Document:

May 31, 2012

 

Frederick’s of Hollywood Group Inc.

and each of the other Borrowers referenced
below

6255 Sunset Boulevard, 6th Floor

Hollywood, CA 9008

 

Ladies and Gentlemen:

 

This
is the fee letter (this “Fee Letter”) referred to in that certain Credit
and Security Agreement dated as of the date hereof (as the same may be amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), by and among Frederick’s of Hollywood Group Inc., a New York corporation
(“Group”), FOH Holdings, Inc., a Delaware corporation (“Parent”), Frederick’s of Hollywood
Inc., a Delaware corporation (“Frederick’s”), Frederick’s of Hollywood Stores, Inc., a Nevada corporation
(“Stores”), and Hollywood Mail Order, LLC, a Nevada limited liability company (“Mail Order”
and together with Group, Parent, Frederick’s and Stores, each individually, a “Borrower” and collectively,
the “Borrowers”), and Salus Capital Partners, LLC (the “Lender”). Unless otherwise defined
herein, capitalized terms shall have the same meanings as specified therefor in the Credit Agreement. 

 

In
connection with, and in consideration of Lender entering into the Credit Agreement and providing Advances as contemplated therein,
each of the Borrowers, jointly and severally, agrees to pay to the Lender, the fees referred to below:

 

1.Origination
Fee. An origination fee (the “Origination Fee”) in the amount of $465,000 on account of the Line of Credit,
which Origination Fee is deemed fully earned and non-refundable on the Closing Date. Borrowers shall pay the Origination Fee to
Lender in cash as follows: (i) $232,500 shall be paid on the Closing Date and (ii) $232,500 shall be paid on May [__], 2013; provided,
however, if an Event of Default occurs then any outstanding portion of the Origination Fee shall be immediately due and
payable. No portion of the Origination Fee shall be subject to refund, rebate or abatement in whole or part.

 

2.Unused
Line of Credit Fee. An unused line of credit fee (the “Unused Line Fee”), which Unused Line Fee shall accrue
at a rate equal to three-quarters of one percent (0.75%) per annum times the average daily unused portion of the Line of Credit.
The Unused Line Fee shall be payable monthly in arrears on the first day of each month, commencing with the first full month following
the Closing Date, and on the Termination Date.

 

3.Monitoring
Fees. Collateral monitoring fees (the “Monitoring Fee”) in the amount of $4,500 per month. The Monitoring
Fee shall be payable monthly, in advance, on the first day of each month following the Closing Date until the Lender’s commitment
to lend is terminated and the Obligations are indefeasibly paid in full, in which event a monthly installment of the Monitoring
Fee shall be paid on the date of such termination.

 

4.Line
of Credit Reduction or Termination Fees. If Lender terminates the Line of Credit during a Default Period, or if Borrowers elect
to terminate the Line of Credit or reduce the Maximum Line of Credit on a date prior to the Maturity Date, then Borrowers shall
pay to Lender as liquidated damages, and not as a penalty, a Line of Credit termination fee in an amount equal to a percentage
of the then effective Maximum Line of Credit (or in the case of a reduction of the Maximum Line of Credit, a percentage of the
amount by which the Maximum Line of Credit is to be reduced), calculated as follows: (i) three percent (3.0%) if the Termination
Date or effective date of reduction of the Maximum Line of Credit occurs before the first anniversary of the Closing Date; (ii)
two percent (2.0%) if the Termination Date or effective date of reduction of the Maximum Line of Credit occurs on or after the
first anniversary of the Closing Date, but before the second anniversary of the Closing Date; and (iii) one-half of one percent
(0.5%) if the Termination Date or effective date of reduction of the Maximum Line of Credit occurs on or after the second anniversary
of the Closing Date, but before the third anniversary of the Closing Date; provided, that in the event of a sale of all or substantially
all of the assets or Capital Stock of the Borrowers resulting in a Change of Control and repayment in full of the Obligations and
termination of this Agreement, then the Line of Credit termination fee shall be reduced by fifty percent (50%) of the amount otherwise
due under this paragraph.

 

    	 

    	 

    

5.Annual
FILO Facility Fee. Commencing on the first anniversary of the Closing Date, and continuing on each subsequent anniversary of
the Closing Date, Borrowers shall pay to Lender a nonrefundable annual facility fee on account of the FILO Advance equal to one-half
of one percent (.50%) of the then-outstanding FILO Advance, which fee shall be fully earned and non-refundable on each such anniversary
date.

