Wall


London
EC2M 5SY


United
Kingdom


Attn:
Brendan Flood, Chairman and Chief Executive Officer


Telephone
No.:+44 20 7464 1999


 


with
a copy to:


 


Staffing
360 Solutions, Inc.


641
Lexington Avenue, 27th Floor


New
York, NY 10022


Attention:
General Counsel


Telephone
Number: 646-507-5725


 


and


 


Haynes
and Boone, LLP


30
Rockefeller Plaza


26th
Floor


New
York, New York 10112


Attention:
Rick A. Werner and Greg Kramer


Telephone
Number: 212-659-7300


 


If
to the Purchaser:


 


Jackson
Investment Group, LLC


2655
Northwinds Parkway


Alpharetta,
Georgia 30009


Attn:
Richard L. Jackson


Telecopy
Number: 678-495-5356


Telephone
Number: 770-643-5605


 


with
a copy to:


 


Kilpatrick
Townsend & Stockton LLP


1100
Peachtree Street, N.E.


Atlanta,
GA 30309


Attn:
David Stockton, Esq.


Telecopy
Number: (404) 815-541-3402


Telephone
Number: (404) 815-6444


 






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Section
10.2 No Waiver. No delay or failure on the part of the Purchaser or any holder of the Senior Notes and the exercise of any right,
power or privilege granted under this Agreement or any other Transaction Document or available at law or in equity, shall impair any
such right, power or privilege or be construed as a waiver of any Event of Default or any acquiescence therein. No single or partial
exercise of any such right, power or privilege shall preclude the further exercise of such right, power or privilege. No waiver shall
be valid against the Purchaser unless made in writing and signed by the Purchaser, and then only to the extent expressly specified therein.


 


Section
10.3 Expenses.


 


(1)
The Company agrees to pay on demand all costs, expenses, taxes and fees (i) incurred by the Purchaser in connection with the preparation,
negotiation, execution and delivery of this Agreement and the other Transaction Documents, including the reasonable and documented out-of-pocket
fees and disbursements of counsel for the Purchaser, in each case, irrespective of whether or not the Closing has occurred or has failed
to occur, (ii) incurred by Purchaser in connection with the preparation, negotiation, execution and delivery of any waiver, amendment
or consent by the Purchaser relating to any of the Transaction Documents, including the reasonable costs and fees of counsel for the
Purchaser; and (iii) incurred by the Purchaser, including the reasonable costs and fees of its counsel, in connection with the enforcement
of any of the Transaction Documents or the Purchaser’s rights and remedies thereunder.


 


(2)
The Company agrees to indemnify, pay and hold the Purchaser and any holder of any of the Senior Notes and the Existing Warrant and the
officers, directors, employees and agents of the Purchaser and such holders (the “Indemnified Persons”) harmless from
and against any and all liabilities, losses, damages, costs and expenses of any kind (including, without limitation, the reasonable fees
and disbursements of counsel for any Indemnified Person in connection with any investigative, administrative or judicial proceeding,
whether or not such Indemnified Person shall be designated a party thereto) which may be incurred by any Indemnified Person, relating
to or arising out of this Agreement, any of the Senior Notes, the Existing Warrant or any other Transaction Document, the transactions
contemplated hereby or under any other Transaction Documents, and any actual or proposed use of proceeds of the Existing Senior Notes
or any other Senior Note (as such term defined in the Existing Note Purchase Agreement); provided, that no Indemnified Person
shall have the right to be indemnified hereunder for its own gross negligence or willful misconduct, as finally determined by a court
of competent jurisdiction.


 


Section
10.4 Amendments, Etc. Any provision of this Agreement, the Senior Notes, or any other Note Document to which the Company is a
party may be amended or waived, if such amendment or waiver is in writing and is signed by the Company and the Purchaser. Any provision
of any other Note Document to which the Company is not a party may be amended or waived, if such amendment or waiver is in writing and
is signed by the Obligor(s) party thereto and the Purchaser.


 


Section
10.5 Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided, that (a) no Obligor may assign or otherwise transfer any of its rights
or obligations under this Agreement, any of the Senior Notes or any other Note Document to any Person without the prior written consent
of the Purchaser, and (b) so long as no Default or Event of Default has occurred and is continuing, any such assignment or transfer by
the Purchaser of its rights or obligations under this Agreement, any Senior Note or any other Note Document shall be subject to the consent
of the Company, which consent shall not be unreasonably withheld, delayed or conditioned. Any assignee or transferee of the Purchaser
shall have, to the extent of such assignment (unless otherwise provided therein), the same rights, obligations and benefits as it would
have if it were the Purchaser hereunder and under the other Note Documents. Notwithstanding the foregoing, the Purchaser may sell or
otherwise grant participations in all or any part of any Senior Note, provided, that so long as no Default or Event of Default
has occurred and is continuing, any such sale or participation by the Purchaser of its rights or obligations under this Agreement or
any Senior Note shall be subject to the consent of the Company, which consent shall not be unreasonably withheld, delayed or conditioned.


