Document:

PURCHASE AGREEMENT

 Exhibit 10.1 
  
 PURCHASE AGREEMENT 
  
 This Purchase Agreement (this “Agreement”) is dated as of August 30, 2004, among ProsoftTraining, a Nevada corporation (the
“Company”), and the investors identified on the signature pages hereto (each an “Investor” and, collectively, the “Investors”). 
  
 WHEREAS, subject to the terms and conditions set forth in this Agreement, the Company desires to borrow certain sums from
each of the Investors and, in consideration thereof issue certain convertible notes and warrants to each of the Investors, and each Investor, severally and not jointly, desires to make a loan to the Company and accept such notes and warrants from
the Company, all pursuant to the terms set forth herein. 
  
 NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Investors agree as follows: 
  
 ARTICLE I. 
 DEFINITIONS 
  
 1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms shall have the meanings indicated in this Section 1.1: 
  
 “Action” means any action, suit, inquiry, notice of
violation, proceeding (including any partial proceeding such as a deposition) or investigation pending or threatened in writing against or affecting the Company, any Subsidiary or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency, regulatory authority (federal, state, county, local or foreign), stock market, stock exchange or trading facility. 
  
 “Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or
is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 144. 
  
 “Benefit Arrangement” means at any time an employee benefit plan within the meaning of Section 3(3) of ERISA which is not a Plan or
Multiemployer Plan and which is maintained or otherwise contributed by the Company. 
  
 “Benefit Plan” has the meaning set forth in Section 3.1(bb)(ii). 
  
 “Business Day” means any day except Saturday, Sunday and any day that is a federal legal holiday or a day on which banking institutions
in the State of New York are authorized or required by law or other governmental action to close. 
  
 “Closing” means the closing of the purchase and sale of the Securities pursuant to Article II. 
  
 “Closing Date” means the date of this Agreement or such
later date as the parties agree. 

 “Code” means the Internal Revenue Code of 1986, as amended. 
  
 “Commission” means the Securities and Exchange Commission.

  
 “Common Stock” means the common stock of the
Company, par value $.001 per share, and any securities into which such common stock may hereafter be reclassified. 
  
 “Common Stock Equivalents” means any securities of the Company or any Subsidiary which entitle the holder thereof to acquire Common Stock
at any time, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock or other
securities that entitle the holder to receive, directly or indirectly, Common Stock. 
  
 “Company Counsel” means Hewitt & O’Neil, LLP. 
  
 “Company Deliverables” has the meaning set forth in Section 2.2(a). 
  
 “Contingent Liability” means, as to any Person, any obligation, contingent or otherwise, of such Person
guaranteeing or having the economic effect of guaranteeing any Debt or obligation of any other Person in any manner, whether directly or indirectly, including without limitation any obligation of such Person, direct or indirect, (a) to purchase or
pay (or advance or supply funds for the purchase or payment of) such Debt or to purchase (or to advance or supply funds for the purchase of) any security for the payment of such Debt, (b) to purchase property or services for the purpose of assuring
the owner of such Debt of its payment, or (c) to maintain the solvency, working capital, equity, cash flow, fixed charge or other coverage ratio, or any other financial condition of the primary obligor so as to enable the primary obligor to pay any
Debt or to comply with any agreement relating to any Debt or obligation. 
  
 “Debt” of any Person means at any date, without duplication, (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes, or other
similar instruments issued by such Person, (iii) all obligations of such Person as lessee which (y) are capitalized in accordance with GAAP or (z) arise pursuant to sale-leaseback transactions, (iv) all reimbursement obligations of such Person in
respect of letters of credit or other similar instruments, (v) all Debt of others secured by a Lien on any asset of such Person, whether or not such Debt is otherwise an obligation of such Person and (vi) all Debt of others guaranteed by such
Person. 
  
 “Disclosure Materials” has the
meaning set forth in Section 3.1(h). 
  
 “Effective
Date” means the date that the Registration Statement required by Section 2(a) of the Registration Rights Agreement is first declared effective by the Commission. 
  
 “Equity Interest” means (i) shares of corporate stock, partnership interests, membership interests and any
other interest that confers on a Person the right to receive a share of the profits and losses of, or a distribution of the assets of, the issuing Person and (ii) all warrants, options or other rights to acquire any Equity Interest set forth in
clause (i) of this defined term. 
  

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 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, or any
successor statute. 
  
 “ERISA Group” means the
Company and each Subsidiary and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Company or any Subsidiary, are treated as a single employer
under the Code. 
  
 “Exchange Act” means the
Securities Exchange Act of 1934, as amended. 
  
 “GAAP” means U.S. generally accepted accounting principles. 
  
 “Hunt Group” shall have the meaning set forth in Section 4.3(b). 
  
 “Intellectual Property Rights” has the meaning set forth in Section 3.1(p). 
  
 “Intercreditor Agreement” has the meaning set forth in Section 2.2(a). 
  
 “Investment Amount” means, with respect to each Investor,
the investment amount indicated below such Investor’s signature page to this Agreement. 
  
 “Investor Deliverables” has the meaning set forth in Section 2.2(b). 
  
 “Investor Party” has the meaning set forth in Section 4.11. 
  
 “Lien” means any lien, charge, encumbrance, security interest, right of first refusal or other restrictions
of any kind. 
  
 “Losses” has the meaning set
forth in Section 4.11. 
  
 “Material Adverse
Effect” means any of (i) a material and adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material and adverse effect on the results of operations, assets, prospects, business or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) an adverse impairment to the Company’s ability to perform on a timely basis its obligations under any Transaction Document. 
  
 “New York Courts” means the state and federal courts sitting
in the City of New York, Borough of Manhattan. 
  
 “Notes” means the convertible promissory notes issuable by the Company to the Investors pursuant to terms hereof, in the Form of Exhibit A, due on the two year anniversary of the Closing Date which, among other
things, give the Holders thereof the right to acquire shares of Common Stock on the terms thereof. 
  
 “Oasis” has the meaning set forth in Section 7.1. 
  
 “Permitted Indebtedness” has the meaning set forth in Section 6.3. 
  

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 “Permitted Liens” means: (a) liens for taxes, assessments or governmental charges not
delinquent or being contested in good faith and by appropriate proceedings and for which adequate reserves in accordance with GAAP are maintained on the books of the Company or the applicable Subsidiary; (b) liens arising out of deposits in
connection with workers’ compensation, unemployment insurance, old age pensions or other social security or retirement benefits legislation; (c) deposits or pledges to secure bids, tenders, contracts (other than contracts for the payment of
money), leases, statutory obligations, surety and appeal bonds, and other obligations of like nature arising in the ordinary course of business of the Company or a Subsidiary; (d) liens imposed by law, such as mechanics’, workers’,
materialmens’, carriers’ or other like liens arising in the ordinary course of business of the Company or a Subsidiary which secure the payment of obligations which are not past due or which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with GAAP are maintained on the books of the Company or the applicable Subsidiary; (e) liens existing on the Closing Date, and described on Schedule 3.1(o); (f) purchase money
security interests or liens for the purchase of fixed assets to be used in the business of the Company or a Subsidiary, securing solely the fixed assets so purchased and the proceeds thereof; (g) capitalized leases which do not violate any provision
of this Agreement; (h) liens of commercial depository institutions, arising in the ordinary course of business, constituting a statutory or common law right of setoff against amounts on deposit with such institution; and (i) rights of way, zoning
restrictions, easements and similar encumbrances affecting the Company’s real property which do not materially interfere with the use of such property. 
  
 “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. 
  
 “PBGC” means the Pension Benefit Guarantee Corporation or any entity succeeding to any or all of its functions under ERISA. 

 
 “Plan” means at any time an employee pension plan benefit
plan which is covered by Title IV of ERISA or subject to the minimum funding standards under the Code and either (i) is maintained, or contributed to, by any member of the ERISA Group for employees of any member of the ERISA Group or (ii) has at any
time within the preceding five years been maintained, or contributed to, by any Person which was at such time a member of the ERISA Group for employees of any Person which was at such time a member of the ERISA Group. 
  
 “Proceeding” means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. 
  
 “Purchase Money Financing” has the meaning set forth in Section 6.3. 
  
 “Registration Statement” means a registration statement meeting the requirements set forth in the
Registration Rights Agreement and covering the resale by the Investors of the Underlying Shares and the Warrant Shares. 
  

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 “Registration Rights Agreement” means the Registration Rights Agreement, dated as of the
date of this Agreement, among the Company and the Investors, in the form of Exhibit B hereto. 
  
 “Required Investors” means one or more Investors representing greater than 50% of the aggregate principal amount of all Notes then
outstanding. 
  
 “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 that the Company is obligated to issue, whether contingently or otherwise, including, without
limitation, any Underlying Shares issuable upon conversion in full of all Notes or Warrant Shares issuable upon exercise in full of all Warrants. 
  
 “Restricted Payment” means, with respect to any Person, (a) any direct or indirect distribution, dividend or other payment on account of
any equity interest in, or shares of capital stock or other securities of, such Person and (b) any management, consulting or other similar fees, or any interest thereon, payable by such Person to any affiliate of such Person (other than the
Company), or to any other Person other than an unrelated third party; provided, however, that Restricted Payments shall not include any arms length consulting agreements with consultants of the Company which are approved by the Board of
Directors of the Company. 
  
 “Rule 144” means
Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

  
 “SEC Reports” has the meaning set forth in
Section 3.1(h). 
  
 “Securities” means the Notes,
the Underlying Shares issuable under the Notes, the Warrants and the Warrant Shares. 
  
 “Securities Act” means the Securities Act of 1933, as amended. 
  
 “Security Agreement” has the meaning set forth in Section 2.2(a). 
  
 “Short Sales” means “short sales” as defined in Rule 3b-3 of the Exchange Act or any successor
thereto promulgated by the Commission, and includes forward sale contracts, options, puts, calls, short sales, swaps and similar arrangements (including on a total return basis), and sales and other transactions through non-US broker dealers or
foreign regulated brokers. 
  
 “Strategic
Transaction” means a transaction or relationship in which the Company issues shares of Common Stock or other securities of the Company to a Person which is, itself or through its Subsidiaries, an operating company in a business synergistic
with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an
entity whose primary business is investing in securities. 
  

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 “Subsequent Placement” has the meaning set forth in the Section 4.3. 
  
 “Subsequent Placement Notice” has the meaning set forth in
the Section 4.3. 
  
 “Subsidiary” means any
subsidiary of the Company included in the SEC Reports. 
  
 “Trading Day” means (i) a day on which the Common Stock is traded on a Trading Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a
day on which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market
as reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding to its functions of reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii)
and (iii) hereof, then Trading Day shall mean a Business Day. 
  
 “Trading Market” means whichever of the New York Stock Exchange, the American Stock Exchange, the NASDAQ National Market, the NASDAQ SmallCap Market or OTC Bulletin Board on which the Common Stock is listed or quoted for
trading on the date in question. 
  
 “Transaction
Documents” means this Agreement, the Notes, the Registration Rights Agreement, the Warrants, the Security Agreement, the Intercreditor Agreement and any other documents or agreements executed in connection with the transactions contemplated
hereunder. 
  
 “2001 Notes Transaction” means the
Subordinated Secured Convertible Notes of the Company issued on or about October 16, 2001 to or held by members of the Hunt Group, and the agreements and transactions entered into in connection therewith, as previously or hereafter modified, amended
or supplemented. 
  
 “Underlying Shares” means
the shares of Common Stock issuable upon conversion of the Notes. 
  
 “Warrants” means, collectively, the Series A and Series B Common Stock purchase warrants in the form of Exhibit C and Exhibit D, respectively, which are issuable to the Investors at the Closing. 
  
 “Warrant Shares” means the shares of Common Stock issuable
upon exercise of the Warrants. 
  
 ARTICLE II. 
 PURCHASE AND SALE 
  
 2.1 Closing. Subject to the terms and conditions set forth in this Agreement, at the Closing the Company shall issue and sell to each Investor, and
each Investor shall, severally and not jointly, purchase from the Company, the Notes and the Warrants representing such Investor’s 
  

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 Investment Amount. The Closing shall take place simultaneously with the signing of this Agreement at the offices of Bryan
Cave LLP, counsel for Oasis, 1290 Avenue of the Americas, New York, NY 10104 or at such other location or time as the parties may agree. 
  
 2.2 Closing Deliveries. (a) At the Closing, the Company shall deliver or cause to be delivered to each Investor the following (the “Company
Deliverables”): 
  
 (i) Notes in the aggregate
principal amount of the Investment Amount indicated below such Investor’s name on its signature page of this Agreement, issued in the name of such Investor; 
  
 (ii) a Series A Warrant, registered in the name of such Investor, pursuant to which such Investor shall have the right to
acquire the number of shares of Common Stock equal to 25% of the Underlying Shares issuable upon an assumed conversion of the Notes issuable to such Investor in accordance with Section 2.2(a)(i); 
  
 (iii) a Series B Warrant, registered in the name of such Investor, pursuant
to which such Investor shall have the right to acquire the number of shares of Common Stock equal to 80% of the Underlying Shares issuable upon an assumed conversion of the Notes issuable to such Investor in accordance with Section 2.2(a)(i);

  
 (iv) the legal opinion of Company Counsel, in agreed form,
addressed to the Investors; 
  
 (v) the Registration Rights
Agreement, duly executed by the Company; 
  
 (vi) a security
agreement, duly executed by the Company, in the form attached hereto as Exhibit E (as amended, supplemented or otherwise modified from time to time, the “Security Agreement”); 
  
 (vii) an intercreditor agreement, duly executed by the Company, the Hunt
Group and each Investor in the form attached hereto as Exhibit F (as amended, supplemented or otherwise modified from time to time (the “Intercreditor Agreement”); 
  
 (viii) appropriate lien and record search reports showing that there are no liens on the collateral security granted under
the Security Agreement, other than Liens expressly permitted thereby; 
  
 (ix) evidence that the Hunt Group shall have irrevocably waived, in a writing reasonably acceptable to the Investors, any rights under any agreements or understandings with or binding upon the Company (including as may be contained within
the 2001 Notes Transaction) (i) to participate in or otherwise provide the financing to the Company that is contemplated by the Transaction Documents or (ii) to declare an Event of Default or acceleration under any debt obligation owed to it by the
Company, including by virtue of the 2001 Notes Transaction, as a result of the entering into and consummation of the transactions contemplated by the Transaction Documents; and 
  

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 (x) any other documents reasonably requested by such Investor. 
  
