Document:

Service Agreement

 Exhibit 10.36 
 Execution Copy 
 SERVICES AGREEMENT 

This SERVICES AGREEMENT (this “AGREEMENT”) is made as of November 14, 2012 by and between Harbinger
Capital Partners LLC, a Delaware limited liability company (“HCP”), and Harbinger Group Inc., a Delaware corporation (the “Company”) (collectively referred to herein as the “Parties”, and each a
“Party”). 
 WHEREAS, HCP and certain of its affiliated funds (together, the “HCP
Entities”) and the Company and certain of its wholly-owned subsidiaries (together, the “Company Entities”) desire to enter into this Agreement to set forth the terms and conditions upon which the Parties will provide
certain ongoing services to each other as described herein. 
 NOW, THEREFORE, and in consideration of the
mutual covenants, rights, and obligations set forth in this Agreement, the benefits to be derived therefrom, and other good and valuable consideration, the receipt and the sufficiency of which are hereby acknowledged, the Parties agree as follows:

 1. TERM. The term of this Agreement shall commence on November 14, 2012 and shall continue in
effect until terminated by either Party to this Agreement following thirty (30) days advance written notice to the other Party (the “Term”) or such other amount of days as agreed to by the Parties in writing. 

2. SERVICES TO BE PROVIDED. 

(a) During the Term, the Company shall, and shall cause the other Company Entities to, (i) provide,
or cause to be provided, those services and goods to the HCP Entities that are reasonably requested by HCP from time to time, including office spaces and operational support and (ii) make available to the HCP Entities those employees of the
Company Entities requested by HCP from time to time to perform such services (each, a “Company Service Provider”), as reasonably requested by HCP and subject to any limitations on the provision of Company Services (as defined below)
contained in any employment agreement between a Company Service Provider and the Company Entities or any other agreement (such services listed in clause (i) and (ii) of this Section 2(a), the “Company Services”). It
is the current intention of the Parties that no Company Service Provider spend more than 10% of his or her business time per year providing Company Services without the consent of a majority of the members of the board of directors of the Company
that are determined to be “independent” pursuant to the rules of the New York Stock Exchange (the “Independent Directors”). 

(b) The Company shall use commercially reasonable efforts to cause the Company Services to be provided to
the HCP Entities; provided that, the Company shall be under no obligation, and shall have no obligation to cause the other Company Entities, to (A) provide access to any Company Service Provider if such person’s employment with any of the
Company Entities has been terminated or such person refuses 

  
 1 

 
or is unable to perform Company Services (as defined below); (B) provide any Company Service if the Company determines in good faith that any applicable law or regulation prevents or
prohibits any of the applicable Company Entities from providing such Company Service or any of the Company Entities is unable to obtain the requisite consents, approvals or authorizations to provide such Company Service; (C) provide any Company
Service if a third party contractor ceases to provide Company Services to any of the Company Entities such that such Company Entity can no longer provide such Company Service or (D) provide any Company Service if any of the Company Entities
cease to provide such Company Service to itself or its subsidiaries; provided, that in each such circumstance described in clauses (A) through (D) of this Section 2(a), each Party shall cooperate in good faith and use commercially
reasonable efforts to determine the best alternative approach. The Company Services shall be provided on an as-needed, non-exclusive basis within a reasonable time after HCP requests such Company Services. At any time during the Term, HCP may in its
sole discretion reduce or increase the level of Company Services or terminate or add one or more Company Services on a prospective basis, including reducing or increasing the number of Company Service Providers. 

(c) During the Term, HCP shall, and shall cause the other HCP Entities to, (i) provide, or cause to
be provided, those services and goods to the Company Entities that are reasonably requested by the Company from time to time, including office spaces and operational support and (ii) make available to the Company Entities those employees of the
HCP Entities requested by the Company from time to time to perform such services (each, an “HCP Service Provider”), as reasonably requested by the Company and subject to any limitations on the provision of HCP Services (as defined
below) contained in any employment agreement between an HCP Service Provider and the HCP Entities or any other agreement (such services listed in clause (i) and (ii) of this Section 2(b), the “HCP Services”, and
together with the Company Services, the “Services”). HCP shall use commercially reasonable efforts to cause the HCP Services to be provided to the Company Entities; provided that, HCP shall be under no obligation, and shall have no
obligation to cause the other HCP Entities, to (A) provide access to any HCP Service Provider if such person’s employment with any of the HCP Entities has been terminated or such person refuses or is unable to perform HCP Services;
(B) provide any HCP Service if HCP determines in good faith that any applicable law or regulation prevents or prohibits any of the applicable HCP Entities from providing such HCP Service or any of the HCP Entities is unable to obtain the
requisite consents, approvals or authorizations to provide such HCP Service; (C) provide any HCP Service if a third party contractor ceases to provide HCP Services to any of the HCP Entities such that such HCP Entity can no longer provide such
HCP Service or (D) provide any HCP Service if any of the HCP Entities cease to provide such HCP Service to itself or its affiliated funds; provided, that in each such circumstance described in clauses (A) through (D) of this
Section 2(b), each Party shall cooperate in good faith and use commercially reasonable efforts to determine the best alternative approach. The HCP Services shall be 

  
 2 

 
provided on an as-needed, non-exclusive basis within a reasonable time after the Company requests such HCP Services. At any time during the Term, the Company may in its sole discretion reduce or
increase the level of HCP Services or terminate or add one or more HCP Services on a prospective basis, including reducing or increasing the number of HCP Service Providers. 

(d) The Parties mutually acknowledge and agree that the execution of this Agreement and the performance
of Services hereunder shall not constitute a breach of, or otherwise contravene the terms of any employment agreement or other material agreement or contract to which the Company Entities or HCP is a party or otherwise bound. Notwithstanding the
above, except as expressly set forth herein, the Parties acknowledge and agree that the Services are provided as-is, that the HCP Entities and the Company Entities assume all risks and liabilities arising from or relating to its use of and reliance
upon the Company Services and the HCP Services, respectively, and neither the HCP Entities, the Company Entities nor any individual providing Services make any representation or warranty with respect thereto. Except as expressly set forth herein,
the HCP Entities, the Company Entities and the individuals providing Services hereby expressly disclaim all representations and warranties regarding the Services, whether express or implied, including any representation or warranty in regard to
quality, performance, noninfringement, compliance with laws or regulations (domestic and foreign), commercial utility, merchantability or fitness of the Services for a particular purpose. 

3. FEES. 
 (a) In consideration of the provision of the Company Services and unless terminated sooner under the terms of this Agreement, HCP shall pay to the Company a service fee, which shall be calculated to
reflect the Base Price (as defined below) for each Company Service (such fee, the “Company Service Fee”) and be paid in accordance with Section 5 hereof. The Company shall notify HCP in writing at any time that, to the best of
its knowledge, the Company Service Fee does not equal the Base Price. 
 (b) In consideration of
the provision of the HCP Services and unless terminated sooner under the terms of this Agreement, the Company shall pay to HCP a service fee, which shall be calculated to reflect the Base Price for each HCP Service (such fee, the “HCP
Service Fee”) and be paid in accordance with Section 5 hereof. HCP shall notify the Company in writing at any time that, to the best of its knowledge, the HCP Service Fee does not equal the Base Price. 

(c) For purposes hereof, “Base Price” shall mean, with respect to the price of any
Service, an amount that is the actual cost of such Service (reasonably estimated, to the extent required) without any element of profit or other comparable compensation, which shall include (i) one-time costs and cash and non-cash charges
incurred by the provider of such Service, (ii) out-of-pocket costs and expenses incurred subject to 

  
 3 

 
Section 4 hereof by the provider of such Service, (iii) the cost of any consents, approvals, licenses or other agreements required to be obtained in order for any Service to be
provided; (iv) the hourly rate (based on a fully loaded rate that includes all costs of employment, including salary, bonus, benefits, expenses and overhead costs associated with such employment, including office space and payroll costs, but
excluding the cost of equity or equity based compensation unless the Parties mutually agree otherwise) for each of the individuals providing Services under this Agreement; and (iv) pass through or allocation of payments made to any party in
connection with providing the Company Services or the HCP Services. 
 4. REIMBURSEMENT OF CERTAIN COSTS.
The Company and HCP shall be entitled to reimbursement for reasonable out-of-pocket expenses incurred in connection with the provision of Services; provided that the Parties shall first notify and seek approval from the other Party prior to
incurring any expense in excess of $100,000 during a single calendar quarter. 
 5. BILLING. 

