Exhibit 10.1

SECURITIES SETTLEMENT AGREEMENT

 

This securities settlement agreement (the “Agreement”) is by and between
NetCapital.com LLC (“Claimant”) and the undersigned ("Company" or "Debtor") and
is entered into as of the effective date below, all with reference to the
following facts, which the parties agree are true and correct:

 

RECITALS

 

Claimant acquired, on or about this date, certain debt rights, noted below,
along with the rights to common stock and conversion of a prior debt holder of
the Company;

 

Claimant is, therefore, both an investor and a creditor of the Company entitled
to payment and conversion of outstanding debt securities, including common stock
conversion of such debt securities, as referenced in agreement(s) and
document(s), including between the parties hereto, such as listed below;

 

Debtor seeks to avoid dispute, retire debt from its books and records, make
effort to improve its financial picture for potential acquisition and future
fundings by eliminating or limiting the extent of debt the Debtor faces, and
honor such conversion and related rights acquired by the Claimant;

 

THEREFORE, THE PARTIES AGREE TO SETTLE, AND THE PURPOSE OF THIS AGREEMENT IS TO
REFLECT SUCH SETTLEMENT;

 

NOW THEREFORE, the parties hereto hereby represent, warrant, and covenant with
and to each other and confirm all of the above and following to the transfer
agent of Company and others to whom it may concern, as follows:

 

1.Obligations Owing. Reference is made to the debt securities identified on the
signature page hereof (the "Debt"). As to the Debt, any past or current dispute,
potential defenses and disputed considerations, are waived by the Company, and
the debt obligation is hereby confirmed as owed.

 

2.Exchange. Claimant and the Company hereby agree to confirm the exchange of the
Debt for securities of the Company as follows: based upon the provisions of this
Agreement, the Company is to repay the principal amount of the Debt
("Principal") with interest at a rate set below per annum ("Interest") by the
"Maturity Date" (below) in accordance with conversion rights to the Claimant so
that, at the election of the Claimant, it may convert the Principal in whole
into shares of common stock in the Company (the "Shares"). This obligation of
the Company is in the nature of a debenture but in lieu of issuing a debenture
form, the Company shall honor the exchange, payment obligation and conversion
rights pursuant to this Agreement. Thus, concurrently with the execution of this
Agreement, Claimant surrenders hereby the Debt and its interest in the Debt
strictly for the payment, conversion, Shares and related rights under this
Agreement. (Claimant will endeavor to use best efforts, for non-material file
recording, to deliver to the Company any promissory notes, commercial paper, or
other evidences of the Debt, but such ministerial obligation shall not be a
condition to the conversion, Shares, and enforcement rights of this Agreement by
Claimant.) With reference to Rule 144 promulgated under the Securities Act of
1933, as amended, the exchange hereby is made without any additional
consideration applicable.

 

3.Payment of Principal and Interest. The Company promises to pay to Claimant the
Principal and Interest on the Maturity Date, or sooner if required hereby,
unless to the extent of any completed conversion of Principal and or Interest as
stated herein.

 

THE COMPANY MAY PREPAY ANY PORTION OF THE PRINCIPAL AMOUNT DUE HEREUNDER BY
MAKING A PAYMENT EQUAL TO 110% OF THE PURCHASE PRICE OF SUCH PRINCIPAL AMOUNT
ALONG WITH ANY ACCRUED INTEREST AT ANY TIME UPON THREE DAYS WRITTEN NOTICE TO
THE CLAIMANT.

 

4.Events of Default. "Event of Default," wherever used herein, means any one of
the following events (whatever the reason and whether it shall be voluntary or
involuntary or effected by operation of law or pursuant to any judgment, decree
or order of any court, or any order, rule or regulation of any administrative or
governmental body):

 

(A)Any default in the payment of the Principal of, Interest on, or liquidated
damages in respect to this Agreement, free of any claim of subordination, as and
when the same shall become due and payable (whether on a Conversion Date or the
Maturity Date or by acceleration or otherwise); and or

  

(B)The Company shall fail to file all reports required to be filed by it with
the SEC pursuant to Section 13 or 15(d) of the Securities and Exchange Act of
1934, as amended (the “Exchange Act”), or otherwise required by the Exchange Act
or as required to be deemed a current public company as to disclosure including
on any exchange or over the counter trading medium and or the Company is in, or
accused of, being in violation of any law or regulation by written demand, court
proceeding or similarly; and or

  

(C)The material breach of any promise or representation in this Agreement and or
related representation or agreement made by the Company and or any of its
officers, which shall include, without limitation, the failure to deliver shares
of common stock due Claimant on a conversion within four Business Days from the
date of conversion or sooner, which delivery must be otherwise made per
reasonable specifications of the Claimant (e.g. to brokerage firm account).