 (b) At the Closing, each Investor shall deliver or cause to be delivered to
the Company the following (the “Investor Deliverables”): 
  
 (i) its Investment Amount indicated below such Investor’s name on the signature page of this Agreement, in United States dollars and in immediately available funds, by wire transfer to an account designated in
writing by the Company for such purpose; 
  
 (ii) the
Registration Rights Agreement, duly executed by such Investor; 
  
 (iii) the Security Agreement, duly executed by such Investor; and 
  
 (iv) the Intercreditor Agreement, duly executed by such Investor. 
  
 ARTICLE III. 
 REPRESENTATIONS AND WARRANTIES 
  
 3.1 Representations and Warranties of the Company. The Company hereby
makes the following representations and warranties to each Investor: 
  
 (a) Subsidiaries. Except as disclosed in Schedule 3.1(a)(i), the Company has no direct or indirect Subsidiaries other than as specified in the SEC Reports. Except as disclosed in Schedule 3.1(a)(ii), the Company owns,
directly or indirectly, all of the capital stock of each Subsidiary free and clear of any and all Liens (other than Permitted Liens), and all the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar rights. 
  
 (b) Organization and Qualification. The Company and, except as disclosed in Schedule 3.1(b), each Subsidiary are duly incorporated or otherwise organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in
violation of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. The Company and each Subsidiary are duly qualified to conduct its respective businesses and are in
good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. 
  
 (c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its obligations thereunder. The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated
thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company in connection 
  

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 therewith. Each Transaction Document has been (or upon delivery will have been) duly executed by the Company and, when
delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application. 
  
 (d) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the transactions contemplated thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles
of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company
or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court
or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of
each of clauses (ii) and (iii), such as could not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. Payments of cash on account of principal of or interest under the Notes, upon any Event of
Default under the Notes, as a result of liquidated damages under any Transaction Document or upon a Buy-In under and as such term is defined in a Warrant will not require the consent of, any payment to, or the springing of any Lien in favor of any
lender to or creditor of the Company or any Subsidiary (under a credit facility, loan agreement or otherwise) and will not result in a default under any such credit facilities, loans or other agreements. The proceeds from the issuance and sale of
the Securities will not count towards, and the transactions contemplated hereby do not constitute, a “Material Equity Financing” (as such term is used in the 2001 Notes Transaction). 
  
 (e) Filings, Consents and Approvals. The Company is not required to
obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery
and performance by the Company of the Transaction Documents, other than (i) the filing with the Commission of one or more Registration Statements in accordance with the requirements of the Registration Rights Agreement, (ii) filings required by
state securities laws, (iii) the filing of a Notice of Sale of Securities on Form D with the Commission under Regulation D of the Securities Act (iv) the filings required in accordance with Sections 2.2(a)(x), 4.6 and 4.9, and (iv) those that have
been made or obtained prior to the date of this Agreement. 
  
 (f)
Issuance of the Securities. The Securities have been duly authorized and, when issued and paid for in accordance with the Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens. The
Company has 
  

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 reserved from its duly authorized capital stock a number of shares of Common Stock issuable upon conversion of the Notes
and upon exercise of the Warrants, which number of reserved shares is not less than the Required Minimum calculated as of the date hereof. 
  
 (g) Capitalization. The number of shares and type of all authorized, issued and outstanding capital stock of the Company, and all shares of Common
Stock reserved for issuance under the Company’s various option and incentive plans, is specified in the SEC Reports. Except as specified in the SEC Reports, no securities of the Company are entitled to preemptive or similar rights, and no
Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as specified in the SEC Reports and Schedule 3.1(g),
there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exchangeable for, or giving any Person any right to
subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock, or securities or rights
convertible or exchangeable into shares of Common Stock. Except as disclosed in Schedule 3.1(g), the issue and sale of the Securities will not, immediately or with the passage of time, obligate the Company to issue shares of Common Stock or
other securities to any Person (other than the Investors) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under such securities. 
  
 (h) SEC Reports; Financial Statements. The Company has filed all
reports required to be filed by it under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve months preceding the date hereof (or such shorter period as the Company was required by law to
file such reports) (the foregoing materials being collectively referred to herein as the “SEC Reports” and, together with the Schedules to this Agreement (if any), the “Disclosure Materials”) on a timely basis or
has timely filed a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with GAAP applied on a consistent basis during the
periods involved, except as may be otherwise specified in such financial statements or the notes thereto, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates
thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. 
  
 (i) Press Releases. The press releases disseminated by the Company during the twelve months preceding the date of
this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which
they were made and when made, not misleading. 
  

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 (j) Material Changes. Since the date of the latest audited financial statements included within
the SEC Reports, except as specifically disclosed in the SEC Reports, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred
any liabilities (contingent or otherwise) other than (A) trade payables, accrued expenses and other liabilities incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the
Company’s financial statements pursuant to GAAP or required to be disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting or the identity of its auditors, (iv) the Company has not declared or
made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, and (v) the Company has not issued any equity securities to any
officer, director or Affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment of information. 
  
 (k) Litigation. There is no Action which (i) adversely affects or
challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) except as specifically disclosed in the SEC Reports, would, if there were an unfavorable decision, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof (in his or her capacity as such), is or has been the subject of any Action involving a claim of
violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty, except as specifically disclosed in periodic reports filed by the Company under the Exchange Act. There has not been, and to the knowledge of
the Company, there is not pending any investigation by the Commission involving the Company or any current or former director or officer of the Company (in his or her capacity as such). The Commission has not issued any stop order or other order
suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act. 
  
 (l) Labor Relations. No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the
Company. 
  
 (m) Compliance. Except as set forth in
Schedule 3.1(m), neither the Company nor any Subsidiary (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any
Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by
which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule or
regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor
matters, except in each case as could not, individually or in the aggregate, have or reasonably be expected to result in a Material 
  

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 Adverse Effect. The Company is in compliance with all effective requirements of the Sarbanes-Oxley Act of 2002, as
amended, and the rules and regulations thereunder, that are applicable to it, except where such noncompliance could not have or reasonably be expected to result in a Material Adverse Effect. 
  
 (n) Regulatory Permits. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such
permits could not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification
of any such permits. 
  
 (o) Title to Assets. The Company
and the Subsidiaries have good and marketable title in fee simple to all real property owned by them that is material to their respective businesses and good and valid title in all personal property owned by them that is material to their respective
businesses, in each case free and clear of all Liens, except for Permitted Liens and Liens that do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the
Company and the Subsidiaries. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases of which the Company and the Subsidiaries are in compliance, except
as could not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect. 
  
 (p) Patents and Trademarks. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and other similar rights that are necessary or material for use in connection with their respective businesses as described in the SEC Reports and which the failure to so have could,
individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Neither the Company nor any Subsidiary has received a written notice that
the Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon the rights of any Person. Except as set forth in the SEC Reports, to the knowledge of the Company, all such Intellectual Property Rights are
enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. 
  
 (q) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged. The Company has no reason to believe that it will not be able to renew its and the Subsidiaries’ existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business on terms consistent with market for the Company’s and such Subsidiaries’ respective lines of business.

  
 (r) Transactions With Affiliates and Employees. Except
as set forth in the SEC Reports or on Schedule 3.1(r), none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any 
  

 12 

 transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including
any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to
the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner. 
  
 (s) Internal Accounting Controls. The Company and 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 generally accepted accounting principles and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, 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. The Company has established disclosure controls and procedures (as defined in Exchange Act rules 13a-14 and 15d-14)
for the Company and designed such disclosure controls and procedures to ensure that material information relating to the Company, including its Subsidiaries, is made known to the certifying officers by others within those entities, particularly
during the period in which the Company’s Form 10-K or 10-Q, as the case may be, is being prepared. The Company’s certifying officers have evaluated the effectiveness of the Company’s controls and procedures in accordance with Item 307
of Regulation S-K under the Exchange Act for the Company’s most recently ended fiscal quarter or fiscal year-end (such date, the “Evaluation Date”). The Company presented in its most recently filed Form 10-K or Form 10-Q the
conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the Company’s internal
controls that would be required to be disclosed pursuant to Item 308(c) of Regulation S-K under the Exchange Act or, to the Company’s knowledge, in other factors that could reasonably be expected to have a Material Adverse Effect on the
Company’s internal controls. 
  
 (t) Solvency. Based
on the financial condition of the Company as of the Closing Date (and assuming that the Closing shall have occurred), (i) 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; (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business for the current fiscal year as now
conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, and projected capital requirements and capital availability thereof; and (iii)
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 has no current intention 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). 
  

 13 

 (u) Certain Fees. Except as specified in Schedule 3.1(u), no brokerage or finder’s
fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by this Agreement. The Investors
shall have no obligation with respect to any fees or with respect to any claims (other than such fees or commissions owed by a Investor pursuant to written agreements executed by such Investor which fees or commissions shall be the sole
responsibility of such Investor) made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by this Agreement. 
  
 (v) Certain Registration Matters. Assuming the accuracy of the
Investors’ representations and warranties set forth in Section 3.2(b)-(e), no registration under the Securities Act is required for the offer and sale of the Notes and Warrants by the Company to the Investors under the Transaction Documents.
The Company is eligible to register the resale of its Common Stock for resale by the Investors under Form S-3 promulgated under the Securities Act. Except as specified in Schedule 3.1(v), the Company has not granted or agreed to grant to any
Person any rights (including “piggy-back” registration rights) to have any securities of the Company registered with the Commission or any other governmental authority that have not been satisfied. 
  
 (w) Listing and Maintenance Requirements. Except as specified in the
SEC Reports, the Company has not, in the two years preceding the date hereof, received notice from any Trading Market to the effect that the Company is not in compliance with the listing or maintenance requirements thereof. Except for matters
disclosed in the SEC Reports and as a result of minimum stock price requirements, the Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with the listing and maintenance requirements for
continued listing of the Common Stock on the Trading Market on which the Common Stock is currently listed or quoted. The issuance and sale of the Securities under the Transaction Documents does not contravene the rules and regulations of the Trading
Market on which the Common Stock is currently listed or quoted, and no approval of the shareholders of the Company thereunder is required for the Company to issue and deliver to the Investors the Securities contemplated by the Transaction Documents.

  
 (x) Investment Company. The Company is not, and is not
an Affiliate of, and immediately following the Closing will not have become, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. 
  
 (y) Application of Takeover Protections. The Company has taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s Certificate of Incorporation (or similar charter
documents) or the laws of its state of incorporation that is or could become applicable to the Investors as a result of the Investors and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including
without limitation the Company’s issuance of the Securities and the Investors’ ownership of the Securities. 
  

 14 

 (z) No Additional Agreements. The Company does not have any agreement or understanding with any
Investor with respect to the transactions contemplated by the Transaction Documents other than as specified in the Transaction Documents. 
  
 (aa) Disclosure. The Company confirms that neither it nor any Person acting on its behalf has provided any Investor or its respective agents or
counsel with any information that the Company believes constitutes material, non-public information except insofar as the existence and terms of the proposed transactions hereunder may constitute such information. The Company understands and
confirms that the Investors will rely on the foregoing representations and covenants in effecting transactions in securities of the Company. All disclosure provided to the Investors regarding the Company, its business and the transactions
contemplated hereby, furnished by or on behalf of the Company (including the Company’s representations and warranties set forth in this Agreement) are true and correct in all material respects and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. 
  
 (bb) Compliance with ERISA. (i) Each member of the ERISA Group has fulfilled its obligations under the minimum
funding standards of ERISA and the Code with respect to each Plan and is in compliance in all material respects with the presently applicable provisions of ERISA and the Code with respect to each Plan. No member of the ERISA Group has (i) sought a
waiver of the minimum funding standard under Section 412 of the Code in respect of any Plan, (ii) failed to make any required contribution or payment to any Plan or Multiemployer Plan or in respect of any Benefit Arrangement, or made any amendment
to any Plan or Benefit Arrangement, which has resulted or could result in the imposition of a Lien or the posting of a bond or other security under ERISA or the Code or (iii) incurred any liability under Title IV of ERISA other than a liability to
the PBGC for premiums under Section 4007 of ERISA. 
  
 (ii) The
benefit plans not covered under clause (a) above (including profit sharing, deferred compensation, stock option, employee stock purchase, bonus, retirement, health or insurance plans, collectively the “Benefit Plans”) relating to
the employees of the Company are duly registered where required by, and are in good standing in all material respects under, all applicable laws. All required employer and employee contributions and premiums under the Benefit Plans to the date
hereof have been made, the respective fund or funds established under the Benefit Plans are funded in accordance with applicable laws, and no past service funding liabilities exist thereunder. 
  