(a) The Company shall submit to HCP from time to time, but no less frequently than quarterly, an invoice
in respect of the Company Service Fee and out-of-pocket expenses incurred pursuant to Sections 3 and 4, respectively. Invoices will be in such reasonable detail as to identify the Company Services provided, the amounts charged therefor and any
incurred out-of-pocket expenses. Upon written request by HCP, the Company shall provide HCP with copies of invoices from any third parties for such out-of-pocket expenses. Subject to the netting of fees in accordance with this Section 5, HCP
shall pay in cash to the Company the full amount of the Company Service Fee and such approved expenses within thirty (30) days after receipt of such invoice from the Company. Within thirty (30) days following the end of each calendar year
(or such other period of time as the Parties may agree to in writing) or following a reasonable amount of time after the termination of this Agreement (which shall, solely with respect to Taxes (as defined below), extend to six (6) years
following the termination of this Agreement), the Company shall submit to HCP an invoice reflecting any adjustments to the Company Service Fees previously paid as a result of mutually agreed changes to the Base Price for a Company Service pursuant
to Section 3(a) above (the “Company True-Up Invoice”). To the extent the Company True-Up Invoice requires an additional payment by HCP, the Company may (in its sole discretion) determine to apply the amount of such additional
payment against any future HCP Service Fee(s) or HCP True-Up Invoice(s) (as defined below) requiring a payment by the Company, or elect to have HCP pay in cash to the Company such amount within thirty (30) days after receipt of such invoice. To
the extent that the Company True-Up Invoice reduces any Company Service Fees previously paid by HCP, HCP may (in its sole discretion) determine to apply the amount of such reduction against any future Company Service Fee(s) or any HCP True-Up
Invoice(s) requiring a payment by HCP, or elect to have the Company pay such amount in cash to HCP within thirty (30) days after receipt of such invoice or the termination of this Agreement. 

  
 4 

 (b) HCP shall submit to the Company from time to time, but
no less frequently than quarterly, an invoice in respect of the HCP Service Fee and out-of-pocket expenses incurred pursuant to Sections 3 and 4, respectively. Invoices will be in such reasonable detail as to identify the HCP Services provided,
the amounts charged therefor and any incurred out-of-pocket expenses. Upon written request by the Company, HCP shall provide the Company with copies of invoices from any third parties for such out-of-pocket expenses. Subject to the netting of fees
in accordance with this Section 5, the Company shall pay in cash to HCP the full amount of the HCP Service Fee and such approved expenses within thirty (30) days after receipt of such invoice from HCP. Within thirty (30) days
following the end of each calendar year (or such other period of time as the Parties may agree to in writing) or following a reasonable amount of time after the termination of this Agreement (which shall, solely with respect to the Taxes, extend to
six (6) years following the termination of this Agreement), HCP shall submit to the Company an invoice reflecting any adjustments to the HCP Service Fees previously paid as a result of mutually agreed changes to the Base Price for an HCP
Service pursuant to Section 3(b) above (the “HCP True-Up Invoice”). To the extent that the HCP True-Up Invoice requires an additional payment by the Company, HCP may (in its sole discretion) determine to apply the amount of
such additional payment against any future Company Service Fee(s) or Company True-Up Invoice(s) requiring a payment by HCP, or elect to have the Company pay in cash to HCP such amount within thirty (30) days after receipt of such invoice. To
the extent that the HCP True-Up Invoice reduces any HCP Service Fees previously paid by the Company, the Company may (in its sole discretion) determine to apply the amount of such reduction against any future HCP Service Fee(s) or any HCP True-Up
Invoice(s) requiring a payment by the Company, or elect to have HCP pay such amount in cash to the Company within thirty (30) days after receipt of such invoice or the termination of this Agreement. 

(c) All payments under this Agreement shall be grossed-up to cover any sales tax, value-added tax, goods
and services tax or similar tax (“Taxes”) payable with respect to the provision of Services (but excluding any tax based upon or measured by the net income of HCP or the Company), and each Party shall be responsible for paying any
such Taxes to the appropriate governmental authority with respect to the provision of Services. Upon written request, each Party shall submit to the other Party an original receipt by the applicable tax authority (or such other evidence as shall be
reasonably satisfactory to the other Party) evidencing the payment of Taxes with respect to the provision of Services. The Parties shall cooperate with each other to minimize any applicable Taxes and each shall provide the other with any reasonable
certificates or documents which are useful for such purpose. 
 (d) Each Party shall provide to
the other an invoice (each, an “Initial Invoice”) reflecting the Base Price, as applicable, for any services (and any related costs and expenses) provided to, or for the benefit

  
 5 

 
of, of the other party during the period beginning on October 1, 2011 and ending on the date of this Agreement. Each Initial Invoice shall be in such reasonable detail as to identify the
services provided and by whom, the amounts charged therefor and any incurred out-of-pocket expenses. Upon written request, each Party shall provide the other with copies of invoices from any third parties for such out-of-pocket expenses. The Initial
Invoices of the Company and HCP shall be netted and the remainder shall be paid within thirty (30) days thereafter or such other period of time as the Parties shall agree to in writing. 

6. LIMITATION ON LIABILITY; INDEMNIFICATION. 

(a) The Company Entities shall have no liability with respect to, and shall not be obligated to indemnify
or hold harmless the HCP Entities, or its affiliates, officers, directors, managers, employees, agents or other representatives from or against any cost, loss, expense, damage or liability arising out of or otherwise in respect of the performance of
the Company Services other than any such cost, loss, expense, damage or liability resulting from the willful misconduct or fraud of the Company Entities or any of its directors, managers, officers, employees, partners, members or agents. The HCP
Entities shall have no liability with respect to, and shall not be obligated to indemnify or hold harmless the Company Entities, or its affiliates, officers, directors, managers, employees, agents or other representatives from or against any cost,
loss, expense, damage or liability arising out of or otherwise in respect of the performance of the HCP Services other than any such cost, loss, expense, damage or liability resulting from the willful misconduct or fraud of the HCP Entities or any
of its directors, managers, officers, employees, partners, members or agents. A Party entitled to indemnification hereunder shall give written notice to the indemnifying party, in reasonable detail, promptly upon learning of any claim, suit or
proceeding for which indemnification may be sought, provided that failure to do so shall have no effect except to the extent the indemnifying party is prejudiced thereby. The indemnified party may choose to participate in the defense of any claim or
suit, at its own expense and with its own choice of counsel, but the indemnifying party shall have the right to control the defense and settlement, provided that the indemnifying party shall not, without the indemnified party’s prior written
consent, settle any claim that increases the indemnified party’s costs or adversely affects the indemnified party’s rights. 
 (b) Notwithstanding the terms of any indemnification agreement between the HCP Entities or the Company Entities and those persons who will be providing Services under this Agreement (each an
“Indemnification Agreement”), each such Indemnification Agreement shall continue in full force and effect with respect to the Services provided hereunder subject to the exclusions set forth in Section 6(a). The indemnification
pursuant to the Indemnification Agreements shall not be deemed exclusive of any other rights to which such persons may be entitled under the HCP Entities’ or the Company Entities’ organizational or governing documents or under any other
agreement, contract of insurance, vote of stockholders, members, or disinterested directors or managers, or otherwise, or of the broader power of the HCP Entities or the Company Entities to indemnify an agent of the HCP Entities or the Company
Entities as authorized by applicable law. 

  
 6 

 (c) Except as required by applicable law or legal process,
no advice rendered by any individual providing Services pursuant to this Agreement, whether formal or informal, may be disclosed, in whole or in part, or summaries, excerpted from or otherwise referred to without the Company’s or HCP’s
prior written consent, as applicable. In addition, except as required by applicable law or legal process, such individual’s role under this Agreement may not be otherwise disclosed or referred to without the Company’s or HCP’s prior
written consent, as applicable. 
 (d) Notwithstanding the provision of certain legal services
from time to time pursuant to the terms of this Agreement, (i) neither the Company Entities nor any of the Company Service Providers shall be responsible for supervising the HCP Entities’ legal, regulatory or compliance functions, and
(ii) neither the HCP Entities nor any of the HCP Service Providers shall be responsible for supervising the Company Entities’ legal, regulatory or compliance functions. The Parties agree that they share a common interest in the subject
matter of HCP Entities’ and the Company Entities’ communications, information and materials, including attorney-client communications, attorney work-product and other privileged or protected information. Subject to the confidentiality
restrictions set forth in Section 9 of this Agreement, the Parties are hereby entering into a voluntary sharing of confidential communication, information and materials, including attorney-client communications, attorney work-product and other
privileged or protected information of the HCP Entities and the Company Entities. The Company Entities’ lawyers providing legal services to the HCP Entities, and the HCP Entities’ lawyers providing legal services to the Company Entities,
shall have an attorney-client relationship with the HCP Entities and the Company Entities, respectively, and it is intended by the Parties that communication among the HCP Entities’ and the Company Entities’ lawyers and the work product of
those lawyers shall enjoy the benefits of the attorney-client privilege, the attorney work-product immunity, joint defense and/or any other applicable privilege, immunity or protection. The protection of the attorney-client privilege, the attorney
work-product immunity, joint defense and/or any other applicable privilege, immunity or protection are not waived for any communication, information or materials of the HCP Entities or the Company Entities that may be exchanged among the Company
Entities and the HCP Entities and their respective counsel, whether or not such counsel is an employee of the Company Entities or the HCP Entities. This Agreement does not affect the independent and separate relationship of the Parties and their
respective attorneys, nor shall it require disclosure by the Parties’ counsel of their respective information to the other Party. Notwithstanding any other provision hereof, the limitations on liability included in this Agreement shall not
apply to legal services to the extent that such limitation or liability would contravene any applicable ethical code, code of responsibility or other legal, administrative or regulatory requirement. 

