Notice of Guaranteed Delivery
                                       for
                         Subscription Warrants Issued by
                                GSE Systems, Inc.

         This form, or one substantially equivalent hereto, must be used to
exercise Rights pursuant to the Rights Offering described in the Prospectus
dated [ ________ ], 2001 (the 'Prospectus') of GSE Systems, Inc., a Delaware
corporation ('GSE Systems'), if a holder of Rights cannot deliver the
Subscription Warrant(s) evidencing the Rights to Continental Stock Transfer &
Trust Company (sometimes referred to herein as the 'Subscription Agent') at or
prior to [ _____ ], 2001, at 5:00 p.m. Eastern Time, unless extended (the
'Expiration Date'). Such form must be delivered by hand or sent by facsimile
transmission or mail to the Subscription Agent, and must be received by the
Subscription Agent on or prior to the Expiration Date. See the discussion set
forth under 'The Rights Offering -- Procedures to Exercise Rights' in the
Prospectus.

Regardless of the manner of delivery of the Subscription Warrant, payment of the
Subscription Price of $2.53 per share for each share of GSE Systems common stock
subscribed for upon exercise of such Rights must be received by the Subscription
Agent in the manner specified in the Prospectus at or prior to 5:00 p.m. Eastern
Time on the Expiration Date.

         The Subscription Agent is:

                   Continental Stock Transfer & Trust Company
                         Attn: Reorganization Department
                                   2 Broadway
                            New York, New York 10004
                    Telephone: (212) 509-4000, extension 535
                               Fax: (212) 616-7610

         Delivery of this instrument to an address other than as set forth above
or transmission of instructions via a facsimile other than as set forth above
does not constitute a valid delivery.






Ladies and Gentlemen:

         The undersigned hereby represents that he or she is the holder of
Subscription Warrant(s) representing ____________________ Rights and that such
Subscription Warrant(s) cannot be delivered to the Subscription Agent at or
before 5:00 p.m., Eastern Time on the Expiration Date. Upon the terms and
subject to the conditions set forth in the Prospectus, receipt of which is
hereby acknowledged, the undersigned hereby elects to exercise (i) the Basic
Subscription Privilege to subscribe for one share of Common Stock per each whole
Right represented by such Subscription Warrant (as rounded up for fractional
Rights, as described in the Prospectus) and (ii) the Oversubscription Privilege
relating to each such Right to subscribe, to the extent that Shares are
available, for an aggregate of up to ____________________Shares. The undersigned
understands that payment of the Subscription Price of $2.53 per Share for each
Share of the Common Stock subscribed for pursuant to the Basic Subscription
Privilege and Oversubscription Privilege must be received by the Subscription
Agent at or before 5:00 p.m. Eastern Time on the Expiration Date. The
undersigned represents that such payment, in the aggregate amount of
$____________, either (check appropriate box):

[ ] is being  delivered  to  Continental  Stock  Transfer  & Trust  Company,  as
Subscription Agent, herewith or

[ ] has been delivered separately to Continental Stock Transfer & Trust Company,
as  Subscription  Agent,  and is or was  delivered in the manner set forth below
(check appropriate box and complete information relating thereto):

[ ] wire transfer of funds (name of transferor institution) _________________
          date of transfer ______________________________________________

          confirmation number (if available) _______________________________

[ ] uncertified  check (payment by uncertified  check will not be deemed to have
been received by the  Subscription  Agent until such check has cleared.  Holders
paying by such means are urged to make  payment  sufficiently  in advance of the
Expiration Date to ensure that such payment clears by such date.)

[ ] certified check

[ ] bank draft (cashier's check)

[ ] U.S. postal money order (name of maker) _________________________

          date of check, draft or money order number ________________________

          bank on which check is drawn or issuer of money order ______________

Signature(s) _____________________________________________________________

Name(s) ________________________________________________________________

________________________________________________________________________
                             (Please Type or Print)




Address(es)
_________________________________________________________________________
                                                       (Zip Code)

Area Code and Tel. No(s). ________________________________________________


Subscription Warrant No(s). (if available) ________________________________









                              Guaranty Of Delivery
          (Not to be used for Subscription Warrant Signature Guarantee)

         The undersigned, a member firm of a registered national securities
exchange or member of the National Association of Securities Dealers, Inc.,
commercial bank or trust company having an office or correspondent in the United
States, or other eligible guarantor institution which is a member of or a
participant in a signature guarantee program acceptable to the Subscription
Agent, guarantees that the undersigned will deliver to the Subscription Agent
the certificates representing the Rights being exercised hereby, with any
required signature guarantees and any other required documents, all within three
American Stock Exchange trading days after the date hereof.

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________
                                    (Address)

______________________________________________________________________________
                        (Area Code and Telephone Number)

Dated:__________________________________________________________________, 2001


______________________________________________________________________________
(Name of Firm)

______________________________________________________________________________
(Authorized Signature)

         The institution which completes this form must communicate the
guarantee to the Subscription Agent and must deliver the Subscription Warrant(s)
to the Subscription Agent within the time period shown herein. Failure to do so
could result in a financial loss to such institution.


BA3#185973