 (iii) No Benefit Plans have any unfunded liabilities, either on a
“going concern” or “winding up” basis and determined in accordance with all applicable laws and actuarial practices and using actuarial assumptions and methods that are reasonable in the circumstances. No event has occurred and
no condition exists with respect to any Benefit Plans that has resulted or could reasonably be expected to result in any pension plan having its registration revoked or wound up (in whole or in part) or refused for the purposes of any applicable
laws or being placed under the administration of any relevant pension benefits regulatory authority or being required to pay any taxes or penalties (in any material amounts) under any applicable laws. 
  

 15 

 (cc) Taxes. All United States federal, state, county, municipality local or foreign income tax
returns and all other material tax returns (including foreign tax returns) which are required to be filed by or on behalf of the Company and each Subsidiary, have been filed and all material taxes due pursuant to such returns or pursuant to any
assessment received by the Company and each Subsidiary have been paid except those being disputed in good faith and for which adequate reserves have been established. The charges, accruals and reserves on the books of the Company and each Subsidiary
in respect of taxes or other governmental charges have been established in accordance with GAAP. 
  
 (dd) Secured Indebtedness. As of the Closing Date, other than as set forth in Schedule 3.1(dd), the Company has no Debt that is secured by
any Lien. 
  
 3.2 Representations and Warranties of the
Investors. Each Investor hereby, for itself and for no other Investor, represents and warrants to the Company as follows: 
  
 (a) Organization; Authority. Such Investor is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of
its organization with the requisite corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the applicable Transaction Documents and otherwise to carry out its obligations thereunder. The
execution, delivery and performance by such Investor of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or, if such Investor is not a corporation, such partnership, limited liability company or
other applicable like action, on the part of such Investor. Each Transaction Document to which such Investor is a party has been duly executed by such Investor, and when delivered by such Investor in accordance with the terms hereof, will constitute
the valid and legally binding obligation of such Investor, enforceable against it in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar
laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application. 
  
 (b) Investment Intent. Such Investor is acquiring the Securities as principal for its own account for investment purposes only and not with a view
to or for distributing or reselling such Securities or any part thereof, without prejudice, however, to such Investor’s right at all times to sell or otherwise dispose of all or any part of such Securities in compliance with applicable federal
and state securities laws. Subject to the immediately preceding sentence, nothing contained herein shall be deemed a representation or warranty by such Investor to hold the Securities for any period of time. Such Investor is acquiring the Securities
hereunder in the ordinary course of its business. Such Investor does not have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities. 
  
 (c) Investor Status. At the time such Investor was offered the Securities, it was, and at the date hereof it is, and
on each date on which it exercises Warrants it will be, an “accredited investor” as defined in Rule 501(a) under the Securities Act. Such Investor is not a registered broker-dealer under Section 15 of the Exchange Act. Each Investor
represents that it has been organized under the laws of the state or country set forth opposite its name on its signature page. 
  

 16 

 (d) General Solicitation. Such Investor is not purchasing the Securities as a result of any
advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general
advertisement. 
  
 (e) Access to Information. Such Investor
acknowledges that it has reviewed the Disclosure Materials and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions
of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and the Subsidiaries and their respective financial condition, results of operations, business, properties,
management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make
an informed investment decision with respect to the investment. Neither such inquiries nor any other investigation conducted by or on behalf of such Investor or its representatives or counsel shall modify, amend or affect such Investor’s right
to rely on the truth, accuracy and completeness of the Disclosure Materials and the Company’s representations and warranties contained in the Transaction Documents. 
  
 (f) Limited Ownership. The purchase by such Investor of the Securities issuable to it at the Closing (including the
Underlying Shares and Warrant Shares that would be issuable upon the conversion and exercise of such Securities) will not result in such Investor (individually or together with other Persons with whom such Investor has identified, or will have
identified, itself as part of a “group” in a public filing made with the Commission involving the Company’s securities) acquiring, or obtaining the right to acquire, in excess of 19.999% of the Common Stock or the voting power of the
Company on a post transaction basis that assumes that the Closing shall have occurred. Such Investor does not presently intend to, alone or together with others, make a public filing with the Commission to disclose that it has (or that it together
with such other Persons have) acquired, or obtained the right to acquire, as a result of the Closing (when added to any other securities of the Company that it or they then own or have the right to acquire), in excess of 19.999% of the Common Stock
or voting power of the Company on a post transaction basis that assumes that the Closing shall have occurred. 
  
 (g) Certain Trading Activities. Such Investor has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any
understanding with such Investor, engaged in any transactions in the securities of the Company (including, without limitations, any Short Sales involving the Company’s securities) since the earlier to occur of (1) the time that such Investor
was first contacted by the Company or any placement agent engaged by the Company regarding an investment in the Company and (2) the 20th day prior to the date of this Agreement. Such Investor covenants that neither it nor any Person acting on its behalf or pursuant to any understanding with it will engage in any transactions in the securities of the Company
(including Short Sales) prior to the time that the transactions contemplated by this Agreement are publicly disclosed. Notwithstanding the foregoing, in the case of an Investor that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Investor’s assets and the portfolio managers have no actual knowledge of the investment decisions made by the portfolio managers managing other portions of such Investor’s assets, the
representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. 
  

 17 

 The Company acknowledges and agrees that no Investor has made or makes any representations or warranties with respect to
the transactions contemplated hereby other than those specifically set forth in this Section 3.2. 
  
 ARTICLE IV. 
 OTHER AGREEMENTS OF THE PARTIES 
  
 4.1 (a) The Securities may only be disposed of in compliance with state and
federal securities laws. In connection with any transfer of the Securities other than pursuant to an effective registration statement, to the Company, to an Affiliate of an Investor or in connection with a pledge as contemplated in Section 4.1(b)
(but such exclusion does not include the subsequent transfer following default by the Investor transferee of such pledge), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor, the
form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. 
  
 (b) Certificates evidencing the Securities will contain the following legend,
until such time as they are not required under Section 4.1(c): 
  
 [NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON CONVERSION OR 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 CONVERSION OR 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 an Investor may from time to time pledge, and/or grant a security interest in some or all of the Securities pursuant to a bona fide margin agreement in connection with a bona fide margin account and, if required
under the terms 
  

 18 

 of such agreement or account, such 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 appropriate 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 Securities Act or other applicable provision of the Securities Act to appropriately amend the list of Selling Stockholders thereunder. 
  
 (c) Certificates evidencing Underlying Shares and Warrant Shares shall not contain any legend (including the legend set forth in Section 4.1(b)): (i)
while a registration statement (including the Registration Statement) covering such Underlying Shares or Warrant Shares is then effective; as long as the Holder checks the certification box in the Conversion Notice or Exercise Notice, as the case
may be, and if such certification is not so provided, upon the resale of such Underlying Shares or Warrant Shares, as the case may be, pursuant to a Registration Statement, or (ii) following a sale or transfer of such Securities pursuant to Rule 144
(assuming the transferor is not an Affiliate of the Company), or (iii) while such Securities are eligible for sale under Rule 144(k). 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 4.1. The Company agrees that it shall, within three Trading Days following a request by a Investor given at such time as restrictive legends would not then be required under this Section
4.1(c), issue and deliver to such Investor certificates that are free of restrictive legends representing Underlying Shares or Warrant Shares in replacement of Underlying Shares or Warrant Shares previously issued with restrictive legends.

  
 4.2 Furnishing of Information. As long as any 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 Exchange Act. As
long as any Investor owns Securities, if the Company is not required to file reports pursuant to such laws, it will prepare and furnish to the Investors and make publicly available in accordance with Rule 144(c) such information as is required for
the Investors to sell the Underlying Shares and Warrant Shares under Rule 144. The Company further covenants that it will take such further action as any holder of Securities may reasonably request, all to the extent required from time to time to
enable such Person to sell the Underlying Shares and Warrant Shares without registration under the Securities Act within the limitation of the exemptions provided by Rule 144. 
  
 4.3 Subsequent Securities Offerings. 
  
 (a) Prior to the first year anniversary of the Closing Date, in the event the Company, directly or indirectly, offers,
sells, grants any option to purchase, or otherwise disposes of (or announces any offer, sale, grant or any option to purchase or other disposition of) any of Common Stock or Common Stock Equivalents or any of its Subsidiaries’ equity or Common
Stock Equivalents (such offer, sale, grant, disposition or announcement being referred 
  

 19 

 to as “Subsequent Placement”), the Company shall deliver to each Investor a written notice (each,
a “Subsequent Placement Notice”) of its intention to effect such Subsequent Placement, which specifies in reasonable detail all of the material terms of such Subsequent Placement, the amount of proceeds intended to be raised
thereunder, the names of the investors (including the investment manager of such investors, if any) and the investment bankers with whom such Subsequent Placement is proposed to be effected, and attached to which shall be a term sheet or similar
document. Each Investor shall have until 6:30 p.m. (New York City time) on the fifth Trading Day after its respective receipt of the Subsequent Placement Notice to notify Company of its intention to provide, subject to completion of mutually
acceptable documentation, all or a portion of such financing on the same terms as set forth in the Subsequent Placement Notice; provided, that the Investors’ right to provide such financing will be subject to pro rata apportionment (as
set forth in Section 4.3(b)) with the similar rights of the Hunt Group for so long as the Hunt Group has such rights under the 2001 Notes Transaction. In the event that the Investors do not timely elect to provide the entire financing subject to the
Subsequent Placement Notice and the Company shall not have consummated the portion of the Subsequent Placement for which such elections shall not have been so made on the terms and to the Persons specified in the Subsequent Placement Notice within
45 days following the expiration of the time to so elect, the Company shall provide each Investor with a second Subsequent Placement Notice and each Investor will again have the right of first refusal set forth in this Section. If the Investors
indicate in the aggregate a willingness to provide financing in excess of the amount set forth in the Subsequent Placement Notice, then each Investor will be entitled to provide financing pursuant to such Subsequent Placement Notice up to an amount
of all such proceeds equal to such Investor’s pro rata portion of all Investment Amounts hereunder. 
  
 (b) The Company’s obligations under this Section 4.3 shall not apply to any grant or issuance by the Company of any of the following: (i) the
issuance of securities upon the exercise or conversion of any Common Stock Equivalents issued by the Company prior to the date of this Agreement (but will apply to any amendments, modifications and reissuances thereof), (ii) the grant of options or
warrants, or the issuance of additional securities, under any duly authorized Company stock option, restricted stock plan or stock purchase plan whether now existing or approved by the Board of Directors of the Company in the future, or (iii) the
issuance of Common Stock Equivalents pursuant to a Strategic Transaction. The Investors acknowledge that Hunt Capital Growth Fund II L.P. and its affiliates (the “Hunt Group”) have certain existing rights of participation or refusal
with respect to Subsequent Placements by virtue of the 2001 Notes Transaction and the rights of Investors pursuant to this Section 4.3 shall be apportioned with the Hunt Group on a pro rata basis, with reference to the respective then outstanding
principal and interest amounts under the Notes and the promissory notes issued under the 2001 Notes Transaction, for so long as the Hunt Group has such rights under the 2001 Notes Transaction. 
  
 4.4 Acknowledgment of Dilution. The Company acknowledges that the
issuance of Underlying Shares upon conversion of Notes and Warrant Shares upon exercise of Warrants will result in dilution of the outstanding shares of Common Stock, which dilution may be substantial. The Company further acknowledges that its
obligation to honor conversions under the Notes is unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim that the Company may have against any
Investor. 
  

 20 

 4.5 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 Securities Act) that would be integrated with the offer or sale of the Securities in a manner that
would require the registration under the Securities Act of the sale of the Securities to the Investors, or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market in a manner
that would require stockholder approval of the sale of the securities to the Investors. 
  
 4.6 Reservation of Shares. The Company shall maintain a reserve from its duly authorized shares of Common Stock to comply with its conversion obligations under the Notes. If on any date the Company would be, if
notice of conversion were to be delivered on such date, precluded from issuing the number of (i) Underlying Shares, as the case may be, issuable upon conversion in full of the Notes or (ii) Warrant Shares, as the case may be, issuable upon exercise
in full of the Warrants, due to the unavailability of a sufficient number of authorized but unissued or reserved shares of Common Stock, then the Board of Directors of the Company shall promptly prepare and mail to the stockholders of the Company
proxy materials or other applicable materials requesting authorization to amend the Company’s certificate of incorporation or other organizational document to increase the number of shares of Common Stock which the Company is authorized to
issue so as to provide enough shares for issuance of the Underlying Shares and Warrant Shares. In connection therewith, the Board of Directors shall (a) adopt proper resolutions authorizing such increase, (b) recommend to and otherwise use its best
efforts to promptly and duly obtain stockholder approval to carry out such resolutions (and hold a special meeting of the stockholders as soon as practicable, but in any event not later than the 60th day after delivery of the proxy or other applicable materials relating to such meeting) and (c) within five Business Days of obtaining such stockholder
authorization, file an appropriate amendment to the Company’s certificate of incorporation or other organizational document to evidence such increase. 
  
 4.7 Conversion Procedures. The form of Conversion Notice included in and as defined in the Notes sets forth the totality of the procedures required
by the Investors in order to convert the Notes. The Company shall honor conversions of the Notes and shall deliver Underlying Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents. 
  
