Document:

Exhibit 10.1

    

    SECURITIES PURCHASE AGREEMENT

    This Securities Purchase Agreement (as amended, supplemented, restated and/or modified from time to time, this “Agreement”) is entered
      into as of February 23, 2022, by and between GSE Systems, Inc., a Delaware corporation (the “Company”), and Lind Global Fund II LP, a Delaware limited partnership (the “Investor”).

    BACKGROUND

    A. The board of directors (the “Board

        of Directors”) of the Company has authorized the issuance to Investor of the Note (as defined below) and the Warrant (as defined below).

    B The Investor desires to purchase the Note and the Warrant on the
      terms and conditions set forth in this Agreement.

    NOW THEREFORE, in consideration of the foregoing recitals and the covenants and agreements set forth herein, and intending hereby to be legally bound, the Company and the
      Investor hereby agree as follows:

    1. DEFINITIONS. 

      As used in this Agreement, the following terms shall have the following meanings specified or indicated below, and such meanings shall be equally applicable to the singular and plural forms of such defined terms:

    “1933 Act” means the Securities Act of 1933, as amended.

    “1934 Act” means the Securities Exchange Act of 1934, as amended.

     “Acquisition” means the acquisition by the Company or any direct or indirect Subsidiary of the Company of a majority of the Equity
      Interests or substantially all of the assets and business of any Person, whether by direct purchase of Equity Interests, asset purchase, merger, consolidation or like combination.

    “Affiliate” means a Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under
      common control with, the Person specified.

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

    “Blue Sky Application” has the meaning set forth in Section 9.3(a).

    “Board of Directors” has the meaning set forth in the recitals.

    “Business Day” means any day other than a Saturday, Sunday or any other day on which banks are permitted or required to be closed in New
      York City.

    “Capital Stock” means the Common Stock and any other classes of capital stock of the Company.

    “Certificate of Incorporation” means the Restated Certificate of Incorporation of the Company, as amended.

    “Change of Control” means, with respect to the Company, on or after the date
      of this Agreement:

    
      	
              (a)

            	
              a change in the composition of the Board of Directors of the Company at a single shareholder meeting where a majority of the individuals that were directors of the Company immediately
                prior to the start of such shareholder meeting are no longer directors at the conclusion of such meeting, without the written consent of the Investor (which consent shall not be unreasonably withheld);

            

    

    
      	
              (b)

            	
              a change, without prior written consent of the Investor, in the composition of the Board of Directors of the Company prior to the termination of this Agreement where a majority of the
                individuals that were directors as of the date of this Agreement cease to be directors of the Company prior to the termination of this Agreement; provided that any individual who is nominated by the Board of Directors (or a duly authorized
                committee thereof) as of the date of this Agreement and is elected or appointed as a director of the Company after the date of this Agreement shall be deemed a member of the Board of Directors of the Company as of the date of this Agreement
                for all purposes.

            

    

    
      	
              (c)

            	
              other than a shareholder that holds such a position at the date of this Agreement, if a Person comes to have beneficial ownership, control or direction over more than fifty percent (50%)
                of the Common Stock of the Company; or

            

    

    
      	
              (d)

            	
              the sale or other disposition by the Company or any of its Subsidiaries in a single transaction, or in a series of transactions, of all or substantially all of their respective assets.

            

    

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

    “Closing Date” has the meaning set forth in Section 2.2(b).

    “Commitment Fee” means an amount equal to Three and One-half Percent (3.5%) of the applicable Funding Amount.

    “Common Stock” means the common stock of the Company, par value $0.01 per share.

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

    “Conversion Shares” means the shares of Common Stock issuable upon the full or any partial conversion of the Note.

    “Disclosure Letter” has the meaning set forth in Section 3.

    “Effectiveness Period” has the meaning set forth in Section 9.2(a).

     “Equity Interests” means and includes capital stock, membership interests and other similar equity securities, and shall also include
      warrants or options to purchase capital stock, membership interests or other equity interests.

    “Event” means any event, change, development, effect, condition, circumstance, matter, occurrence or state of facts.

    “Event of Default” has the meaning set forth in Section 7.1.

    “Exempted Securities” means (a) shares of Common Stock or preferred shares or rights, warrants or options to purchase Common Stock or
      preferred shares issued as consideration for any Acquisition, (b) equity securities issued by reason of a dividend, stock split, split-up or other distribution on shares Common Stock, (c) shares of Common Stock or rights, warrants or options to
      purchase shares of Common Stock issued to employees or directors of, or consultants or advisors to, the Company or any of its Subsidiaries pursuant to a plan, agreement or arrangement approved by the Board of Directors, including, but not limited to,
      the Company’s 1995 Long-Term Incentive Plan, as amended, supplemented or restated (“Equity Plans”), (d) shares of Common Stock actually issued upon the exercise of options, warrants or shares of Common Stock
      actually issued upon the conversion or exchange of any securities convertible into shares of Common Stock, in each case provided that such issuance is pursuant to the terms of the applicable option, warrant or convertible security, or (e) shares of
      Common Stock issued upon the exercise or conversion of options or warrants outstanding on the date hereof.

    “Form 8-K” has the meaning set forth in Section 5.8.

    “Funding Amount” means an amount equal to Five Million Dollars ($5,000,000).

    “GAAP” means United States generally accepted accounting principles.

    “HSR Act” has the meaning set forth in Section 5.15.

    “Investor” has the meaning set forth in the preamble.

    “Investor Group” shall mean the Investor plus any other Person with which the Investor is considered to be part of a group under Section
      13 of the 1934 Act or with which the Investor otherwise files reports under Sections 13 and/or 16 of the 1934 Act.

    “Investor Party” has the meaning set forth in Section 5.11(a).

    “Investor Shares” means the Conversion Shares, the Warrant Shares, the Repayment Shares and any other shares issued or issuable to the
      Investor pursuant to this Agreement, Note or the Warrant.

    “IP Rights” has the meaning set forth in Section 3.10.

    “Law” means any law, rule, regulation, order, judgment or decree, including, without limitation, any federal and state securities Laws.

    “Legend Removal Date” shall have the meaning set forth in Section 5.1(c).

    “Losses” has the meaning set forth in Section 5.11(a).

    “Material Adverse Effect” means any material adverse effect on (i) the businesses, properties, assets, operations, results of operations
      or financial condition of the Company, or the Company and the Subsidiaries, taken as a whole, or (ii) the ability of the Company to consummate the transactions contemplated by this Agreement or to perform its obligations hereunder or under the Note
      or the Warrant; provided, however, that none of the following shall be deemed either alone or in combination to constitute, and none of the following shall be taken into account in determining whether there
      has been or would be, a Material Adverse Effect: (a) any adverse effect resulting from or arising out of general economic conditions; (b) any adverse effect resulting from or arising out of general conditions in the industries in which the Company
      and the Subsidiaries operate; (c) any adverse effect resulting from any changes to applicable Law; or (d) any adverse effect resulting from or arising out of any natural disaster or any acts of terrorism, sabotage, military action or war or any
      escalation or worsening thereof; provided, further, that any event, occurrence, fact, condition or change referred to in clauses (a) through (d) immediately above
      shall be taken into account in determining whether a Material Adverse Effect has occurred or could reasonably be expected to occur to the extent that such event, occurrence, fact, condition or change has a disproportionate effect on the Company
      and/or the Subsidiaries compared to other participants in the industries in which the Company and the Subsidiaries operate.

    
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    “Maximum Percentage” means 4.99%; provided, that if at any time after the date hereof the
      Investor Group beneficially owns in excess of 4.99% of any class of Equity Interests in the Company that is registered under the 1934 Act, then the Maximum Percentage shall automatically increase to 9.99% so long as the Investor Group owns in excess
      of 4.99% of such class of Equity Interests (and shall, for the avoidance of doubt, automatically decrease to 4.99% upon the Investor Group ceasing to own in excess of 4.99% of such class of Equity Interests).

    “Money Laundering Laws” has the meaning set forth in Section 3.25.

    “New Securities” means, collectively, equity securities of the Company, whether or not currently authorized, as well as rights, options,
      or warrants to purchase such equity securities, or securities of any type whatsoever that are, or may become convertible or exchangeable into or exercisable for such equity securities.

    “Note” has the meaning set forth in Section 2.1.

    “Notice Termination Time” has the meaning set forth in Section 10.2.

    “OFAC” has the meaning set forth in Section 3.23.

    “Offer Notice” has the meaning set forth in Section 10.1.

    “Permitted Indebtedness” means, collectively: (a) indebtedness existing on the date hereof and set forth on Schedule 1 hereto; (b) intercompany indebtedness among Company and its Subsidiaries or among Subsidiaries of the Company; provided that the foregoing shall not be deemed to permit the Company to provide a guarantee in respect
      of any indebtedness of a Subsidiary; (c) purchase money indebtedness incurred to finance the acquisition of property for use in Company’s and its Subsidiaries’ business and capital lease obligations incurred by Company and its Subsidiaries, each in
      the ordinary course of business; (d) indebtedness incurred in connection with the financing of insurance premiums in an aggregate amount at any time outstanding not to exceed the premiums owed under such policy; (e) hedging agreements and similar
      hedge or swap transactions entered into in the ordinary course of business for bona fide hedging purposes relating to cash-flow currency risks and not for speculation; (f) indebtedness incurred in the ordinary course of business with respect to
      surety and appeals bonds, performance bonds and other similar obligations; (g) indebtedness incurred in respect of netting services, overdraft protection, and other like services, in each case, incurred in the ordinary course of business; (h)
      indebtedness in connection with purchase cards, treasury obligations and similar obligations incurred by Company and its Subsidiaries in the ordinary course of business; (i) indebtedness in connection with letters of credit incurred by Company and
      its Subsidiaries in the ordinary course of business and commercial revolving lines of credit entered into by Company, which such indebtedness shall not exceed in the aggregate $5,000,000.00; and (j) other indebtedness not to exceed $250,000 at any
      time. Notwithstanding the foregoing, the aggregate indebtedness incurred pursuant to clauses (a)-(h) and (j) shall not exceed $1,000,000 and the aggregate indebtedness pursuant to this definition of Permitted Indebtedness as a whole, shall not exceed
      $5,000,000.

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

    “Prepayment Right” has the meaning set forth in Section 2.4.

     “Press Release” has the meaning set forth in Section 5.8.

    “Principal Amount” has the meaning set forth in Section 2.1.

    “Proceedings” has the meaning set forth in Section 3.6.

    “Prohibited Transaction” means a transaction with a third party or third parties in which the Company issues or sells (or arranges or
      agrees to issue or sell):

    (a) any debt, equity or equity-linked securities (including
      options or warrants) that are convertible into, exchangeable or exercisable for, or include the right to receive shares of the Company’s Capital Stock:

    (i) at a conversion, repayment, exercise or exchange rate or other
      price that is based on, and/or varies with, a discount to the future trading prices of, or quotations for, shares of Common Stock; or

    (ii) at a conversion, repayment, exercise or exchange rate or
      other price that is subject to being reset at some future date after the initial issuance of such debt, equity or equity-linked security or upon the occurrence of specified or contingent events (other than warrants that may be repriced by the
      Company); or

    (b) any securities in a capital or debt raising transaction or
      series of related transactions which grant to an investor the right to receive additional securities based upon future transactions of the Company on terms more favorable than those granted to such investor in such first transaction or series of
      related transactions;

    and are deemed to include transactions generally referred to as at-the-market transactions (ATMs) or equity lines of credit and stand-by equity distribution agreements, and convertible securities
      and loans having a similar effect.  Notwithstanding the foregoing, and for the avoidance of doubt, rights issuances, shareholder purchase plans, Equity Plans, convertible securities, or Common Stock Shares on the Trading Market but each at a fixed
      price per share, shall not be deemed to be a Prohibited Transaction.

    “Prospectus” means the prospectus included in any Registration Statement, as amended or supplemented by any prospectus supplement, with
      respect to the terms of the offering of any portion of the Investor Shares covered by such Registration Statement and by all other amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by
      reference in such prospectus, and any “free writing prospectus” as defined in Rule 405 under the 1933 Act.

    “register,” “registered” and “registration” refer to a
      registration made by preparing and filing a Registration Statement or similar document in compliance with the 1933 Act (as defined below), and the declaration or ordering of effectiveness of such Registration Statement or document.

    “Registration Statement” means any registration statement of the Company filed under the 1933 Act that covers the resale of any of the
      Investor Shares pursuant to the provisions of this Agreement, including the Prospectus and amendments and supplements to such Registration Statement, and including post-effective amendments, all exhibits and all material incorporated by reference in
      such Registration Statement.

    
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    “Required Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable in
      the future pursuant to the Transaction Documents, including any Warrant Shares issuable upon exercise in full of the Warrant or Conversion Shares issuable upon conversion in full of the Note, ignoring any conversion or exercise limits set forth
      therein.

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

    “SEC Documents” has the meaning set forth in Section 3.5(a).

    “Securities” means the Note, the Warrant and the Investor Shares.

     “Securities Termination Event” means either of the following has occurred:

    (a) trading in securities generally in the United States has been
      suspended or limited for a consecutive period of greater than three (3) Business Days; or

    (b) a banking moratorium has been declared by the United States or
      the New York State authorities and is continuing for a consecutive period of greater than three (3) Business Days; provided, however, for clarification, commercial banks in New York shall not be deemed to be subject to a banking moratorium due to
      “stay at home”, “shelter-in-place”, “non-essential employee” or other similar law, executive order or restriction or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer
      systems (including for wire transfers) of commercial banks in the City of New Y:ork are open for use by customers.

    “Shareholder Approval” shall mean the required vote of the holders of the Common Stock: (a) required by to the Delaware General
      Corporation Law and the Certificate of Incorporation to amend the Certificate of Incorporation to increase the number of authorized shares of Common Stock by at least the number of shares equal to the number of shares of Common Stock issuable under
      the Transaction Documents, or (b) required by the applicable rules and regulations of the Trading Market to ratify or approve the transactions contemplated by the Transaction Documents, including the issuance of all of the Investor Shares.

    “Subsequent Financing” has the meaning set forth in Section 10.1.

    “Subsidiaries” and “Subsidiary” have the meaning set forth in Section 3.4(b).

    “Trading Day” means a day on which the Common Stock is traded on a Trading Market.

    “Trading Market” means whichever of the New York Stock Exchange, NYSE American or the Nasdaq Stock Market (including the Nasdaq Capital
      Market), on which shares of the Common Stock are listed or quoted for trading on the date in question.

     “Transaction Documents” means this Agreement, the Note, the Warrant and any other documents or agreements executed or delivered in
      connection with the transactions contemplated hereunder.

    “VWAP” means, as of any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
      listed or quoted on a Trading Market, the daily volume weighted average price of one share of Common Stock trading in the ordinary course of business at the applicable Trading Price for such date (or the nearest preceding date) on such Trading Market
      as reported by Bloomberg Financial L.P.; (b) if the Common Stock is not then listed on a Trading Market and if the Common Stock traded in the over‐the‐counter market, as reported by the  OTCQX or OTCQB Markets, the volume weighted average price of
      one share of Common Stock for such date (or the nearest preceding date) on the OTCQX or OTCQB Markets, as reported by Bloomberg Financial L.P.; (c) if the Common Stock is not then listed or quoted on a Trading Market or on the OTCQX or OTCQB Markets
      and if prices for the Common Stock are then reported in the “Pink Sheets” published by the OTC Markets Group (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price of one share of Common Stock
      so reported, as reported by Bloomberg Financial L.P.; or (d) in all other cases, the fair market value of one share of Common Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the
      Company.

    “Warrant” has the meaning set forth in Section 2.1.

    “Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrant.

    2. PURCHASE
          AND SALE OF THE NOTE AND THE WARRANT

    2.1 Purchase and Sale of the Note and the Warrant.  Subject to the terms and
      conditions set forth herein at the Closing, the Company shall issue and sell to the Investor, and the Investor shall purchase from the Company, for the Funding Amount (a) a convertible promissory note, in the form attached hereto as Exhibit A (the “Note”), in the principal amount of Five Million Seven Hundred Fifty Thousand Dollars ($5,750,000) (the “Principal Amount”)

      and (b) a Common Stock purchase warrant, in the form attached hereto as Exhibit B, registered in the name of the Investor, pursuant to which the Investor shall have the right to acquire 1,283,732 shares
      of Common Stock (the “Warrant”).

    2.2 Closing.  The closing of the offer and sale of the Note and the Warrant shall
      take place remotely via the exchange of documents and signature and shall occur no later than ten (10) Business Days following the execution and delivery of this Agreement, subject to satisfaction or waiver of the conditions set forth in Section
        6, or at such other time and place as the Company and the Investor agree upon, orally or in writing (the “Closing”, and the date the Closing is completed being the “Closing

        Date”).