 

All fees payable
under this Fee Letter constitute compensation for services rendered and do not constitute interest or a charge for the use of money.
All fees payable hereunder shall be fully earned when due or as otherwise provided herein and shall not be subject to refund or
rebate under any circumstances. All fees payable hereunder will be paid in immediately available funds and shall not be subject
to reduction by way of setoff or counterclaim.

 

The Borrowers shall
execute such instruments, documents and agreements as the Lender may reasonably require in order to implement the terms of this
Fee Letter. Each Borrower agrees to keep the terms of this Fee Letter confidential and not to disclose same to any other Person,
without the Lender’s prior written consent other than to (a) such Borrower’s officers, directors, employees, accountants,
attorneys, and other advisors, agents and representatives, and then only on a confidential basis in connection with the transactions
contemplated hereby, and (b) as required by applicable law or compulsory legal process (in which case such Borrower agrees to inform
the Lender promptly thereof).

 

This Fee Letter may
not be amended or any provision hereof waived or modified except by an instrument in writing signed by each of the parties hereto.
THIS FEE LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS THEREOF. This Fee Letter may be executed in any number of counterparts, each of which shall
be an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a
signature page of this Fee Letter by electronic transmission shall be equally effective as delivery of a manually executed counterpart
of this Fee Letter. Section headings used herein are for convenience of reference only, are not part of this Fee Letter and are
not to affect the construction of, or to be taken into consideration in interpreting, this Fee Letter.

 

    	2

    	 

    

If the foregoing correctly
sets forth our understanding, please indicate your acceptance of the terms hereof by returning to us an executed counterpart hereof,
whereupon this Fee Letter shall become a binding agreement between us.

 

[signature
pages follow]

 

    	3

    	 

    

	 	Very truly yours,

SALUS CAPITAL PARTNERS, LLC
	 	 
	 	By: 	s/ Kyle C. Shonak   
	 	 	Kyle C. Shonak

Senior Vice President

 

 

[Signature Page to Fee Letter]

    	 

    	 

    

 

Accepted and agreed to as of

the date first above written:

 

	FREDERICK’S OF HOLLYWOOD GROUP INC.
	 
	By: 	s/ Thomas Rende   
	 	Thomas Rende

Chief Financial Officer

 

	FOH HOLDINGS, INC.
	 
	By: 	s/ Thomas Rende   
	 	Thomas Rende

Chief Financial Officer

 

 

	FREDERICK’S OF HOLLYWOOD, INC.
	 
	By: 	s/ Thomas Rende   
	 	Thomas Rende

Chief Financial Officer

 

 

	FREDERICK’S OF HOLLYWOOD STORES,
INC.
	 
	By: 	s/ Thomas Rende   
	 	Thomas Rende

Chief Financial Officer

 

 

	HOLLYWOOD MAIL ORDER, LLC
	 
	By: 	s/ Thomas Rende   
	 	Thomas Rende

Chief Financial Officer

  

 

 

 

 

[Signature Page to Fee Letter]THE ISSUANCE AND SALE OF THE SECURITIES
REPRESENTED BY THIS DEBENTURE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A
FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO
RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

10% SENIOR SECURED DEBENTURE

DUE June 30, 2012

 

No.: 12-02

 

Original Issue Date: May 28,
2012

 

Principal Amount: $550,000, to be funded as follows:

 

May 15, 2012 $  50,000

May 30, 2012 $100,000

June 8, 2012   $100,000

June 15, 2012 $100,000

June 22, 2012 $100,000

June 29, 2012 $100,000

 

THIS 10% SENIOR SECURED
DEBENTURE is one of a series of duly authorized and validly issued debentures of Net Talk.com,
Inc., a Florida corporation, having its principal place of business at 1100 NW 163 Drive, Miami, Florida 33169 (the “Company”),
designated as its 10% Senior Secured Debenture, due June 30, 2012 (this debenture, the “Debenture” and collectively
with the other debentures of such series, the “Debentures”).