  
 7 

 7. EMPLOYEES DEEMED TO BE CONSULTANTS. Employees of a Party engaged
in performing the Services shall be considered to be providing such Services to the other Party as its consultants. Under no circumstances (including federal, state and local law) shall such employees be considered to be employees of the other Party
or any of its subsidiaries. 
 8. INDEPENDENT CONTRACTOR. In performing the Services, each Party shall be
an independent contractor and neither Party shall be deemed to be an agent, partner or co-venturer of the other due to the terms and provisions of this Agreement. For the avoidance of doubt, neither Party nor any of its employees, partners, officers
or agents shall have any right, power or authority to bind the other Party in any manner whatsoever, except at the express instruction of such other Party. 
 9. CONFIDENTIAL AND PROPRIETARY INFORMATION. 

(a) In addition to any confidential and proprietary information that the Company Service Providers or the
HCP Service Providers heretofore developed, learned or became aware of as employees, directors, managers, officers, stockholders or members of a Party (collectively, the “Prior Confidential Information”), either Party may, in
connection with the provision of the Services under this Agreement, provide to the other Party or such individuals and confide in any of them additional confidential and proprietary information (collectively, the “Additional Confidential
Information”), including: (i) business methods and systems, techniques and methods of operation developed by each Party or its affiliates and which the other Party recognizes to be unique assets; (ii) any research or data of any
kind; or (iii) any information relating to strategic plans or the financial condition of either Party or their respective affiliates. All the Prior Confidential Information and all the Additional Confidential Information are herein sometimes
referred to collectively as “Confidential Information”. Neither Party nor any of the individuals that provide the Services shall, either during or at any time after the Term, directly or indirectly, in any manner utilize or disclose
any Confidential Information to any individual, firm, corporation, company, association or other entity without the prior consent of the other Party (unless legally compelled to do so, but subject to the provisions of Section 9(b) or otherwise
permitted by Section 9(d)); provided however, that only to the extent necessary to allow the provision of Services, the Company Entities or the HCP Entities and/or any of the individuals that provide the Services may disclose Confidential
Information in a limited manner reasonably calculated to ensure non-disclosure of such information. The term “Confidential Information” does not include information, knowledge or factual data that: (A) becomes part of the
public knowledge or literature, other than as a result of disclosure thereof by a Party or any of the individuals that provide the Services in breach of this Agreement; (B) was disclosed to the Company Entities, the HCP Entities or any of the
individuals that provide the Services on a non-confidential basis by a third party that is known by the Company Entities, 

  
 8 

 
the HCP Entities or any of the individuals that provide the Services, after reasonable inquiry, to have the right to disclose the same; (C) was independently developed by the either Party,
their affiliates or agents or any of the individuals that provide the Services; or (D) was already known to the Parties, their affiliates or agents or any of the individuals that provide the Services before they received such information and
was not obtained from a source known by the Parties, their agents or any of the individuals that provide the Services, after reasonable inquiry, to have been prohibited from the right to disclose the same. 

(b) If a Party or any individual that provides the Services on behalf of such Party becomes legally
compelled (by deposition, interrogatory, request for documents, order, subpoena, civil investigative demand or similar process issued by a court of competent jurisdiction or by a governmental body) to disclose any Confidential Information, then such
Party will give prompt prior notice of such requirement to the other Party so that the other Party or any of its affiliates may seek a protective order or other appropriate remedy and/or waive compliance with the terms of this Agreement. If such
protective order or other remedy is not obtained then only that portion of the Confidential Information that is required to be disclosed will be disclosed by such Party or the individual that provides the Services on behalf of such Party, and
commercially reasonable efforts will be made by that Party to obtain assurance that confidential treatment will be accorded such portion of such Confidential Information; provided, subject to Section 4, the Party required to disclose the
Confidential Information may require the other Party, to either (i) advance the third party costs and expenses necessary for such Party to seek to obtain such confidential treatment or (ii) reimburse its out-of-pocket costs and expenses
incurred to seek to obtain such assurance of confidential treatment hereunder. 
 (c) The
provisions herein governing Confidential Information shall be separate and in addition to any other agreements or obligations that each Party and their partners, employees, or agents may be subject to regarding the confidential, trade secret and/or
proprietary nature of information related to the other Party or its affiliates and the provisions set forth herein shall not in any way supersede or otherwise limit any such other agreements or obligations. Notwithstanding the foregoing, the
provisions herein governing Confidential Information shall supersede any other agreements or obligations regarding such information only to the extent necessary to allow the Services to be performed as contemplated by this Agreement. 

(d) Notwithstanding anything to the contrary in this Section 9 or any other agreement among the
Parties in effect on the date hereof, each Company Entity that has reporting obligations under applicable securities laws (including Sections 13(a) and 15(d) of the Securities Exchange Act of 1934) shall be permitted to disclose in its filings
required thereunder any information required to be disclosed therein under applicable law or the rules of any applicable stock exchange. 

  
 9 

 10. COOPERATION AND DISPUTE RESOLUTION. 

(a) The Company and HCP shall each appoint as many as two (2) employees occupying a senior management
role with the Company and HCP, respectively, to coordinate the provision of Services (each such person, a “Service Coordinator”). Each Service Coordinator shall have the authority and responsibility to: (i) represent the
appointing Party in relation to this Agreement and make appropriate decisions on day-to-day issues subject to the terms of this Agreement; (ii) coordinate the technical aspects of the Services and consult on the operation and management of the
Services; (iii) monitor the appointing Party’s compliance with its obligations under this Agreement and review the performance of the Services; and (iv) resolve any dispute between the Parties. 

(b) In the event of a dispute hereunder between HCP and the Company that the Service Coordinators are
unable to resolve within five (5) days (a “Dispute”), a senior officer of the Company and a senior officer of HCP shall attempt within a period of seven (7) days thereafter, or such longer period as the Parties may agree
(the “Resolution Period”), to conclusively resolve the Dispute. If a Dispute remains unresolved after the expiration of the Resolution Period, then either Party may deliver to the other Party a written notice along with reasonable
supporting detail (a “Dispute Notice”) with respect to such Dispute and the Parties shall negotiate in good faith to resolve any such Dispute, and any resolution agreed to in writing by the Parties shall be final and binding upon
the Parties. If the Parties have not reached a final resolution within thirty (30) days from the date of delivery of any Dispute Notice, then each Party shall have the right to cause the matter to be submitted to an arbitrator, who shall be
selected by the American Arbitration Association and shall have expertise in the subject matter of the Dispute Notice (the “Arbitrator”), whose written final decision shall be final and binding upon the Parties. The fees, expenses
and costs of the Arbitrator shall be borne equally by each Party except to the extent specifically awarded otherwise by the Arbitrator. All materials submitted to the Arbitrator (including the final decision of the Arbitrator) shall be considered
Confidential Information and subject to Section 9 hereof. 
 (c) The Service Coordinators
shall meet as often as necessary in order to promptly (i) oversee the implementation and application of this Agreement, (ii) resolve any disputes submitted to it by any representative of either Party and (iii) discuss any delay,
disruptions, suspension or outage in the provision of any Service. 
 (d) Each of the Parties
shall have the right to change its Service Coordinators at any time by providing written notice to the other Party. 
 11. BOOKS AND RECORDS. During the Term and for three (3) years following the termination of this Agreement (or such shorter period of time agreed to in writing by the Parties), each Party
shall in the ordinary course of business and consistent with past practice keep books and records of the Services provided and 

  
 10 

 
reasonable supporting documentation of all charges incurred in connection with providing such Services, and shall make such books and records available to the other Party and its representatives,
upon reasonable notice, during normal business hours, and as necessary to comply with any compelled disclosure described in Section 9(b) or other circumstances in which information regarding the Services is required by deposition,
interrogatory, request for documents, order, subpoena, civil investigative demand or similar process issued by a court of competent jurisdiction or by a governmental body. 

12. ENTIRE AGREEMENT; WAIVERS AND AMENDMENTS. This Agreement sets forth the entire understanding between the
Company and HCP relating to the subject matter hereof, superseding all prior understandings and agreements, whether written or oral. Except as provided herein, this Agreement shall not be modified or amended, and no provision hereof shall be waived,
except by an instrument in writing signed by each of the Parties hereto, or in the case of a waiver, by the Party hereto against whom such waiver is sought to be enforced; provided that however any waiver, modification or amendment to the terms of
this Agreement, must be approved by a majority of the Independent Directors. 
 13. SUCCESSORS AND
ASSIGNS. The provisions of this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. No Party may assign, delegate or otherwise transfer any of its rights or obligations
under this Agreement without the prior written consent of the other Party. Notwithstanding the foregoing, either Party (or such Party’s permitted successive assignees or transferees hereunder) may assign or transfer this Agreement as a whole
without consent to one or more of such Party’s affiliates or to an entity that succeeds to all or substantially all of the business or assets of such Party. 