    2.3 Commitment Fee.  At each Closing, as
      applicable, the Company shall pay to the Investor the Commitment Fee, in United States dollars and in immediately available funds. The Commitment Fee shall be paid by being offset against the applicable Funding Amount payable by the Investor at the
      Closing.

    2.4 Prepayment Right.  As set forth in
      the Note, in its sole discretion and upon giving the prior written notice set forth in the Note, the Company will have the right to pre-pay the entire then-outstanding principal amount of the Note at any time with no premium (the “Prepayment Right”); provided, that in the event that the Company elects to exercise its Prepayment Right, the Investor will have the option to convert up to one-third (1/3)
      of the Principal Amount of the Note, at a price per share equal to the lesser of the Repayment Share Price or the Conversion Price (as each such term is defined in the Note).

    2.5 Senior Obligation.  As an inducement
      for the Investor to enter into this Agreement and to purchase the Note, all obligations of the Company pursuant to this Agreement and the Note shall be senior to all other existing Indebtedness and equity of the Company, other than Permitted
      Indebtedness, which Permitted Indebtedness shall rank pari passu with the obligations of the Company pursuant to this Agreement and the Note. Upon any Liquidation Event (as defined in the Note), the Investor
      will be entitled to receive, before any distribution or payment is made upon, or set apart with respect to, any Indebtedness (other than Permitted Indebtedness) of the Company or any class of capital stock of the Company, an amount equal to the
      Outstanding Principal Amount (as defined in the Note).  Company and its Subsidiaries shall be permitted to incur Permitted Indebtedness.

    
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    3. REPRESENTATIONS

          AND WARRANTIES OF THE COMPANY.  The Company represents and warrants to the Investor and covenants with the Investor that as of the Closing Date, except as is set forth in the Disclosure Letter being delivered to the Investor as of the
      date hereof and updated and delivered to the Investor as of the Second Closing Date, as applicable (the “Disclosure Letter”), the following representations and warranties are true and correct:

    3.1 Organization and Qualification.  The Company is a corporation duly organized
      and validly existing in good standing under the Laws of the State of Delaware and has the requisite corporate power and authority to own its properties and to carry on its business as now being conducted.  The Company is duly qualified to do business
      and is in good standing (if a good standing concept exists in such jurisdiction) in every jurisdiction in which the ownership of its property or the nature of the business conducted by it makes such qualification necessary, except to the extent that
      the failure to be so qualified or be in good standing would not have a Material Adverse Effect.

    3.2 Authorization; Enforcement; Compliance with Other Instruments. The Company
      has the requisite corporate power and authority to execute the Transaction Documents, to issue and sell the Note and the Warrant pursuant hereto, and to perform its obligations under the Transaction Documents, including issuing the Investor Shares on
      the terms set forth in this Agreement.  The execution and delivery of the Transaction Documents by the Company and the issuance and sale of the Securities pursuant hereto, including without limitation the reservation of the Investor Shares for future
      insuance, have been duly and validly authorized by the Company’s Board of Directors and no further consent or authorization is required by the Company, its Board of Directors, its shareholders or any other Person in connection therewith.  The
      Transaction Documents have been duly and validly executed and delivered by the Company and constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such
      enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar Laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies.

    3.3 No Conflicts.  The execution, delivery and performance of the Transaction
      Documents by the Company and the issuance and sale of the Note and the Warrant hereunder will not (a) conflict with or result in a violation of the Certificate of Incorporation or By-Laws, (b) conflict with, or constitute a material default (or an
      event which, with notice or lapse of time or both, would become a material default) under, or give to others any right of termination, amendment, acceleration or cancellation of, any material agreement to which the Company or any of the Subsidiaries
      is a party, or (c) subject to the making of the filings referred to in Section 5, violate in any material respect any Law or any rule or regulation of the Trading Market applicable to the Company or any of the Subsidiaries or by which any of
      their properties or assets are bound or affected.  Assuming the accuracy of the Investor’s representations in Section 4 and subject to the making of the filings referred to in Section 5, (i) no approval or authorization will be
      required from any governmental authority or agency, regulatory or self-regulatory agency or other third party (including the Trading Market) in connection with the issuance of the Note and the Warrant and the other transactions contemplated by this
      Agreement (including the issuance any Investor Shares) and (ii) the issuance of the Note and the Warrant, and the issuance of the Investor Shares, as applicable, will be exempt from the registration and qualification requirements under the 1933 Act
      and all applicable state securities Laws.

    3.4 Capitalization and Subsidiaries.

    (a) The authorized Capital Stock of the Company consists of 60,000,000 shares of
      Common Stock and 2,000,000 shares of Preferred Stock. As of the close of business on September 30, 2021, 20,826,850 shares of Common Stock were issued and outstanding and 1,598,911 shares were held by the Company as treasury shares. Since September
      30, 2021, and through the date of this Agreement, the Company has issued 97,754 additional shares of Common Stock. As of September 30, 2021, (i) an aggregate of zero shares of Common Stock are issuable upon exercise of options granted under the
      Company’s 1995 Long-Term Incentive Plan; (ii) an aggregate of 2,027,201 shares of Common Stock are issuable upon exercise of restricted stock units granted under the Company’s 1995 Long-Term Incentive Plan; and (iii) no shares of Common Stock are
      reserved for issuance upon exercise of outstanding warrants. The Company has duly reserved up to 4,144,544 shares of Common Stock for issuance upon conversion of the Note and has duly reserved up to 1,283,732 shares of Common Stock for issuance upon
      exercise of the Warrant. The Conversion Shares, when issued upon conversion of the Note in accordance with their terms, the Warrant Shares, if and when issued upon exercise of the Warrant in accordance with their terms, and the Repayment Shares, when
      issued upon repayment of the Note in accordance with its terms, will be validly issued, fully paid and non-assessable and free from all taxes, liens and charges with respect to the issuance thereof. No shares of the Company’s Capital Stock are
      subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company. The Certificate of Incorporation and By-Laws on file on the SEC’s EDGAR website are true and correct copies of the Certificate
      of Incorporation and By-Laws as in effect as of the Closing Date.  The Company is not in violation of any provision of the Certificate of Incorporation and By-Laws.

    (b) Schedule 3.4(b) lists each direct and indirect subsidiary of the Company
      (each, a “Subsidiary” and collectively, the “Subsidiaries”). The Company owns, directly or indirectly, all of the capital stock or other equity interests of each
      Subsidiary.  No Subsidiary has any outstanding stock options, warrants or other instruments pursuant to which such Subsidiary may at any time or under any circumstances be obligated to issue any shares of its capital stock or other Equity Interests. 
      Each Subsidiary is duly organized and validly existing in good standing under the laws of its jurisdiction of formation (if a good standing concept exists in such jurisdiction) and has all requisite power and authority to own its properties and to
      carry on its business as now being conducted.

    (c) Neither the Company nor any Subsidiary is bound by any agreement or arrangement
      pursuant to which it is obligated to register the sale of any securities under the 1933 Act.  There are no outstanding securities of the Company or any of the Subsidiaries which contain any redemption or similar provisions, and there are no
      contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem or purchase any security of the Company or any Subsidiary.  There are no outstanding securities or instruments containing
      anti-dilution or similar provisions that will be triggered by the issuance of the Note, the Warrant or the Investor Shares.  Neither the Company nor any Subsidiary has any stock appreciation rights or “phantom stock” plans or agreements or any
      similar plan or agreement.

    (d) The issuance and sale of any of the Securities will not obligate the Company to
      issue shares of Common Stock or other securities, or to satisfy any related contractual obligations, to any other Person and will not result in the adjustment of the exercise, conversion, exchange, or reset price of any outstanding securities.

    (e) As of the date of this Agreement, the Company has capacity under the rules and
      regulations of the Trading Market to issue up to approximately 4,165,367 shares of Common Stock (or securities convertible into or exercisable for shares of Common Stock) without obtaining Shareholder Approval.

    
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    3.5 SEC Documents; Financial Statements.

    (a) As of the Closing Date, the Company has filed all reports, schedules, forms,
      statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act for the two years preceding the Closing Date (or such shorter period as the Company was required by law or regulation to
      file such material) (all of the foregoing filed prior to the Closing Date and all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC Documents”). As of their respective filing dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder
      applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the
      statements therein, in light of the circumstances under which they were made, not misleading.

    (b) As of their respective dates, the financial statements of the Company included in
      the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with GAAP, and
      audited by a firm that is a member a member of the Public Companies Accounting Oversight Board consistently applied, during the periods involved (except as may be otherwise indicated in such financial statements or the notes thereto, or, in the case
      of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the consolidated financial position of the Company as of the dates thereof and the
      consolidated results of its operations and consolidated cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).  No other written information provided by or on behalf of the Company
      to the Investor in connection with the Investor’s purchase of the Note and the Warrant which is not included in the SEC Documents contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements
      therein, in the light of the circumstance under which they are or were made, not misleading.

    (c) The Company and each of the Subsidiaries maintain a system of internal accounting
      controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in
      conformity with GAAP and to maintain asset accountability, (iii) reasonable controls to safeguard assets are in place and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action
      is taken with respect to any differences.

    3.6 Litigation and Regulatory Proceedings.  Except as set forth on Schedule 3.6,

      there are no material actions, causes of action, suits, claims, proceedings, inquiries or investigations (collectively, “Proceedings”) before or by any court, public board, government agency, self-regulatory
      organization or body pending or, to the knowledge of the executive officers of Company or any of the Subsidiaries, threatened against or affecting the Company or any of the Subsidiaries, the Common Stock or any other class of issued and outstanding
      shares of the Company’s Capital Stock, or any of the Company’s or the Subsidiaries’ officers or directors in their capacities as such.

    3.7 No Undisclosed Events, Liabilities or Developments. No event, development or
      circumstance has occurred or exists, or to the knowledge of the executive officers of the Company is reasonably anticipated to occur or exist that (a) would reasonably be anticipated to have a Material Adverse Effect or (b) would be required to be
      disclosed by the Company under applicable securities Laws on a registration statement filed with the SEC relating to an issuance and sale by the Company of its Common Stock and which has not been publicly announced.

    3.8 Compliance with Law.  The Company and each of the Subsidiaries have conducted
      and are conducting their respective businesses in compliance in all material respects with all applicable Laws and are in compliance in all material respects with the rules and regulations of the Trading Market. The Company has taken no action
      designed to, or likely to have the effect of, delisting the Common Stock from the Trading Market, nor has the Company received any notification that the Trading Market is currently contemplating terminating such listing.

    3.9 Employee Relations.  Neither the Company nor any Subsidiary is involved in
      any union labor dispute nor, to the knowledge of the Company, is any such dispute threatened. Neither the Company nor any Subsidiary is a party to any collective bargaining agreement. No executive officer (as defined in Rule 501(f) of the 1933 Act)
      has notified the Company that such officer intends to leave the Company’s employ or otherwise terminate such officer’s employment with the Company.

    3.10 Intellectual Property Rights.  The Company and each Subsidiary owns or
      possesses adequate rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and
      other intellectual property rights (collectively, “IP Rights”) necessary to conduct their respective businesses as now conducted.  None of the material IP Rights of the Company or any of the Subsidiaries are
      expected to expire or terminate within three (3) years from the date of this Agreement and which expiration or termination would reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary is infringing,
      misappropriating or otherwise violating any IP Rights of any other Person.  No claim has been asserted, and no Proceeding is pending, against the Company or any Subsidiary alleging that the Company or any Subsidiary is infringing, misappropriating or
      otherwise violating the IP Rights of any other Person, and, to the Company’s knowledge no such claim or Proceeding is threatened, and the Company is not aware of any facts or circumstances which might give rise to any such claim or Proceeding.  The
      Company and the Subsidiaries have taken commercially reasonable security measures to protect the secrecy, confidentiality and value of all of their material IP Rights.

    3.11 Environmental Laws. Except, in each case, as would not be reasonably
      anticipated to have a Material Adverse Effect, the Company and the Subsidiaries (a) are in compliance with any and all applicable Laws relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes,
      pollutants or contaminants, (b) have received and hold all permits, licenses or other approvals required of them under all such Laws to conduct their respective businesses and (c) are in compliance with all terms and conditions of any such permit,
      license or approval.

    3.12 Title to Assets. The Company and the Subsidiaries have good and marketable
      title to all personal property owned by them which is material to their respective businesses, in each case free and clear of all liens, encumbrances and defects.  Any real property and facilities held under lease by the Company or any Subsidiary are
      held under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and the Subsidiaries.

    3.13 Insurance.  The Company and each of the Subsidiaries are insured by insurers
      of recognized financial responsibility against such losses and risks and in such amounts as management of the Company reasonably believes to be prudent and customary in the businesses in which the Company and the Subsidiaries are engaged.  Neither
      the Company nor any of the Subsidiaries has been refused any insurance coverage sought or applied for, and the Company has no reason to believe that it will not be able to renew all existing insurance coverage as and when such coverage expires or to
      obtain similar coverage from similar insurers.

    3.14 Regulatory Permits.  The Company and the Subsidiaries have in full force and
      effect all certificates, approvals, authorizations and permits from all regulatory authorities and agencies necessary to own, lease or operate their respective properties and assets and conduct their respective businesses, and neither the Company nor
      any Subsidiary has received any notice of Proceedings relating to the revocation or modification of any such certificate, approval, authorization or permit, except for such certificates, approvals, authorizations or permits with respect to which the
      failure to hold would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

    
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    3.15 No Materially Adverse Contracts, Etc.  Neither the Company nor any of the
      Subsidiaries is (a) subject to any charter, corporate or other legal restriction, or any judgment, decree or order which in the judgment of the Company’s officers has or is reasonably expected to have a Material Adverse Effect or (b) a party to any
      contract or agreement which in the judgment of the Company’s management has or would reasonably be expected to have a Material Adverse Effect.

    3.16 Taxes.  The Company and the Subsidiaries each has made or filed, or caused
      to be made or filed, all United States federal and other material tax returns, reports and declarations required by any jurisdiction to which it is subject and has paid all taxes and other governmental assessments and charges that are material in
      amount, required to be paid by it, regardless of whether such amounts are shown or determined to be due on such returns, reports and declarations, except those being contested in good faith by appropriate proceedings and for which it has set aside on
      its books reserves in accordance with GAAP. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction.

    3.17 Solvency.  After giving effect to
      the receipt by the Company of the proceeds from the transactions contemplated by this Agreement (a) the Company’s fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts
      and other liabilities (including known contingent liabilities) as they mature; and (b) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all
      anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts are required to be paid.  The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into
      account the timing and amounts of cash to be payable on or in respect of its debt).  The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or
      reorganization laws of any jurisdiction.

    3.18 Investment Company.  The Company
      is not, and is not an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

    3.19 Certain Transactions.  Other than as disclosed in the SEC Documents, there
      are no contracts, transactions, arrangements or understandings between the Company or any of its Subsidiaries, on the one hand, and any director, officer or employee thereof on the other hand, that would be required to be disclosed pursuant to Item
      404 of Regulation S-K promulgated by the SEC in the Company’s Form 10-K or proxy statement pertaining to an annual meeting of stockholders.

    3.20 No General Solicitation.  Neither the Company, nor any of its Affiliates,
      nor any person acting on its behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Note or the Warrant pursuant to this Agreement.

    3.21 Acknowledgment Regarding the
        Investor’s Purchase of the Note and the Warrant.  The Company’s Board of Directors has approved the execution of the Transaction Documents and the issuance and sale of the Note and the Warrant, based on its own independent evaluation and
      determination that the terms of the Transaction Documents are reasonable and fair to the Company and in the best interests of the Company and its stockholders.  The Company is entering into this Agreement and is issuing and selling the each of the
      Note and the Warrant voluntarily and without economic duress.  The Company has had independent legal counsel of its own choosing review the Transaction Documents and advise the Company with respect thereto. The Company acknowledges and agrees that
      the Investor is acting solely in the capacity of an arm’s length purchaser with respect to the Note and the Warrant and the transactions contemplated hereby and that neither the Investor nor any person affiliated with the Investor is acting as a
      financial advisor to, or a fiduciary of, the Company (or in any similar capacity) with respect to execution of the Transaction Documents or the issuance of the Note and the Warrant or any other transaction contemplated hereby.

    3.22 No Brokers’, Finders’ or Other
        Advisory Fees or Commissions. No brokers, finders or other similar advisory fees or commissions will be payable by the Company or any Subsidiary or by any of their respective agents with respect to the issuance of the Note or any of the other
      transactions contemplated by this Agreement.

    3.23 OFAC.  None of the Company nor any
      of the Subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee, affiliate or person acting on behalf of the Company and/or any Subsidiary has been or is currently subject to any United States sanctions administered
      by the Office of Foreign Assets Control of the United States Department of the Treasury (“OFAC”); and the Company will not directly or indirectly use any proceeds received from the Investor, or lend, contribute
      or otherwise make available such proceeds to its Subsidiaries or to any affiliated entity, joint venture partner or other person or entity, to finance any investments in, or make any payments to, any country or person currently subject to any of the
      sanctions of the United States administered by OFAC.