 






    	54



    	 



    

 


Section
10.6 Governing Law. THIS AGREEMENT AND THE OTHER NOTE DOCUMENTS SHALL (OTHER THAN
THE MIDCAP INTERCREDITOR AGREEMENT) BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD
TO THE PRINCIPLES THEREOF REGARDING CONFLICTS OF LAWS).


 


Section
10.7 Survival of Representations and Warranties. All representations and warranties contained herein or made by or furnished on
behalf of the Company in connection herewith shall survive the execution and delivery of this Agreement and the Closing.


 


Section
10.8 Severability. If any part of any provision contained in this Agreement shall be invalid or unenforceable under applicable
law, said part shall be ineffective to the extent of such invalidity only, without in any way affecting the remaining parts of said provision
or the remaining provisions.


 


Section
10.9 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original
and all of which, taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page
to this Agreement by facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement.


 


Section
10.10 Set-Off. Upon the occurrence and during the continuation of an Event of Default, each Obligor authorizes the Purchaser,
without notice or demand, to apply any indebtedness due or to become due to such Obligor from the Purchaser in satisfaction of any of
the indebtedness, liabilities or obligations of such Obligor under this Agreement or under any other Note Document, including, without
limitation, the right to set-off against any deposits or other cash collateral of the Company held by the Purchaser or an Affiliate thereof.


 


Section
10.11 Termination of Agreement. This Agreement shall terminate upon the payment in full of the Senior Notes and all other Obligations
(subject to Section 4.3 hereof); provided that Sections 3.2, 7.13, 7.14, 10.3, 10.6, 10.12
and 10.13 shall survive the termination of this Agreement.


 


Section
10.12 Consent to Service of Process. Each party to this Agreement irrevocably consents
to service of process in the manner provided for notices in Section 10.01. EACH OF THE OBLIGORS (OTHER THAN THE COMPANY) HEREBY
irrevocably ACKNOWLEDGES AND AGREES TO THE APPOINTMENT BY EACH SUCH OBLIGOR OF THE COMPANY AS its NON-EXCLUSIVE AGENT FOR SERVICE OF
PROCESS ON BEHALF OF EACH SUCH OBLIGOR IN ANY SUIT, ACTION or PROCEEDING brought by the purchaser arising out of or relating to THIS
AGREEMENT, ANY SENIOR NOTE or any of the OTHER Transaction documents. Nothing in this Agreement or any other Transaction Document will
affect the right of any party hereto or thereto to serve process in any other manner permitted by law.


 






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Section
10.13 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY WAIVE THE RIGHT
EITHER OF THEM MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY LITIGATION, WHETHER IN CONTRACT OR TORT, AT LAW OR EQUITY, BASED HEREON,
OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY OTHER DOCUMENT OR INSTRUMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION
HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO. THIS PROVISION
IS A MATERIAL INDUCEMENT FOR PURCHASER ENTERING INTO THIS AGREEMENT. FURTHER, EACH OBLIGOR HEREBY CERTIFIES THAT NO REPRESENTATIVE OR
AGENT OF PURCHASER, NOR THE PURCHASER’S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT PURCHASER WOULD NOT, IN THE EVENT
OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION, NO REPRESENTATIVE OR AGENT OF THE PURCHASER, NOR THE
PURCHASER’S COUNSEL HAS THE AUTHORITY TO WAIVE, CONDITION, OR MODIFY THIS PROVISION.


 


Section
10.14 Entire Agreement. This Agreement, the Senior Notes and the other Transaction Documents to which the Company is a party,
together with any exhibits and schedules attached hereto and thereto, constitute the entire understanding of the parties with respect
to the subject matter hereof and thereof, and any other prior or contemporaneous agreements, whether written or oral, with respect hereto
or thereto are expressly superseded hereby. The execution of this Agreement, the Senior Notes and the other Transaction Documents to
which the Company is a party by the Company was not based upon any facts or materials provided by the Purchaser, nor was the Company
induced to execute this Agreement, the Senior Notes or the other Transaction Documents to which the Company is a party by any representation,
statement or analysis made by the Purchaser.