14. NO THIRD PARTY BENEFICIARIES. The HCP Service Providers and the Company Service Providers shall be deemed
third party beneficiaries solely of the provisions set forth in Section 6 of this Agreement. Except as provided in the preceding sentence, nothing in this Agreement shall confer any rights upon any person which is not a party or a successor or
permitted assignee of a party to this Agreement. 
 15. TERMINATION. This Agreement may be
terminated at any time by the written agreement of the Parties as provided in Section 1 hereof. Notwithstanding the foregoing and any other provision contained herein, the following Sections of this Agreement shall remain in effect and
shall survive the termination of this Agreement: Section 5, Billing; Section 6, Limitation on Liability; Indemnification; Section 9, Confidential and Proprietary Information; Section 10, Cooperation and Dispute Resolution;
Section 13, Successors and Assigns; and Section 14, No Third Party Beneficiaries. 
 16. GOVERNING
LAW. This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof. 

  
 11 

 17. NOTICES. All written notices, demands and other communications
given to or made by either Party to the other in connection with this Agreement shall be either personally served on an officer or other authorized representative of the Party to which it is given or mailed by registered first class mail, postage
prepaid, to the headquarters of such Party to the attention of its chief financial officer, with a copy to its general counsel, or to such other address and to the attention of such persons as the Party in question may from time to time specify to
the other by notice hereunder. All notices shall be deemed delivered and effective (a) if hand-delivered, upon delivery, or (b) if mailed, three (3) business days after mailing. 

18. INTERPRETATION. Unless otherwise expressly provided, for the purposes of this Agreement, the following rules
of interpretation shall apply: 
 (a) The section and sub-section headings contained in this
Agreement are for convenience of reference only and will not affect in any way the meaning or interpretation hereof. 
 (b) When a reference is made in this Agreement to a section, paragraph or clause, such reference will be to a section, paragraph or clause hereof unless otherwise clearly indicated to the contrary.

 (c) Whenever the words “include,” “includes” or “including” are
used in this Agreement, they will be deemed to be followed by the words “without limitation.” 
 (d) The words “hereof,” “herein” and “herewith” and words of similar import will, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any
particular provision of this Agreement. 
 (e) The meaning assigned to each term defined herein
will be equally applicable to both the singular and the plural forms of such term, and words denoting any gender will include all genders. Where a word or phrase is defined herein, each of its other grammatical forms will have a corresponding
meaning. 
 (f) A reference to any period of days will be deemed to be to the relevant number of
calendar days, unless otherwise specified. 
 (g) The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties, and no presumption or burden of proof will arise favoring or
disfavoring any Party by virtue of the authorship of any provisions hereof. 
 (h) Any statute
or rule defined or referred to herein or in any agreement or instrument that is referred to herein means such statute or rule as from time to time amended, modified or supplemented, including by succession of comparable successor statutes or rules
and references to all attachments thereto and instruments incorporated therein. 

  
 12 

 19. FURTHER ASSURANCES. Each of the Parties shall execute such
documents and perform such further acts as may be reasonably required or desirable to carry out or to perform the provisions of this Agreement. 
 20. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same
instrument. 
 [Signature page follows] 

  
 13 

 IN WITNESS WHEREOF the Parties have executed this Agreement effective as of
the date first above written. 
  

					
	HARBINGER CAPITAL PARTNERS LLC
		
	By:	 	/s/ Keith M. Hladek
		 	 Name:
	 	 Keith M. Hladek

		 	 Title:
	 	Chief Financial Officer & Co-Chief Operating Officer
	
	HARBINGER GROUP INC.
		
	By:	 	/s/ Thomas A. Williams
		 	 Name:
	 	 Thomas A. Williams

		 	 Title:
	 	Executive Vice President and Chief Financial Officer

  
 14Exhibit 4.11

 

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE 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 (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, 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.

 

 

Principal Amount: $63,000.00Issue
Date: October 26, 2012

Purchase Price: $63,000.00

CONVERTIBLE PROMISSORY NOTE

 

FOR VALUE RECEIVED,
SIMPLEPONS, INC., a Delaware corporation (hereinafter called the “Borrower”), hereby promises to pay to the
order of ASHER ENTERPRISES, INC., a Delaware corporation, or registered assigns (the “Holder”) the sum of $63,000.00
together with any interest as set forth herein, on July 24, 2013 (the “Maturity Date”), and to pay interest on the
unpaid principal balance hereof at the rate of eight percent (8%) (the “Interest Rate”) per annum from the date hereof
(the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment
or otherwise. This Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein. Any amount of principal
or interest on this Note which is not paid when due shall bear interest at the rate of twenty two percent (22%) per annum from
the due date thereof until the same is paid (“Default Interest”). Interest shall commence
accruing on the date that the Note is fully paid and shall be computed on the basis of a 365-day year and the actual number
of days elapsed. All payments due hereunder (to the extent not converted into common stock, $0.01 par value per share (the “Common
Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments
shall be made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the
provisions of this Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business
day, the same shall instead be due on the next succeeding day which is a business day and, in the case of any interest payment
date which is not the date on which this Note is paid in full, the extension of the due date thereof shall not be taken into account
for purposes of determining the amount of interest due on such date. As used in this Note, the term “business day”
shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of New York, New York are authorized
or required by law or executive order to remain closed. Each capitalized term used herein, and not otherwise defined, shall have
the meaning ascribed thereto in that certain Securities Purchase Agreement dated the date hereof, pursuant to which this Note was
originally issued (the “Purchase Agreement”).

 

This Note is free from
all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other
similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.

 

The following terms shall
apply to this Note:

 

    	(1)

    	 

    
  

Article
I. CONVERSION RIGHTS

 

1.1 
Conversion Right. The Holder shall have the right from time to time, and at any time during the period beginning
on the date which is one hundred eighty (180) days following the date of this Note and ending on the later of: (i) the Maturity
Date and (ii) the date of payment of the Default Amount (as defined in Article III) pursuant to Section 1.6(a) or Article III,
each in respect of the remaining outstanding principal amount of this Note to convert all or any part of the outstanding and unpaid
principal amount of this Note into fully paid and non- assessable shares of Common Stock, as such Common Stock exists on the Issue
Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed
or reclassified at the conversion price (the “Conversion Price”) determined as provided herein (a “Conversion”);
provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of
that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the
Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the
unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation
on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable
upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result
in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock. For purposes
of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as
otherwise provided in clause (1) of such proviso, provided, further, however, that the limitations on conversion
may be waived by the Holder upon, at the election of the Holder, not less than 61 days’ prior notice to the Borrower, and
the provisions of the conversion limitation shall continue to apply until such 61st day (or such later date, as determined by the
Holder, as may be specified in such notice of waiver). The number of shares of Common Stock to be issued upon each conversion of
this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect
on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”),
delivered to the Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted
by facsimile or e-mail (or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00
p.m., New York, New York time on such conversion date (the “Conversion Date”). The term “Conversion Amount”
means, with respect to any conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion
plus (2) at the Holder’s option, accrued and unpaid interest, if any, on such principal amount at the interest rates
provided in this Note to the Conversion Date, plus (3) at the Holder’s option, Default Interest, if any, on the amounts
referred to in the immediately preceding clauses (1) and/or (2) plus (4) at the Holder’s option, any amounts owed
to the Holder pursuant to Sections 1.3 and 1.4(g) hereof.

 

1.2 
Conversion Price.

 

(a)   
Calculation of Conversion Price. The conversion price (the “Conversion Price”)
shall equal the Variable Conversion Price (as defined herein) (subject to equitable adjustments for stock splits, stock dividends
or rights offerings by the Borrower relating to the Borrower’s securities or the securities of any subsidiary of the Borrower,
combinations, recapitalization, reclassifications, extraordinary distributions and similar events). The "Variable Conversion
Price" shall mean 58% multiplied by the Market Price (as defined herein) (representing a discount rate of 42%). 
“Market Price” means the average of the lowest three (3) Trading Prices (as defined below) for the Common Stock during
the ten (10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. “Trading Price”
means, for any security as of any date, the closing bid price on the Over-the-Counter Bulletin Board, or applicable trading market
(the “OTCBB”) as reported by a reliable reporting service (“Reporting Service”) designated by the Holder
(i.e. Bloomberg) or, if the OTCBB is not the principal trading market for such security, the closing bid price of such security
on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid price of such
security is available in any of the foregoing manners, the average of the closing bid prices of any market makers for such security
that are listed in the “pink sheets” by the National Quotation Bureau, Inc. If the Trading Price cannot be calculated
for such security on such date in the manner provided above, the Trading Price shall be the fair market value as mutually determined
by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation of the Trading
Price is required in order to determine the Conversion Price of such Notes. “Trading Day” shall mean any day on which
the Common Stock is tradable for any period on the OTCBB, or on the principal securities exchange or other securities market on
which the Common Stock is then being traded.