 

FOR VALUE RECEIVED,
the Company promises to pay to Vicis Capital Master Fund, or its registered assigns (the “Holder”), or shall
have paid pursuant to the terms hereunder, the principal sum of $550,000 by June 30, 2012, or such earlier date as this Debenture
is required or permitted to be repaid as provided hereunder (the “Maturity Date”), and to pay interest to the
Holder on the aggregate then outstanding principal amount of this Debenture in accordance with the provisions hereof. This Debenture
is subject to the following additional provisions:

 

Section 1.     
Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Debenture, (a) capitalized terms not otherwise
defined herein shall have the meanings set forth in the Purchase Agreement (as defined below) and (b) the following terms shall
have the following meanings:

 

    	1

    	 

    

 

“Alternate
Consideration” shall have the meaning set forth in Section 5(e).

 

“Bankruptcy
Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule
1-02(w) of Regulation S-X) thereof 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 Significant Subsidiary thereof; (b) there is commenced against the Company or any Significant Subsidiary thereof any such case
or proceeding that is not dismissed within 60 days after commencement; (c) the Company or any Significant Subsidiary thereof is
adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered; (d) the
Company or any Significant Subsidiary thereof 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 calendar days after such appointment; (e) the Company or any Significant
Subsidiary thereof makes a general assignment for the benefit of creditors; (f) the Company or any Significant Subsidiary thereof
calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or (g) the Company
or any Significant Subsidiary thereof, 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.

 

“Business
Day” means any day except Saturday, Sunday, any day which shall be a federal legal holiday in the United States or any
day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

 

“Change of
Control Transaction” means the occurrence after the date hereof of any of (i) an acquisition after the date hereof by
an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective
control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess
of 45% of the voting securities of the Company (other than by means of exercise of the Securities issued together with the Debentures),
or (ii) the Company merges into or consolidates with any other Person, or any Person merges into or consolidates with the Company
and, after giving effect to such transaction, the stockholders of the Company immediately prior to such transaction own less than
55% of the aggregate voting power of the Company or the successor entity of such transaction, or (iii) the Company sells or transfers
all or substantially all of its assets to another Person and the stockholders of the Company immediately prior to such transaction
own less than 55% of the aggregate voting power of the acquiring entity immediately after the transaction, or (iv) a replacement
at one time or within a two-year period of more than one-half of the members of the Company’s board of directors (except
as such replacement may be required pursuant to the rules and regulations
of a Trading Market) which is not approved by a majority of those individuals who are members of the board of directors on the
date hereof (or by those individuals who are serving as members of the board of directors on any date whose nomination to the board
of directors was approved by a majority of the members of the board of directors who are members on the date hereof), or (v) the
execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events
set forth in clauses (i) through (iv) above.

 

    	2

    	 

    

 

“Common Stock”
means the common stock, par value $.001 per share, of the Company and stock of any other class of securities into which such securities
may hereafter be reclassified or changed into.

 

“Debenture Register”
shall have the meaning set forth in Section 2(b).

 

“Event of Default” shall
have the meaning set forth in Section 8.

 

“Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Fundamental
Transaction” shall have the meaning set forth in Section 5(e).

 

“Interest
Payment Date” shall have the meaning set forth in Section 2(a).

 

“Late Fees”
shall have the meaning set forth in Section 2(c).

 

“Mandatory
Default Amount” means the sum of (i) 110% of the outstanding principal amount of this Debenture, plus all accrued and
unpaid interest hereon, and (ii) all other amounts, costs, expenses and liquidated damages due in respect of this Debenture.

 

“New York
Courts” shall have the meaning set forth in Section 9(d).

 

“Optional
Redemption” shall have the meaning set forth in Section 6.

 

“Optional
Redemption Amount” means the sum of (i) 100% of the principal amount of the Debenture then outstanding, (ii) accrued
but unpaid interest and (iii) all liquidated damages and other amounts due in respect of the Debenture.

 

“Optional
Redemption Date” shall have the meaning set forth in Section 6.

 

“Optional
Redemption Notice” shall have the meaning set forth in Section 6.

 

“Optional
Redemption Notice Date” shall have the meaning set forth in Section 6.

 

“Original
Issue Date” means the date of the first issuance of the Debentures, regardless of any transfers of any Debenture and
regardless of the number of instruments which may be issued to evidence such Debentures.

 

“Permitted
Indebtedness” means the Permitted Indebtedness as defined by the Purchase Agreement.

 

“Permitted
Lien” means the a Permitted Lien as defined by the Purchase Agreement.

 

“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.

 

    	3

    	 

    

 

“Purchase
Agreement” means that certain Securities Purchase Agreement dated September 30, 2011 between the Company and the original
Holder.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Share Delivery
Date” shall have the meaning set forth in Section 4(d).