    3.24 No Foreign
        Corrupt Practices.  None of the Company or any of the Subsidiaries has, directly or indirectly:  (a) made or authorized any contribution, payment or gift of funds or property to any official, employee or agent of any governmental authority of
      any jurisdiction except as otherwise permitted under applicable Law; or (b) made any contribution to any candidate for public office, in either case, where either the payment or the purpose of such contribution, payment or gift was, is, or would be
      prohibited under the Foreign Corrupt Practices Act or the rules and regulations promulgated thereunder or under any other legislation of any relevant jurisdiction covering a similar subject matter applicable
      to the Company or its Subsidiaries and their respective operations and the Company has instituted and maintained policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance with such
      legislation.

    3.25 Anti-Money Laundering.  The
      operations of each of the Company and the Subsidiaries are and have been conducted at all times in compliance with all applicable anti-money laundering laws, regulations, rules and guidelines in its jurisdiction of incorporation and in each other
      jurisdiction in which such entity, as the case may be, conducts business (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental authority involving
      the Company or its Subsidiaries with respect to any of the Money Laundering Laws is, to the knowledge of the Company, pending, threatened or contemplated.

    3.26 No Other Representations. 
      Except for the representations and warranties set forth in this Agreement and in the other Transaction Documents, the Company makes no other representations or warranties to the Investor and makes no predictions or forecasts of future revenues or
      earnings. Notwithstanding the foregoing, no representation or warranty by the Company or any Subsidiary in this Agreement and no statement contained in the Disclosure Schedules to this Agreement or any certificate or other document furnished or to be
      furnished to Investor pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not
      misleading.

    
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    4. REPRESENTATIONS

          AND WARRANTIES OF THE INVESTOR.  The Investor represents and warrants to the Company as follows:

    4.1 Organization and Qualification.  The Investor is a limited partnership, duly
      organized and validly existing in good standing under the laws of the State of Delaware.

    4.2 Authorization; Enforcement; Compliance with Other Instruments.  The Investor
      has the requisite power and authority to enter into this Agreement, to purchase the Note and the Warrant and to perform its obligations under the Transaction Documents.  The execution and delivery of the Transaction Documents to which it is a party
      have been duly and validly authorized by the Investor’s governing body and no further consent or authorization is required.  The Transaction Documents to which it is a party have been duly and validly executed and delivered by the Investor and
      constitute valid and binding obligations of the Investor, enforceable against the Investor in accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency,
      reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies.

    4.3 No Conflicts.  The execution, delivery and performance of the Transaction
      Documents to which it is a party by the Investor and the purchase of the Note and the Warrant by the Investor will not (a) conflict with or result in a violation of the Investor’s organizational documents, (b) conflict with, or constitute a material
      default (or an event which, with notice or lapse of time or both, would become a material default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement, contract, indenture mortgage,
      indebtedness or instrument to which the Investor is a party, or (c) violate in any material respect any Law applicable to the Investor or by which any of the Investor’s properties or assets are bound or affected. No approval or authorization will be
      required from any governmental authority or agency, regulatory or self-regulatory agency or other third party in connection with the purchase of the Note and the Warrant and the other transactions contemplated by this Agreement.

    4.4 Investment Intent; Accredited Investor.  The Investor is purchasing the Note
      and the Warrant for its own account, for investment purposes, and not with a view towards distribution.  The Investor is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D of the 1933 Act.  The Investor has, by reason of
      its business and financial experience, such knowledge, sophistication and experience in financial and business matters and in making investment decisions of this type that it is capable of (a) evaluating the merits and risks of an investment in the
      Note, the Warrant and the Investor Shares and making an informed investment decision, (b) protecting its own interests and (c) bearing the economic risk of such investment for an indefinite period of time.

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

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

    4.7 No Other Representations.  Except
      for the representations and warranties set forth in this Agreement and in other Transaction Documents, the Investor makes no other representations or  warranties to the Company.

    5. OTHER
        AGREEMENTS OF THE PARTIES.

    5.1 Legends, etc.

    (a) Securities may only be disposed of pursuant to an effective registration statement
      under the 1933 Act, to the Company or pursuant to an available exemption from or in a transaction not subject to the registration requirements of the 1933 Act, and in compliance with any applicable state securities laws.

    (b) Certificates evidencing the Securities will contain the following legend, so long
      as is required by this Section 5.1(b) or Section 5.1(c):

    [NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED] [THESE SECURITIES HAVE NOT BEEN REGISTERED] WITH THE SECURITIES AND
      EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
      EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  [THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES] [THESE SECURITIES] MAY
      BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

    The Company acknowledges and agrees that the Investor may from time to time pledge, and/or grant a security interest in some or all of the Securities, in accordance with
      applicable securities laws, pursuant to a bona fide margin agreement in connection with a bona fide margin account and, if required under the terms of such agreement or account, the Investor may transfer pledged or secured Securities to the pledgees
      or secured parties.  Such a pledge or transfer would not be subject to approval or consent of the Company and no legal opinion of legal counsel to the pledgee, secured party or pledgor shall be required in connection with the pledge, but such legal
      opinion may be required in connection with a subsequent transfer following default by the Investor transferee of the pledge.  No notice shall be required of such pledge.  At the Investor’s expense, the Company will execute and deliver such reasonable
      documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities including the preparation and filing of any required prospectus supplement under Rule 424(b)(3) of the 1933 Act
      or other applicable provision of the 1933 Act to appropriately amend the list of selling stockholders thereunder.

    (c) Certificates evidencing the Investor Shares shall not contain any legend
      (including the legend set forth in Section 5.1(b)):  (i) while a Registration Statement is effective under the 1933 Act, (ii) following any sale of such Investor Shares pursuant to Rule 144, (iii) while such Investor Shares are eligible for
      sale without restriction under Rule 144(k), or (iv) if such legend is not required under applicable requirements of the 1933 Act (including judicial interpretations and pronouncements issued by the Staff of the SEC).  The Company shall cause its
      counsel to issue any legal opinion or instruction required by the Company’s transfer agent to comply with the requirements set forth in this Section.  At such time as a legend is no longer required for the Investor Shares under this Section 5.1(c),

      the Company will, no later than three (3) Business Days following the delivery by the Investor to the Company or the Company’s transfer agent of a certificate representing Investor Shares containing a restrictive legend (such third Business Day, the
      “Legend Removal Date”), deliver or cause to be delivered to the Investor a certificate representing such Investor Shares that is free from all restrictive and other legends. In addition to any other remedies
      available to the Investor, the Company shall pay to the Investor, in cash, as partial liquidated damages and not as a penalty, for each $1,000 of Investor Shares (based on the VWAP of the Common Stock on the date such Investor Shares are submitted to
      the Company or the Company’s transfer agent) delivered for removal of the restrictive or other legend, $5 per Trading Day for each Trading Day after the Legend Removal Date until such Investor Shares are delivered without a legend.  The Company may
      not make any notation on its records or give instructions to any transfer agent of the Company that enlarge the restrictions on transfer set forth in this Section except as it may reasonably determine are necessary or appropriate to comply or to
      ensure compliance with those applicable laws that are enacted or modified after the Closing.

    
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    5.2 Furnishing of Information.  As long
      as the Investor owns the Securities, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the 1934
      Act.  As long as the Investor owns the Securities, if the Company is not required to file reports pursuant to such laws, it will prepare and furnish to the Investor and make publicly available in accordance with Rule 144(c) such information as is
      required for the Investor to sell the Investor Shares under Rule 144.  The Company further covenants that it will take such further action as any holder of the Securities may reasonably request, all to the extent required from time to time to enable
      such Person to sell such Investor Shares without registration under the 1933 Act within the limitation of the exemptions provided by Rule 144 or other applicable exemptions.

    5.3 Integration.  The Company shall
      not, and shall use its best efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the 1933 Act) that will be integrated
      with the offer or sale of the Securities in a manner that would require the registration under the 1933 Act of the sale of the Securities to the Investor, or that will be integrated with the offer or sale of the Securities for purposes of the rules
      and regulations of any Trading Market that would require, under the rules of the Trading Market, the Shareholder Approval.

    5.4 Notification of Certain Events. 
      The Company shall give prompt written notice to the Investor of (a) the occurrence or non-occurrence of any Event, the occurrence or non-occurrence of which would render any representation or warranty of the Company contained in this Agreement or any
      other Transaction Document, if made on or immediately following the date of such Event, untrue or inaccurate in any material respect, (b) the occurrence of any Event that, individually or in combination with any other Events, has had or could
      reasonably be expected to have a Material Adverse Effect, (c) any failure of the Company to comply with or satisfy any covenant or agreement to be complied with or satisfied by it hereunder or any Event that would otherwise result in the
      nonfulfillment of any of the conditions to the Investor’s obligations hereunder, (d) any written notice or other written communication from any Person alleging that the consent of such Person is or may be required in connection with the consummation
      of the transactions contemplated by this Agreement or any other Transaction Document, or (e) any Proceeding pending or, to the Company’s knowledge threatened in writing against a party relating to the transactions contemplated by this Agreement or
      any other Transaction Document.

    5.5 Available Stock. 

      The Company shall at all times keep authorized and reserved and available for issuance, free of preemptive rights, such number of shares of Common Stock equal to the number of Investment Shares as are issuable upon repayment or conversion in full of
      the Note and exercise in full of the Warrant at any time.  If the Company determines at any time that it does not have a sufficient number of authorized Common Stock to reserve and keep available for issuance as described in this Section 5.5,

      the Company shall use all commercially reasonable efforts to increase the number of authorized Common Stock by seeking Shareholder Approval for the authorization of such additional shares.

    5.6 Use of Proceeds. 

      The Company will use the proceeds from the sale of the Note and the Warrant for repayment of indebtedness, general working capital purposes and other corporate purposes.

    5.7 Repayment of Note. 

      The Company shall not make any voluntary cash prepayments on any Indebtedness other than Permitted Indebtedness at any time while any amounts are owing under the Note other than cash payments the Company is required to make pursuant to the express
      terms thereof existing on the date hereof. If the Company or any Subsidiary issues any (i) debt, including any subordinated debt or convertible debt (other than the Note) but excluding Permitted Indebtedness for aggregate proceeds in any amount, or
      (ii) any Equity Interests, other than Exempted Securities for aggregate proceeds to the Company of greater than $7,000,000, the Company shall notify the Investor within 2 Business Days of such issuance and, unless otherwise waived in writing by and
      at the discretion of the Investor, no later than 5 Business Days after such issuance the Company will (i) utilize the proceeds of the issuance of such debt (or cause such Subsidiary to immediately utilize the proceeds of the issuance of such debt) to
      repay the Note, or (ii) direct 20% of such proceeds from such issuance of Equity Interests to repay the Note.

    5.8 Intercreditor Agreement.  In the
      event that the Company or any Subsidiary incurs debt or issues convertible debt securities to a seller as partial consideration paid to such seller in connection with an Acquisition, unless otherwise waived in writing by the Investor, as a condition
      to consummation of such Acquisition, the holder of such debt or convertible debt securities shall enter into an intercreditor agreement with the Company and the Investor on terms reasonably satisfactory to the Investor.

    5.9 Prohibited
        Transactions.  The Company hereby covenants and agrees not to enter into any Prohibited Transactions without the Investor’s prior written consent, until the later of (a) thirty (30) days after such time as the Note have been repaid in full, as
      applicable, and/or have been converted into Conversion Shares and (b) the date on which the Investor ceases to hold any shares of Common Stock or have the right to acquire any shares of Common Stock.

    5.10 Securities Laws
        Disclosure; Publicity.  Within four (4) Business Days of the date hereof, the Company intends to issue a press release disclosing the material terms of the transactions contemplated hereby (the “Press Release”)
      and file a Report on Form 8-K (the “Form 8-K”) disclosing the material terms of the transactions contemplated hereby (including this Agreement as an exhibit thereto). The Company shall provide a copy of the
      draft Press Release and Form 8-K to the Investor for review prior to release and the Company shall incorporate the Investor’s reasonable comments. The Company shall not issue any press release nor otherwise make any such public statement regarding
      the Investor or the Transaction Documents without the prior written consent of the Investor, except if such disclosure is made in a manner consistent with the Press Release or Form 8-K, or is required by law, in which case the Company shall (a)
      ensure that such disclosure is restricted and limited in content and scope to the maximum extent permitted by Law to meet the relevant disclosure requirement and (b) provide a copy of the proposed disclosure to the Investor for review prior to
      release and the Company shall incorporate the Investor’s reasonable comments.  Following the execution of this Agreement, the Investor and its Affiliates and/or advisors may place announcements on their respective corporate websites and in financial
      and other newspapers and publications (including, without limitation, customary “tombstone” advertisements) describing the Investor’s relationship with the Company under this Agreement in a manner consistent with the Press Release or Form 8-K and
      including the name and corporate logo of the Company.  Notwithstanding anything herein to the contrary, to comply with United States Treasury Regulations Section 1.6011-4(b)(3)(i), each of the Company and the Investor, and each employee,
      representative or other agent of the Company or the Investor, may disclose to any and all persons, without limitation of any kind, the U.S. federal and state income tax treatment, and the U.S. federal and state income tax structure, of the
      transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are provided to such party relating to such tax treatment and tax structure insofar as such treatment and/or structure relates to a U.S.
      federal or state income tax strategy provided to such recipient.

    
      9

      
        

    

    5.11 Indemnification of the Investor.

    (a) The Company will indemnify and hold the Investor, its Affiliates and their
      respective directors, officers, managers, shareholders, members, partners, employees and agents and permitted successors and assigns (each, an “Investor Party”) harmless from any and all damages, losses,
      liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and actual, reasonable and documented attorneys’ fees and costs of investigation and defense
      (collectively, “Losses”) that any such Investor Party may suffer or incur as a result of or relating to:

    (i) any breach or inaccuracy of any representation, warranty, covenant or agreement
      made by the Company in any Transaction Document;

    (ii) any misrepresentation made by the Company in any Transaction Document or in any
      SEC Document;

    (iii) any omission to state any material fact necessary in order to make the
      statements made in any SEC Document, in light of the circumstances under which they were made, not misleading;

    (iv) any Proceeding before or by any court, public board, government agency,
      self-regulatory organization or body based upon, or resulting from the execution, delivery, performance or enforcement of any of the Transaction Documents or the consummation of the transactions contemplated thereby, and whether or not the Investor
      is party thereto by claim, counterclaim, crossclaim, as a defendant or otherwise, or if such Proceeding is based upon, or results from, any of the items set forth in clauses (i) through (iii) above.

    (b) In addition to the indemnity contained herein, the Company will reimburse each
      Investor Party for its actual, reasonable and documented legal and other expenses (including the cost of any investigation, preparation and travel in connection therewith) incurred in connection therewith, as such expenses are incurred.

    (c) The provisions of this Section 5.11 shall survive the termination or
      expiration of this Agreement.

    5.12 Non-Public Information.  The
      Company covenants and agrees that neither it nor any other Person acting on its behalf will provide the Investor or its agents or counsel with any information that the Company believes constitutes material, non-public information (i) without the
      prior written consent of the Investor, and (ii) without publicly disclosing such information within forty-eight (48) hours of providing the information to the Investor. The Company understands and confirms that the Investor shall be relying on the
      foregoing representation in effecting transactions in securities of the Company.

    5.13 Shareholder
        Approval.  If required by the rules and regulations of the Trading Market or to otherwise fulfill any of its obligations under the Transaction Documents, the Company shall hold a special meeting of shareholders (which may also be at the annual
      meeting of shareholders) on or before the 90th calendar day following the date hereof for the purpose of obtaining the Shareholder Approval; provided, however, such ninety (90) calendar days shall be increased to one hundred twenty (120) calendar
      days in the event the Company receives comments to its proxy statement from the SEC, with the recommendation of the Board of Directors that such proposal be approved, and the Company shall solicit proxies from its shareholders in connection therewith
      in the same manner as all other management proposals in such proxy statement and all management-appointed proxyholders shall vote their proxies in favor of such proposal.  If the Company does not obtain Shareholder Approval at the first meeting, the
      Company shall call a meeting every six (6) months thereafter to seek Shareholder Approval until the date the Shareholder Approval is obtained.

    5.14 Listing of
        Securities.  The Company shall: (a) in the time and manner required by each Trading Market on which the Common Stock is listed, prepare and file with such Trading Market a Listing of Additional Shares form covering the Investor Shares, (b) take
      all steps necessary to cause such shares to be approved for listing on each Trading Market on which the Common Stock is listed as soon as possible thereafter, (c) provide to the Investor evidence of such Trading Market’s completion of review of the
      Listing of Additional Shares form, and (d) maintain the listing of such shares on each such Trading Market.