 4.8 Subsequent Registrations. Other than pursuant to the Registration
Statement, prior to the ninetieth (90th) day following the Effective Date (plus one day for each day during such
period when a Registration Statement shall not be effective and available to the Holders for the resale of Underlying Shares or Warrant Shares), the Company may not file any registration statement with the Commission with respect to any securities
of the Company other than registration statements on Form S-8 promulgated by the Commission. 
  
 4.9 Securities Laws Disclosure; Publicity. By 9:00 a.m. (New York time) on the Trading Day following the execution of this Agreement, the Company
shall issue a press release disclosing the transactions contemplated hereby and the Closing. On the Trading Day following the execution of this Agreement the Company will file a Current Report on Form 8-K disclosing the material terms of the
Transaction Documents and the Closing (and attach as exhibits thereto the Transaction Documents). In addition, the Company will make such other filings and notices 
  

 21 

 in the manner and time required by the Commission and the Trading Market on which the Common Stock is listed.
Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Investor, or include the name of any Investor in any filing with the Commission (other than the Registration Statement and any exhibits to filings made in respect
of this transaction in accordance with periodic filing requirements under the Exchange Act) or any regulatory agency or Trading Market, without the prior written consent of such Investor, except to the extent such disclosure is required by law or
Trading Market regulations. 
  
 4.10 Limitation on Issuance of
Future Priced Securities. During the six months following the Closing Date, the Company shall not issue any “Future Priced Securities” as such term is described by NASD IM-4350-1. 
  
 4.11 Indemnification of Investors. In addition to the indemnity
provided in the Registration Rights Agreement, the Company will indemnify and hold the Investors and their directors, officers, shareholders, partners, employees and agents (each, an “Investor Party”) harmless from any and all
losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation (collectively,
“Losses”) that any such Investor Party may suffer or incur as a result of or relating to any misrepresentation, breach or inaccuracy of any representation, warranty, covenant or agreement made by the Company in any Transaction
Document. In addition to the indemnity contained herein, the Company will reimburse each Investor Party for its reasonable 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. 
  
 4.12
Non-Public Information. The Company covenants and agrees that neither it nor any other Person acting on its behalf will provide any Investor or its agents or counsel with any information that the Company believes constitutes material
non-public information, unless prior thereto such Investor shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands and confirms that each Investor shall be relying on the foregoing
representations in effecting transactions in securities of the Company. 
  
 4.13 Listing of Securities. The Company agrees, (i) if the Company applies to have the Common Stock traded on a Trading Market other than the Nasdaq SmallCap Market, it will include in such application the Underlying Shares and
Warrant Shares, and will take such other action as is necessary or desirable to cause the Underlying Shares and Warrant Shares to be listed on such other Trading Market as promptly as possible, and (ii) it will take all action reasonably necessary
to continue the listing and trading of its Common Stock on a Trading Market and will comply in all material respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market. 
  
 4.14 Use of Proceeds. The Company will use the net proceeds from the
sale of the Securities hereunder for working capital purposes and not for the satisfaction of any portion of the Company’s indebtedness (other than payment of trade payables and accrued expenses in the ordinary course of the Company’s
business and consistent with prior practices), or to redeem any Common Stock or Common Stock Equivalents. 
  

 22 

 4.15 Payment of Cash Dividend. The Company agrees, so long as any of the Notes are outstanding,
not to declare, pay or make any provision for any cash dividend or distribution with respect to the Common Stock of the Company, without first obtaining the approval of the Required Investors. 
  
 4.16 Existence; Conduct of Business. The Company will, and will cause
each of the Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises material to the conduct of its business,
provided that the foregoing shall not prohibit (a) any sale, lease, transfer or other disposition permitted by this Agreement, or (b) any merger of (i) any domestic Subsidiary with any other domestic Subsidiary, (ii) any domestic Subsidiary
with and into the Company, or (iii) any foreign Subsidiary with any other foreign Subsidiary. 
  
 ARTICLE V. 
 [INTENTIONALLY OMITTED] 
  
 ARTICLE VI. 
 NEGATIVE COVENANTS 
  
 The Company hereby agrees that,
from and after the date hereof until the date that the Notes have either been repaid in their entirety and/or converted entirely into Common Stock, the Company shall be bound according to the restrictions set forth in each of following negative
covenants unless any such restriction shall have been expressly waived in writing by the Required Investors: 
  
 6.1 Restrictions on Certain Amendments. The Company will not amend the rights and privileges granted under the Notes, to adversely affect the
rights or privileges granted under the Notes. 
  
 6.2
Restricted Payment. The Company shall not make any Restricted Payment. 
  
 6.3 Debt. The Company shall not create, incur, assume, become or be liable in any manner in respect of, or suffer to exist, any Debt, except (a) Debt in existence on the date hereof, as shown on Schedule
6.3(a), (b) trade payables incurred and paid in the ordinary course of business, (c) Contingent Liabilities in existence on the date hereof, as shown on Schedule 6.3(c), (d) Contingent Liabilities resulting from the endorsement of negotiable
instruments for collection in the ordinary course of business, and (e) Debt incurred to finance the acquisition of fixed or capital assets (whether pursuant to a loan, capital lease obligation or otherwise) in an aggregate principal amount not to
exceed five-hundred thousand dollars ($500,000) at any time outstanding, provided that such Debt is incurred simultaneously with such acquisition (the “Purchase Money Financing”) (collectively (a) through (e) shall be referred to as
the “Permitted Indebtedness”). 
  
 6.4
Liens. The Company shall not create or suffer to exist any Lien upon any of its properties, except (a) Liens created by the Security Agreement, (b) Liens in existence on the date 
  

 23 

 hereof, as disclosed herein, (c) tax, mechanics’, materialmen’s, warehousemen’s, laborer’s and
landlord and other similar Liens relating to amounts that are not yet due and payable, or that are being contested in good faith by appropriate proceedings, for which adequate reserves have been established, (d) Liens incurred in the ordinary course
of business in connection with worker’s compensation, unemployment insurance or similar legislation and (e) Liens to secure the Permitted Indebtedness, provided that (x) any Lien securing any Purchase Money Financing shall be created
substantially simultaneously with the acquisition of such fixed or capital asset, (y) such Liens do not at any time encumber any property other than the property that is the subject of the Purchase Money Financing, and (z) the principal amount of
Debt secured by any such Purchase Money Financing shall at no time exceed one hundred percent (100%) of the original purchase price of such property at the time it was acquired. Except as provided in this Section 6.4, the Company shall not hereafter
agree with any Person (other than the Investors) to grant a Lien on any of its assets or to permit the pledge of any of its equity interests. 
  
 6.5 Amendment of Organizational Documents. The Company shall not permit any amendment to its articles of incorporation so as to adversely affect
the rights or privileges granted under the Notes. 
  
 6.6 Sale
and Leaseback. The Company shall not enter into any arrangement whereby it sells or transfers any of its assets, and thereafter rents or leases such assets. 
  

6.7 Business. The Company shall not change the nature of its business as now conducted. 
  
 6.8 Transactions with Affiliates. The Company shall not, directly or
indirectly, pay any funds to or for the account of, make any investment (whether by acquisition of stock or indebtedness, by loan, advance, transfer of property, guarantee or other agreement to pay, purchase or service, directly or indirectly, any
Debt, or otherwise) in, lease, sell, transfer or otherwise dispose of any assets, tangible or intangible, to, or participate in, or effect any transaction in connection with any joint enterprise or other joint arrangement with, any Affiliate,
except, on terms no less favorable than terms that could be obtained by the Company from a Person that is not an Affiliate of the Company upon negotiation at arms’ length, as determined in good faith by the Board; provided that no determination
of the Board of Directors shall be required with respect to any such transactions entered into in the ordinary course of business. 
  
 6.9 Limitation on Restrictions. The Company shall not enter into, or suffer to exist, any agreement with any Person which prohibits or limits the
ability of the Company to pay Debt owed to the Investors, except as expressly permitted by the Security Agreement. 
  
 ARTICLE VII. 
 MISCELLANEOUS 
  
 7.1 Fees and Expenses. At the Closing, the Company shall pay to Bryan
Cave LLP $40,000 (less previously delivered amounts) as partial reimbursement of DKR SoundShore Strategic Holding Fund Ltd. and DKR SoundShore Oasis Holding Fund Ltd. (collectively, “Oasis”) for their respective legal fees in
connection with the Transaction Documents (Oasis may deduct such amount from the Investment Amount deliverable to the Company at Closing), it 
  

 24 

 being understood that Bryan Cave LLP has only rendered legal advice to OASIS, and not to the Company or any other
Investor in connection with the transactions contemplated hereby, and that each of the Company and the other Investors has relied for such matters on the advice of its own respective counsel. Except as specified in the immediately preceding
sentence, 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 Notes. 
  
 7.2 Entire Agreement. The Transaction Documents, together with the Exhibits and Schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements, understandings, discussions and representations, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents,
exhibits and schedules. 
  
 7.3 Notices. Any and all
notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered
via facsimile (provided the sender receives a machine-generated confirmation of successful transmission) at the facsimile number specified in this Section prior to 6:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the
date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (c) the Trading
Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, 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:	  	ProsoftTraining
	 	  	410 N. 44th Street, Suite 600
	 	  	Phoenix, AZ 85008
	 	  	Facsimile: (602) 794-4198
	 	  	Attention: Chief Financial Officer
		
	With a copy to:	  	Hewitt & O’Neil, LLP
	 	  	19900 MacArthur Blvd., Suite 1050
	 	  	Irvine, CA 92612
	 	  	Facsimile: (949) 798-0511
	 	  	Attention: William L. Twomey, Esq.
		
	If to an Investor:	  	To the address set forth under such Investor’s name
	 	  	on the signature pages hereof;

  

 25 

			
		
	 With a copy to for
 any Oasis Investor:
	  	Bryan Cave LLP
	 	  	1290 Avenue of the Americas
	 	  	New York, NY 10104
	 	  	Facsimile: (212) 541-1432
	 	  	Attention: Eric L. Cohen, Esq.

  
 or such other address as may be
designated in writing hereafter, in the same manner, by such Person. 
  
 7.4 Amendments; Waivers; No Additional Consideration. No provision of this Agreement may be waived or amended except in a written instrument signed by the Company and the Required Investors. No waiver of any default with respect to
any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or
omission of either party to exercise any right hereunder in any manner impair the exercise of any such right. No consideration shall be offered or paid to any Investor to amend or consent to a waiver or modification of any provision of any
Transaction Document unless the same consideration is also offered to all Investors who then hold Notes. Without the written consent of each Holder of Securities affected thereby, an amendment or waiver under this Section 7.4 may not: 
  
 (a) change the maturity of the principal amount of, or the interest payment
date under, or the payment of liquidated damages, which is due on, any Note or Warrant; 
  
 (b) make any change that impairs the conversion or exercise rights of any Securities; 
  
 (c) reduce the Event Equity Value under the Notes or amend or modify in any manner adverse to the Holders of Securities the Company’s obligation to
make such payments; 
  
 (d) amend the definition of Required
Investors; 
  
 (e) change the currency of any amount owed or owing
under the Securities or any interest thereon from U.S. Dollars; 
  
 (f) impair the right of any Investor to institute suit for the enforcement of any payment with respect to, or conversion or exercise of, any Security; or 
  
 (g) modify the provisions of this Section 7.4. 
  
 It shall not be necessary for the consent of the Holders under this Section 7.4 to approve the particular form of any proposed amendment,
but it shall be sufficient if such consent approves the substance thereof. 
  
 7.5 Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The language used in this
Agreement will be deemed to be the language chosen by the parties to 
  

 26 

 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. 

 
 7.6 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investors. Any Investor may assign any or
all of its rights under this Agreement to any Person to whom such Investor assigns or transfers any Notes, provided such transfer complies with Section 4.1(a) herein and such transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions hereof that apply to the “Investors.” 
  
 7.7 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other Person, except as otherwise set forth in Section 4.11 (as to each Investor Party). 
  
 7.8 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective Affiliates, employees or agents) shall be commenced exclusively in the New York Courts. Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the
enforcement of the any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such New York Court, or that such Proceeding has
been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If either party shall commence a Proceeding to enforce any provisions of a Transaction Document, then the prevailing party in such Proceeding shall be
reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding. 
  
 7.9 Survival. The representations, warranties, agreements and covenants contained herein shall survive the Closing
and the delivery of the Securities. 
  

 27 

 7.10 Execution. This Agreement may be executed in two or more counterparts, all of which when
taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In
the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such
facsimile signature page were an original thereof. 
  
 7.11
Severability. If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired
thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement. 
  
 7.12 Rescission and Withdrawal Right. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever any Investor exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then such Investor may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice
to its future actions and rights. 
  
 7.13 Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and
substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity, if requested. The applicants for a new
certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Securities. If a replacement certificate or instrument evidencing any Securities is requested due to
a mutilation thereof, the Company may require delivery of such mutilated certificate or instrument as a condition precedent to any issuance of a replacement. 
  
 7.14 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including
recovery of damages, each of the Investors and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any
breach of obligations described in the foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation the defense that a remedy at law would be adequate. 
  
 7.15 Payment Set Aside. To the extent that the Company makes a payment
or payments to any Investor pursuant to any Transaction Document or an Investor enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any 
  

 28 

 law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not
occurred. 
  