 

(b)  
Conversion Price During Major Announcements. Notwithstanding anything contained in Section 1.2(a) to the contrary,
in the event the Borrower (i) makes a public announcement that it intends to consolidate or merge with any other corporation (other
than a merger in which the Borrower is the surviving or continuing corporation and its capital stock is unchanged) or sell or transfer
all or substantially all of the assets of the Borrower or (ii) any person, group or entity (including the Borrower) publicly announces
a tender offer to purchase 50% or more of the Borrower’s Common Stock (or any other takeover scheme) (the date of the announcement
referred to in clause (i) or (ii) is hereinafter referred to as the “Announcement Date”), then the Conversion Price
shall, effective upon the Announcement Date and continuing through the Adjusted Conversion Price Termination Date (as defined below),
be equal to the lower of (x) the Conversion Price which would have been applicable for a Conversion occurring on the Announcement
Date and (y) the Conversion Price that would otherwise be in effect. From and after the Adjusted Conversion Price Termination Date,
the Conversion Price shall be determined as set forth in this Section 1.2(a). For purposes hereof, “Adjusted Conversion Price
Termination Date” shall mean, with respect to any proposed transaction or tender offer (or takeover scheme) for which a public
announcement as contemplated by this Section 1.2(b) has been made, the date upon which the Borrower (in the case of clause (i)
above) or the person, group or entity (in the case of clause (ii) above) consummates or publicly announces the termination or abandonment
of the proposed transaction or tender offer (or takeover scheme) which caused this Section 1.2(b) to become operative.

 

1.3 Authorized
Shares. The Borrower covenants that during the period the conversion right exists, the Borrower will reserve from its authorized
and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock
upon the full conversion of this Note issued pursuant to the Purchase Agreement. The Borrower is required at all times to have
one (1) million shares authorized but unissued in its capital structure such that when the Holder submits a Notice of Conversion
there will be at a minimum one (1) million shares of Common Stock that are authorized but unissued for the Borrower's transfer
agent to issue to the Holder (the “Reserved Amount”). This Reserved Amount is in addition to any shares presently held
or to be held in the future by the transfer agent for the benefit of the Holder. If at any time the Reserved Amount is less than
one (1) million shares of Common Stock then the Borrower will take immediate steps to increase the reserve but in any event will
increase the reserve within thirty (30) days of the Reserved Amount falling below one (1) million shares of Common Stock (the "Cure
Period"). The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable.
In addition, if the Borrower shall issue any securities or make any change to its capital structure which would change the number
of shares of Common Stock into which the Notes shall be convertible at the then current Conversion Price, the Borrower shall at
the same time make proper provision so that thereafter there shall be a sufficient number of shares of Common Stock authorized
and reserved, free from preemptive rights, for conversion of the outstanding Notes. The Borrower (i) acknowledges that it has irrevocably
instructed its transfer agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii) agrees
that its issuance of this Note shall constitute full authority to its officers and agents who are charged with the duty of executing
stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and
conditions of this Note.

 

    	(2)

    	 

    
 

1.4             
Method of Conversion.

 

(a)   
Mechanics of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part at
any time from time to time after the Issue Date, by (A) submitting to the Borrower a Notice of Conversion (by facsimile, e-mail
or other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time) and (B) subject
to Section 1.4(b), surrendering this Note at the principal office of the Borrower.

 

(b)  
Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of
this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower
unless the entire unpaid principal amount of this Note is so converted. The Holder and the Borrower shall maintain records showing
the principal amount so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to
the Holder and the Borrower, so as not to require physical surrender of this Note upon each such conversion. In the event of any
dispute or discrepancy, such records of the Borrower shall, prima
facie, be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if any portion
of this Note is converted as aforesaid, the Holder may not transfer this Note unless the Holder first physically surrenders this
Note to the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the Holder a new Note of like tenor,
registered as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, representing in the aggregate
the remaining unpaid principal amount of this Note. The Holder and any assignee, by acceptance of this Note, acknowledge and agree
that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted
principal amount of this Note represented by this Note may be less than the amount stated on the face hereof.

 

(c)   
Payment of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name
other than that of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or
other securities or property unless and until the person or persons (other than the Holder or the custodian in whose street name
such shares are to be held for the Holder’s account) requesting the issuance thereof shall have paid to the Borrower the
amount of any such tax or shall have established to the satisfaction of the Borrower that such tax has been paid.

 

(d)  
Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder
of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements
for conversion as provided in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or
upon the order of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after
such receipt (the “Deadline”) (and, solely in the case of conversion of the entire unpaid principal amount hereof,
surrender of this Note) in accordance with the terms hereof and the Purchase Agreement.

 

(e)   
Obligation of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder
shall be deemed to be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount
and the amount of accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower
defaults on its obligations under this Article I, all rights with respect to the portion of this Note being so converted shall
forthwith terminate except the right to receive the Common Stock or other securities, cash or other assets, as herein provided,
on such conversion. If the Holder shall have given a Notice of Conversion as provided herein, the Borrower’s obligation to
issue and deliver the certificates for Common Stock shall be absolute and unconditional, irrespective of the absence of any action
by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment against
any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower to
the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the
Holder of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation
of the Borrower to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall
be the Conversion Date so long as the Notice of Conversion is received by the Borrower before 6:00 p.m., New York, New York time,
on such date.

 

(f)   
Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common
Stock issuable upon conversion, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast
Automated Securities Transfer (“FAST”) program, upon request of the Holder and its compliance with the provisions contained
in Section 1.1 and in this Section 1.4, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit
the Common Stock issuable upon conversion to the Holder by crediting the account of Holder’s Prime Broker with DTC through
its Deposit Withdrawal Agent Commission (“DWAC”) system.

 

(g)  
Failure to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder’s
right to pursue other remedies, including actual damages and/or equitable relief, the parties agree that if delivery of the Common
Stock issuable upon conversion of this Note is not delivered by the Deadline (other than a failure due to the circumstances described
in Section 1.3 above, which failure shall be governed by such Section) the Borrower shall pay to the Holder $2,000 per day in cash,
for each day beyond the Deadline that the Borrower fails to deliver such Common Stock. Such cash amount shall be paid to Holder
by the fifth day of the month following the month in which it has accrued or, at the option of the Holder (by written notice to
the Borrower by the first day of the month following the month in which it has accrued), shall be added to the principal amount
of this Note, in which event interest shall accrue thereon in accordance with the terms of this Note and such additional principal
amount shall be convertible into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to
convert is a valuable right to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion
right are difficult if not impossible to qualify. Accordingly the parties acknowledge that the liquidated damages provision contained
in this Section 1.4(g) are justified.

 

1.5 
Concerning the Shares. The shares of Common Stock issuable upon conversion of this Note may not be sold or transferred
unless (i) such shares are sold pursuant to an effective registration statement under the Act or (ii) the Borrower or its transfer
agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions
of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant
to an exemption from such registration or (iii) such shares are sold or transferred pursuant to Rule 144 under the Act (or
a successor rule) (“Rule 144”) or (iv) such shares are transferred to an “affiliate” (as defined in Rule
144) of the Borrower who agrees to sell or otherwise transfer the shares only in accordance with this Section 1.5 and who is an
Accredited Investor (as defined in the Purchase Agreement). Except as otherwise provided in the Purchase Agreement (and subject
to the removal provisions set forth below), until such time as the shares of Common Stock issuable upon conversion of this Note
have been registered under the Act or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities
as of a particular date that can then be immediately sold, each certificate for shares of Common Stock issuable upon conversion
of this Note that has not been so included in an effective registration statement or that has not been sold pursuant to an effective
registration statement or an exemption that permits removal of the legend, shall bear a legend substantially in the following form,
as appropriate:

 

    	(3)

    	 

    

 

“NEITHER THE ISSUANCE AND SALE
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE 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 (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE
FORM, 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.”

 

The
legend set forth above shall be removed and the Borrower shall issue to the Holder a new certificate therefore free of any transfer
legend if (i) the Borrower or its transfer agent shall have received an opinion of counsel, in form, substance and scope customary
for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Common Stock may be made
without registration under the Act, which opinion shall be accepted by the Company so that the sale or transfer is effected or
(ii) in the case of the Common Stock issuable upon conversion of this Note, such security is registered for sale by the Holder
under an effective registration statement filed under the Act or otherwise may be sold pursuant to Rule 144 without any restriction
as to the number of securities as of a particular date that can then be immediately sold. In the event that the Company does not
accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration,
such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Note.

 

1.6 
Effect of Certain Events.

 

(a)   
Effect of Merger, Consolidation, Etc. At the option of the Holder, the sale, conveyance or disposition of all or
substantially all of the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions
in which more than 50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination
of the Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall either:
(i) be deemed to be an Event of Default (as defined in Article III) pursuant to which the Borrower shall be required to pay to
the Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in
Article III) or (ii) be treated pursuant to Section 1.6(b) hereof. “Person” shall mean any individual, corporation,
limited liability company, partnership, association, trust or other entity or organization.