    5.15 Antitrust Notification.  If the
      Investor determines, in its sole judgment and upon the advice of counsel, that the issuance of the Note, the Warrant or the Investor Shares pursuant to the terms hereof would be subject to the provisions of the Hart-Scott-Rodino Antitrust
      Improvements Act of 1976, as amended (the “HSR Act”), the Company shall file as soon as practicable after the date on which the Company receives notice from the Investor of the applicability of the HSR Act and
      a request to so file with the United States Federal Trade Commission and the United States Department of Justice the notification and report form required to be filed by it pursuant to the HSR Act in connection with such issuance.

    5.16 Change of Prime Broker, Custodian. 

      The Investor has informed the Company of the names of its prime broker and its share custodian.  The Investor shall notify the Company of any change in its prime broker or share custodian within three (3) Business Days of such change having taken
      effect.

    5.17 Share Transfer Agent.  The Company
      has informed the Investor of the name of its share transfer agent and represents and warrants that the transfer agent participates in the Depository Trust Company Fast Automated Securities Transfer program. The Company will notify the Investor of any
      change in the Company’s share transfer agent within ten (10) Business Days.

    5.18 Tax Treatment. 

      The Investor and the Company agree that for U.S. federal income tax purposes, and applicable state, local and non-U.S. income tax purposes, the Note is not intended to be, and shall not be, treated as indebtedness.  Neither the Investor nor the
      Company shall take any contrary position on any tax return, or in any audit, claim, investigation, inquiry or proceeding in respect of taxes, unless otherwise required pursuant to a final determination within the meaning of Section 1313 of the
      Internal Revenue Code of 1986, as amended, or any analogous provision of applicable state, local or non-U.S. law.

    5.19 Set-Off.

    (a) The Investor may set off any of its obligations to the Company (whether or not due
      for payment), against any of the Company’s obligations to the Investor (whether or not due for payment) under this Agreement and/or any other Transaction Document.

    (b) The Investor may do anything necessary to effect any set-off undertaken in
      accordance with this Section 5.16 (including varying the date for payment of any amount payable by the Investor to the Company).

    5.20 Short Sales.
      While the Note is outstanding, the Investor and its Affiliates shall not engage in any “short sales” (as defined in Rule 200 of Regulation SHO under the 1934 Act) or any swaps or other derivative transactions that would be equivalent to any sales or
      short position, in each case with respect to any shares of Common Stock if the sale price of the Common Stock in respect of such sale is below the then Conversion Price.

    
      10

      
        

    

    6. CLOSING
        CONDITIONS

    6.1 Conditions
        Precedent to the Obligations of the Investor.  The obligations of the Investor to fund the Note and acquire the Warrant are subject to the satisfaction or waiver by the Investor, at or before the Closing of each of the following conditions:

    (a) Required Documentation. The Company must have delivered to the Investor (i)
      copies of all resolutions duly adopted by the Board of Directors of the Company, or any such other documentation of the Company approving the Agreement, the Transaction Documents and any of the transactions contemplated hereby or thereby;

    (b) Consents and Permits. The Company must have obtained and delivered to the
      Investor copies of all necessary permits, approvals, and registrations necessary to effect this Agreement, the Transaction Documents and any of the transactions contemplated hereby or thereby, including pursuant to Section 3.14 of this
      Agreement;

    (c) Trading Market Approval. The Company shall have either (i) obtained and
      delivered to the Investor copies of all necessary Trading Market approvals for the issuance of the Note, the Warrant, and the Investor Shares, as applicable, or (ii) submitted a Listing of Additional Shares Notification Form with the Trading Market
      relating to the issuance of the Note, the Warrant, and the Investor Shares, as applicable;

    (d) No Event(s) of Default. No Event of Default has occurred and no Event of
      Default would result from the execution of this Agreement or any of the Transaction Documents or the transactions contemplated hereby or thereby;

    (e) Representations and Warranties.  The representations and warranties of the
      Company contained herein shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made on and as of such date;

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

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

    (h) No Suspensions of Trading in Common Stock; Listing.  Trading in the Common
      Stock shall not have been suspended by the SEC or any Trading Market (except for any suspensions of trading of not more than one day on which the Trading Market is open solely to permit dissemination of material information regarding the Company) at
      any time since the date of execution of this Agreement, and the Common Stock shall have been at all times since such date listed for trading on a Trading Market;

    (i) Limitation on Beneficial Ownership.  The issuance of the Note and the
      Warrant shall not cause the Investor Group to become, directly or indirectly, a “beneficial owner” (within the meaning of Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder) of a number of Equity Interests of a class
      that is registered under the 1934 Act which exceeds the Maximum Percentage of the Equity Interests of such class that are outstanding at such time;

    (j) Funds Flow Request.  The Company shall have delivered to the Investor a
      flow of funds request, substantially in the form set out in Exhibit C.

    6.2 Conditions
        Precedent to the Obligations of the Company.  The obligations of the Company to issue the Note and the Warrant are subject to the satisfaction or waiver by the Company, at or before the Closing, of each of the following conditions:

    (a) Representations and Warranties.  The representations and warranties of the
      Investor contained herein shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made on and as of such date;

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

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

    7. EVENTS OF
          DEFAULT

    7.1 Events of Default. 

      The occurrence of any of the following events shall be an “Event of Default” under this Agreement:

    (a) an Event of Default (as defined in the Note);

    (b) any of the representations or warranties made by the Company or any of its agents,
      officers, directors, employees or representatives in any Transaction Document or public filing being inaccurate, false or misleading in any material respect, as of the date as of which it is made or deemed to be made, including as of the Closing
      Date, or any certificate or financial or other written statements furnished by or on behalf of the Company to the Investor or any of its representatives, is inaccurate, false or misleading, in any material respect, as of the date as of which it is
      made or deemed to be made, including as of the Closing Date; or

    (c) a failure by the Company to comply with any of its covenants or agreements set
      forth in this Agreement, including those set forth in Section 9.

    7.2 Investor Right to
        Investigate an Event of Default.  If in the Investor’s reasonable opinion, an Event of Default has occurred, or is or may be continuing:

    (a) the Investor may notify the Company that is wishes to investigate such purported
      Event of Default;

    (b) the Company shall cooperate with the Investor in such investigation;

    (c) the Company shall comply with all reasonable requests made by the Investor to the
      Company in connection with any investigation by the Investor and shall (i) provide all information reasonably requested by the Investor in relation to the Event of Default to the Investor; provided that the Investor agrees that any materially price
      sensitive information and/or non-public information will be subject to confidentiality and not subject to Section 5.12, and (ii) provide all such requested information within three (3) Business Days of such request; and

    (d) the Company shall pay all reasonable costs incurred by the Investor in connection
      with any such investigation.

    
      11

      
        

    

    7.3 Remedies Upon an
        Event of Default

    (a) If an Event of Default occurs pursuant to Section 7.1(a), the Investor
      shall have such remedies as are set forth in the Note.

    (b) If an Event of Default occurs pursuant to Section 7.1(b) or Section 7.1(c)

      and is not remedied within (i) two (2) Business Days for an Event of Default occurring by the Company’s failure to comply with Section 7.1(c), or (ii) ten (10) Business Days for an Event of Default occurring pursuant to Section 7.1(b),
      the Investor may declare, by notice to the Company, effective immediately, all outstanding obligations by the Company under the Transaction Documents to be immediately due and payable in immediately available funds and the Investor shall have no
      obligation to consummate the Closing or to accept the conversion of the Note into Conversion Shares.

    (c) If any Event of Default occurs and is not remedied within (i) two (2) Business
      Days for an Event of Default occurring by the Company’s failure to comply with Section 7.1(c), or (ii) fifteen (15) Business Days for an Event of Default occurring pursuant to Section 7.1(b), the Investor may, by written notice to
      the Company, terminate this Agreement effective as of the date set forth in the Investor’s notice.

    8. TERMINATION

    8.1 Events of Termination.  This
      Agreement:

    (a) may be terminated:

    (i) by the Investor on the occurrence or existence of a Securities Termination Event
      or a Change of Control;

    (ii) by the mutual written consent of the Company and the Investor, at any time;

    (iii) by either Party, by written notice to the other Party, effective immediately, if
      the Closing has not occurred within ten (10) Business Days of the date specified by this Agreement or such later date as the Company and the Investor agree in writing, provided that the right to terminate this Agreement under this Section 8.1(a)(iii)

      is not available to any party that is in material breach of or material default under this Agreement or whose failure to fulfill any obligation under this Agreement has been the principal cause of, or has resulted in the failure of the Closing to
      occur; or

    (iv) by the Investor, in accordance with Section 7.3(c).

    8.2 Automatic
        Termination.  This Agreement will automatically terminate, without further action by the parties, at the time after the Closing Date when the applicable Principal Amount outstanding under the Note outstanding and any accrued but unpaid interest
      is reduced to zero (0), whether as a result of Conversion or repayment by the Company in accordance with the terms of this Agreement and the Note.

    8.3 Effect of Termination.

    (a) Subject to Section 8.3(b), each party’s right of termination under Section

      8.1 is in addition to any other rights it may have under this Agreement or otherwise, and the exercise of a right of termination will not be an election of remedies.

    (b) If the Investor terminates this Agreement under Section 8.1(a)(i):

    (i) the Investor may declare, by notice to the Company, all outstanding obligations by
      the Company under the Transaction Documents to be due and payable (including, without limitation, the immediate repayment of any Principal Amounts outstanding under the Note plus accrued but unpaid interest) without presentment, demand, protest or
      any other notice of any kind (other than the Investor’s election to declare such outstanding obligations due and payable) all of which are expressly waived by the Company, anything to the contrary contained in this Agreement or in any other
      Transaction Document notwithstanding; and

    (ii) the Company must within five (5) Business Days of such notice being received, pay
      to the Investor in immediately available funds the outstanding Principal Amounts for the Note plus all accrued interest thereon (if any), unless the Investor terminates this Agreement as a result of an Event of Default and provided that (A)
      subsequent to the termination under Section 8.1(a)(i), the Investor is not prohibited by Law or otherwise from exercising its conversion rights pursuant to this Agreement or the Note, (B) the Investor actually exercises its conversion rights
      under this Agreement or the Note, and (C) the Company otherwise complies in all respects with its obligation to issue Investor Shares in accordance with the Note and the Warrant (which obligation will survive termination).

    (c) Upon termination of this Agreement, the Investor will not be required to fund any
      further amount after the date of termination of the Agreement, provided that termination will not affect any undischarged obligation under this Agreement, and any obligation of the Company to pay or repay any amounts owing to the Investor hereunder
      and which have not been repaid at the time of termination.

    (d) Nothing in this Agreement will be deemed to release any party from any liability
      for any breach by such party of the terms and provisions of this Agreement or to impair the right of any party to compel specific performance by any other Party of its obligations under this Agreement.

    9. REGISTRATION
        RIGHTS

    9.1 Registration.

    (a) Registration Statement.  Promptly, but in any event no later than thirty
      (30) days from the date of this Agreement, the Company shall prepare and file with the SEC a Registration Statement covering the resale of all of the Investor Shares.  The foregoing Registration Statement shall be filed on Form S-3 or any successor
      forms thereto.  The Registration Statement (and each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided to the Investor and its counsel at least five (5) Business Days prior to its filing or
      other submission and the Company shall incorporate all reasonable comments provided by the Investor or its counsel.

    (b) Expenses.  Except as otherwise expressly provided herein, the Company will
      pay all fees and expenses incident to the performance of or compliance with this Section 9, including all fees and expenses associated with effecting the registration of the Investor Shares, including all filing and printing fees, the
      Company’s counsel and accounting fees and expenses, costs associated with clearing the Investor Shares for sale under applicable state securities laws, listing fees, fees and expenses of one counsel to the Investor and the Investor’s reasonable
      expenses in connection with the registration, but excluding discounts, commissions, fees of underwriters, selling brokers, dealer managers or similar securities industry professionals with respect to the Investor Shares being sold.

    (c) Effectiveness.  The Company shall use its best efforts to have the
      Registration Statement declared effective as soon as practicable after filing thereof but in no event later than the date that is ninety (90) days following the Closing Date.  The Company shall notify the Investor by e-mail as promptly as
      practicable, and in any event, within twenty-four (24) hours, after the Registration Statement is declared effective and shall simultaneously provide the Investor with copies of any related Prospectus to be used in connection with the sale or other
      disposition of the securities covered thereby.

    
      12

      
        

    

    (d) Piggyback Registration Rights.  If the Company at any time determines to file
      a registration statement under the 1933 Act to register the offer and sale, by the Company, of Common Stock (other than (x) on Form S-4 or Form S-8 under the 1933 Act or any successor forms thereto, (y) an at-the-market offering, or (z) a
      registration of securities solely relating to an offering and sale to employees or directors of the Company pursuant to any employee stock plan or other employee benefit plan arrangement), and the Company has not yet filed a Registration Statement
      covering all of the Investor Shares, the Company shall, as soon as reasonably practicable, give written notice to the Investor of its intention to so register the offer and sale of Common Stock and, upon the written request, given within five (5)
      Business Days after delivery of any such notice by the Company, of the Investor to include in such registration the Investor Shares (which request shall specify the number of Investor Shares proposed to be included in such registration), the Company
      shall cause all such Investor Shares to be included in such registration statement on the same terms and conditions as the Common Stock otherwise being sold pursuant to such registered offering.

    9.2 Company Obligations.  The Company
      will use its best efforts to effect the registration of the Investor Shares in accordance with the terms hereof, and pursuant thereto the Company will, as expeditiously as possible:

    

    

    (a) use its commercially reasonable efforts to cause the Registration Statement to
      become effective and to remain continuously effective for a period that will terminate upon the first date on which all Investor Shares are either covered by the Registration Statement or may be sold without restriction, including volume or
      manner-of-sale restrictions, pursuant to Rule 144 or have been sold by the Investor (the “Effectiveness Period”) and advise the Investor in writing when the Effectiveness Period has expired;

    (b) prepare and file with the SEC such amendments and post-effective amendments and
      supplements to the Registration Statement and the Prospectus as may be necessary to keep the Registration Statement effective for the Effectiveness Period and to comply with the provisions of the 1933 Act and the 1934 Act with respect to the
      distribution of all of the Investor Shares covered thereby;

    (c) provide copies to and permit counsel designated by the Investor to review all
      amendments and supplements to the Registration Statement no fewer than three (3) Business Days prior to its filing with the SEC and not file any document to which such counsel reasonably objects;

    (d) furnish to the Investor and its legal counsel, without charge, (i) promptly after
      the same is prepared and publicly distributed, filed with the SEC, or received by the Company (but not later than two (2) Business Days after the filing date, receipt date or sending date, as the case may be) one copy of the Registration Statement
      and any amendment thereto, each preliminary prospectus and Prospectus and each amendment or supplement thereto, and each letter written by or on behalf of the Company to the SEC or the staff of the SEC, and each item of correspondence from the SEC or
      the staff of the SEC, in each case relating to the Registration Statement (other than any portion of any thereof which contains information for which the Company has sought confidential treatment), and (ii) such number of copies of a Prospectus,
      including a preliminary prospectus, and all amendments and supplements thereto and such other documents as the Investor may reasonably request in order to facilitate the disposition of the Investor Shares that are covered by the related Registration
      Statement;

    (e) immediately notify the Investor of any request by the SEC for the amending or
      supplementing of the Registration Statement or Prospectus or for additional information;

    (f) use its commercially reasonable efforts to (i) prevent the issuance of any stop
      order or other suspension of effectiveness and, (ii) if such order is issued, obtain the withdrawal of any such order at the earliest possible moment and notify the Company of the issuance of any such order and the resolution thereof, or its receipt
      of notice of the initiation or threat of any proceeding for such purpose;

    (g) prior to any public offering of Investor
      Shares, use its commercially reasonable efforts to register or qualify or cooperate with the Investor and its counsel in connection with the registration or qualification of such Investor Shares for offer and sale under the securities or blue sky
      laws of such jurisdictions requested by the Investor and do any and all other commercially reasonable acts or things necessary or advisable to enable the distribution in such jurisdictions of the Investor covered by the Registration Statement and the Company shall promptly notify the Investor of any notification with respect to the suspension of the registration or qualification of any of such Investor Shares for sale under the securities or blue sky
      laws of such jurisdictions or its receipt of notice of the initiation or threat of any proceeding for such purpose;

    (h) immediately notify the Investor, at any time prior to the end of the Effectiveness
      Period, upon discovery that, or upon the happening of any event as a result of which, the Registration Statement or Prospectus includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or
      necessary to make the statements therein not misleading (in the case of the Prospectus, in light of the circumstances in which they were made), and promptly prepare, file with the SEC and furnish to such holder a supplement to or an amendment of such
      Registration Statement or Prospectus as may be necessary so that such Registration Statement or Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make
      the statements therein not misleading (in the case of such Prospectus, in light of the circumstances in which they were made);

    (i) otherwise use its commercially reasonable efforts to comply with all applicable
      rules and regulations of the SEC under the 1933 Act and the 1934 Act;  and

    (j) hold in confidence and not make any disclosure of information concerning the
      Investor provided to the Company unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to complete the Registration Statement or to avoid or
      correct a misstatement or omission in the Registration Statement, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such
      information has been made generally available to the public other than by disclosure in violation of this Agreement or any other agreement, and upon learning that disclosure of such information concerning the Investor is sought in or by a court or
      governmental body of competent jurisdiction or through other means, give prompt written notice to the Investor and allow the Investor, at the Investor’s expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective
      order for, such information.