 


Section
10.15 Publicity. The Company and the Purchaser agree to consult with each other before issuing any press release or public announcement
regarding the transactions contemplated hereby or by the other Transaction Documents, and shall not issue any such press release or public
announcement without the consent of the other party, which consent shall not be unreasonably withheld or delayed; provided, however,
that while the Company will consult with the Purchaser with regards to any form 8-k filing with respect to the transactions contemplated
hereby, nothing herein shall restrict the Company from so filing any such 8-k in accordance with the terms and requirements (including
timing requirement) of the SEC.


 


Section
10.16 Further Assurances. At any time or from time to time after the date hereof, each party agrees to cooperate with the others,
and at the request of any other party, to execute and deliver any further instruments or documents and to take all such further action
as the other party may reasonably request in order to evidence or effectuate the consummation of the transactions contemplated hereby
and to otherwise carry out the intent of the parties hereunder. Without limiting the foregoing, the Obligors shall execute such documents
and take such actions as Purchaser may reasonably request from time to time in order to perfect and/or maintain the perfection of its
Liens on the Collateral.


 


Section
10.17 Subordination of Intercompany Indebtedness and Management Fees. Each Obligor (a “Subordinating Obligor”)
agrees that the payment of all obligations and indebtedness, whether principal, interest, fees (including, without limitation, any management
fees) and other amounts and whether now owing or hereafter arising, owing to such Subordinating Obligor by any other Obligor is expressly
subordinated to the payment in full in cash of the Obligations. If the Purchaser so requests after the occurrence and during the continuance
of any Default or Event of Default, any such obligation or indebtedness shall be enforced and performance received by the Subordinating
Obligor as trustee for the holders of the Obligations and the proceeds thereof shall be paid over to the holders of the Obligations on
account of the Obligations, but without reducing or affecting in any manner the liability of the Subordinating Obligor under this Agreement
or any other Note Document. Without limitation of the foregoing, so long as no Default has occurred and is continuing, the Obligors may
make and receive payments with respect to any such obligations and indebtedness, provided, that in the event that any Obligor
receives any payment of any such obligations and indebtedness at a time when such payment is prohibited by this Section, such payment
shall be held by such Obligor, in trust for the benefit of, and shall be paid forthwith over and delivered, upon written request, to
the Purchaser.


 






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Section
10.18 Effect of Amendment and Restatement. Effective upon satisfaction of the conditions set forth in Section 5.1, this
Agreement shall amend and restate the Existing Note Purchase Agreement in its entirety. The parties hereto acknowledge and agree that
(a) this Agreement, the Third Amended and Restated Note and the other Note Documents, whether executed and delivered in connection herewith
or otherwise, do not constitute a novation or termination of any of the “Obligations” (as defined in the Existing Note Purchase
Agreement) under the Existing Note Purchase Agreement, the Existing Senior Notes or any other Note Documents, in each case, as in effect
immediately prior to the Closing Date, which remain outstanding; and (b) except for any “Obligations” (as defined in the
Existing Note Purchase Agreement) which are expressly contemplated to be repaid on the Closing Date and to the extent are in fact so
repaid, the “Obligations” (as amended and restated hereby and which are hereinafter subject to the terms herein) are in all
respects continuing. Without limiting the foregoing, the parties hereto acknowledge and confirm that (i) the Company previously issued
and sold to the Purchaser, and the Purchaser previously purchased, the Existing Warrant pursuant to the terms of the Original Note Purchase
Agreement and the Existing Warrant Documents, in reliance on the representations and warranties contained in the Original Note Purchase
Agreement, (ii) on and after the Closing Date, and after giving effect to this Agreement, the Existing Warrant Documents shall remain
in full force and effect and shall continue to be binding on and enforceable against the Company in accordance with their terms, and
(iii) the outstanding principal amount of the indebtedness evidenced by the Existing Senior Notes, together with all accrued and unpaid
interest on such principal amount, are not being novated or forgiven in connection with the amendment and restatement of the Existing
Note Purchase Agreement or the amendment and restatement of the Existing Senior Notes by and pursuant to the terms of the Third Amended
and Restated Note, and such principal amount of indebtedness together with all accrued and unpaid interest thereon (A) shall remain outstanding
on and after the Closing Date and shall be evidenced by the Third Amended and Restated Note, (B) shall be payable in accordance with
the terms of this Agreement and the terms of the Third Amended and Restated Note, and (C) are intended to be and shall be included in
the Obligations as defined in this Agreement, and (D) shall be and remain at all times secured by the Liens granted by the Obligors in
favor of the Purchaser pursuant to the Security Documents.