 

(b)  
Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior
to conversion of all of the Notes, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization,
or other similar event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different
number of shares of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or
conveyance of all or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation
of the Borrower, then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the
basis and upon the terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable
upon conversion, such stock, securities or assets which the Holder would have been entitled to receive in such transaction had
this Note been converted in full immediately prior to such transaction (without regard to any limitations on conversion set forth
herein), and in any such case appropriate provisions shall be made with respect to the rights and interests of the Holder of this
Note to the end that the provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and
of the number of shares issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in
relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction
described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, thirty (30) days prior written notice (but
in any event at least fifteen (15) days prior written notice) of the record date of the special meeting of shareholders to approve,
or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization
or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting
successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Section 1.6(b). The above
provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

 

(c)   
Adjustment Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to
acquire its assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including
any dividend or distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock
of a subsidiary (i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any conversion
of this Note after the date of record for determining shareholders entitled to such Distribution, to receive the amount of such
assets which would have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had
such Holder been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to
such Distribution.

 

(d)  
Adjustment Due to Dilutive Issuance. If, at any time when any Notes are issued and outstanding, the Borrower issues
or sells, or in accordance with this Section 1.6(d) hereof is deemed to have issued or sold, any shares of Common Stock for no
consideration or for a consideration per share (before deduction of reasonable expenses or commissions or underwriting discounts
or allowances in connection therewith) less than the Conversion Price in effect on the date of such issuance (or deemed issuance)
of such shares of Common Stock (a “Dilutive Issuance”), then immediately upon the Dilutive Issuance, the Conversion
Price will be reduced to the amount of the consideration per share received by the Borrower in such Dilutive Issuance.

 

    	(4)

    	 

    
 

The Borrower shall
be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or grants any warrants, rights or
options (not including employee stock option plans), whether or not immediately exercisable, to subscribe for or to purchase Common
Stock or other securities convertible into or exchangeable for Common Stock (“Convertible Securities”) (such warrants,
rights and options to purchase Common Stock or Convertible Securities are hereinafter referred to as “Options”) and
the price per share for which Common Stock is issuable upon the exercise of such Options is less than the Conversion Price then
in effect, then the Conversion Price shall be equal to such price per share. For purposes of the preceding sentence, the “price
per share for which Common Stock is issuable upon the exercise of such Options” is determined by dividing (i) the total amount,
if any, received or receivable by the Borrower as consideration for the issuance or granting of all such Options, plus the minimum
aggregate amount of additional consideration, if any, payable to the Borrower upon the exercise of all such Options, plus, in the
case of Convertible Securities issuable upon the exercise of such Options, the minimum aggregate amount of additional consideration
payable upon the conversion or exchange thereof at the time such Convertible Securities first become convertible or exchangeable,
by (ii) the maximum total number of shares of Common Stock issuable upon the exercise of all such Options (assuming full conversion
of Convertible Securities, if applicable). No further adjustment to the Conversion Price will be made upon the actual issuance
of such Common Stock upon the exercise of such Options or upon the conversion or exchange of Convertible Securities issuable upon
exercise of such Options.

 

Additionally, the
Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or sells any Convertible
Securities, whether or not immediately convertible (other than where the same are issuable upon the exercise of Options), and the
price per share for which Common Stock is issuable upon such conversion or exchange is less than the Conversion Price then in effect,
then the Conversion Price shall be equal to such price per share. For the purposes of the preceding sentence, the “price
per share for which Common Stock is issuable upon such conversion or exchange” is determined by dividing (i) the total amount,
if any, received or receivable by the Borrower as consideration for the issuance or sale of all such Convertible Securities, plus
the minimum aggregate amount of additional consideration, if any, payable to the Borrower upon the conversion or exchange thereof
at the time such Convertible Securities first become convertible or exchangeable, by (ii) the maximum total number of shares of
Common Stock issuable upon the conversion or exchange of all such Convertible Securities. No further adjustment to the Conversion
Price will be made upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible Securities.

 

(e)   
Purchase Rights. If, at any time when any Notes are issued and outstanding, the Borrower issues any convertible securities
or rights to purchase stock, warrants, securities or other property (the “Purchase Rights”) pro rata to the record
holders of any class of Common Stock, then the Holder of this Note will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder had held the number of shares
of Common Stock acquirable upon complete conversion of this Note (without regard to any limitations on conversion contained herein)
immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights or, if no such record
is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase
Rights.

 

(f)   
Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result
of the events described in this Section 1.6, the Borrower, at its expense, shall promptly compute such adjustment or readjustment
and prepare and furnish to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Borrower shall, upon the written request at any time of the Holder, furnish
to such Holder a like certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect
and (iii) the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would
be received upon conversion of the Note.

 

1.7 
Trading Market Limitations. Unless permitted by the applicable rules and regulations of
the principal securities market on which the Common Stock is then listed or traded, in no event shall the Borrower issue upon conversion
of or otherwise pursuant to this Note and the other Notes issued pursuant to the Purchase Agreement more than the maximum number
of shares of Common Stock that the Borrower can issue pursuant to any rule of the principal United States securities market on
which the Common Stock is then traded (the “Maximum Share Amount”), which shall be 4.99% of the total shares outstanding
on the Closing Date (as defined in the Purchase Agreement), subject to equitable adjustment from time to time for stock splits,
stock dividends, combinations, capital reorganizations and similar events relating to the Common Stock occurring after the date
hereof. Once the Maximum Share Amount has been issued, if the Borrower fails to eliminate any prohibitions under applicable law
or the rules or regulations of any stock exchange, interdealer quotation system or other self-regulatory organization with jurisdiction
over the Borrower or any of its securities on the Borrower’s ability to issue shares of Common Stock in excess of the Maximum
Share Amount, in lieu of any further right to convert this Note, this will be considered an Event of Default under Section 3.3
of the Note.

 

1.8 
Status as Shareholder. Upon submission of a Notice of Conversion by a Holder, (i) the shares covered thereby (other
than the shares, if any, which cannot be issued because their issuance would exceed such Holder’s allocated portion of the
Reserved Amount or Maximum Share Amount) shall be deemed converted into shares of Common Stock and (ii) the Holder’s rights
as a Holder of such converted portion of this Note shall cease and terminate, excepting only the right to receive certificates
for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because
of a failure by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received
certificates for all shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline with respect
to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its status as a
holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect to
such unconverted portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note to the Holder
or, if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted.
In all cases, the Holder shall retain all of its rights and remedies (including, without limitation, (i) the right to receive Conversion
Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion Default and any subsequent Conversion
Default and (ii) the right to have the Conversion Price with respect to subsequent conversions determined in accordance with Section
1.3) for the Borrower’s failure to convert this Note.

 

    	(5)

    	 

    
 

1.9 
Prepayment. Notwithstanding anything to the contrary contained in this Note, at any time
during the period beginning on the Issue Date and ending on the date which is sixty (60) days following the issue date, the Borrower
shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay
the outstanding Note (principal and accrued interest), in full, in accordance with this Section 1.9. Any notice of prepayment hereunder
(an “Optional Prepayment Notice”) shall be delivered to the Holder of the Note at its registered addresses and shall
state: (1) that the Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be not more
than three (3) Trading Days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “Optional
Prepayment Date”), the Borrower shall make payment of the Optional Prepayment Amount (as defined below) to or upon the order
of the Holder as specified by the Holder in writing to the Borrower at least one (1) business day prior to the Optional Prepayment
Date. If the Borrower exercises its right to prepay the Note, the Borrower shall make payment to the Holder of an amount in cash
(the “Optional Prepayment Amount”) equal to 120%, multiplied by the sum of: (w) the then outstanding principal amount
of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this Note to the Optional Prepayment
Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed
to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If the Borrower delivers an Optional Prepayment Notice and fails to pay
the Optional Prepayment Amount due to the Holder of the Note within two (2) business days following the Optional Prepayment Date,
the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section 1.9.

 

Notwithstanding anything
to the contrary contained in this Note, at any time during the period beginning on the date which is sixty-one (61) days following
the issue date and ending on the date which is ninety (90) days following the issue date, the Borrower shall have the right, exercisable
on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding Note (principal
and accrued interest), in full, in accordance with this Section 1.9. Any Optional Prepayment Notice shall be delivered to the Holder
of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay the Note, and
(2) the date of prepayment which shall be not more than three (3) Trading Days from the date of the Optional Prepayment Notice.
On the Optional Prepayment Date, the Borrower shall make payment of the Second Optional Prepayment Amount (as defined below) to
or upon the order of the Holder as specified by the Holder in writing to the Borrower at least one (1) business day prior to the
Optional Prepayment Date. If the Borrower exercises its right to prepay the Note, the Borrower shall make payment to the Holder
of an amount in cash (the “Second Optional Prepayment Amount”) equal to 130%, multiplied by the sum of: (w) the then
outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this
Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x)
plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If the Borrower delivers an Optional
Prepayment Notice and fails to pay the Second Optional Prepayment Amount due to the Holder of the Note within two (2) business
days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section
1.9.