    9.3 Indemnification.

    (a) Indemnification by the Company.  The Company will indemnify and hold
      harmless the Investor Parties, from and against any Losses to which they may become subject under the 1933 Act or otherwise, arising out of, relating to or based upon: (i) any untrue statement or alleged untrue statement of any material fact
      contained in any Registration Statement, any preliminary Prospectus, final Prospectus or other document, including any Blue Sky Application (as defined below), or any amendment or supplement thereof or any omission or alleged omission of a material
      fact required to be stated therein or, in the case of the Registration Statement, necessary to make the statements therein not misleading or, in the case of any preliminary Prospectus, final Prospectus or other document, necessary to make the
      statements therein, in light of the circumstances in which they were made, not misleading; (ii) any Blue Sky Application or other document executed by the Company specifically for that purpose or based upon written information furnished by the
      Company filed in any state or other jurisdiction in order to qualify any or all of the Investor Shares under the securities laws thereof (any such application, document or information herein called a “Blue Sky
        Application”); (iii) any violation or alleged violation by the Company or its agents of the 1933 Act, the 1934 Act or any similar federal or state law or any rule or regulation promulgated thereunder applicable to the Company or its agents
      and relating to any action or inaction required of the Company in connection with the registration or the offer or sale of the Investor Shares pursuant to any Registration Statement; or (iv) any failure to register or qualify the Investor Shares
      included in any such Registration Statement in any state where the Company or its agents has affirmatively undertaken or agreed in writing that the Company will undertake such registration or qualification on the Investor’s behalf and will reimburse
      the Investor Indemnified Parties for any legal or other expenses reasonably incurred by them in connection with investigating, preparing or defending any such Losses; provided, however, that the Company will not be liable in any such
      case if and to the extent, but only to the extent, that any such Losses arise out of or are based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by the Investor or
      any such controlling Person in writing specifically for use in such Registration Statement or Prospectus.

    
      13

      
        

    

    
    (b) Conduct of Indemnification Proceedings.  Any Person entitled to
      indemnification hereunder shall (i) give prompt notice to the indemnifying party of any claim, action, suit or proceeding with respect to which it seeks indemnification following such Person’s receipt of, or such Person otherwise become aware of, the
      commencement of such claim, action, suit or proceeding and (ii) permit such indemnifying party to assume the defense of such claim, action, suit or proceeding with counsel reasonably satisfactory to the indemnified party; provided, however,
      that any Person entitled to indemnification hereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such Person unless (A) the
      indemnifying party has agreed to pay such fees or expenses, (B) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such Person or (C) in the reasonable judgment of any such
      Person, based upon written advice of its counsel, a conflict of interest exists between such Person and the indemnifying party with respect to such claims (in which case, if the Person notifies the indemnifying party in writing that such Person
      elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such Person); and provided, further, that the failure or
      delay of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations hereunder, except to the extent that such failure or delay to give notice shall materially adversely affect the indemnifying
      party in the defense of any such claim or litigation.  It is understood that the indemnifying party shall not, in connection with any proceeding in the same jurisdiction, be liable for fees or expenses of more than one separate firm of attorneys at
      any time for all such indemnified parties.  No indemnifying party will, except with the consent of the indemnified party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving
      by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation.

    (c) Contribution.  If for any reason the indemnification provided for in the
      preceding paragraph (a) is unavailable to an indemnified party or insufficient to hold it harmless, other than as expressly specified therein, the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result
      of such Losses in such proportion as is appropriate to reflect the relative fault of the indemnified party and the indemnifying party, as well as any other relevant equitable considerations. No Person guilty of fraudulent misrepresentation within the
      meaning of Section 11(f) of the 1933 Act shall be entitled to contribution from any Person not guilty of such fraudulent misrepresentation.  The indemnity and contribution agreements contained in this Section are in addition to any other rights or
      remedies that any indemnified party may have under applicable law, by separate agreement or otherwise.

    10. RIGHTS TO FUTURE STOCK
        ISSUANCES.  Subject to the terms and conditions of this Section 10 and applicable securities laws, if at any time prior to the first anniversary of the Closing, the Company proposes to offer or sell any New Securities (a “Subsequent Financing”), the Company shall first offer the Investor the opportunity to purchase up to ten percent (10%) of such New Securities.  The Investor shall be entitled to apportion the right of first offer
      hereby granted to it in such proportions as it deems appropriate among itself and its Affiliates (provided that such Affiliates are accredited investors and otherwise legally permitted to participate in such Subsequent Financings).

    

    

    10.1 The Company shall give notice (the “Offer Notice”) to the Investor, stating (a) its bona fide intention to offer such New Securities, (b) the number of such New Securities to be offered, and (c) the price and terms, if any, upon which it proposes to
      offer such New Securities.

    

    

    10.2 By notification to the Company within
      two (2) days after the date the Offer Notice is given (the “Notice Termination Time”), the Investor may elect to purchase or otherwise acquire, at the price and on the terms specified in the Offer Notice, up
      to ten percent (10%) of such New Securities.  If the Company receives no such notice from the Investor as of such Notice Termination Time, the Investor shall be deemed to have notified the Company that it does not elect to participate in such
      Subsequent Financing. The closing of any sale pursuant to this Section 9 shall occur within five (5) days of the date that the Offer Notice is given and the date of initial sale of New Securities pursuant to Section 10.3.

    

    

    10.3 The Company may, during the five (5) day period following the
      expiration of the period provided in Section 10.2, offer and sell the remaining portion of such New Securities to any Person or Persons at a price not less than, and upon terms no more favorable to the offeree than, those specified in the
      Offer Notice.  If the Company does not enter into an agreement for the sale of the New Securities within such period, or if such agreement is not consummated within thirty (30) days of the execution thereof, the right provided hereunder shall be
      deemed to be revived and such New Securities shall not be offered unless first reoffered to the Investors in accordance with this Section 10.

    

       

     
    10.4 The right of first offer in this Section
        10 shall not be applicable to Exempted Securities.

    

    

    11. GENERAL
          PROVISIONS

    11.1 Fees and Expenses.  Prior to the
      date of this Agreement, the Company has paid Lucosky Brookman LLP $25,000.  At the Closing, the Company shall reimburse the Investor up to an additional $50,000 of actual, documented and reasonable due diligence costs and actual, documented and
      reasonable fees and disbursements of Lucosky Brookman LLP in connection with the preparation of the Transaction Documents, it being understood that Lucosky Brookman LLP has not rendered any legal advice to the Company in connection with the
      transactions contemplated hereby and that the Company has relied for such matters on the advice of its own counsel.  Except as specified above, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if
      any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of the Transaction Documents. The Company shall pay all stamp and other taxes and duties levied in connection with the
      sale of the Note and the Warrant.

    
      14

      
        

    

    11.2 Notices.  Any and all notices or
      other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via email at
      the email address specified in this Section prior to 5:00 p.m. (New York time) on a Business Day, (b) the next Business Day after the date of transmission, if such notice or communication is delivered via email at the email address specified in this
      Section on a day that is not a Business Day or later than 5:00 p.m. (New York time) on any date and earlier than 11:59 p.m. (New York time) on such date, (c) the Business Day following the date of mailing, if sent by U.S. nationally recognized
      overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given.  The address for such notices and communications shall be as follows:

    If to the Company:

    GSE Systems, Inc.

      6940 Columbia Gateway Dr.

    Suite 470

    Columbia, MD 21046

    Telephone: (410) 970-7800

      Email: Emmett.Pepe@gses.com

      Attention: Emmett Pepe

    With a copy (which shall not constitute notice) to:

    Miles & Stockbridge P.C.

    100 Light Street

    Baltimore, MD 21202

    Attn: Scott Wilson

    Telephone: 410.385.3590

    Email: swilson@milesstockbridge.com

    

    

    And

    Miles & Stockbridge P.C.

    1201 Pennsylvania Avenue NW

    Suite 900

    Washington, DC 20004

    Attn: Benjamin D. Horowicz

    Telephone: 202.524.8054

    Email: bhorowic@milesstockbridge.com

    

    

    If to the Investor:

    Lind Global Fund II LP

      c/o The Lind Partners LLC

      444 Madison Avenue, Floor 41

      New York, NY 10022

      Telephone: (646) 395-3931

      Email: jeaston@thelindpartners.com and

                notice@thelindpartners.com

      Attention: Jeff Easton

    With a copy (which shall not constitute notice) to:

    Lucosky Brookman LLP

      101 Wood Avenue South

      Fifth Floor

      Woodbridge, NJ

      Telephone: (732) 395-4400

      Email: sbrookman@lucbro.com

      Attention: Seth Brookman

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

    
      15

      
        

    

    
    11.3 Severability.  If any provision of this Agreement is held by a court of
      competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable, such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and the validity and enforceability of
      the remaining provisions of this Agreement will not in any way be affected or impaired thereby.

    11.4 Governing Law.  This Agreement shall be governed by and construed in
      accordance with the Laws of the State of Delaware, without reference to principles of conflict of laws or choice of laws.

    11.5 Jurisdiction and Venue.  Any action, proceeding or claim arising out of, or
      relating in any way to this Agreement shall be brought and enforced in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York.  The Company and the Investor irrevocably submit to
      the jurisdiction of such courts, which jurisdiction shall be exclusive, and hereby waive any objection to such exclusive jurisdiction or that such courts represent an inconvenient forum.  The prevailing party in any such action shall be entitled to
      recover its reasonable and documented attorneys’ fees and out-of-pocket expenses relating to such action or proceeding.

    11.6 WAIVER OF RIGHT TO JURY TRIAL.  THE COMPANY AND THE INVESTOR HEREBY
      IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS.

    11.7 Survival. 
      The representations, warranties, agreements and covenants contained herein shall survive the Closing and the delivery of the Securities.

    11.8 Entire Agreement.  The Transaction Documents, together with the Exhibits and
      Schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been
      merged into such documents, exhibits and schedules.

    11.9 Amendments;
        Waivers.  No provision of this Agreement may be waived or amended except in a written instrument signed by the Company and the Investor. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be
      deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner
      impair the exercise of any such right.

    11.10 Construction.  The headings
      herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.  The language used in this Agreement will be deemed to be the language chosen by the parties to
      express their mutual intent, and no rules of strict construction will be applied against any party.  This Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any
      party by virtue of the authorship of any provisions of this Agreement or any of the Transaction Documents.

    11.11 Successors and Assigns.  This Agreement shall be binding upon, and inure to
      the benefit of and be enforceable by, the Company and the Investor and their respective successors and assigns.  The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investor.  The
      Investor may assign any or all of its rights under this Agreement to any Person to whom the Investor assigns or transfers any Securities, provided such transferee agrees in writing to be bound, with respect to the transferred Securities, by the
      provisions hereof that apply to the “Investor” and such transferee is an accredited investor.

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

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

    11.14 Counterparts.  This Agreement may be executed in two identical
      counterparts, both of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.  Signature pages delivered by facsimile or e-mail shall have the
      same force and effect as an original signature.

    11.15 Specific Performance.  The Company
      acknowledges that monetary damages alone would not be adequate compensation to the Investor for a breach by the Company of this Agreement and the Investor may seek an injunction or an order for specific performance from a court of competent
      jurisdiction if (a) the Company fails to comply or threatens not to comply with this Agreement or (b) the Investor has reason to believe that the Company will not comply with this Agreement.

    

    

    [Signature Page Follows]

    
      16

      
        

    

    
    IN WITNESS WHEREOF, the undersigned have executed this Securities Purchase Agreement as of the date first set forth above.

    
      	
              COMPANY:

            	 	
              INVESTOR:

            	 
	 	 	 	 	 
	
              GSE SYSTEMS, INC.

            	 	
              LIND GLOBAL FUND II LP

            
	 	 	 	 	 
	 	 	 	 	 
	
              By:

            	 /s/ Emmett Pepe

            	 	
              By:

            	 /s/ Jeff Easton

            
	
              Name:

            	
              Emmett Pepe

            	 	
              Name: 

              

            	 Jeff Easton
	
              Title: Chief Financial Officer

            	 	
              Title: Managing Member of Lind Global Partners II LLC, General Partner

            

    

    

  

  

  17Exhibit 10.2

  

   

  

  
    THIS NOTE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
      NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
      ACCEPTABLE TO THE COMPANY. THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS NOTE MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.

    GSE SYSTEMS, INC.

    Senior

      Convertible Promissory

      Note due February 23, 2024

    Note No. 1 $5,750,000 

      Dated: February 23, 2022 (the “Issuance Date”)

    For value received, GSE Systems, Inc., a Delaware corporation (the “Maker” or the “Company”), hereby promises to pay to
      the order of Lind Global Fund II LP, a Delaware limited partnership (together with its successors and representatives, the “Holder”), in accordance with the terms hereinafter provided, the principal amount of
      FIVE MILLION SEVEN HUNDRED FIFTY THOUSAND DOLLARS ($5,750,000.00) (the “Principal Amount”).

    

    

    All payments under or pursuant to this Senior Convertible Promissory Note (this “Note”) shall be made in United States Dollars in
      immediately available funds to the Holder at the address of the Holder set forth in the Purchase Agreement (as hereinafter defined) or at such other place as the Holder may designate from time to time in writing to the Maker or by wire transfer of
      funds to the Holder’s account, instructions for which are attached hereto as Exhibit A. The outstanding principal balance of this Note shall be due and payable on February 23, 2024 (the “Maturity Date”) or at such earlier time as provided herein; provided, that the Holder, in its sole discretion, may at the request of the Maker extend the Maturity Date to any date after the original Maturity Date. 
      In the event that the Maturity Date shall fall on Saturday or Sunday, such Maturity Date shall be the next succeeding Business Day. All calculations made pursuant to this Note shall be rounded down to three decimal places.

    ARTICLE 1

    1.1 Purchase Agreement.  This Note has been executed and delivered pursuant to
      the Securities Purchase Agreement, dated as of February 23, 2022 (as the same may be amended from time to time, the “Purchase Agreement”), by and between the Maker and the Holder. Capitalized terms used and not
      otherwise defined herein shall have the meanings set forth for such terms in the Purchase Agreement.

    1.2 Interest. Other than as set forth in Section 3.6(c), this Note shall
      not bear interest.

    1.3 Principal Installment Payments.     Commencing on the date that is 180 days
      from the Issuance Date, the Maker shall pay to the Holder the Outstanding Principal Amount hereunder in eighteen (18) consecutive monthly installments, on such date and each one (1) month anniversary thereof (each, a “Payment

        Date” and collectively the “Monthly Payments”), an amount equal to Three Hundred Nineteen Thousand Four Hundred Forty Four Dollars ($319,444.00), until the Outstanding Principal Amount has been paid in
      full prior to or on the Maturity Date or, if earlier, upon acceleration, conversion or redemption of this Note in accordance with the terms herein.  The Monthly Payments shall, at the Maker’s option, be made in (i) cash, (ii) Repayment Shares, or
      (iii) a combination of cash and Repayment Shares; provided that the number of Repayment Shares shall be determined by dividing the Principal Amount being paid in shares of Common Stock by the Repayment Share Price; provided, however, that no portion
      of the Principal Amount may be paid in Repayment Shares unless such Repayment Shares (A) may be immediately resold under Rule 144 without restriction on the number of shares to be sold or manner of sale, or (B) are registered for resale under the
      1933 Act and the registration statement is in effect and lawfully usable to effect immediate sales of such Repayment Shares. The Company must provide advance written notice to the Holder of whether it will elect to pay a Monthly Payment in cash,
      Repayment Shares or a combination thereof as follows: (i) with respect to the first Monthly Payment, at least ten (10) Business Days before the Payment Date, and (ii) with respect to each Monthly Payment thereafter, within three (3) Business Days of
      the prior Payment Date; provided, however, that if no such notice is provided within the timeframes set forth above, such Monthly Payments shall be made in Repayment Shares.