 

“Subsidiary”
shall have the meaning set forth in the Purchase Agreement.

 

“Trading Day”
means a day on which the principal Trading Market is open for business.

 

“Trading Market”
means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the
American Stock Exchange, the Nasdaq Capital Market, the Nasdaq Global Market, Nasdaq Global Select Market, the New York Stock Exchange
or the OTC Bulletin Board.

 

“Transaction
Documents” shall have the meaning set forth in the Purchase Agreement.

 

Section 2.      Interest.

 

a)     Payment
of Interest in Cash. The Company shall pay interest to the Holder on the aggregate then outstanding principal amount of this
Debenture at the rate of 10% per annum, payable on each Optional Redemption Date (as to that principal amount then being redeemed)
and on the Maturity Date (except that, if any such date is not a Business Day, then such payment shall be due on the next succeeding
Business Day) (each such date, an “Interest Payment Date”), in cash.

 

b)     Interest
Calculations. Interest shall be calculated on the basis of a 360-day year and shall accrue daily commencing on the Original
Issue Date until payment in full of the principal sum, together with all accrued and unpaid interest, liquidated damages and other
amounts which may become due hereunder, has been made. Interest hereunder will be paid to the Person in whose name this Debenture
is registered on the records of the Company regarding registration and transfers of this Debenture (the “Debenture Register”).

 

c)     Late
Fee. All overdue accrued and unpaid interest to be paid hereunder shall be subject to a late fee at an interest rate equal
to the lesser of 18% per annum or the maximum rate permitted by applicable law (“Late Fees”) which shall accrue
daily from the date such interest is due hereunder through and including the date of payment in full.

 

d)     Prepayment.
Upon fifteen (15) days prior written notice to the Holder, the Company shall have the privilege and option to prepay the then outstanding
principal amount of this Debenture in full, and not in part, at any time prior to the Maturity Date, upon payment of 110% of the
then outstanding principal amount, plus all accrued and unpaid interest hereon, plus all other amounts, costs, expenses and liquidated
damages due in respect of this Debenture. Except as otherwise set forth in the preceding sentence, the Company may not prepay any
portion of the principal amount of this Debenture without the prior written consent of the Holder.

 

    	4

    	 

    

 

Section 3.      Registration
of Transfers and Exchanges.

 

a)     Different
Denominations. This Debenture is exchangeable for an equal aggregate principal amount of Debentures of different authorized
denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer
or exchange.

 

b)     Investment
Representations. This Debenture has been issued subject to certain investment representations of the original Holder set forth
in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable
federal and state securities laws and regulations.

 

c)     Reliance
on Debenture Register. Prior to due presentment for transfer to the Company of this Debenture, the Company and any agent of
the Company may treat the Person in whose name this Debenture is duly registered on the Debenture Register as the owner hereof
for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Debenture is overdue, and
neither the Company nor any such agent shall be affected by notice to the contrary.

 

Section 4.      Intentionally
omitted.

 

Section 5.      Intentionally
omitted.

 

Section 6.      Optional
Redemption at Election of Holder.

 

a)     Optional
Redemption at Election of Holder. Subject to the provisions of this Section 6, upon a Change of Control Transaction and at
any time on or before the 90th calendar day following the consummation of such Change of Control Transaction, the Holder
may deliver a notice to the Company (an “Optional Redemption Notice” and the date such notice is deemed delivered
hereunder, the “Optional Redemption Notice Date”) of its election to require the Company to redeem all or a
portion of the then outstanding Debentures for an amount in cash equal to the Optional Redemption Amount on the 5th Trading Day
following the Optional Redemption Notice Date (such date, the “Optional Redemption Date” and such redemption,
the “Optional Redemption”). The Optional Redemption Amount is due in full on the Optional Redemption Date. The
Holder may rescind the Optional Redemption Notice at any time until the later of (i) the Optional Redemption Date or (ii) the date
on which the Optional Redemption Amount is actually paid in full. If any portion of the cash payment for an Optional Redemption
shall not be paid by the Company by the respective due date, interest shall accrue thereon at the rate of 18% per annum (or the
maximum rate permitted by applicable law, whichever is less) until the payment of the Optional Redemption Amount plus all amounts
owing thereon is paid in full.