 

Notwithstanding anything
to the contrary contained in this Note, at any time during the period beginning on the date which is ninety-one (91) days following
the issue date and ending on the date which is one hundred twenty (120) days following the issue date, the Borrower shall have
the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay the outstanding
Note (principal and accrued interest), in full, in accordance with this Section 1.9. Any Optional Prepayment Notice shall be delivered
to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its right to prepay
the Note, and (2) the date of prepayment which shall be not more than three (3) Trading Days from the date of the Optional Prepayment
Notice. On the Optional Prepayment Date, the Borrower shall make payment of the Third Optional Prepayment Amount (as defined below)
to or upon the order of the Holder as specified by the Holder in writing to the Borrower at least one (1) business day prior to
the Optional Prepayment Date. If the Borrower exercises its right to prepay the Note, the Borrower shall make payment to the Holder
of an amount in cash (the “Third Optional Prepayment Amount”) equal to 140%, multiplied by the sum of: (w) the then
outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of this
Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and (x)
plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If the Borrower delivers an Optional
Prepayment Notice and fails to pay the Third Optional Prepayment Amount due to the Holder of the Note within two (2) business days
following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant to this Section
1.9.

 

Notwithstanding any
to the contrary stated elsewhere herein, at any time during the period beginning on the date that is one hundred twenty-one (121)
day from the issue date and ending one hundred eighty (180) days following the issue date, the Borrower
shall have the right, exercisable on not less than three (3) Trading Days prior written notice to the Holder of the Note to prepay
the outstanding Note (principal and accrued interest), in full, in accordance with this Section 1.9. Any Optional Prepayment Notice
shall be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the Borrower is exercising its
right to prepay the Note, and (2) the date of prepayment which shall be not more than three (3) Trading Days from the date of the
Optional Prepayment Notice. On the Optional Prepayment Date, the Borrower shall make payment of the Fourth Optional Prepayment
Amount (as defined below) to or upon the order of the Holder as specified by the Holder in writing to the Borrower at least one
(1) business day prior to the Optional Prepayment Date. If the Borrower exercises its right to prepay the Note, the Borrower shall
make payment to the Holder of an amount in cash (the “Fourth Optional Prepayment Amount”) equal to 150%, multiplied
by the sum of: (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid interest on the unpaid
principal amount of this Note to the Optional Prepayment Date plus (y) Default Interest, if any, on the amounts referred
to in clauses (w) and (x) plus (z) any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If the Borrower
delivers an Optional Prepayment Notice and fails to pay the Fourth Optional Prepayment Amount due to the Holder of the Note within
two (2) business days following the Optional Prepayment Date, the Borrower shall forever forfeit its right to prepay the Note pursuant
to this Section 1.9.

After the expiration
of one hundred eighty (180) following the date of the Note, the Borrower shall have no right of prepayment. 

    	(6)

    	 

    
 

Article
II.  CERTAIN COVENANTS

 

2.1 
Distributions on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall
not without the Holder’s written consent (a) pay, declare or set apart for such payment, any dividend or other distribution
(whether in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely
in the form of additional shares of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment
or distribution in respect of its capital stock except for distributions pursuant to any shareholders’ rights plan which
is approved by a majority of the Borrower’s disinterested directors.

 

2.2 
Restriction on Stock Repurchases. So long as the Borrower shall have any obligation under this Note, the Borrower
shall not without the Holder’s written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for
property or other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock
of the Borrower or any warrants, rights or options to purchase or acquire any such shares.

 

2.3 
Borrowings. So long as the Borrower shall have any obligation under this Note, the Borrower
shall not, without the Holder’s written consent, create, incur, assume guarantee, endorse, contingently agree to purchase
or otherwise become liable upon the obligation of any person, firm, partnership, joint venture or corporation, except by the endorsement
of negotiable instruments for deposit or collection, or suffer to exist any liability for borrowed money, except (a) borrowings
in existence or committed on the date hereof and of which the Borrower has informed Holder in writing prior to the date hereof,
(b) indebtedness to trade creditors or financial institutions incurred in the ordinary course of business or (c) borrowings, the
proceeds of which shall be used to repay this Note.

 

2.4 
Sale of Assets. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without
the Holder’s written consent, sell, lease or otherwise dispose of any significant portion of its assets outside the ordinary
course of business. Any consent to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.

 

2.5 
Advances and Loans. So long as the Borrower shall have any obligation under this Note, the Borrower shall not, without
the Holder’s written consent, lend money, give credit or make advances to any person, firm, joint venture or corporation,
including, without limitation, officers, directors, employees, subsidiaries and affiliates of the Borrower, except loans, credits
or advances (a) in existence or committed on the date hereof and which the Borrower has informed Holder in writing prior to the
date hereof, (b) made in the ordinary course of business or (c) not in excess of $100,000.

 

    	(7)

    	 

    
 

Article
III.  EVENTS OF DEFAULT

 

If any of the following events
of default (each, an “Event of Default”) shall occur:

 

3.1 
Failure to Pay Principal or Interest. The Borrower fails to pay the principal hereof or
interest thereon when due on this Note, whether at maturity, upon acceleration or otherwise.

 

3.2 
Conversion and the Shares. The Borrower fails to issue shares of Common Stock to the Holder
(or announces or threatens in writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion
rights of the Holder in accordance with the terms of this Note, fails to transfer or cause its
transfer agent to transfer (issue) (electronically or in certificated form) any certificate for shares of Common Stock issued to
the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Borrower directs its transfer
agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in
certificated form) any certificate for shares of Common Stock to be issued to the Holder upon conversion of or otherwise pursuant
to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs, delays,
and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect
thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant to this
Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend to honor
the obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement, statement
or threat not to honor its obligations shall not be rescinded in writing) for three (3) business days after the Holder shall have
delivered a Notice of Conversion. It is an obligation of the Borrower to remain current in its obligations to its transfer agent.
It shall be an event of default of this Note, if a conversion of this Note is delayed, hindered or frustrated due to a balance
owed by the Borrower to its transfer agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s
transfer agent in order to process a conversion, such advanced funds shall be paid by the Borrower to the Holder within forty eight
(48) hours of a demand from the Holder.

 

3.3 
Breach of Covenants. The Borrower breaches any material covenant or other material term or condition contained in
this Note and any collateral documents including but not limited to the Purchase Agreement and such breach continues for a period
of ten (10) days after written notice thereof to the Borrower from the Holder.

 

3.4 
Breach of Representations and Warranties. Any representation or warranty of the Borrower made herein or in any agreement,
statement or certificate given in writing pursuant hereto or in connection herewith (including, without limitation, the Purchase
Agreement), shall be false or misleading in any material respect when made and the breach of which has (or with the passage of
time will have) a material adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement.

 

3.5 
Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors,
or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business,
or such a receiver or trustee shall otherwise be appointed.

 

3.6 
Judgments. Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary
of the Borrower or any of its property or other assets for more than $50,000, and shall remain unvacated, unbonded or unstayed
for a period of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.

 

3.7 
Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or
involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower
or any subsidiary of the Borrower.

 

3.8 
Delisting of Common Stock. The Borrower shall fail to maintain the listing of the Common Stock on at least one of
the OTCBB or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange,
or the American Stock Exchange.

 

3.9 
Failure to Comply with the Exchange Act. The Borrower shall fail to comply with the reporting requirements of the
Exchange Act; and/or the Borrower shall cease to be subject to the reporting requirements of the Exchange Act.

 

3.10         
Liquidation.Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.

 

3.11         
Cessation of Operations.Any cessation of operations by Borrower or Borrower admits it is otherwise generally
unable to pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue
as a “going concern” shall not be an admission that the Borrower cannot pay its debts as they become due.

 

3.12         
Maintenance of Assets.The failure by Borrower to maintain any material intellectual property rights, personal,
real property or other assets which are necessary to conduct its business (whether now or in the future).

 

3.13         
Financial Statement Restatement.The restatement of any financial statements filed by the Borrower with the SEC
for any date or period from two years prior to the Issue Date of this Note and until this Note is no longer outstanding, if the
result of such restatement would, by comparison to the unrestated financial statement, have constituted a material adverse effect
on the rights of the Holder with respect to this Note or the Purchase Agreement.

 

3.14         
Reverse Splits.The Borrower effectuates a reverse split of its Common Stock without twenty (20) days prior written
notice to the Holder.

 

    	(8)

    	 

    
 

3.15 Replacement
of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior
to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered
pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in
the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

 3.15         
Cross-Default.  Notwithstanding anything to the contrary contained in this Note or the other related or companion
documents, a breach or default by the Borrower of any covenant or other term or condition contained in any of the Other Agreements,
after the passage of all applicable notice and cure or grace periods, shall, at the option of the Holder, be considered a default
under this Note and the Other Agreements, in which event the Holder shall be entitled (but in no event required) to apply all
rights and remedies of the Holder under the terms of this Note and the Other Agreements by reason of a default under said Other
Agreement or hereunder. “Other Agreements” means,
collectively, all agreements and instruments between, among or by: (1) the Borrower, and, or for the benefit of, (2) the
Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided, however, the term “Other
Agreements” shall not include the related or companion documents to this Note. Each of the loan transactions will be cross-defaulted
with each other loan transaction and with all other existing and future debt of Borrower to the Holder.