 

If any Event of Default occurs and is continuing, the full Principal amount of
this Agreement, together with Interest and other amounts owing in respect
thereof, shall become immediately due and payable in cash except the Claimant
may elect any part thereof to be paid in Shares as part of any conversion
hereunder in which case such Shares shall be due.

 

5. Conversion of Debt into Common Stock.

  

(A)At any time until both the Principal and Interest is paid in full by the
Company and this Agreement is no longer outstanding, the Principal shall be
convertible into shares of common stock of the Company at a price of at a
conversion price of $0.02 per share. The Claimant shall effect conversion by
delivering to the Company the form of Notice of Conversion attached hereto as
Exhibit A (a "Notice of Conversion"), specifying the date on which such
conversion is to be effected (a "Conversion Date") and Shares shall then be
delivered by the Company within four Business Days.

  

(B)The Company covenants that it will at all times reserve and keep available
out of its authorized and unissued shares of Common Stock solely for the purpose
of issuance upon conversion of this Agreement. Claimant agrees to not engage in
any activities or strategies that would depress the trading price of the
Company’s Common Stock, such as short selling, hedging, or selling more than (i)
$15,000 in Common Stock in one day, or (ii) 30% of the trading volume in shares
of Common Stock in one day, whichever limit is higher.

  

(C)Any notice or other communication or deliveries hereunder shall be deemed
given and effective on the earliest of (i) the date of transmission, (ii) the
date after the date of transmission, if such notice or communication is
delivered via facsimile, (iii) the first Business Day following the date of
mailing, if sent by nationally recognized overnight courier service, or (iv)
upon actual receipt by the party to whom such notice is required to be given.

  

(D)Notwithstanding anything to the contrary herein contained, the Claimant may
not convert this Agreement to the extent such conversion would result in the
Claimant, together with any affiliate thereof, beneficially owning (as
determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") and the rules promulgated thereunder) in
excess of 4.99% of the then issued and outstanding shares of Common Stock.

  

(E)In conjunction with the granting of conversion rights to the Claimant,
Claimant shall cancel debt assigned to it from LV Administrative Services, Ltd.
(“LV”) in accordance with the following schedule:

 

(1)With the first assignment of debt to Claimant from LV, Claimant shall
immediately cancel all debt assigned to it, except for $100,000. Of the $100,000
balance owed by Company to Claimant, the full amount or any portion thereof
shall be convertible into Shares at a conversion rate of $0.02 per share.

 

(2)For each additional assignment of debt from LV to Claimant, the entire amount
of debt assigned to Claimant, less the actual cash payment sent to LV shall be
cancelled, and the portion of debt not cancelled shall be convertible in
accordance with the provisions of paragraph 5 (A) of this Agreement.

 

(3)Any remaining balance of debt assigned from LV to Claimant shall be adjusted
or canceled so that principal amounts due by the Company to the Claimant, and
paid via conversions into stock, prepayments or other methods, shall not exceed
$450,000 in the aggregate, for the assignment to the Claimant of all of the debt
owed to LV by the Company.

 

6. Herein meanings are, unless otherwise defined herein:

 

"Business Day" means any day except Saturday, Sunday and any day which shall be
a federal legal holiday in the United States or a day on which banking
institutions in the State of New York are authorized or required by law or other
government action to close. Whenever any payment or other obligation hereunder
shall be due on a day other than a Business Day, such payment shall be made on
the next succeeding Business Day.

 

"Common Stock" means the common stock of the Company and stock of any other
class into which such shares may hereafter have been reclassified or changed.

 

"Person" means a corporation, an association, a partnership, organization, a
business, an individual, a government or political subdivision thereof or a
governmental agency.