 7.16 Limitation of Liability. Notwithstanding
anything herein to the contrary, the Company acknowledges and agrees that the liability of an Investor arising directly or indirectly, under any Transaction Document of any and every nature whatsoever shall be satisfied solely out of the assets of
such Investor, and that no trustee, officer, other investment vehicle or any other Affiliate of such Investor or any investor, shareholder or holder of shares of beneficial interest of such a Investor shall be personally liable for any liabilities
of such Investor. 
  
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

 SIGNATURE PAGES FOLLOW] 
  

 29 

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

			
	PROSOFTRAINING
		
	By:	 	 /s/ Robert G. Gwin

	Name:	 	Robert G. Gwin
	Title:	 	Chief Executive Officer

  
 [REMAINDER OF
PAGE INTENTIONALLY LEFT BLANK 
 SIGNATURE PAGES FOR INVESTORS FOLLOW] 
  

 30 

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

			
	NAME OF INVESTOR
	
	DKR SoundShore Oasis Holding Fund Ltd.
		
	By:	 	 /s/ Barbara Burger

	Name:	 	Barbara Burger
	Title:	 	Alternate Director
	
	Investment Amount: $1,080,000
	
	Tax ID No.: 98-0221468
	
	Organized under the laws of:
	
	Bermuda
	
	 ADDRESS FOR NOTICE

	
	c/o: DKR Oasis Management Company L.P.
	Street: 1281 East Main Street
	City/State/Zip: Stamford, CT 06920
	Attention: Barbara Burger/Rajni Narasi
	Tel: 203-324-8400
	Fax: 203-324-8488
	
	REGISTERED ADDRESS
	
	29 Richmond Road
	Pembroke HM08
	Bermuda

  
 [Signatures
continued on next page] 
  

 31 

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

			
	NAME OF INVESTOR
	
	DKR SoundShore Strategic Holding Fund Ltd.
		
	By:	 	 /s/ Barbara Burger

	Name:	 	Barbara Burger
	Title:	 	Alternate Director
	
	Investment Amount: $270,000
	
	Tax ID No.: 98-0210934
	
	Organized under the laws of:
	
	Bermuda
	
	ADDRESS FOR NOTICE
	
	c/o: DKR Oasis Management Company L.P.
	Street: 1281 East Main Street
	City/State/Zip: Stamford, CT 06920
	Attention: Barbara Burger/Rajni Narasi
	Tel: 203-324-8400
	Fax: 203-324-8488
	
	REGISTERED ADDRESS
	
	29 Richmond Road
	Pembroke HM08
	Bermuda

  

 32$1,080,000 SECURED CONVERTIBLE NOTE

 Exhibit 10.2 
  
 NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON CONVERSION OF THESE SECURITIES HAVE 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 CONVERSION OF THESE SECURITIES MAY BE PLEDGED
IN A MANNER CONSISTENT WITH THE SECURITIES ACT IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES. 
  

			
	 No. 1
	 	$1,080,000
	 	 	Original Issue Date: August 30, 2004

  
 PROSOFTTRAINING

 SECURED 8% CONVERTIBLE NOTE DUE AUGUST 30, 2006 
  
 THIS NOTE is one of a series of duly authorized and issued notes of ProsoftTraining, a Nevada corporation (the
“Company”), designated as its Secured 8% Convertible Notes due August 30, 2006, in the original aggregate principal amount of one million three hundred and fifty thousand dollars ($1,350,000) (collectively, the
“Notes” and each Note comprising the Notes, a “Note”). 

 FOR VALUE RECEIVED, the Company promises to pay to the order of DKR SoundShore Oasis Holding Fund Ltd. or
its registered assigns (the “Investor”), the principal sum of $1,080,000, on August 30, 2006 or such earlier date as this Note is required to be repaid as provided hereunder (the “Maturity Date”), and to pay
interest to the Investor on the principal amount of this Note outstanding from time to time in accordance with the provisions hereof. All holders of Notes are referred to collectively, as the “Investors.” This Note is subject to the
following additional provisions: 
  
 1. Definitions. In
addition to the terms defined elsewhere in this Note: (a) capitalized terms that are used but not otherwise defined herein have the meanings given to such terms in the Purchase Agreement, dated as of the Original Issue Date, among the Company and
the Investors identified therein (the “Purchase Agreement”), and (b) the following terms have the meanings indicated below: 
  
 “Bankruptcy Event” means any of the following events: (a) the Company or any Subsidiary commences a case or other proceeding under any
bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Subsidiary thereof; (b) there is commenced against the Company
or any Subsidiary any such case or proceeding that is not dismissed within 60 days after commencement; (c) the Company or any subsidiary is adjudicated by a court of competent jurisdiction insolvent or bankrupt or any order of relief or other order
approving any such case or proceeding is entered; (d) the Company or any Subsidiary suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 60 days; (e) under
applicable law the Company or any Subsidiary makes a general assignment for the benefit of creditors; (f) the Company or any Subsidiary fails to pay, or states that it is unable to pay or is unable to pay, its debts generally as they become due; (g)
the Company or any Subsidiary calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or (h) the Company or any Subsidiary, by any act or failure to act, expressly indicates its consent to,
approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing. 
  
 “Change of Control” means the occurrence of any of the following in one or a series of related transactions: (i) an acquisition after the
date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) under the Exchange Act) of more than one-third of the voting rights or equity interests in the Company, except that, if such acquisition shall occur
through a hostile tender offer, the one-third threshold shall be increased to one-half; (ii) a replacement of more than one-half of the members of the Company’s board of directors in a single election of directors that is not approved by those
individuals who are members of the board of directors on the date hereof (or other directors previously approved by such individuals); (iii) a Fundamental Transaction (as defined in Section 11(c)), a merger or consolidation of the Company or any
Subsidiary or a sale of more than one-half of the assets of the Company in one or a series of related transactions, unless following such transaction or series of transactions, the holders of the Company’s securities prior to the first such
transaction continue to hold at least two-thirds (one-half in the event of a hostile tender offer) of the voting rights and equity interests in the surviving entity or acquirer of such assets; (iv) a recapitalization, reorganization or other
transaction involving the Company or any Subsidiary that constitutes or results in a transfer of more than one-third of the voting rights or equity interests in the Company, unless following such transaction or series of transactions, the holders of
the Company’s securities prior to the first such transaction continue to hold at least two-thirds of the voting rights and equity interests in the surviving entity or acquirer of such assets; (v) consummation of a “Rule 13e-3
transaction” as defined in Rule 13e-3 under the Exchange Act with respect to the Company, or (vi) the execution by the Company or its controlling shareholders of an agreement providing for or reasonably likely to result in any of the foregoing
events. 
  
 “Closing Price” means, for any date,
the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on an Eligible Market, the closing sale price per share of the Common Stock for such date (or the nearest preceding date) on
the primary Eligible Market or exchange on which the Common Stock is then listed or quoted; (b) if prices for the Common Stock are then quoted on the OTC Bulletin Board, the closing sale 
  

 2 

 price per share of the Common Stock for such date (or the nearest preceding date) so quoted; (c) if prices for the Common
Stock are then reported in the “Pink Sheets” published by the National Quotation Bureau Incorporated (or a similar organization or agency succeeding to its functions of reporting prices), the most recent sale price per share of the Common
Stock so reported; or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent qualified appraiser selected in good faith and paid for by a majority in interest of the Investors. 
  
 “Common Stock” means the common stock of the Company, $0.001
par value per share, and any securities into which such common stock may hereafter be reclassified. 
  
 “Common Stock Equivalents” means any securities of the Company or a Subsidiary thereof which entitle the holder thereof to acquire Common
Stock at any time, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock or
other securities that entitle the holder to receive, directly or indirectly, Common Stock. 
  
 “Conversion Date” means the date a Conversion Notice together with the Conversion Schedule is delivered to the Company in accordance with Section 5(a). 
  
 “Conversion Notice” means a written notice in the form
attached hereto as Exhibit A. 
  
 “Conversion
Price” means $0.28 subject to adjustment from time to time pursuant to Section 11. 
  
 “Default” means any event or condition which constitutes an Event of Default or that upon notice, lapse of time or both would, unless cured or waived, become an Event of Default. 
  
 “Eligible Market” means any of the New York Stock Exchange,
the American Stock Exchange, the Nasdaq National Market or the Nasdaq SmallCap Market. 
  
 “Equity Conditions Are Satisfied” means, as of any date of determination, that each of the following conditions is (or would be) satisfied on such date, if the Company were to issue on such date all
of the Underlying Shares then issuable upon (1) conversion in full of the outstanding principal amount of all Notes, and (2) the payment of accrued and unpaid interest on such Interest Payment Date under all the Notes of the Company: (i) the number
of authorized but unissued and otherwise unreserved shares of Common Stock is sufficient for such issuance, (ii) the Common Stock is listed or quoted (and is not suspended from trading) on an Eligible Market and such shares of Common Stock are
approved for listing on such Eligible Market upon issuance, (iii) such Common Stock is registered for resale under the Registration Statement and the prospectus under such Registration Statement is available for the sale of all Registrable
Securities held by the Investor, (iv) such issuance would be permitted in full without violating, Section 5(b) and Section 5(c) hereof or the rules or regulations of the Eligible Market on which such shares are listed or quoted, (v) both immediately
before and after giving effect thereto, no Default shall or would exist, and (vi) no public announcement of a pending or proposed Change of Control transaction has occurred that has not been consummated. 
  

 3 

 “Event Equity Value” means the average of the Closing Prices for the five consecutive
Trading Days preceding either: (a) the date of an Event Notice or the date the Company becomes obligated to pay the Event Price under Section 7(b), as applicable, or (b) the date on which the Event Price with respect thereto (together with any other
payments, expenses and liquidated damages then due and payable under the Transaction Documents) is paid in full, whichever is greater. 
  
 “Event of Default” means any one of the following events (whatever the reason and whether it shall be voluntary or involuntary or
effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body): 
  
 (i) any default in the payment (free of any claim of subordination), when the same becomes due and payable (whether on a
Prepayment Date, the Maturity Date or by acceleration or prepayment or otherwise), of (a) liquidated damages in respect of this Note which default continues unremedied for a period of three Trading Days after the date on which written notice of such
default is first given to the Company by the Investor, or (b) principal or interest in respect of this Note. 
  
 (ii) the Company or any Subsidiary (1) fails to pay when due any monetary obligation (regardless of amount) under any currently existing or hereafter
arising debenture (other than a Note) or any mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any Indebtedness
or under any long term leasing or factoring arrangement, if the aggregate amount of the obligations and liabilities of the Company and the subsidiaries thereunder exceed $200,000 (each of the foregoing a “Material Debt Agreement”),
or (2) fails to observe or perform any other obligation under any Material Debt Agreement, and such failure results in the obligations thereunder becoming or being declared due and payable prior to the date on which they would otherwise become due
and payable. 
  
 (iii) the occurrence or entering into by the
Company or any subsidiary, or consummation of, any Change of Control transaction. 
  
 (iv) the Company shall fail to observe or perform any covenant, condition or agreement contained in any Transaction Document (other than those specified in clause (i) above and clause (xvi) below), and such failure
shall continue unremedied for a period of twenty days after the date on which written notice of such default is first given to the Company by the Investor (it being understood that no prior notice need be given in the case of a default that cannot
reasonably be cured within twenty days). 
  
 (v) the occurrence
and continuance of an Event of Default under any other Note or any Interest Note. 
  
 (vi) any prepayment by the Company of any other Note or any other Indebtedness issued by it or any issuance of securities in exchange for any Notes issued by it (other than Underlying Shares upon conversion of such
Notes in accordance with their terms as in effect on the Original Issue Date thereof), except in each case (i) if the Company offers to the 
  

 4 

 Investor in writing the same prepayment of this Note and all other Notes then held by such Investor on the same economic
terms on which the Company prepays or offers to prepay (whichever is more favorable to the holder of such Note) such Notes, (ii) in accordance with the prepayment provisions of the Security Agreement, and (iii) in accordance with the prepayment
provisions of Section 13 of this Note. 
  
 (vii) any of the
Company’s representations and warranties set forth in the Purchase Agreement shall be incorrect in any material respect as of the Closing Date. 
  
 (viii) the occurrence of a Bankruptcy Event. 
  
 (ix) one or more final judgments for the payment of money in an aggregate amount in excess of $200,000 shall be rendered against the Company or any
subsidiary or any combination thereof (which shall not be fully covered by insurance without taking into account any applicable deductibles) and which shall remain undischarged or unbonded for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Company or any subsidiary to enforce any such judgment. 
  
 (x) any Transaction Document shall cease, for any reason, to be in full
force and effect, or the Company shall so assert in writing or shall disavow any of its obligations thereunder. 
  
 (xi) the Common Stock shall not be listed or quoted, or is suspended from trading, on an Eligible Market for a period of three Trading Days (which need
not be consecutive Trading Days) (other than voluntary suspensions of partial Trading Days in connection with Company issued press releases). 
  
 (xii) the Company fails to deliver a stock certificate evidencing Underlying Shares to an Investor within five Trading Days after a Conversion Date or in
the case of exercises under a Warrant, within five Trading Days after a Date of Exercise under, and as such term is defined in, such Warrant, or the conversion or exercise rights of the Investors pursuant to the terms hereof or the terms of the
Warrants are otherwise suspended for any reason (other than as a result of the limitations set forth in Section 5(b)(ii) or Section 5(c). 
  
 (xiii) the Company fails to have available a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock available to
issue Underlying Shares upon any conversion of Notes or upon any exercise of Warrants. 
  