    1.4 Prepayment. The Maker may repay all, but not less than all, of the then Outstanding Principal Amount upon delivering a Prepayment Notice. If the Maker elects to prepay this Note pursuant to this Section
        1.4, the Holder shall have the right, upon written notice to the Maker (a “Prepayment Conversion Notice”) within five (5) Business Days of the Holder’s receipt of a Prepayment Notice, to convert up
      to one third (1/3) of the Outstanding Principal Amount (the “Maximum Amount”) at the lesser of the Repayment Share Price or the Conversion Price (each as defined below), in accordance with the provisions of
      Article 3, specifying the Principal Amount (up to the Maximum Amount) that the Holder will convert. Upon delivery of a Prepayment Notice, the Maker irrevocably and unconditionally agrees to, within five (5) Business Days of receiving a Prepayment
      Conversion Notice, and if no Prepayment Conversion Notice is received, within ten (10) Business Days of delivery of a Prepayment Notice: (i) repay the amount of the Outstanding Principal Amount minus the Principal Amount set forth in the Prepayment
      Conversion Notice and (ii) issue the applicable Conversion Shares to the Holder in accordance with Article 3, as applicable.  The foregoing notwithstanding, the Maker may not deliver a Prepayment Notice with respect to any Outstanding Principal
      Amount that is subject to a Conversion Notice delivered by the Holder in accordance with Article 3.

    1.5 Delisting from a Trading Market. If at any time the Common Stock ceases to
      be listed on a Trading Market, (i) the Holder may deliver a demand for payment to the Company and, if such a demand is delivered, the Company shall, within ten (10) Business Days following receipt of the demand for payment from the Holder, pay all of
      the Outstanding Principal Amount or (ii) the Holder may, at its election, after the six-month anniversary of the Issuance Date or earlier if a Registration Statement covering the Conversion Shares has been declared effective, upon notice to the
      Company in accordance with Section 5.1, convert all or a portion of the Outstanding Principal Amount and the Conversion Price shall be adjusted to the lower of (A) the then-current Conversion Price and (A) eighty percent (80%) of the average of the
      three (3) lowest daily VWAPs during the twenty (20) Trading Days prior to delivery by the Holder of its notice of conversion pursuant to this Section 1.5.

    1.6 Payment on Non-Business Days.  Whenever any payment to be made shall be due
      on a day which is not a Business Day, such payment may be due on the next succeeding Business Day.

    1.7 Transfer.  This Note may be transferred or sold, subject to the provisions
      of Section 5.8 of this Note, or pledged, hypothecated or otherwise granted as security by the Holder.

    1.8 Replacement.  Upon receipt of a duly executed and notarized written
      statement from the Holder with respect to the loss, theft or destruction of this Note (or any replacement hereof), or, in the case of a mutilation of this Note, upon surrender and cancellation of such Note, the Maker shall issue a new Note, of like
      tenor and amount, in lieu of such lost, stolen, destroyed or mutilated Note.

    
      1

      
        

    

    
    1.9 Use of Proceeds.  The Maker shall use the proceeds of this Note as set forth
      in the Purchase Agreement.

    1.10 Status of Note. Subject to the terms of the Purchase Agreement, the
      obligations of the Maker under this Note shall be senior to all other existing Indebtedness and equity of the Company. Subject to the terms of the Purchase Agreement, upon any Liquidation Event (as hereinafter defined), the Holder will be entitled to
      receive, before any distribution or payment is made upon, or set apart with respect to, any Indebtedness of the Maker or any class of capital stock of the Maker, an amount equal to the Outstanding Principal Amount. For purposes of this Note, “Liquidation Event” means a liquidation pursuant to a filing of a petition for bankruptcy under applicable law or any other insolvency or debtor’s relief, an assignment for the benefit of creditors, or a voluntary
      or involuntary liquidation, dissolution or winding up of the affairs of the Maker.

    1.11 Tax Treatment.  The Maker and the Holder agree that for U.S. federal income
      tax purposes, and applicable state, local and non-U.S. income tax purposes, this Note is not intended to be, and shall not be, treated as indebtedness.  Neither the Maker nor the Holder shall take any contrary position on any tax return, or in any
      audit, claim, investigation, inquiry or proceeding in respect of Taxes, unless otherwise required pursuant to a final determination within the meaning of Section 1313 of the Internal Revenue Code of 1986, as amended (the “Code”), or any analogous provision of applicable state, local or non-U.S. law.

    1.12 Limitations on the Number of Repayment Shares Issuable. Notwithstanding
      anything herein to the contrary, the Company may not issue any Repayment Shares in satisfaction of its obligations hereunder to the extent such Repayment Shares would, after giving effect to such issuance and when added to the number of shares of
      Common Stock issued and issuable under the Transaction Documents, cause the issuance of shares under the Transaction Documents to be in excess of (a) 4,144,544 shares of Common Stock or (b)(i) 19.9% of the number of shares of Common Stock outstanding
      as of the date hereof,  or (ii) 19.9% of the total voting power of the Company's securities outstanding as of the date hereof that are entitled to vote on a matter being voted on by holders of the Common Stock, unless and until the Company obtains
      stockholder approval permitting such issuances in accordance with the Trading Market. For purposes of this Section 1.12, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and
      the rules and regulations promulgated thereunder. To the extent that the Company is unable issue Repayment Shares as result of the limitation provided in this Section 1.12, the Company shall issue the amount of Repayment Shares possible under the
      foregoing limitation and shall pay to the Holder the cash value of the number of Repayment Shares that the Maker is unable to issue at a price per share equal to the VWAP of the Common Stock on the applicable Payment Date.

    ARTICLE 2

    2.1 Events of Default.  An “Event of Default”
      under this Note shall mean the occurrence of any of the events defined in the Purchase Agreement, and any of the additional events described below:

    
      	
              (a)

            	
              any default in the payment of (i) the Principal Amount when due; or (ii) liquidated damages in respect of this Note as and when the same shall become due and payable
                (whether on the Maturity Date or by acceleration or otherwise);

            

    

    
      	
              (b)

            	
              the Maker shall fail to observe or perform any covenant, condition or agreement contained in this Note or a material covenant, condition or agreement contained in any
                Transaction Document;

            

    

    
      	
              (c)

            	
              the Maker’s notice to the Holder, including by way of public announcement, at any time, of its inability to comply (including for any of the reasons described in Section

                3.6(a) hereof) or its intention not to comply with permissible requests for conversion of this Note into shares of Common Stock;

            

    

    
      	
              (d)

            	
              the Maker shall fail to (i) timely deliver the shares of Common Stock as and when required in Section 3.2; or (ii) make the payment of any fees and/or
                liquidated damages under this Note, the Purchase Agreement or the other Transaction Documents;

            

    

    
      	
              (e)

            	
              [Reserved];

            

    

    
      	
              (f)

            	
              at any time the Maker shall fail to have a sufficient number of shares of Common Stock authorized, reserved and available for issuance to satisfy the potential
                conversion in full (disregarding for this purpose any and all limitations of any kind on such conversion) of this Note or upon exercise of the Warrant;

            

    

    
      	
              (g)

            	
              any representation or warranty made by the Maker or any of its Subsidiaries herein or in the Purchase Agreement, this Note, the Warrant or any other Transaction
                Document shall prove to have been false or incorrect or breached in a material respect on the date as of which made;

            

    

    
      	
              (h)

            	
              [Reserved];

            

    

    
      	
              (i)

            	
              the Maker or any of its Subsidiaries shall (A) default in any payment of any amount or amounts of principal of or interest (if any pursuant to Section 3.6(c))
                on any Indebtedness (other than the Indebtedness hereunder), the aggregate principal amount of which Indebtedness is in excess of $250,000 or (B) default in the observance or performance of any other agreement or condition relating to any
                such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the
                holder or holders or beneficiary or beneficiaries of such Indebtedness to cause with the giving of notice if required, such Indebtedness to become due prior to its stated maturity;

            

    

     

     

     

     

     

     

     

     

     

     

    

    
      2

      
        

    

    
      
        	
                (j)

              	
                the Maker or any of its Subsidiaries shall: (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or
                  liquidator of itself or of all or a substantial part of its property or assets; (ii) make a general assignment for the benefit of its creditors; (iii) commence a voluntary case under the United States Bankruptcy Code (as now or hereafter
                  in effect) or under the comparable laws of any jurisdiction (foreign or domestic); (iv) file a petition seeking to take advantage of any bankruptcy, insolvency, moratorium, reorganization or other similar law affecting the enforcement of
                  creditors’ rights generally; (v) acquiesce in writing to any petition filed against it in an involuntary case under United States Bankruptcy Code (as now or hereafter in effect) or under the comparable laws of any jurisdiction (foreign or
                  domestic); (vi) issue a notice of bankruptcy or winding down of its operations or issue a press release regarding same; or (vii) take any action under the laws of any jurisdiction (foreign or domestic) analogous to any of the foregoing;

              

      

      
        	
                (k)

              	
                a proceeding or case shall be commenced in respect of the Maker or any of its Subsidiaries, without its application or consent, in any court of competent
                  jurisdiction, seeking: (i) the liquidation, reorganization, moratorium, dissolution, winding up, or composition or readjustment of its debts; (ii) the appointment of a trustee, receiver, custodian, liquidator or the like of it or of all
                  or any substantial part of its assets in connection with the liquidation or dissolution of the Maker or any of its Subsidiaries; or (iii) similar relief in respect of it under any law providing for the relief of debtors, and such
                  proceeding or case described in clause (i), (ii) or (iii) shall continue undismissed, or unstayed and in effect, for a period of sixty (60) days or any order for relief shall be entered in an involuntary case under United States
                  Bankruptcy Code (as now or hereafter in effect) or under the comparable laws of any jurisdiction (foreign or domestic) against the Maker or any of its Subsidiaries or action under the laws of any jurisdiction (foreign or domestic)
                  analogous to any of the foregoing shall be taken with respect to the Maker or any of its Subsidiaries and shall continue undismissed, or unstayed and in effect for a period of forty-five (45) days;

              

      

      
        	
                (l)

              	
                one or more final, non-appealable judgments or orders for the payment of money aggregating in excess of $500,000 (or its equivalent in the relevant currency of
                  payment) are rendered against one or more of the Company and its Subsidiaries;

              

      

      
        	
                (m)

              	
                the failure of the Maker to instruct its transfer agent to remove any legends from shares of Common Stock and issue such unlegended certificates to the Holder
                  within three (3) Trading Days of the Holder’s request so long as the Holder has provided a legal opinion (at the cost of the Maker) that such shares of Common Stock can be sold pursuant to Rule 144 or any other applicable exemption;

              

      

      
        	
                (n)

              	
                the Maker’s Common Stock is no longer publicly traded or cease to be listed on the Trading Market or, after the six month anniversary of the Issuance Date, any
                  Investor Shares may not be immediately resold under Rule 144 without restriction on the number of shares to be sold or manner of sale, unless such Investor Shares have been registered for resale under the 1933 Act and may be sold without
                  restriction;

              

      

      
        	
                (o)

              	
                the Maker proposes to or does consummate a “going private” transaction as a result of which the Common Stock will no longer be registered under Sections 12(b) or
                  12(g) of the 1934 Act;

              

      

      
        	
                (p)

              	
                there shall be any SEC or judicial stop trade order or trading suspension stop-order or any restriction in place with the transfer agent for the Common Stock
                  restricting the trading of such Common Stock;

              

      

      
        	
                (q)

              	
                the Depository Trust Company places any restrictions on transactions in the Common Stock or the Common Stock are no longer tradeable through the Depository Trust
                  Company Fast Automated Securities Transfer program; or

              

      

      
        	
                (r)

              	
                the Company’s Market Capitalization is below $12.5 million for ten (10) consecutive days.

              

      

    

    For the avoidance of doubt, any default pursuant to clause (i) above shall not be subject to any cure periods pursuant to the instrument governing such Indebtedness or this Note.

    
      2.2 Remedies Upon an Event of Default.

      
        	
                (a)

              	
                Upon the occurrence of any Event of Default that has not been remedied within (i) two (2) Business Days for an Event of Default occurring by the Company’s failure
                  to comply with Section 7.1(c) of the Purchase Agreement or Section 3.2 of this Note, or (ii) ten (10) Business Days for all other Events of Default (the relevant period, the “Applicable Cure Period”), provided
                    however, that there shall be no cure period for an Event of Default described in Sections 2.1(a), 2.1(d), 2.1(i), 2.1(j) or 2.1(k) hereof, the Maker shall be obligated to pay to the Holder the Mandatory Default Amount, which
                  Mandatory Default Amount shall be earned by the Holder on the date the Event of Default giving rise thereto occurs and shall be due and payable on the earlier to occur of the Maturity Date, upon conversion, redemption or prepayment of
                  this Note or the date on which all amounts owing hereunder have been accelerated in accordance with the terms hereof.

              

      

      
        	
                (b)

              	
                Upon the occurrence of any Event of Default, the Maker shall, as promptly as possible but in any event within two (2) Business Days of an officer of the Maker
                  obtaining knowledge of the occurrence of such Event of Default, notify the Holder of the occurrence of such Event of Default, describing the event or factual situation giving rise to the Event of Default and specifying the relevant
                  subsection or subsections of Section 2.1 hereof under which such Event of Default has occurred.

              

      

    

     

    

    
      3

      
        

    

    

    

     

     

    
      	
              (c)

            	
              Upon the occurrence and during the continuance of an Event of Default, subject to any Applicable Cure Period, the Holder may at any time at its option (1) provide
                Maker with a written notice of the Event of Default and declare the Mandatory Default Amount due and payable, and thereupon, the same shall be accelerated and so due and payable, without further presentment, demand, protest or notice (other
                than the Holder’s election to declare such acceleration), all of which are hereby expressly unconditionally and irrevocably waived by the Maker and (2) exercise all other rights and remedies available to it under the Transaction Documents;
                provided, however, that (x) upon the occurrence of an Event of Default described above, the Holder, in its sole and absolute discretion, may: (a) from time-to-time demand that all or a portion of the
                Outstanding Principal Amount be converted into shares of Common Stock at the lower of (i) the then current Conversion Price and (ii) eighty five-percent (85%) of the average of the three (3) lowest daily VWAPs during the twenty (20) Trading
                Days prior to the delivery by the Holder of the applicable notice of conversion, or (b) exercise or otherwise enforce any one or more of the Holder’s rights, powers, privileges, remedies and interests under this Note, the Purchase
                Agreement, the other Transaction Documents or applicable law and (y) upon the occurrence of an Event of Default described in Section 2.1(k) above, the Mandatory Default Amount shall become immediately due and payable without
                presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Maker. No course of delay on the part of the Holder shall operate as a waiver thereof or otherwise prejudice the rights of the Holder. No remedy
                conferred hereby shall be exclusive of any other remedy referred to herein or now or hereafter available at law, in equity, by statute or otherwise.

            

    

    ARTICLE 3

    3.1 Conversion.

    
      	
              (a)

            	
              Conversion. At any time following the date that is the earlier of (i) the date that is the six (6) month anniversary of the Issuance Date or (ii) the date of
                effectiveness of a Registration Statement covering the applicable Conversion Shares (as set forth in the Purchase Agreement), this Note shall be convertible (in whole or in part), at the option of the Holder, into such number of fully paid
                and non-assessable Common Stock as is determined by dividing (x) that portion of the Outstanding Principal Amount that the Holder elects to convert (the “Conversion Amount”) by (y) the Conversion
                Price then in effect on the date on which the Holder delivers a notice of conversion, in substantially the form attached hereto as Exhibit B (the “Conversion
                  Notice”), in accordance with Section 5.1 to the Maker. The Holder shall deliver this Note to the Maker at the address designated in the Purchase Agreement at such time that this Note is fully converted. With respect to
                partial conversions of this Note, the Maker shall keep written records of the amount of this Note converted as of the date of such conversion (each, a “Conversion Date”). Any amounts of the
                Outstanding Principal Amount converted hereunder shall be credited to the next scheduled Monthly Payment, or if any amount of the Outstanding Principal Amount converted hereunder exceeds the next scheduled Monthly Payment, future Monthly
                Payments shall be credited, as applicable.

            

    

    
      	
              (b)

            	
              Conversion Price. The “Conversion Price” means $1.94, and shall be subject to adjustment as provided herein.

            

    

    3.2 Delivery of Conversion Shares.  As soon as practicable after the occurrence
      of any event requiring the issuance of Common Stock issuable upon conversion of this Note (“Conversion Shares”), and in any event within one (1) Business Day thereafter (such date, the “Share Delivery Date”), the Maker shall, at its expense, cause to be issued in the name of and delivered to the Holder, or as the Holder may direct, a certificate or certificates evidencing the number of fully paid
      and nonassessable Common Stock to which the Holder shall be entitled, in such denominations as may be requested by the Holder, which certificate or certificates shall be free of restrictive and trading legends, except for any such legends as may be
      required under the Securities Act.  In lieu of delivering physical certificates for the shares of Common Stock issuable upon the occurrence of any event requiring the issuance of Conversion Shares in accordance with this Note, provided the Company’s
      transfer agent is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer program or a similar program, upon request of the Holder, the Company shall cause its transfer agent to
      electronically transmit such Conversion Shares so issuable to the Holder (or its designee), by crediting the account of the Holder’s (or such designee’s) broker with DTC through its Deposit and Withdrawal At Custodian (“DWAC”) system (provided that the same time periods herein as for stock certificates shall apply) as instructed by the Holder (or its designee); provided, that such issuance shall only be made through DTC’s DWAC system if such
      Conversion Shares will be issued free of restrictive legends.