 


Section
10.19 Intercreditor Agreement. Reference is made to that certain Intercreditor Agreement, dated as of the Original Closing
Date (as amended, restated, supplemented or modified from time to time, the “Intercreditor Agreement”), by and among Jackson
Investment Group, LLC, a Georgia limited liability company, (“Term Note Purchaser”), Staffing 360 Solutions, Inc., a Delaware
corporation (“Parent”), certain of the Parent’s subsidiaries party thereto and MidCap Funding X Trust, in its capacity
as agent (together with its affiliates and their respective successors and assigns, “Agent”) for the ABL Lenders (as defined
in the Intercreditor Agreement), and each holder and transferee of this instrument or agreement, by its acceptance hereof, irrevocably
agrees to be bound by the provisions of the Intercreditor Agreement. Each Person that benefits from the security hereunder, by accepting
the benefits of the security provided hereby, (i) consents (or is deemed to consent), to the subordination of Liens provided for in the
Intercreditor Agreement, (ii) agrees (or is deemed to agree) that it will be bound by, and will take no actions contrary to, the provisions
of the Intercreditor Agreement, (iii) authorizes (or is deemed to authorize) the Term Note Purchaser on behalf of such Person to enter
into, and perform under, the Intercreditor Agreement and (iv) acknowledges (or is deemed to acknowledge) that a copy of the Intercreditor
Agreement was delivered, or made available, to such Person. Notwithstanding any other provision contained herein, this Agreement, the
Liens created hereby and the rights, remedies, duties and obligations provided for herein are subject in all respects to the provisions
of the Intercreditor Agreement. In the event of any conflict or inconsistency between the provisions of this Agreement and the Intercreditor
Agreement, the provisions of the Intercreditor Agreement shall control.


 


[Signatures
on Following Pages]


 




    	57



    	 



    

 


IN
WITNESS WHEREOF, the parties hereto have caused this Third Amended and Restated Note Purchase Agreement to be executed by their authorized
officers or members, as the case may be, all as of the day and year first above written.


 


	 	COMPANY:
	 	 
	 	STaffing
    360 solutions, inc.
	 	 
	 	By:	/s/
    Brendan Flood
	 	Name:	Brendan
    Flood
	 	Title:	Chairman
    and Chief Executive Officer
	 	
	 	SUBSIDIARY
    GUARANTORS:
	 	 
	 	FARO
    RECRUITMENT AMERICA, INC.
	 	 
	 	By:	/s/
    Brendan Flood
	 	Name:	Brendan
    Flood
	 	Title:	President
    and Chief Executive Officer
	 	 
	 	MONROE
    STAFFING SERVICES, LLC
	 	 
	 	By:	/s/
    Brendan Flood
	 	Name:	Brendan
    Flood
	 	Title:	President
    and Chief Executive Officer
	 	 
	 	LIGHTHOUSE
    PLACEMENT SERVICES, INC.
	 	 
	 	By:	/s/
    Brendan Flood
	 	Name:	Brendan
    Flood
	 	Title:	President
	 	 
	 	KEY
    RESOURCES, INC.
	 	 
	 	By:	/s/
    Brendan Flood
	 	Name:	Brendan
    Flood
	 	Title:	President
    and Chief Executive Officer



 


[SIGNATURE
PAGE TO THE THIRD


AMENDED
AND RESTATED NOTE PURCHASE AGREEMENT]


 






    	58



    	 



    

 


	 	HEADWAY
    WORKFORCE SOLUTIONS, INC.
	 	 
	 	By:	/s/ Brendan Flood
	 	Name:	Brendan
Flood
	 	Title:	President
and CEO
	 	 
	 	HEADWAY
    EMPLOYER SERVICES, LLC  
	 	 
	 	By:	/s/ Brendan Flood
	 	Name:	Brendan
Flood
	 	Title:	President and CEO
	 	 
	 	HEADWAY
    PAYROLL SOLUTIONS, LLC  
	 	 
	 	By:	/s/
    Brendan Flood
	 	Name:	Brendan Flood
	 	Title:	President and CEO
	 	 
	 	HEADWAY
    HR SOLUTIONS, INC.  
	 	 
	 	By:	/s/
    Brendan Flood
	 	Name:	Brendan Flood
	 	Title:	President and CEO
	 	 
	 	NC
    PEO HOLDINGS, LLC
	 	 
	 	By:	/s/
    Brendan Flood
	 	Name:	Brendan Flood
	 	Title:	President and CEO





 


[SIGNATURE
PAGE TO THE THIRD


AMENDED
AND RESTATED NOTE PURCHASE AGREEMENT]

 




    	59



    	 



    

 


	 	PURCHASER:
	 	 
	 	JACKSON
    INVESTMENT GROUP, LLC
	 	 
	 	By:	/s/
    Richard L. Jackson
	 	Name:	Richard
    L. Jackson
	 	Title:	Chief
    Executive Officer




 


[SIGNATURE
PAGE TO THE THIRD


AMENDED
AND RESTATED NOTE PURCHASE AGREEMENT]


 



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