Notwithstanding anything
to the contrary the Borrower will be permitted to cure a breach or default within ten (10) business days, other than an Event of
Default under Section 3.2 of the Note in which only the cure period provided in 3.2 will apply.

Upon the occurrence and during the continuation
of any Event of Default specified in Section 3.1 (solely with respect to failure to pay the principal hereof or interest thereon
when due at the Maturity Date), the Note shall become immediately due and payable and the Borrower shall pay to the Holder, in
full satisfaction of its obligations hereunder, an amount equal to the Default Sum (as defined herein).  UPON THE OCCURRENCE
AND DURING THE CONTINUATION OF ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE
AND THE BORROWER SHALL PAY TO THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT
SUM (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of any Event of Default specified
in Sections 3.1 (solely with respect to failure to pay the principal hereof or interest thereon when due on this Note upon a Trading
Market Prepayment Event pursuant to Section 1.7 or upon acceleration), 3.3, 3.4, 3.6, 3.8, 3.9, 3.11, 3.12, 3.13, 3.14, and/or
3. 15 exercisable through the delivery of written notice to the Borrower by such Holders (the “Default Notice”), and
upon the occurrence of an Event of Default specified the remaining sections of Articles III (other than failure to pay the principal
hereof or interest thereon at the Maturity Date specified in Section 3,1 hereof), the Note shall become immediately due and payable
and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to the greater of
(i) 150% times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued and unpaid
interest on the unpaid principal amount of this Note to the date of payment (the “Mandatory Prepayment Date”) plus
(y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed to the Holder
pursuant to Sections 1.3 and 1.4(g) hereof (the then outstanding principal amount of this Note to the date of payment plus
the amounts referred to in clauses (x), (y) and (z) shall collectively be known as the “Default Sum”) or (ii) the “parity
value” of the Default Sum to be prepaid, where parity value means (a) the highest number of shares of Common Stock issuable
upon conversion of or otherwise pursuant to such Default Sum in accordance with Article I, treating the Trading Day immediately
preceding the Mandatory Prepayment Date as the “Conversion Date” for purposes of determining the lowest applicable
Conversion Price, unless the Default Event arises as a result of a breach in respect of a specific Conversion Date in which case
such Conversion Date shall be the Conversion Date), multiplied by (b) the highest Closing Price for the Common Stock during
the period beginning on the date of first occurrence of the Event of Default and ending one day prior to the Mandatory Prepayment
Date (the “Default Amount”) and all other amounts payable hereunder shall immediately become due and payable, all without
demand, presentment or notice, all of which hereby are expressly waived, together with all costs, including, without limitation,
legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at
law or in equity. 

 

If the Borrower fails
to pay the Default Amount within five (5) business days of written notice that such amount is due and payable, then the Holder
shall have the right at any time, so long as the Borrower remains in default (and so long and to the extent that there are sufficient
authorized shares), to require the Borrower, upon written notice, to immediately issue, in lieu of the Default Amount, the number
of shares of Common Stock of the Borrower equal to the Default Amount divided by the Conversion Price then in effect.

 

    	(9)

    	 

    
 

Article
IV. MISCELLANEOUS

 

4.1 
Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder in the exercise of any power, right
or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other right, power or privileges. All rights and remedies existing
hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

4.2 
Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder
shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered
or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid,
or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party
shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder
shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where
such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during
normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.
The addresses for such communications shall be:

 

If to the Borrower,
to:

SIMPLEPONS, INC.

220 Congress Park Drive - Suite 304

Delray Beach, FL 33445

Attn:
BRIAN S. JOHN, Chief Executive Officer

facsimile:

 

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

[enter name
of law firm]

Attn: [attorney
name]

[enter address
line 1]

[enter city,
state, zip]

facsimile:
[enter fax number]

 

If to the Holder:

ASHER ENTERPRISES, INC.

1 Linden Pl.,
Suite 207

Great Neck, NY.
11021

Attn:
Curt Kramer, President

facsimile:
516-498-9894

 

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

Naidich Wurman Birnbaum
& Maday, LLP

80 Cuttermill Road,
Suite 410

Great Neck, NY 11021

Attn: Bernard S. Feldman,
Esq.

facsimile:
516-466-3555

 

4.3 
Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower
and the Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument
(and the other Notes issued pursuant to the Purchase Agreement) as originally executed, or if later amended or supplemented, then
as so amended or supplemented.

 

4.4 
Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be
the benefit of the Holder and its successors and assigns. Each transferee of this Note must be an “accredited investor”
(as defined in Rule 501(a) of the 1933 Act). Notwithstanding anything in this Note to the contrary, this Note may be pledged as
collateral in connection with a bona fide margin account or other lending arrangement.

 

4.5 
Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs
of collection, including reasonable attorneys’ fees.

 

4.6 
Governing Law. This Note 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. Any action brought by either party against the other concerning the transactions
contemplated by this Note shall be brought only in the state courts of New York or in the federal courts located in the state and
county of Nassau. The parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any action instituted
hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. The
Borrower and Holder waive trial by jury. The prevailing party shall be entitled to recover from the other party its reasonable
attorney's fees and costs. In the event that any provision of this Note or any other agreement delivered in connection herewith
is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the
extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision
which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of
any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit,
action or proceeding in connection with this Agreement or any other Transaction Document 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 other manner permitted by law.

 

    	(10)

    	 

    

 

4.7 
Certain Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding
principal amount (or the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest
on such interest, the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this
Note may be difficult to determine and the amount to be so paid by the Borrower represents stipulated damages and not a penalty
and is intended to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a return from the
sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of the price paid for such shares pursuant
to this Note. The Borrower and the Holder hereby agree that such amount of stipulated damages is not plainly disproportionate to
the possible loss to the Holder from the receipt of a cash payment without the opportunity to convert this Note into shares of
Common Stock.

 

4.8 
Purchase Agreement. By its acceptance of this Note, each party agrees to be bound by the applicable terms of the
Purchase Agreement.

 

4.9 
Notice of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a
Holder of Common Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the
Holder with prior notification of any meeting of the Borrower’s shareholders (and copies of proxy materials and other information
sent to shareholders). In the event of any taking by the Borrower of a record of its shareholders for the purpose of determining
shareholders who are entitled to receive payment of any dividend or other distribution, any right to subscribe for, purchase or
otherwise acquire (including by way of merger, consolidation, reclassification or recapitalization) any share of any class or any
other securities or property, or to receive any other right, or for the purpose of determining shareholders who are entitled to
vote in connection with any proposed sale, lease or conveyance of all or substantially all of the assets of the Borrower or any
proposed liquidation, dissolution or winding up of the Borrower, the Borrower shall mail a notice to the Holder, at least twenty
(20) days prior to the record date specified therein (or thirty (30) days prior to the consummation of the transaction or event,
whichever is earlier), of the date on which any such record is to be taken for the purpose of such dividend, distribution, right
or other event, and a brief statement regarding the amount and character of such dividend, distribution, right or other event to
the extent known at such time. The Borrower shall make a public announcement of any event requiring notification to the Holder
hereunder substantially simultaneously with the notification to the Holder in accordance with the terms of this Section 4.9.

 

4.10         
Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm
to the Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges
that the remedy at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach
or threatened breach by the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other
available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining,
preventing or curing any breach of this Note and to enforce specifically the terms and provisions thereof, without the necessity
of showing economic loss and without any bond or other security being required.

 

IN WITNESS WHEREOF, Borrower
has caused this Note to be signed in its name by its duly authorized officer this October 26, 2012.

 

SIMPLEPONS, INC.

 

By: /s/ Brian S. John

BRIAN S. JOHN

Chief
Executive Officer 

EXHIBIT A

NOTICE OF
CONVERSION 

 

The undersigned hereby elects
to convert $_________________ principal amount of the Note (defined below) into that number
of shares of Common Stock to be issued pursuant to the conversion of the Note (“Common Stock”) as set forth
below, of SIMPLEPONS, INC., a Delaware corporation (the “Borrower”) according to the conditions of the convertible
note of the Borrower dated as of October 26, 2012 (the “Note”), as of the date written below. No fee will be charged
to the Holder for any conversion, except for transfer taxes, if any.

 

Box Checked as to applicable
instructions:

 

[ ] The Borrower
shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned
or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).

 

Name of DTC Prime Broker:

Account Number:

 

[ ] The undersigned
hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below
(which numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional
space is necessary, on an attachment hereto:

 

ASHER ENTERPRISES, INC.

1 Linden Pl.,
Suite 207

Great Neck, NY.
11021

Attention: Certificate
Delivery

(516) 498-9890

 

Date of Conversion:  _____________

Applicable Conversion Price: $____________

Number of Shares of Common Stock to
be Issued

Pursuant to Conversion
of the Notes: ______________

Amount of Principal Balance Due remaining

Under the Note
after this conversion: ______________

 

ASHER ENTERPRISES, INC.

 

By:_____________________________

Name:Curt Kramer

Title: President

Date: ______________

1 Linden Pl.,
Suite 207

Great Neck, NY.
11021

 

(11)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00210-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00210-of-00352.parquet"}]]