    3.3  Ownership Cap. Notwithstanding anything to the contrary contained herein,
      the Holder shall not be entitled to receive shares representing Equity Interests upon conversion of this Note to the extent (but only to the extent) that such exercise or receipt would cause the Holder Group (as defined below) to become, directly or
      indirectly, a “beneficial owner” (within the meaning of Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder) of a number of Equity Interests of a class that is registered under the 1934 Act which exceeds the Maximum
      Percentage (as defined in the Purchase Agreement) of the Equity Interests of such class that are outstanding at such time.  Any purported delivery of Equity Interests in connection with the conversion of this Note prior to the termination of this
      restriction in accordance herewith shall be void and have no effect to the extent (but only to the extent) that such delivery would result in the Holder Group becoming the beneficial owner of more than the Maximum Percentage of the Equity Interests
      of a class that is registered under the 1934 Act that is outstanding at such time. If any delivery of Equity Interests owed to the Holder following conversion of this Note is not made, in whole or in part, as a result of this limitation, the
      Company’s obligation to make such delivery shall not be extinguished and the Company shall deliver such Equity Interests as promptly as practicable after the Holder gives notice to the Company that such delivery would not result in such limitation
      being triggered or upon termination of the restriction in accordance with the terms hereof.  To the extent limitations contained in this Section 3.3 apply, the determination of whether this Note is convertible and of which portion of this
      Note is convertible shall be the sole responsibility and in the sole determination of the Holder, and the submission of a notice of conversion shall be deemed to constitute the Holder’s determination that the issuance of the full number of Conversion
      Shares requested in the notice of conversion is permitted hereunder, and the Company shall not have any obligation to verify or confirm the accuracy of such determination.  For purposes of this Section 3.2, (i) the term “Maximum Percentage” shall mean 4.99%; provided, that if at any time after the date hereof the Holder Group beneficially owns in excess of 4.99% of any class of Equity Interests in the Company that is registered
      under the 1934 Act, then the Maximum Percentage shall automatically increase to 9.99% so long as the Holder Group owns in excess of 4.99% of such class of Equity Interests (and shall, for the avoidance of doubt, automatically decrease to 4.99% upon
      the Holder Group ceasing to own in excess of 4.99% of such class of Equity Interests); and (ii) the term “Holder Group” shall mean the Holder plus any other Person with which the Holder is considered to be part
      of a group under Section 13 of the 1934 Act or with which the Holder otherwise files reports under Sections 13 and/or 16 of the 1934 Act.  In determining the number of Equity Interests of a particular class outstanding at any point in time, the
      Holder may rely on the number of outstanding Equity Interests of such class as reflected in (x) the Company’s most recent Annual Report on Form 20-F filed with the Securities and Exchange Commission, as the case may be, (y) a more recent public
      announcement by the Company or (z) a more recent notice by the Company or its transfer agent to the Holder setting forth the number of Equity Interests of such class then outstanding.  For any reason at any time, upon written or oral request of the
      Holder, the Company shall, within one (1) Business Day of such request, confirm orally and in writing to the Holder the number of Equity Interests of any class then outstanding. The provisions of this Section 3.3 shall be construed, corrected
      and implemented in a manner so as to effectuate the intended beneficial ownership limitation herein contained.

    
      4

      
        

    

    3.4 Adjustment of Conversion Price.

    
      	
              (a)

            	
              Until the Note has been paid in full or converted in full, the Conversion Price shall be subject to adjustment from time to time as follows (but shall not be
                increased, other than pursuant to Section 3.4(a)(i) hereof):

            

    

    (i) Adjustments for Stock Splits and Combinations.  If the Maker shall at any
      time or from time to time after the Closing Date (but whether before or after the Issuance Date) effect a split or other subdivision of the outstanding Common Stock, the applicable Conversion Price in effect immediately prior to the stock split shall
      be proportionately decreased. If the Maker shall at any time or from time to time after the Closing Date (but whether before or after the Issuance Date), combine the outstanding Common Stock, the applicable Conversion Price in effect immediately
      prior to the combination shall be proportionately increased. Any adjustments under this Section 3.4(a)(i) shall be effective at the close of business on the date the stock split or combination occurs.

    (ii) Adjustments for Certain Dividends and Distributions.  If the Maker shall
      at any time or from time to time after the Closing Date (but whether before or after the Issuance Date) make or issue or set a record date for the determination of holders of Common Stock entitled to receive a dividend or other distribution payable
      in Common Stock, then, and in each event, the applicable Conversion Price in effect immediately prior to such event shall be decreased as of the time of such issuance or, in the event such record date shall have been fixed, as of the close of
      business on such record date, by multiplying the applicable Conversion Price then in effect by a fraction:

    (1) the numerator of which shall be the total number of shares of Common Stock issued
      and outstanding immediately prior to the time of such issuance or the close of business on such record date; and

    (2) the denominator of which shall be the total number of shares of Common Stock
      issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution.

    (iii) Adjustment for Other Dividends and Distributions.  If the Maker shall at
      any time or from time to time after the Closing Date (but whether before or after the Issuance Date) make or issue or set a record date for the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in
      other than Common Stock, then, and in each event, an appropriate revision to the applicable Conversion Price shall be made and provision shall be made (by adjustments of the Conversion Price or otherwise) so that the Holder of this Note shall receive
      upon conversions thereof, in addition to the number of shares of Common Stock receivable thereon, the number of securities of the Maker or other issuer (as applicable) or cash or other property that it would have received had this Note been converted
      into shares of Common Stock in full (without regard to any conversion limitations herein) on the date of such event and had thereafter, during the period from the date of such event to and including the Conversion Date, retained such securities
      (together with any distributions payable thereon during such period) or assets, giving application to all adjustments called for during such period under this Section 3.4(a)(iii) with respect to the rights of the holders of this Note; provided, however, that if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Conversion Price shall be adjusted
      pursuant to this paragraph as of the time of actual payment of such dividends or distributions.

    (iv) Adjustments for Reclassification, Exchange or Substitution.  If the shares
      of Common Stock at any time or from time to time after the Closing Date (but whether before or after the Issuance Date) shall be changed to the same or different number of shares or other securities of any class or classes of stock or other property,
      whether by reclassification, exchange, substitution or otherwise (other than by way of a stock split or combination of shares or stock dividends provided for in Sections 3.4(a)(i), (ii) and (iii) hereof, or a reorganization, merger,
      consolidation, or sale of assets provided for in Section 3.4(a)(vii) hereof), then, and in each event, an appropriate revision to the Conversion Price shall be made and provisions shall be made (by adjustments of the Conversion Price or
      otherwise) so that the Holder shall have the right thereafter to convert this Note into the kind and amount of shares of stock or other securities or other property receivable upon reclassification, exchange, substitution or other change, by holders
      of the number of shares of Common Stock into which such Note might have been converted immediately prior to such reclassification, exchange, substitution or other change, all subject to further adjustment as provided herein.

    (v) Adjustments for Issuance of Additional Shares of Common Stock. In the event
      the Maker shall, at any time or from time to time after the Closing Date (but whether before or after the Issuance Date), issue or sell any additional Common Stock (“Additional Common Stock”), other than (A) as provided in this Note (including
      the foregoing subsections (i) through (iv) of this Section 3.4(a)), (B) pursuant to any Equity Plan (including pursuant to Common Stock Equivalents granted or issued under any Equity Plan), (C) pursuant to Common Stock Equivalents (as defined
      below) granted or issued prior to the Closing Date, (D) Exempted Securities, or (E) pursuant to the terms of this Note, at an effective price per share that is less than the Conversion
      Price then in effect or without consideration, then the Conversion Price upon each such issuance shall be reduced to a price equal to the consideration per share paid for such Additional Common Stock. For purposes of clarification, the amount of
      consideration received for such Additional Common Stock shall not include the value of any additional securities or other rights received in connection with such issuance of Additional Common Stock (i.e. warrants, rights of first refusal or other
      similar rights).

    (vi) Issuance, Amendment or Adjustment of Common Stock Equivalents.  Except for
      Exempted Securities or the Warrant, if (x) the Maker, at any time after the Closing Date (but whether before or after the Issuance Date), shall issue any securities convertible into or exercisable or exchangeable for, directly or indirectly, Common
      Stock (“Convertible Securities”), or any rights or warrants or options to purchase any such Common Stock or Convertible Securities, other than Common Stock Equivalents granted or issued under any Equity Plan (collectively with the Convertible
      Securities, the “Common Stock Equivalents”) and the price per share for which Common Stock may be issuable pursuant to any such Common Stock Equivalent shall be less than the
      applicable Conversion Price then in effect, or (y) the price per share for which Common Stock may be issuable under any Common Stock Equivalents is amended or adjusted, pursuant to the terms of such Common Stock Equivalents or otherwise, and such
      price as so amended or adjusted shall be less than the applicable Conversion Price in effect at the time of such amendment or adjustment, then, in each such case (x) or (y), the applicable Conversion Price upon each such issuance or amendment or
      adjustment shall be adjusted as provided in subsection (vi) of this Section 3.4(a) as if the maximum number of shares of Common Stock issuable upon conversion, exercise or exchange of such Common Stock Equivalents had been issued on the date
      of such issuance or amendment or adjustment.

    (vii) Consideration for Stock.  In case any shares of Common Stock or any
      Common Stock Equivalents shall be issued or sold:

    (1) in connection with any merger or consolidation in which the Maker is the surviving
      corporation (other than any consolidation or merger in which the previously outstanding Common Stock of the Maker shall be changed to or exchanged for the stock or other securities of another corporation), the amount of consideration therefor shall
      be deemed to be the fair value, as determined reasonably and in good faith by the Board of Directors of the Maker and approved by the Holder, of such portion of the assets and business of the nonsurviving corporation as such Board of Directors may
      determine to be attributable to such shares of Common Stock, Convertible Securities, rights or warrants or options, as the case may be; or

    
      5

      
        

    

    (2) in the event of any consolidation or merger of the Maker in which the Maker is not
      the surviving corporation or in which the previously outstanding Common Stock of the Maker shall be changed into or exchanged for the stock or other securities of another corporation or other property, or in the event of any sale of all or
      substantially all of the assets of the Maker for stock or other securities or other property of any corporation, the Maker shall be deemed to have issued shares of Common Stock, at a price per share equal to the valuation of the Maker’s Common Stock
      based on the actual exchange ratio on which the transaction was predicated, as applicable, and the fair market value on the date of such transaction of all such stock or securities or other property of the other corporation. If any such calculation
      results in adjustment of the applicable Conversion Price, or the number of shares of Common Stock issuable upon conversion of the Note, the determination of the applicable Conversion Price or the number of shares of Common Stock issuable upon
      conversion of the Note immediately prior to such merger, consolidation or sale, shall be made after giving effect to such adjustment of the number of shares of Common Stock issuable upon conversion of the Note. In the event shares of Common Stock are
      issued with other shares or securities or other assets of the Maker for consideration which covers both, the consideration computed as provided in this Section 3.4(a)(vii) shall be allocated among such securities and assets as determined in
      good faith by the Board of Directors of the Maker, and approved by the Holder.

    (viii) Record Date.  In case the Maker shall take record of the holders of its
      Common Stock for the purpose of entitling them to subscribe for or purchase shares of Common Stock or Convertible Securities, then the date of the issue or sale of the shares of Common Stock shall be deemed to be such record date.

    
      	
              (b)

            	
              No Impairment.  The Maker shall not, by amendment of its Certificate of Incorporation or through any reorganization, transfer of assets, consolidation, merger,
                dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Maker, but will at all times in good faith assist
                in the carrying out of all the provisions of this Section 3.4 and in the taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the Holder against impairment. In the event the
                Holder shall elect to convert this Note as provided herein, the Maker cannot refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation of law, violation of an
                agreement to which the Holder is a party or for any reason whatsoever, unless, an injunction from a court, or notice, restraining and or adjoining conversion of this Note shall have issued.

            

    

    
      	
              (c)

            	
              Certificates as to Adjustments.  Upon occurrence of each adjustment or readjustment of the Conversion Price or number of shares of Common Stock issuable upon
                conversion of this Note pursuant to this Section 3.4, the Maker at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to the Holder a certificate setting forth such
                adjustment and readjustment, showing in detail the facts upon which such adjustment or readjustment is based. The Maker shall, upon written request of the Holder, at any time, furnish or cause to be furnished to the Holder a like
                certificate setting forth such adjustments and readjustments, the applicable Conversion Price in effect at the time, and the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be
                received upon the conversion of this Note. Notwithstanding the foregoing, the Maker shall not be obligated to deliver a certificate unless such certificate would reflect an increase or decrease of at least one percent (1%) of such adjusted
                amount.

            

    

    
      	
              (d)

            	
              Issue Taxes. The Maker shall pay any and all issue and other taxes, excluding federal, state or local income taxes, that may be payable in respect of any issue
                or delivery of shares of Common Stock on conversion of this Note pursuant thereto; provided, however, that the Maker shall not be obligated to pay any transfer taxes resulting from any transfer
                requested by the Holder in connection with any such conversion.

            

    

    
      	
              (e)

            	
              Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of this Note. In lieu of any fractional shares to which the Holder
                would otherwise be entitled, the Maker shall pay cash equal such fractional shares multiplied by the Conversion Price then in effect.

            

    

    
      	
              (f)

            	
              Reservation of Shares of Common Stock. The Maker shall at all times while this Note shall be outstanding, reserve and keep available out of its authorized but
                unissued Common Stock, such number of shares of Common Stock as shall from time to time be sufficient to effect the conversion of this Note (disregarding for this purpose any and all limitations of any kind on such conversion). The Maker
                shall, from time to time, use all commercially reasonable efforts to increase the authorized number of shares of Common Stock or take other effective action if at any time the unissued number of authorized shares shall not be sufficient to
                satisfy the Maker’s obligations under this Section 3.4(f).

            

    

    
      	
              (g)

            	
              Regulatory Compliance.  If any shares of Common Stock to be reserved for the purpose of conversion of this Note require registration or listing with or
                approval of any governmental authority, stock exchange or other regulatory body under any federal or state law or regulation or otherwise before such shares may be validly issued or delivered upon conversion, the Maker shall, at its sole
                cost and expense, in good faith and as expeditiously as possible, secure such registration, listing or approval, as the case may be.

            

    

    
      	
              (h)

            	
              Effect of Events Prior to the Issuance Date.  If the Issuance Date of this Note is after the Closing Date, then, if the Conversion Price or any other right of
                the Holder of this Note would have been adjusted or modified by operation of any provision of this Note had this Note been issued on the Closing Date, such adjustment or modification shall be deemed to apply to this Note as of the Issuance
                Date as if this Note had been issued on the Closing Date.

            

    

    3.5 Prepayment Following a Change of Control.

    
      	
              (a)

            	
              Mechanics of Prepayment at Option of Holder in Connection with a Change of Control.  No sooner than fifteen (15) days prior to entry into an agreement for a
                Change of Control nor later than ten (10) days prior to the consummation of a Change of Control, but not prior to the public announcement of such Change of Control, the Maker shall deliver written notice (“Notice

                  of Change of Control”) to the Holder. At any time after receipt of a Notice of Change of Control (or, in the event a Notice of Change of Control is not delivered at least ten (10) days prior to a Change of Control, at any time
                within ten (10) days prior to a Change of Control), the Holder may require the Maker to prepay, effective immediately prior to the consummation of such Change of Control, an amount equal to the Outstanding Principal Amount (the “COC Repayment Price”), by delivering written notice thereof (“Notice of Prepayment at Option of Holder Upon Change of Control”) to the Maker.

            

    

    
      	
              (b)

            	
              Payment of COC Repayment Price.  Upon the Maker’s receipt of a Notice(s) of Prepayment at Option of Holder Upon Change of Control from the Holder, the Maker
                shall deliver the COC Repayment Price to the Holder immediately prior to the consummation of the Change of Control; provided that the Holder’s original Note shall have been so delivered to the Maker.