 (xiv) the Company effects or publicly announces its intention to effect any exchange, recapitalization or other transaction that effectively requires or rewards physical delivery of certificates evidencing the Common
Stock, unless following such transaction, the holders of the Company’s securities prior to the first such transaction continue to beneficially own at least two-thirds of the voting rights and equity interests in the surviving entity or acquirer
of such assets. 
  
 (xv) a Registration Statement under the
Registration Rights Agreement is not declared effective by the Commission by the 180th day following the Closing
Date, or is 
  

 5 

 not effective as to all Registrable Securities (as defined in the Registration Rights Agreement), and available for use
by the holders of Registrable Securities, for in excess of an aggregate of 35 Trading Days (which need not be consecutive Trading Days) during the Effectiveness Period (as defined in the Registration Rights Agreement). 
  
 (xvi) the Company fails to make any cash payment required under the
Transaction Documents (other than as set forth in paragraph (i) above) and such failure is not cured within twenty Trading Days after notice of such default is first given to the Company by an Investor. 
  
 (xvii) any acceleration which results in the obligations under the 2001
Notes Transaction becoming or being declared due and payable prior to the date on which they would otherwise become due and payable. 
  
 “Indebtedness” of any Person shall mean, without duplication, (a) all obligations of such Person for borrowed money or with respect to
deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to property or assets purchased by such Person, (e) all obligations of such Person issued or assumed as the deferred purchase price of property or services (other than
unsecured accounts payable incurred in the ordinary course of business and no more than ninety (90) days past the date of the invoice therefor), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (g) all obligations of such Person in respect of interest rate protection
agreements, foreign currency exchange agreements or other interest or exchange rate hedging arrangements that exceed amounts necessary to hedge the Company’s cross-currency exposure and (h) all obligations of such Person as an account party in
respect of letters of credit and bankers’ acceptances. The Indebtedness of any Person shall include the Indebtedness of any partnership in which such Person is a general partner. 
  
 “Original Issue Date” has the meaning set forth on the face of this Note. 
  
 “Proceeding” means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. 
  
 “Registration Statement” shall have the meaning set forth in the Purchase Agreement. 
  
 “Security Agreement” shall have the meaning set forth in the
Purchase Agreement. 
  
 “Trading Day” means (i) a
day on which the Common Stock is traded on an Eligible Market, or (ii) if the Common Stock is not listed on an Eligible Market, a day on which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board or the
National Quotation Bureau Incorporated, or (iii) if the Common Stock is not quoted on the OTC Bulletin Board, a day on which the Common Stock is quoted in the over-the-counter market as reported by the National Quotation Bureau Incorporated (or any
similar organization 
  

 6 

 or agency succeeding to its functions of reporting prices); provided, that in the event that the Common Stock is not
listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day. 
  
 “Underlying Shares” means the shares of Common Stock issuable upon conversion of the Notes and payment of interest thereunder.

  
 “VWAP” means, with respect to any date of
determination, the daily volume weighted average price (as reported by Bloomberg using the VAP function) of the Common Stock on such date of determination, or if there is no such price on such date of determination, then the daily volume weighted
average price on the date nearest preceding such date. 
  
 2.
Interest. (a) The Company shall pay interest to the Investor on the aggregate unconverted and then outstanding principal amount of this Note at the rate of 8% per annum, payable in cash or, at the Company’s option. as set forth in
Section 2(b), in shares of Common Stock or Interest Notes, in arrears on each six month anniversary of the Closing Date (each, an “Interest Payment Date”), except if such date is not a Trading Day, in which case such interest shall
be payable on the next succeeding Trading Day. Interest shall be calculated on the basis of a 360-day year for the actual number of days elapsed and shall accrue daily commencing on the Original Issue Date. 
  
 (b) Subject to the conditions and limitations set forth below, in lieu of
paying interest in cash the Company may, at its option, on each Interest Payment Date, pay accrued interest on this Note by delivering by the Third Trading Day following the applicable Interest Payment Date, either (i) a number of registered shares
of Common Stock equal to the quotient obtained by dividing the amount of such interest by 93% of the arithmetic average of the VWAP for each of the 5 consecutive Trading Days immediately preceding (but not including) such Interest Payment Date or
(ii) one or more promissory notes in lieu of such cash payment (each, an “Interest Note”), in a form reasonably acceptable to the Investor, accruing interest at a rate of 10% per annum and payable in full at the earlier of the (i)
Maturity Date and (ii) one year anniversary of date of issuance of the particular Interest Note. The Company must deliver written notice to the Investor indicating the manner in which it intends to pay interest at least ten Trading Days prior to
each Interest Payment Date, but the Company may indicate in any such notice that the election contained therein shall continue for subsequent Interest Payment Dates until rescinded. Failure to timely provide such written notice shall be deemed an
irrevocable election by the Company to pay such interest in cash. All interest payable in respect of the Notes on any Interest Payment Date must be paid in the same manner. Notwithstanding the foregoing, the Company may not pay interest in shares of
Common Stock on any Interest Payment Date unless, on the date thereof, the Equity Conditions Are Satisfied. Investor shall have the right, but not the obligation, to add to the principal amount of the Notes any interest not fully paid, which may be
converted at the Conversion Price. 
  
 3. Registration of
Notes. The Company shall register the Notes upon records maintained by the Company for that purpose (the “Note Register”) in the name of each record Investor thereof from time to time. The Company may deem and treat the
registered Investor of this Note as the absolute owner hereof for the purpose of any conversion hereof or any payment of interest hereon, and for all other purposes, absent actual notice to the contrary from such record Investor. 
  

 7 

 4. Registration of Transfers and Exchanges. The Company shall register the transfer of any portion
of this Note in the Note Register upon surrender of this Note to the Company at its address for notice set forth herein. Upon any such registration or transfer, a new Note, in substantially the form of this Note (any such new debenture, a
“New Note”), evidencing the portion of this Note so transferred shall be issued to the transferee and a New Note evidencing the remaining portion of this Note not so transferred, if any, shall be issued to the transferring Investor.
The acceptance of the New Note by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations of a holder of a Note. The Company agrees that its prior consent is not required for the transfer of any
portion of this Note; provided, however, that the Company shall be entitled to reasonable assurance, including an opinion of counsel reasonably acceptable to Company, that such transfer complies with applicable federal and state securities
laws. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the Investor surrendering the same. No service charge or other fee will be imposed in connection with any such
registration of transfer or exchange. Investor agrees that no single transfer of its Notes shall be of a principal amount of less than the lesser of (x) 10% of the then outstanding principal amount of Notes then held by it and (y) $75,000.

  
 5. Conversion. 
  
 (a) (i) At the Option of the Investor. All or any portion of the
principal amount of this Note then outstanding together with any accrued and unpaid interest hereunder shall be convertible into shares of Common Stock at the Conversion Price (subject to limitations set forth in Section 5(b) and Section 5(c)), at
the option of the Investor, at any time and from time to time from and after the Original Issue Date. The Investor may effect conversions under this Section 5(a), by delivering to the Company a Conversion Notice together with a schedule in the form
of Schedule 1 attached hereto (the “Conversion Schedule”). If the Investor is converting less than all of the principal amount represented by this Note, or if a conversion hereunder may not be effected in full due to the
application of Section 5(b) or Section 5(c), the Company shall honor such conversion to the extent permissible hereunder and shall promptly deliver to the Investor a Conversion Schedule indicating the principal amount which has not been converted.

  
 (ii) At Option of the Company. Subject to the
provisions of this Section 5(a)(ii), at any time after the one year anniversary of the Closing Date, the Company may deliver a written notice upon five (5) Trading Days’ prior notice (such notice, a “Company Conversion Notice”)
to the Investor stating its irrevocable election to convert at the Conversion Price of all (but not less than all) of the outstanding principal amount of this Note, provided that: (i) the VWAP for each of the 20 consecutive Trading Days prior
to the date of such Company Conversion Notice is greater than $0.84 (subject to equitable adjustment as a result of the events set forth in Sections 11(a), (b) and (c)), on each date during the entire period referred to in clause (i) above and
through the Company Conversion Date (as defined below), (ii) the Equity Conditions Are Satisfied, (iii) the average daily trading volume of the Common Stock during the entire period referred to in clause (i) above and through the Company Conversion
Date (as 
  

 8 

 defined below) shall be 150,000 shares (subject to equitable adjustment as a result of intervening stock splits and
reverse stock splits), and (iv) immediately before or after giving effect to such issuance on such date, no Event of Default or Default shall or would exist. Subject to the terms and conditions of this Section 5(a)(ii), the Company shall effect the
conversion of this Note pursuant to a Company Conversion Notice on the 6th Trading Day immediately succeeding the
date of the Company Conversion Notice (the “Company Conversion Date”). Notwithstanding anything to the contrary set forth in this Note, the Investor shall have the right to nullify such Company Conversion Notice if any of the
conditions set forth in this Section 5(a)(ii) shall not have been met from the date of the Company Conversion Notice through the Company Conversion Date. The Company covenants and agrees that it will honor all Conversion Notices tendered from the
time of delivery of the Company Conversion Notice through 6:30 p.m. on the Trading Day prior to the Company Conversion Date. Notwithstanding the foregoing, the Company and the Investor agree that, if and to the extent Section 5(b) or Section 5(c) of
this Note would restrict the right of the Company to issue or the right of the Investor to receive any of the Underlying Shares otherwise issuable upon the conversion in respect of a Company Conversion Notice, then notwithstanding anything to the
contrary set forth in the Company Conversion Notice, the Company Conversion Notice shall be deemed automatically amended to apply only to such portion of this Note as would permit conversion in full in compliance with Section 5(b) or Section 5(c).
The Investor will promptly (and, in any event, prior to the Company Conversion Date) notify the Company in writing following receipt of a Company Conversion Notice if Section 5(b)(i) or (ii) would restrict its right to receive the full number of
otherwise issuable Underlying Shares following such Company Conversion Notice. 
  
 (b) Certain Conversion Restrictions. 
  
 (i) Notwithstanding anything to the contrary contained herein, the number of shares of Common Stock that may be acquired by the Investor upon conversion of the Notes (or otherwise in respect hereof) shall be limited
to the extent necessary to insure that, following such conversion (or other issuance), the total number of shares of Common Stock then beneficially owned by such Investor and its Affiliates and any other Persons whose beneficial ownership of Common
Stock would be aggregated with the Investor’s for purposes of Section 13(d) of the Exchange Act, does not exceed 4.999% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock
issuable upon such conversion). For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. This provision shall not restrict the number of
shares of Common Stock which an Investor may receive or beneficially own in order to determine the amount of securities or other consideration that such Investor may receive in the event of a Fundamental Transaction involving the Company as
contemplated in Section 11 of this Note. By written notice to the Company, an Investor may waive the provisions of this Section 5(b)(i) as to itself but any such waiver will not be effective until the 61st day after delivery thereof and such waiver shall have no effect on any other Investor. 
  
 (ii) Notwithstanding anything to the contrary contained herein, the number of shares of Common Stock that may be acquired
by an Investor upon each conversion of Notes (or otherwise in respect hereof) shall be limited to the extent necessary to insure that, following such conversion (or other issuance), the total number of shares of Common 
  

 9 

 Stock then beneficially owned by such Investor and its Affiliates and any other Persons whose beneficial ownership of
Common Stock would be aggregated with such Investor’s for purposes of Section 13(d) of the Exchange Act, does not exceed 9.999% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of
Common Stock issuable upon such conversion). For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. This provision shall not restrict the
number of shares of Common Stock which an Investor may receive or beneficially own in order to determine the amount of securities or other consideration that such Investor may receive in the event of a Fundamental Transaction (defined below)
involving the Company as contemplated herein. This restriction may not be waived. 
  
 (c) Nasdaq Shareholder Approval. Notwithstanding anything to the contrary in this Note, if the Company has not previously obtained Shareholder Approval (as defined below), then the Company may not issue shares
of Common Stock in excess of the Issuable Maximum upon conversions of this Note, or in payment of interest on this Note. The “Issuable Maximum” means, as of any date, a number of shares of Common Stock equal to 4,860,000, less such number
of shares of Common Stock as have been issued upon conversion of Notes, or in payment of interest thereon. Each Investor shall be entitled to a portion of the Issuable Maximum equal to the quotient obtained by dividing: (x) the principal amount of
Notes issued and sold to such Investor on the Original Issue Date by (y) the aggregate principal amount of all Notes issued and sold by the Company on the Original Issue Date. If any Investor shall no longer hold Notes, then such Investor’s
remaining portion of the Issuable Maximum shall be allocated pro-rata among the remaining Investors, giving effect to the Company’s desire to allocate this limitation among the class of securities known as the Notes. If on any Conversion Date
or Company Conversion Date, or at such time as an Investor shall notify the Company that the condition in (A) following this clause shall be in effect: (A) the aggregate number of shares of Common Stock that would then be issuable upon conversion in
full of all then outstanding principal amount of Notes would exceed the Issuable Maximum on such date, and (B) the Company shall not have previously obtained the vote of shareholders, as may be required by the applicable rules and regulations of the
Nasdaq Stock Market (or any successor entity or any other Eligible Market on which the Company’s securities then trade), applicable to approve the issuance of shares of Common Stock in excess of the Issuable Maximum pursuant to the terms hereof
(the “Shareholder Approval”), then, the Company shall issue to the Investor a number of shares of Common Stock equal to the Issuable Maximum and, with respect to the remainder of the principal amount of Notes then held by the
Investors for which a conversion would result in an issuance of shares of Common Stock in excess of the Issuable Maximum, the Company must seek Shareholder Approval as soon as possible, but in any event not later than the 90th day following such Conversion Date, Company Conversion Date or the date of such notice from an Investor that Shareholder
Approval is required. The Company and the Investor understand and agree that Underlying Shares issued to and then held by the Investor as a result of conversions of Notes shall not be entitled to cast votes on any resolution to obtain Shareholder
Approval pursuant hereto. If the Company elects, pursuant to Section 2(b) above, to pay interest on this Note in shares of Common Stock or Interest Notes, it shall seek Shareholder Approval at its next annual meeting of shareholders. In furtherance
thereof, the Company agrees that its Board of Directors shall adopt proper resolutions recommending and, subject to the approval of its stockholders, authorizing such approval, and shall use its best efforts to duly obtain stockholder approval at
such annual meeting to carry out such resolutions. 
  