 

    	5

    	 

    

 

Section 7.      Negative
Covenants. As long as any portion of this Debenture remains outstanding, unless Purchasers holding in the aggregate at least
66% of the principal amount of the then outstanding Debentures shall otherwise consent in writing, the Company shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly:

 

a)     other
than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money
of any kind, including but not limited to, a guarantee, 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;

 

b)     other
than Permitted Liens, enter into, create, incur, assume or suffer to exist any Liens 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;

 

c)     amend
its charter documents, including without limitation, the certificate of incorporation and bylaws, in any manner that materially
and adversely affects any rights of the Holder;

 

d)     repay,
repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its Common
Stock or Common Stock Equivalents other than as to (a) the Warrant Shares as permitted or required under the Transaction Documents
and (b) repurchases of Common Stock or Common Stock Equivalents of departing officers and directors of the Company, provided that
such repurchases shall not exceed an aggregate of $100,000 for all officers and directors during the term of this Debenture;

 

e)     none
of the officers, directors or other Affiliates of the Company shall enter into any transaction with the Company or any Subsidiary
(other than for services as employees, officers and directors), including entering into 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 other Affiliates or any entity in which any officer, director, or other Affiliates
has a substantial interest or is an officer, director, trustee or partner;

 

f)     on
an annualized basis, none of the officers of the Company or a Subsidiary shall receive an increase in salary or bonus in excess
of 15% of the prior year’s salary or bonus, as applicable; provided that the foregoing restriction shall not apply
to the extent inconsistent with that certain employment agreement between the Company and Mr. Anastasios Kyriakides as in effect
as of the Closing Date;

 

g)     enter
into any agreement with respect to any of the foregoing; or

 

h)     pay
cash dividends or distributions on any equity securities of the Company.

 

Section 8.      Events
of Default.

 

a)     “Event
of Default” means, wherever used herein, any of the following events (whatever the reason for such event and whether
such event 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):

 

    	6

    	 

    

 

 

i.         any
default in the payment of (A) the principal amount of any Debenture or (B) interest, liquidated damages and other amounts owing
to a Holder on any Debenture, as and when the same shall become due and payable (whether on the Maturity Date or by acceleration
or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above, is not cured within
five (5) Trading Days;

 

ii.       the
Company shall fail to observe or perform any other covenant or agreement contained in the Debentures which failure is not cured,
if possible to cure, within the earlier to occur of (A) Fifteen (15) Trading Days after notice of such failure sent by the Holder
or by any other Holder and (B) 30 Trading Days after the Company has become or should have become aware of such failure;

 

iii.       default
or event of default (subject to any grace or cure period provided in the applicable agreement, document or instrument) shall occur
under (A) any of the Transaction Documents or (B) any other material agreement, lease, document or instrument to which the Company
or any Subsidiary is obligated (and not covered by clause (vi) below);

 

iv.       any
representation or warranty made in this Debenture, any other Transaction Documents, any written statement pursuant hereto or thereto
or any other report, financial statement or certificate made or delivered to the Holder or any other Holder shall be untrue or
incorrect in any material respect as of the date when made or deemed made;

 

v.         the
Company or any Significant Subsidiary shall be subject to a Bankruptcy Event;

 

vi.       the
Company or any Subsidiary shall default on any of its obligations under 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 for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation
greater than $250,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness
becoming or being declared due and payable prior to the date on which it would otherwise become due and payable;

 

vii.       the
Common Stock shall not be eligible for listing or quotation for trading on a Trading Market (as defined above) and shall not be
eligible to resume listing or quotation for trading thereon within ten (10) Trading Days; or

 

viii.       any
monetary judgment, writ or similar final process shall be entered or filed against the Company, any Subsidiary or any of their
respective property or other assets for more than $150,000, and such judgment, writ or similar final process shall remain unvacated,
unbonded or unstayed for a period of forty-five (45) calendar days.

 

    	7

    	 

    

 

b)     Remedies
Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Debenture, plus accrued but
unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become,
at the Holder’s election, immediately due and payable in cash at the Mandatory Default Amount. Commencing five (5) days after
the occurrence of any Event of Default that results in the eventual acceleration of this Debenture, the interest rate on this Debenture
shall accrue at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted under applicable law. Upon
the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender this Debenture to or as directed by the
Company. In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any
presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period
enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration
may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder
of the Debenture until such time, if any, as the Holder receives full payment pursuant to this Section 8(b). No such rescission
or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

 

Section 9.      Miscellaneous.