            

    

    
      6

      
        

    

    3.6 Inability to Fully Convert.

    
      	
              (a)

            	
              Holder’s Option if Maker Cannot Fully Convert.  If, upon the Maker’s receipt of a Conversion Notice or as otherwise required under this Note,
                including with respect to repayment of principal in Common Stock as permitted under this Note, the Maker cannot issue Common Stock for any reason, including, without limitation, because the Maker (x) does not have a sufficient number of
                shares of Common Stock authorized and available or (y) is otherwise prohibited by applicable law or by the rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization with jurisdiction over
                the Maker or any of its securities from issuing all of the shares of Common Stock which are to be issued to the Holder pursuant to this Note, then the Maker shall issue as many shares of Common Stock as it is able to issue and, with respect
                to the unconverted portion of this Note or with respect to any shares of Common Stock not timely issued in accordance with this Note, the Holder, solely at Holder’s option, can elect to:

            

    

    (i) require the Maker to prepay that portion of this Note for which the Maker is
      unable to issue Common Stock or for which shares of Common Stock were not timely issued (the “Mandatory Prepayment”) at a price equal to the number of shares of Common Stock that the Maker is unable to issue
      multiplied by the VWAP on the date of the Conversion Notice (the “Mandatory Prepayment Price”);

    (ii) void its Conversion Notice and retain or have returned, as the case may be, this
      Note that was to be converted pursuant to the Conversion Notice (provided that the Holder’s voiding its Conversion Notice shall not affect the Maker’s obligations to make any payments which have accrued prior to the date of such notice); or

    (iii) defer issuance of the applicable Conversion Shares until such time as the Maker
      can legally issue such shares; provided, that the Principal Amount underlying such Conversion Shares shall remain outstanding until the delivery of such Conversion Shares; provided, further, that if the Holder elects to defer the issuance of the
      Conversion Shares, it may exercise its rights under either clause (i) or (ii) above at any time prior to the issuance of the Conversion Shares upon two (2) Business Days’ notice to the Maker.

    
      	
              (b)

            	
              Mechanics of Fulfilling Holder’s Election.  The Maker shall immediately send to the Holder, upon receipt of a Conversion Notice from the Holder, which cannot
                be fully satisfied as described in Section 3.6(a) above, a notice of the Maker’s inability to fully satisfy the Conversion Notice (the “Inability to Fully Convert Notice”).  Such Inability to
                Fully Convert Notice shall indicate (i) the reason why the Maker is unable to fully satisfy the Holder’s Conversion Notice; and (ii) the amount of this Note which cannot be converted. The Holder shall notify the Maker of its election
                pursuant to Section 3.6(a) above by delivering written notice to the Maker (“Notice in Response to Inability to Convert”).

            

    

    
      	
              (c)

            	
              Payment of Mandatory Prepayment Price.  If the Holder shall elect to have its Note prepaid pursuant to Section 3.6(a)(i) above, the Maker shall pay the
                Mandatory Prepayment Price to the Holder within five (5) Business Days of the Maker’s receipt of the Holder’s Notice in Response to Inability to Convert; provided that prior to the Maker’s receipt of the Holder’s Notice in Response to
                Inability to Convert the Maker has not delivered a notice to the Holder stating, to the satisfaction of the Holder, that the event or condition resulting in the Mandatory Prepayment has been cured and all Conversion Shares issuable to the
                Holder can and will be delivered to the Holder in accordance with the terms of this Note. If the Maker shall fail to pay the applicable Mandatory Prepayment Price to the Holder on the date that is one (1) Business Day following the Maker’s
                receipt of the Holder’s Notice in Response to Inability to Convert, in addition to any remedy the Holder may have under this Note and the Purchase Agreement, such unpaid amount shall bear interest at the rate of two percent (2%) per month
                (prorated for partial months) until paid in full. Until the full Mandatory Prepayment Price is paid in full to the Holder, the Holder may (i) void the Mandatory Prepayment with respect to that portion of the Note for which the full
                Mandatory Prepayment Price has not been paid and (ii) receive back such Note.

            

    

    
      	
              (d)

            	
              No Rights as Stockholder.  Nothing contained in this Note shall be construed as conferring upon the Holder, prior to the conversion of this Note, the right to
                vote or to receive dividends or to consent or to receive notice as a stockholder in respect of any meeting of stockholders for the election of directors of the Maker or of any other matter, or any other rights as a stockholder of the Maker.

            

    

    3.7 Compensation for Buy-In on Failure to Timely Deliver Conversion Shares.  In
      addition to any other rights available to the Holder, if the Company fails to cause its transfer agent to transmit to the Holder Conversion Shares or any other shares pursuant to a conversion on or before the Share Delivery Date, and if after such
      date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Conversion Shares
      which the Holder anticipated receiving upon such conversion (a “Buy-In”), then the Company shall (a) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including
      brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Conversion Shares that the Company was required to deliver to the Holder in connection with the conversion at
      issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (b) at the option of the Holder, either reinstate the portion of the Note and equivalent number of Conversion Shares for which such conversion
      was not honored (in which case such conversion shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its conversion and delivery obligations
      hereunder. For example, if the Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of shares of Common Stock with an aggregate sale price giving rise to such
      purchase obligation of $10,000, under clause (a) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect
      of the Buy-In and evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon
      conversion of the Note as required pursuant to the terms hereof.

    
      7

      
        

    

    ARTICLE 4

    4.1 Covenants.  For so long as any Note is outstanding, without the prior
      written consent of the Holder:

    
      	
              (a)

            	
              Compliance with Transaction Documents.  The Maker shall, and shall cause its Subsidiaries to, comply with its obligations under this Note and the other
                Transaction Documents.

            

    

    
      	
              (b)

            	
              Payment of Taxes, Etc.  The Maker shall, and shall cause each of its Subsidiaries to, promptly pay and discharge, or cause to be paid and discharged, when due
                and payable, all lawful taxes, assessments and governmental charges or levies imposed upon the income, profits, property or business of the Maker and the Subsidiaries, except for such failures to pay that, individually or in the aggregate,
                have not had and would not reasonably be expected to have a Material Adverse Effect; provided, however, that any such tax, assessment, charge or levy need not be paid if the validity thereof shall currently be contested in good faith by
                appropriate proceedings and if the Maker or such Subsidiaries shall have set aside on its books reserves with respect thereto in accordance with generally accepted accounting principles, and provided, further, that the Maker and such
                Subsidiaries will pay all such taxes, assessments, charges or levies forthwith upon the commencement of proceedings to foreclose any lien which may have attached as security therefor.

            

    

    
      	
              (c)

            	
              Corporate Existence.  The Maker shall, and shall cause each of its Subsidiaries to, maintain in full force and effect its corporate existence, rights and
                franchises (other than the existence, rights and franchises of the Subsidiaries of the Maker that the board of directors of the Maker determine are no longer necessary or useful to the operation of the Maker’s business) and all licenses and
                other rights to use property owned or possessed by it and reasonably deemed to be necessary to the conduct of its business.

            

    

    
      	
              (d)

            	
              Investment Company Act.  The Maker shall conduct its businesses in a manner so that it will not become subject to, or required to be registered under, the
                Investment Company Act of 1940, as amended.

            

    

    
      	
              (e)

            	
              Prohibited Transactions.  The Company hereby covenants and agrees not to enter into any Prohibited Transactions until thirty (30) days after such time as this
                Note has been converted into Conversion Shares or repaid in full.

            

    

    
      	
              (f)

            	
              Repayment of This Note.  If the Company issues any (i) debt, including any subordinated debt or convertible debt (other than the Note or any other “Note” as
                defined in the Purchase Agreement and other than any “Permitted Indebtedness” as defined in the Purchase Agreement) for aggregate proceeds of any amount, or (ii) any Equity Interests other than Exempted Securities for aggregate proceeds of
                more than Seven Million Dollars ($7,000,000), the Company shall notify the Holder within 2 Business Days of such issuance and, unless otherwise waived in writing by and at the discretion of the Holder, no later than 5 Business Days after
                issuing such debt or Equity Interests, the Company will direct (i) one hundred percent of the proceeds from the issuance of such debt to repay this Note, or (ii) twenty percent (20%) of the proceeds from the issuance of such Equity
                Interests to repay this Note.

            

    

    4.2 Set-Off.  This Note shall be subject to the set-off provisions set forth in
      the Purchase Agreement.

    ARTICLE 5

    5.1 Notices.  Any and all notices or other communications or deliveries required
      or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via email at the email address specified in this Section
      prior to 5:00 p.m. (New York time) on a Business Day, (b) the next Business Day after the date of transmission, if such notice or communication is delivered via email at the email address specified in this Section on a day that is not a Business Day
      or later than 5:00 p.m. (New York time) on any date and earlier than 11:59 p.m. (New York time) on such date, (c) the Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual
      receipt by the party to whom such notice is required to be given. The addresses for such notices and communications shall be as set forth in the Purchase Agreement.

    5.2 Governing Law.  This Agreement shall be governed by and construed in
      accordance with the Laws of the State of Delaware, without reference to principles of conflict of laws or choice of laws.

    5.3 Headings.  The headings herein are for convenience only, do not constitute a
      part of this Note and shall not be deemed to limit or affect any of the provisions hereof.  The language used in this Note will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction
      will be applied against any party. This Note shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Note.

    5.4 Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief.
      The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note, at law or in equity (including, without limitation, a decree of specific performance and/or other injunctive relief), no remedy
      contained herein shall be deemed a waiver of compliance with the provisions giving rise to such remedy and nothing herein shall limit the Holder’s right to pursue actual damages for any failure by the Maker to comply with the terms of this Note.
      Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the holder thereof and shall not, except as expressly provided herein, be subject to any
      other obligation of the Maker (or the performance thereof). The Maker acknowledges that a breach by it of its obligations hereunder will cause irreparable and material harm to the Holder and that the remedy at law for any such breach would be
      inadequate. Therefore, the Maker agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available rights and remedies, at law or in equity, to equitable relief, including but not
      limited to an injunction restraining any such breach or threatened breach, without the necessity of showing economic loss and without any bond or other security being required.

    5.5 Enforcement Expenses.  The Maker agrees to pay all costs and expenses of
      enforcement of this Note, including, without limitation, reasonable attorneys’ fees and expenses.

    5.6 Binding Effect.  The obligations of the Maker and the Holder set forth
      herein shall be binding upon the successors and assigns of each such party, whether or not such successors or assigns are permitted by the terms herein.

    5.7 Amendments; Waivers.  No provision of this Note may be waived or amended
      except in a written instrument signed by the Company and the Holder. No waiver of any default with respect to any provision, condition or requirement of this Note shall be deemed to be a continuing waiver in the future or a waiver of any subsequent
      default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

    
      8

      
        

    

    5.8 Compliance with Securities Laws.  The Holder of this Note acknowledges that
      this Note is being acquired solely for the Holder’s own account and not as a nominee for any other party, and for investment, and that the Holder shall not offer, sell or otherwise dispose of this Note in violation of securities laws. This Note and
      any Note issued in substitution or replacement therefor shall be stamped or imprinted with a legend in substantially the following form:

    “THIS NOTE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
      EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
      EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE
      OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.”

    5.9 Jurisdiction; Venue.  Any action, proceeding or claim arising out of, or
      relating in any way to this Note shall be brought and enforced in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York.  The Company and the Holder irrevocably submit to the
      jurisdiction of such courts, which jurisdiction shall be exclusive, and hereby waive any objection to such exclusive jurisdiction or that such courts represent an inconvenient forum.  The prevailing party in any such action shall be entitled to
      recover its reasonable and documented attorneys’ fees and out-of-pocket expenses relating to such action or proceeding.

    5.10 Parties in Interest.  This Note shall be binding upon, inure to the benefit
      of and be enforceable by the Maker, the Holder and their respective successors and permitted assigns.

    5.11 Failure or Indulgence Not Waiver.  No failure or delay on the part of the
      Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right,
      power or privilege.

    5.12 Maker Waivers.  Except as otherwise specifically provided herein, the Maker
      and all others that may become liable for all or any part of the obligations evidenced by this Note, hereby waive presentment, demand, notice of nonpayment, protest and all other demands and notices in connection with the delivery, acceptance,
      performance and enforcement of this Note, and do hereby consent to any number of renewals of extensions of the time or payment hereof and agree that any such renewals or extensions may be made without notice to any such persons and without affecting
      their liability herein and do further consent to the release of any person liable hereon, all without affecting the liability of the other persons, firms or Maker liable for the payment of this Note, AND DO HEREBY WAIVE TRIAL BY JURY.

    
      	
              (a)

            	
              No delay or omission on the part of the Holder in exercising its rights under this Note, or course of conduct relating hereto, shall operate as a waiver of such
                rights or any other right of the Holder, nor shall any waiver by the Holder of any such right or rights on any one occasion be deemed a waiver of the same right or rights on any future occasion.

            

    

    
      	
              (b)

            	
              THE MAKER ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY WAIVES ITS
                RIGHT TO NOTICE AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE HOLDER OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE.

            

    

    5.13 Definitions. Capitalized terms used herein and not defined shall have the
      meanings set forth in the Purchase Agreement. For the purposes hereof, the following terms shall have the following meanings:

         (a) “Convertible Securities” means any securities convertible into or exercisable          or exchangeable
      for, directly or indirectly, Common Stock.

    
      	
              (b)

            	
              “Common Stock Equivalents” means any rights or warrants or options to purchase any Common Stock or Convertible Securities,
                other than rights or warrants or options to purchase any Common Stock or Convertible Securities granted or issued under any Equity Plan.

            

    

    
      	
              (c)

            	
              “Indebtedness” means: (a) all obligations for borrowed money; (b) all obligations evidenced by bonds, debentures, notes, or
                other similar instruments and all reimbursement or other obligations in respect of letters of credit, bankers acceptances, current swap agreements, interest rate hedging agreements, interest rate swaps, or other financial products; (c) all
                capital lease obligations that exceed $150,000 in the aggregate in any fiscal year; (d) all obligations or liabilities secured by a lien or encumbrance on any asset of the Maker, irrespective of whether such obligation or liability is
                assumed; (e) all obligations for the deferred purchase price of assets, together with trade debt and other accounts payable that exceed $150,000 in the aggregate in any fiscal year; (f) all synthetic leases; (g) any obligation guaranteeing
                or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co-made, discounted or sold with recourse) any of the foregoing obligations of any other person; (h) trade debt; and (i) endorsements for collection or deposit.

            

    

    
      	
              (d)

            	
               “Mandatory Default Amount” means an amount equal to one hundred twenty percent (120%) of the Outstanding Principal Amount of
                this Note on the date on which the first Event of Default has occurred hereunder.

            

    

    
      	
              (e)

            	
              “Market Capitalization” means, as of any date of determination, the product of (a) the number of issued and outstanding shares
                of Common Stock as of such date (exclusive of any shares of Common Stock issuable upon the exercise of options or warrants or conversion of any convertible securities), multiplied by (b) the closing price of the Common Stock on the Trading
                Market on the date of determination.

            

    

    
      	
              (f)

            	
              “Outstanding Principal Amount” means, at the time of determination, the Principal Amount outstanding after giving effect to
                any adjustments, conversions or prepayments pursuant to the terms hereof.

            

    

    
      	
              (g)

            	
              “Repayment Shares” means shares of Common Stock issued to the Holder by the Maker as payment for interest and/or the Principal
                Amount, pursuant to Section 1.3 of this Note.

            

    

     

     

     

    
      9

      
        

    

    
      	
              (h)

            	
              “Repayment Share Price” means ninety percent (90%) of the average of the five (5) lowest consecutive daily VWAPs during the
                twenty (20) Trading Days prior to the Payment Date.

            

    

    
      	
              (i)

            	
               “Trading Day” means a day on which the Common Stock is traded on a Trading Market.

            

    

    
      	
              (j)

            	
              “VWAP” means, as of any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock
                is then listed or quoted on a Trading Market, the daily volume weighted average price of one share of Common Stock trading in the ordinary course of business on the applicable Trading Price for such date (or the nearest preceding date) on
                such Trading Market as reported by Bloomberg Financial L.P.; (b) if the Common Stock is not then listed on a Trading Market and if the Common Stock is traded in the over‐the‐counter market, as reported by the OTCQX or OTCQB markets, the
                volume weighted average price of one share of Common Stock for such date (or the nearest preceding date) on the OTCQX or OTCQB markets, as reported by Bloomberg Financial L.P.; (c) if the Common Stock is not then listed or quoted on a
                Trading Market or on the OTCQX or OTCBQ markets and if prices for the Common Stock is then reported in the “Pink Sheets” published by the OTC Markets  Group (or a similar organization or agency succeeding to its functions of reporting
                prices), the most recent bid price of one share of Common Stock so reported, as reported by Bloomberg Financial L.P.; or (d) in all other cases, the fair market value of one share of Common Stock as determined by an independent appraiser
                selected in good faith by the Holder and reasonably acceptable to the Company.

            

    

    [Signature Pages Follow] 

    
      10

      
        

    

    
    

    

    

    

    IN WITNESS WHEREOF, the Maker has caused this Note to be duly executed by its duly authorized officer as of the date first above indicated.

    GSE SYSTEMS, INC.

    By: /s/ Emmett Pepe

      

    Name: Emmett Pepe

    Title: Chief Financial Officer

  

  

  11

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