 10 

 6. Mechanics of Conversion. 
  
 (a) The number of Underlying Shares issuable upon any conversion hereunder shall equal the outstanding principal amount of
this Note to be converted, divided by the Conversion Price on the Conversion Date, plus (if indicated in the applicable Conversion Notice or the Company Conversion Notice and permitted by Section 5(c)) the amount of any accrued but unpaid interest
on this Note through the Conversion Date, divided by the Conversion Price on the Conversion Date. 
  
 (b) The Company shall, by the third Trading Day following each Conversion Date (and on the Company Conversion Date), issue or cause to be issued and
cause to be delivered to or upon the written order of the Investor and in such name or names as the Investor may designate a certificate for the Underlying Shares issuable upon such conversion, free of restrictive legends if at such time a
Registration Statement is then effective and available for use by the Investor. The Investor, or any Person so designated by the Investor to receive Underlying Shares, shall be deemed to have become holder of record of such Underlying Shares as of
such Conversion Date. The Company shall use its best efforts to deliver Underlying Shares hereunder electronically (via a DWAC) through the Depository Trust Corporation or another established clearing corporation performing similar functions.

  
 (c) The Investor shall not be required to deliver the
original Note in order to effect a conversion hereunder. Execution and delivery of the Conversion Notice shall have the same effect as cancellation of the Note and issuance of a New Note representing the remaining outstanding principal amount.

  
 (d) The Company’s obligations to issue and deliver
Underlying Shares upon conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Investor to enforce the same, any waiver or consent with respect to any provision
hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Investor or any other Person of any obligation to
the Company or any violation or alleged violation of law by the Investor or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Investor in connection with the issuance of
such Underlying Shares. 
  
 (e) If by the fifth Trading Day after
a Conversion Date or the Company Conversion Date the Company fails to deliver to the Investor such Underlying Shares in such amounts and in the manner required pursuant to Section 5, then the Investor will have the right to rescind the Conversion
Notice or the Company Conversion Notice pertaining thereto by giving written notice to the Company prior to such Investor’s receipt of such Underlying Shares. 
  
 (f) If by the third Trading Day after a Conversion Date or the Company Conversion Date the Company fails to deliver to the
Investor the required number of Underlying Shares in the manner required pursuant to Section 5, and if after such third Trading Day and prior to the receipt of such Underlying Shares, the Investor purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Investor of the Underlying Shares which the Investor anticipated receiving upon such 
  

 11 

 conversion (a “Buy-In”), then the Company shall: (1) pay in cash to the Investor (in addition to any
other remedies available to or elected by the Investor) the amount by which (x) the Investor’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by
multiplying (A) the number of Underlying Shares that the Company was required to deliver to the Investor in connection with the exercise at issue by (B) the Closing Price at the time of the delivery obligation giving rise to such purchase and (2) at
the option of the Investor, either void the conversion at issue and reinstate the principal amount of Notes (plus accrued interest therein) for which such conversion was not timely honored or deliver to the Investor the number of shares of Common
Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. The Investor shall provide the Company reasonably detailed evidence or written notice indicating the amounts payable to the
Investor in respect of the Buy-In. 
  
 7. Events of
Default. 
  
 (a) At any time or times following the
occurrence and during the continuance of an Event of Default (other than under clause (ix) of such defined term with respect to the Company), the Investor may elect, by notice to the Company (an “Event Notice”), to require the
Company to purchase all or any portion of the outstanding principal amount of this Note, as indicated in such Event Notice, at a purchase price in Dollars in cash equal to the greater of: (A) 100% of such outstanding principal amount (except that
such amount shall equal 110% in the case of an Event of Default under clause (iii) of the definition of “Event of Default”), plus all accrued but unpaid interest thereon and any unpaid liquidated damages and other amounts then owing to the
Investor under the Transaction Documents, through the date of purchase, or (B) the Event Equity Value of the Underlying Shares that would be issuable upon conversion of such principal amount and payment in Common Stock of all such accrued but unpaid
interest thereon (without regard to any condition precedent or conversion limitation contained herein). The aggregate amount payable pursuant to the preceding sentence is referred to as the “Event Price.” The Company shall pay the
aggregate Event Price to the Investor (free of any claim of subordination) no later than the third Trading Day following the date of delivery of the Event Notice, and upon receipt thereof the Investor shall deliver the original Note so repurchased
to the Company. 
  
 (b) Upon the occurrence of any Bankruptcy
Event with respect to the Company, all outstanding principal and accrued but unpaid interest on this Note and any unpaid liquidated damages and other amounts then owing under the Transaction Documents shall immediately become due and payable in full
in Dollars in cash (free of any claim of subordination), without any action by the Investor, and the Company shall immediately be obligated to repurchase this Note held by such Investor at the Event Price pursuant to the preceding paragraph as if
the Investor had delivered an Event Notice immediately prior to the occurrence of such Bankruptcy Event. 
  
 (c) In connection with any Event of Default, the Investor need not provide and the Company hereby waives any presentment, demand, protest or other notice
of any kind (other than the Event Notice), and the Investor may immediately enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Any such declaration may be rescinded and annulled by
the Investor at any time prior to payment hereunder. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereto. 
  

 12 

 8. Ranking. Other than as may be specifically permitted by Section 6.3 of the Purchase Agreement,
this Note ranks pari passu with all other Notes now or hereafter issued pursuant to the Transaction Documents and is senior in all respects to all existing and hereafter created unsecured Indebtedness of the Company. The Company will not, directly
or indirectly, enter into, create, incur, assume or suffer to exist any unsecured indebtedness of any kind, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits
therefrom, that is senior in any respect to the Company’s obligations under the Notes. 
  
 9. Charges, Taxes and Expenses. Issuance of certificates for Underlying Shares upon conversion of (or otherwise in respect of) this Note shall be made without charge to the Investor for any issue or transfer
tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company shall not be required to
pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Underlying Shares or Notes in a name other than that of the Investor. The Investor shall be responsible for all other tax liability that
may arise as a result of holding or transferring this Note or receiving Underlying Shares in respect hereof. 
  
 10. Reservation of Underlying Shares. The Company covenants that it will at all times reserve and keep available out of the aggregate of its
authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Underlying Shares as required hereunder, the number of Underlying Shares which are then issuable and deliverable upon the conversion of
(and otherwise in respect of) this entire Note (taking into account the adjustments of Section 11), free from preemptive rights or any other contingent purchase rights of persons other than the Investor. The Company covenants that all Underlying
Shares so issuable and deliverable shall, upon issuance in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable. 
  
 11. Certain Adjustments. The Conversion Price is subject to adjustment from time to time as set forth in this Section
11. 
  
 (a) Stock Dividends and Splits. If the Company, at
any time while this Note is outstanding: (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into
a larger number of shares, or (iii) combines outstanding shares of Common Stock into a smaller number of shares, then in each such case the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become
effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the
effective date of such subdivision or combination. 
  

 13 

 (b) Pro Rata Distributions. If the Company, at any time while this Note is outstanding,
distributes to all holders of Common Stock (i) evidences of its indebtedness, (ii) any security (other than a distribution of Common Stock covered by the preceding paragraph), (iii) rights or warrants to subscribe for or purchase any security, or
(iv) any other asset (in each case, “Distributed Property”), then, at the request of the Investor delivered before the 90th day after the record date fixed for determination of shareholders entitled to receive such distribution, the
Company will deliver to the Investor, within five Trading Days after such request (or, if later, on the effective date of such distribution), the Distributed Property that the Investor would have been entitled to receive in respect of the Underlying
Shares for which this Note could have been converted immediately prior to such record date. If such Distributed Property is not delivered to the Investor pursuant to the preceding sentence, then upon any conversion of this Note that occurs after
such record date, the Investor shall be entitled to receive, in addition to the Underlying Shares otherwise issuable upon such conversion, the Distributed Property that the Investor would have been entitled to receive in respect of such number of
Underlying Shares had the Investor been the record holder of such Underlying Shares immediately prior to such record date. Notwithstanding the foregoing, this Section 11(b) shall not apply to any distribution of rights or securities in respect of
adoption by the Company of a shareholder rights plan, which events shall be covered by Section 11(a). 
  
 (c) Fundamental Transactions. If, at any time while this Note is outstanding, (i) the Company effects any merger or consolidation of the Company
with or into another Person, (ii) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or another Person) is completed
pursuant to which holders of Common Stock tender or exchange their shares for other securities, cash or property, or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or property (other than as a result of a subdivision or combination of shares of Common Stock covered by Section 11(a) above) (in any such case, a “Fundamental
Transaction”), then in addition to its other rights under the Transaction Documents the Investor shall have the right to: (x) receive, upon any subsequent conversion of this Note, for each Underlying Share that would have been issuable upon
such conversion absent such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such
Fundamental Transaction, the holder of one share of Common Stock (the “Alternate Consideration”) or (y) require the surviving entity to issue to the Investor and instrument identical to this Note (with an appropriate adjustments to
the conversion price). For purposes of any such conversion, the Company shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate
Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Investor shall be given the same choice as to the Alternate Consideration it receives upon
any conversion of this Note following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction (or, if different, the ultimate
parent of such successor or entity or the entity issuing the Alternate Consideration) shall issue to the Investor a new debenture consistent with the foregoing provisions and evidencing the Investor’s right to convert such debenture into
Alternate Consideration. The terms 
  

 14 

 of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor
or surviving entity to comply with the provisions of this paragraph (c) and insuring that this Note (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. 
  
 (d) Subsequent Equity Sales. 
  
 (i) If the Company or any subsidiary thereof, as applicable, at any time
while this Note is outstanding, shall issue shares of Common Stock or Common Stock Equivalents entitling any Person to acquire shares of Common Stock, at a price per share less than the Conversion Price (if the holder of the Common Stock or Common
Stock Equivalent so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights issued in connection with such
issuance, be entitled to receive shares of Common Stock at a price less than the Conversion Price, such issuance shall be deemed to have occurred for less than the Conversion Price), then, the Conversion Price shall be multiplied by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding immediately prior to the issuance of such shares of Common Stock or such Common Stock Equivalents plus the number of shares of Common Stock which the offering price for
such shares of Common Stock or Common Stock Equivalents would purchase at the Conversion Price, and the denominator of which shall be the sum of the number of shares of Common Stock outstanding immediately prior to such issuance plus the number of
shares of Common Stock so issued or issuable. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued. The Company shall notify the Investor in writing, no later than the Trading Day following the issuance of
any Common Stock or Common Stock Equivalent subject to this section, indicating therein the applicable issuance price, or of applicable reset price, exchange price, conversion price and other pricing terms. 
  
 (ii) For purposes of this subsection 11(d), the following subsections
(d)(ii)(l) to (d)(ii)(6) shall also be applicable: 
  
 (1)
Issuance of Rights or Options. In case at any time the Company shall in any manner grant (directly and not by assumption in a merger or otherwise) any warrants or other rights to subscribe for or to purchase, or any options for the purchase
of, Common Stock or any stock or security convertible into or exchangeable for Common Stock (such warrants, rights or options being called “Options” and such convertible or exchangeable stock or securities being called
“Convertible Securities”) whether or not such Options or the right to convert or exchange any such Convertible Securities are immediately exercisable, and the price per share for which Common Stock is issuable upon the exercise of
such Options or upon the conversion or exchange of such Convertible Securities (determined by dividing (i) the sum (which sum shall constitute the applicable consideration) of (x) the total amount, if any, received or receivable by the Company as
consideration for the granting of such Options, plus (y) the aggregate amount of additional consideration payable to the Company upon the exercise of all such Options, plus (z), in the case of such Options which relate to Convertible Securities, the
aggregate amount of additional consideration, if any, payable upon the issue or sale of such Convertible Securities and upon the conversion or exchange thereof, by (ii) the total maximum number of shares of Common Stock issuable upon the exercise of
such Options or 
  

 15 

 upon the conversion or exchange of all such Convertible Securities issuable upon the exercise of such Options) shall be
less than the Conversion Price in effect immediately prior to the time of the granting of such Options, then the total number of shares of Common Stock issuable upon the exercise of such Options or upon conversion or exchange of the total amount of
such Convertible Securities issuable upon the exercise of such Options shall be deemed to have been issued for such price per share as of the date of granting of such Options or the issuance of such Convertible Securities and thereafter shall be
deemed to be outstanding for purposes of adjusting the Conversion Price. Except as otherwise provided in subsection 11(d)(ii)(3), no adjustment of the Conversion Price shall be made upon the actual issue of such Common Stock or of such Convertible
Securities upon exercise of such Options or upon the actual issue of such Common Stock upon conversion or exchange of such Convertible Securities. 
  