 

a)     Notices.
Any and all notices or other communications or deliveries to be provided by the Holder hereunder shall be in writing and delivered
personally, by facsimile, or sent by a nationally recognized overnight courier service, addressed to the Company, at the address
set forth above, or such other address as the Company may specify for such purpose by notice to the Holder delivered in accordance
with this Section 9. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be
in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each
Holder at the facsimile number or address of such Holder appearing on the books of the Company, or if no such facsimile number
or address appears, at the principal place of business of the Holder. Any notice or other communication or deliveries hereunder
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 9 prior to 5:30 p.m. (New York City time), (ii) the date immediately
following the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified
in this Section 9 between 5:30 p.m. (New York City time) and 11:59 p.m. (New York City time) on any date, (iii) the second Business
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.

 

b)     Absolute
Obligation. Except as expressly provided herein, no provision of this Debenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable,
on this Debenture at the time, place, and rate, and in the coin or currency, herein prescribed. This Debenture is a direct debt
obligation of the Company. This Debenture ranks pari passu with all other Debentures now or hereafter issued under the terms
set forth herein.

 

    	8

    	 

    

 

c)     Lost
or Mutilated Debenture. If this Debenture shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver,
in exchange and substitution for and upon cancellation of a mutilated Debenture, or in lieu of or in substitution for a lost, stolen
or destroyed Debenture, a new Debenture for the principal amount of this Debenture so mutilated, lost, stolen or destroyed, but
only upon receipt of evidence of such loss, theft or destruction of such Debenture, and of the ownership hereof, reasonably satisfactory
to the Company.

 

d)     Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Debenture 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
conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of
the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates,
directors, officers, shareholders, employees or agents) shall be commenced 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 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 any of the Transaction Documents),
and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding.
Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action
or 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 Debenture 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 other manner permitted by applicable 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 Debenture or the
transactions contemplated hereby. If either party shall commence an action or proceeding to enforce any provisions of this Debenture,
then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees and
other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.

 

e)     Waiver.
Any waiver by the Company or the Holder of a breach of any provision of this Debenture shall not operate as or be construed to
be a waiver of any other breach of such provision or of any breach of any other provision of this Debenture. The failure of the
Company or the Holder to insist upon strict adherence to any term of this Debenture on one or more occasions shall not be considered
a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Debenture.
Any waiver by the Company or the Holder must be in writing.

 

    	9

    	 

    

 

f)     Severability.
If any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain in effect,
and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons
and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable
law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of
interest permitted under applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at
any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury
law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on
this Debenture as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants
or the performance of this indenture, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits
or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impeded the execution
of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law has been
enacted.

 

g)     Next
Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day.

 

h)     Headings.
The headings contained herein are for convenience only, do not constitute a part of this Debenture and shall not be deemed to limit
or affect any of the provisions hereof.

 

i)     Assumption.
Any successor to the Company or any surviving entity in a Fundamental Transaction shall (i) assume, prior to such Fundamental Transaction,
all of the obligations of the Company under this Debenture and the other Transaction Documents pursuant to written agreements in
form and substance satisfactory to the Holder (such approval not to be unreasonably withheld or delayed) and (ii) issue to the
Holder a new debenture of such successor entity evidenced by a written instrument substantially similar in form and substance to
this Debenture, including, without limitation, having a principal amount and interest rate equal to the principal amount and the
interest rate of this Debenture and having similar ranking to this Debenture, which shall be satisfactory to the Holder (any such
approval not to be unreasonably withheld or delayed). The provisions of this Section 9(i) shall apply similarly and equally to
successive Fundamental Transactions and shall be applied without regard to any limitations of this Debenture.

 

j)     Secured
Obligation. The obligations of the Company under this Debenture are secured by all assets of the Company pursuant to that certain
Third Amended and Restated Security Agreement, dated as of September 30, 2011, by and between
the Company and the Secured Party (as defined therein), as may be amended or amended and restated from time to time.

 

*********************

 

    	10

    	 

    

 

IN WITNESS WHEREOF, the Company has caused
this Debenture to be duly executed by a duly authorized officer as of the date first above indicated.

 

	 	NET TALK.COM, INC.
	 	 
	 	By:   /s/ Anastasios Kyriakides
	 	Name: Anastasios Kyriakides
	 	Title: CEO and President

 

    	11

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