 (2) Issuance of Convertible Securities. In case the Company shall in any manner issue (directly and not by assumption in a merger or otherwise) or
sell any Convertible Securities, whether or not the rights to exchange or convert any such Convertible Securities are immediately exercisable, and the price per share for which Common Stock is issuable upon such conversion or exchange (determined by
dividing (i) the sum (which sum shall constitute the applicable consideration) of (x) the total amount received or receivable by the Company as consideration for the issue or sale of such Convertible Securities, plus (y) the aggregate amount of
additional consideration, if any, payable to the Company upon the conversion or exchange thereof, by (ii) the total number of shares of Common Stock issuable upon the conversion or exchange of all such Convertible Securities) shall be less than the
Conversion Price in effect immediately prior to the time of such issue or sale, then the total maximum number of shares of Common Stock issuable upon conversion or exchange of all such Convertible Securities shall be deemed to have been issued for
such price per share as of the date of the issue or sale of such Convertible Securities and thereafter shall be deemed to be outstanding for purposes of adjusting the Conversion Price, provided that (a) except as otherwise provided in subsection
11(d)(ii)(3), no adjustment of the Conversion Price shall be made upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities and (b) no further adjustment of the Conversion Price shall be made by reason
of the issue or sale of Convertible Securities upon exercise of any Options to purchase any such Convertible Securities for which adjustments of the Conversion Price have been made pursuant to the other provisions of subsection 11(d). 
  
 (3) Change in Option Price or Conversion Rate. Upon the happening of
any of the following events, namely, if the purchase price provided for in any Option referred to in subsection 11(d)(ii)(l) hereof, the additional consideration, if any, payable upon the conversion or exchange of any Convertible Securities referred
to in subsections 11(d)(ii)(l) or 11(d)(ii)(2), or the rate at which Convertible Securities referred to in subsections 11(d)(ii)(l) or 11(d)(ii)(2) are convertible into or exchangeable for Common Stock shall change at any time (including, but not
limited to, changes under or by reason of provisions designed to protect against dilution), the Conversion Price in effect at the time of such event shall forthwith be readjusted to the Conversion Price which would have been in effect at such time
had such Options or Convertible Securities still outstanding provided for such changed purchase price, additional consideration or conversion rate, as the case may be, at the time initially granted, issued or sold. On the termination of any Option
for which any adjustment was made pursuant to this subsection 11(d) or any right to convert or exchange Convertible Securities for which any 
  

 16 

 adjustment was made pursuant to this subsection 11(d) (including without limitation upon the redemption or purchase for
consideration of such Convertible Securities by the Company), the Conversion Price then in effect hereunder shall forthwith be changed to the Conversion Price which would have been in effect at the time of such termination had such Option or
Convertible Securities, to the extent outstanding immediately prior to such termination, never been issued. 
  
 (4) Stock Dividends. Subject to the provisions of this Section 11(d), in case the Company shall declare a dividend or make any other distribution
upon any stock of the Company (other than the Common Stock) payable in Common Stock, Options or Convertible Securities, then any Common Stock, Options or Convertible Securities, as the case may be, issuable in payment of such dividend or
distribution shall be deemed to have been issued or sold without consideration. 
  
 (5) Consideration for Stock. In case any shares of Common Stock, Options or Convertible Securities shall be issued or sold for cash, the consideration received therefor shall be deemed to be the net amount
received by the Company therefor, after deduction therefrom of any expenses incurred or any underwriting commissions or concessions paid or allowed by the Company in connection therewith. In case any shares of Common Stock, Options or Convertible
Securities shall be issued or sold for a consideration other than cash, the amount of the consideration other than cash received by the Company shall be deemed to be the fair value of such consideration as determined in good faith by the Board of
Directors of the Company, after deduction of any expenses incurred or any underwriting commissions or concessions paid or allowed by the Company in connection therewith. In case any Options shall be issued in connection with the issue and sale of
other securities of the Company, together comprising one integral transaction in which no specific consideration is allocated to such Options by the parties thereto, such Options shall be deemed to have been issued for such consideration as
determined in good faith by the Board of Directors of the Company. If Common Stock, Options or Convertible Securities shall be issued or sold by the Company and, in connection therewith, other Options or Convertible Securities (the
“Additional Rights”) are issued, then the consideration received or deemed to be received by the Company shall be reduced by the fair market value of the Additional Rights (as determined using the Black-Scholes option pricing model
or another method mutually agreed to by the Company and the Investor). The Board of Directors of the Company shall respond promptly, in writing, to an inquiry by the Investors as to the fair market value of the Additional Rights. In the event that
the Board of Directors of the Company and the Investors are unable to agree upon the fair market value of the Additional Rights, the Company and the Investors shall jointly select an appraiser, who is experienced in such matters. The decision of
such appraiser shall be final and conclusive, and the cost of such appraiser shall be borne evenly by the Company and the Investor. 
  
 (6) Record Date. In case the Company shall take a record of the holders of its Common Stock for the purpose of entitling them (i) to receive a
dividend or other distribution payable in Common Stock, Options or Convertible Securities or (ii) to subscribe for or purchase Common Stock, Options or Convertible Securities, then such record date shall be deemed to be the date of the issue or sale
of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be. 
  

 17 

 (iii) Notwithstanding the foregoing, no adjustment will be made under this paragraph (d) in respect of:
(1) the issuance of securities upon the exercise or conversion of any Common Stock Equivalents issued by the Company prior to the Original Issue Date of this Note (but will apply to any amendments, resets, modifications, and reissuances thereof and
as a result of any changes, resets or adjustments to a Conversion or Exchange Price thereunder whether or not as a result of any amendment, modification or reissuance (except as to the Hunt Group as a result of the initial issuance of the Securities
pursuant to the Purchase Agreement)), or (2) the grant of options or warrants, or the issuance of additional securities, under any duly authorized Company stock option, stock incentive plan, restricted stock plan or stock purchase plan approved by
the Board of Directors of the Company. 
  
 (e)
Reclassifications; Share Exchanges. In case of any reclassification of the Common Stock, or any compulsory share exchange pursuant to which the Common Stock is converted into other securities, cash or property (other than compulsory share
exchanges which constitute Change of Control transactions), the Investors of the Notes then outstanding shall have the right thereafter to convert such shares only into the shares of stock and other securities, cash and property receivable upon or
deemed to be held by holders of Common Stock following such reclassification or share exchange, and the Investors shall be entitled upon such event to receive such amount of securities, cash or property as a holder of the number of shares of Common
Stock of the Company into which such shares of Notes could have been converted immediately prior to such reclassification or share exchange would have been entitled. This provision shall similarly apply to successive reclassifications or share
exchanges. 
  
 (f) Calculations. All calculations under
this Section 11 shall be made to the nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and
the disposition of any such shares shall be considered an issue or sale of Common Stock. 
  
 (g) Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 11, the Company at its expense will promptly compute such adjustment in accordance with the terms hereof and prepare a
certificate describing in reasonable detail such adjustment and the transactions giving rise thereto, including all facts upon which such adjustment is based. Upon written request, the Company will promptly deliver a copy of each such certificate to
the Investor. 
  
 (h) Notice of Corporate Events. If the
Company (i) declares a dividend or any other distribution of cash, securities or other property in respect of its Common Stock, including without limitation any granting of rights or warrants to subscribe for or purchase any capital stock of the
Company or any subsidiary, (ii) authorizes and publicly approves, or enters into any agreement contemplating or solicits shareholder approval for any Fundamental Transaction or (iii) publicly authorizes the voluntary dissolution, liquidation or
winding up of the affairs of the Company, then the Company shall deliver to the Investor a notice describing the material terms and conditions of such transaction, at least 20 calendar days prior to the applicable record or effective date on which a
Person would need to hold Common Stock in order to participate in or vote with respect to such transaction, and the Company will take all steps reasonably necessary in order to insure that the Investor is given the practical opportunity 

 

 18 

 to convert this Note prior to such time so as to participate in or vote with respect to such transaction; provided,
however, that the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice. 
  
 12. Fractional Shares. The Company shall not be required to issue or cause to be issued fractional Underlying Shares
on conversion of this Note. If any fraction of an Underlying Share would, except for the provisions of this Section, be issuable upon conversion of this Note or payment of interest hereon, the number of Underlying Shares to be issued will be rounded
up to the nearest whole share. 
  
 13. Prepayment at Option of
Company. This Note may not be prepaid without the consent of the holder. 
  
 14. Notices. Any and all notices or other communications or deliveries hereunder (including without limitation any Conversion Notice or the Company Conversion Notice) shall be in writing and shall be deemed
given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to 6:30 p.m. (New York City time) on a Trading Day, (ii) the next
Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading
Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. The addresses for such communications shall
be: (i) if to the Company, to 410 N. 44th Street, Suite 600, Phoenix, AZ 85008, facsimile: (602) 794-4198, attention
Chief Financial Officer, (ii) if to the Investor, to the address or facsimile number appearing on the Company’s shareholder records or such other address or facsimile number as the Investor may provide to the Company in accordance with this
Section. 
  
 15. Miscellaneous. 
  
 (a) This Note shall be binding on and inure to the benefit of the parties
hereto and their respective successors and assigns. 
  
 (b)
Subject to Section 15(a), above, nothing in this Note shall be construed to give to any person or corporation other than the Company and the Investor any legal or equitable right, remedy or cause under this Note. This Note shall inure to the sole
and exclusive benefit of the Company and the Investor. 
  
 (c)
All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all Proceedings shall be commenced exclusively in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto hereby
irrevocably submits to the exclusive jurisdiction of the New York Courts for any Proceeding, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any New York
Court 
  

 19 

 or that a New York Court is an inconvenient forum for such Proceeding. Each party hereto hereby irrevocably waives
personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices
to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.
Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal Proceeding. The prevailing party in a Proceeding shall be reimbursed by the other party for its
reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding. 
  
 (d) 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. 
  
 (e) In case any one or more of the provisions of this
Note shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Note shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Note. 
  
 (f) No provision of this Note may be waived or amended except (i) in accordance with the requirements set forth in the
Purchase Agreement, and (ii) in a written instrument signed, in the case of an amendment, by the Company and the Investor or, in the case of a waiver, by the party against whom enforcement of any such waiver is sought. 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. 
  
 (g) To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will resist any and
all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter in force, in connection with any claim, action or Proceeding that may be brought by any Investor in order to enforce any right
or remedy under the Notes. Notwithstanding any provision to the contrary contained in the Notes, it is expressly agreed and provided that the total liability of the Company under the Notes for payments in the nature of interest shall not exceed the
maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the
nature of interest that the Company may be obligated to pay under the Notes exceed such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Notes is increased or decreased by statute or any
official governmental action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate of interest applicable to the Notes from the effective date forward, unless such application is precluded
by applicable law. If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the 
  

 20 

 Company to any Investor with respect to indebtedness evidenced by the Notes, such excess shall be applied by such
Investor to the unpaid principal balance of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at such Investor’s election. 
  
 (h) The outstanding principal amount and interest under this Note may not be prepaid without the prior written consent of
the Investor. 
  
 (i) The obligations under this Note and any
Interest Note are secured pursuant to the Security Agreement. 
  
 IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated. 
  

			
	PROSOFTRAINING
		
	 By:
	 	 /s/ Robert G. Gwin

	 Name:
	 	 Robert G. Gwin

	 Title:
	 	 Chief Executive Officer

  

 21 

 EXHIBIT A 
  

CONVERSION NOTICE 
  
 (To be Executed by the Registered Investor in order to convert Notes) 
  
 The undersigned hereby elects to convert the principal amount of Note indicated below, into shares of Common Stock of ProsoftTraining, as of the date
written below. If shares are to be issued in the name of a Person other than undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by
the Company in accordance therewith. No fee will be charged to the Investor for any conversion, except for such transfer taxes, if any. All terms used in this notice shall have the meanings set forth in the Note. 
  
 (For use if at the time of this Notice, a registration statement is effective and
available for use by the undersigned holder to sell Underlying Shares): 
  
 The undersigned represents its intention to promptly sell the Underlying Shares issuable pursuant to this Conversion Notice pursuant to the prospectus that forms a part of the Registration Statement, and accordingly requests that such
Underlying Shares be issued free of all legends in accordance with the Purchase Agreement.         ̈

  

			
	 Conversion calculations:
	 	  

	 	 	 Date to Effect Conversion

	 	 	  
  

	 	 	 Principal amount of Note owned prior to conversion

	 	 	  
  
  

	 	 	 Principal amount of Note to be Converted

	 	 	  
  

	 	 	 Principal amount of Note remaining after Conversion

	 	 	  
  

	 	 	 DTC Account

	 	 	  
  

	 	 	 Number of shares of Common Stock to be Issued

	 	 	  
  

	 	 	 Applicable Conversion Price

	 	 	  
  

	 	 	 Name of Investor

  

 22 

			
	 By:
	 	  

	 Name:
	 	 
	 Title:
	 	 

  
 By the delivery
of this Conversion Notice the Investor represents and warrants to the Company that its ownership of the Common Stock does not exceed the restrictions set forth in Section 5(b) of the Note. 
  

 23 

 Schedule 1 
  

ProsoftTraining  
 Secured 8%
Convertible Notes due August 30, 2006 
  
 CONVERSION SCHEDULE

  
 This Conversion Schedule reflects conversions made under the
above referenced Notes. 
  
 Dated: 
  

							
	 Date of Conversion

	 	 Amount of
 Conversion

	 	 Aggregate
 Principal
 Amount
 Remaining
 Subsequent to
 Conversion

	  	Applicable Conversion
Price

  

 24

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