 

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

 

 

7. Claimant Status Claimant represents and the Company confirms such
representation, as follows:

 

(A)Claimant believes it is not an affiliate, now or by way of this Agreement;
and

  

(B)Claimant is (i) an "accredited investor" as that term is defined in Rule 501
of the General Rules and Regulations under the Securities Act of 1933, as
amended, the "Act" by reason of Rule 501 and (ii) able, by reason of the
business and financial experience, a sophisticated investor.

 

8. Miscellaneous

 

A.Gender. Wherever the context shall require, all words herein in the masculine
gender shall be deemed to include the feminine or neuter gender, all singular
words shall include the plural, and all plural shall include the singular.

 

B.Severability. If any provision hereof is deemed unenforceable by a court of
competent jurisdiction, the remainder of this Agreement, and the application of
such provision in other circumstances shall not be affected thereby.

 

C.Waiver. No waiver of any provision of this Agreement shall be valid unless in
writing and signed by the waiving party. The failure of any party at any time to
insist upon strict performance of any condition, promise, agreement or
understanding set forth herein, shall not be construed as a waiver or
relinquishment of any other condition, promise, agreement or understanding set
forth herein or of the right to insist upon strict performance of such waived
condition, promise, agreement or understanding at any other time.

 

D.Expenses. Except as otherwise provided herein, or agreed in writing, each
party hereto shall bear all expenses incurred by each such party in connection
with this Agreement and in the consummation of the transactions contemplated
hereby and in preparation thereof.

 

E.Amendment. This Agreement may only be amended or modified at any time, and
from time to time, in writing, executed by the parties hereto.

 

F.Notices. Any notice, communication, request, reply or advice (hereinafter
severally and collectively called "Notice”) in this Agreement provided or
permitted to be given, may be made or be served by delivering same by overnight
mail or by delivering the same by a hand-delivery service, such Notice shall be
deemed given when so delivered or sooner as stated within this Agreement.

 

G.Captions. Captions herein are for the convenience of the parties and shall not
affect the interpretation of this Agreement.

 

H.Counterpart Execution. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument and this Agreement may be
executed by fax or email.

 

I.Assignment. This Agreement is not assignable without the written consent of
the parties except Claimant has the right to assign the obligations and Shares
owed to it hereunder as it may determine.

 

J.Parties in Interest and Affiliates. Provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties,
their heirs, executors, administrators, other permitted successors and assigns,
if any. Nothing contained in this Agreement, whether express or implied, is
intended to confer any rights or remedies under or by reason of this Agreement
on any persons other than the parties to it and their respective successors and
assigns. For this Agreement, affiliated or affiliate, either word being
capitalized or not herein, shall mean controlling, controlled by or under direct
or indirect common control with such person and includes shareholders, officers,
directors, advisors, employees, attorneys, accountants, auditors, subsidiaries,
parent companies, related companies and founders, to broadly defined, to be
interpreted to protect the Claimant, beyond just persons and firms customarily
considered affiliated under federal securities laws and regulations.

 

K.Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties on the subject matter hereof and supersedes all
prior recent settlement discussions and verbal agreements.

 

M.Construction and Misc. This Agreement shall be governed exclusively by the
laws of the State of New York without reference to conflict of laws and the
exclusive venue for any action, claim or dispute in respect of this Agreement
shall be such court of competent jurisdiction as is located in New York County
New York as the sole venue. The parties agree and acknowledge that each has
reviewed this Agreement and the normal rule of construction that agreements are
to be construed against the drafting party shall not apply in respect of this
Agreement given the parties have mutually negotiated and drafted this Agreement.
The Company irrevocably submits to the exclusive jurisdiction stated herein and
the parties hereto agree that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. The parties hereto further
waive any objection to venue in the said place.

 

 

Effective Date: February 6, 2013

Principal Amount due hereunder: $450,000.

Purchase Price: $350,000

Interest due hereunder: 0% per annum

Maturity Date: Date that is 18 months from this Effective Date

Description of Debt: Purchase of debt

Assignor: LV Administrative Services, Ltd.

Name of Company: Pervasip Corp

State of Incorporation of Company: New York

Address of Company: 75 South Broadway #400,White Plains, NY 10601

Name of Claimant: NetCapital.com, LLC

 

The undersigned hereby execute this document, which shall be deemed effective on
the Effective Date noted:

 

"Company/Debtor"

PERVASIP CORP.             By: /s/ Paul H. Riss     Name: Paul H. Riss    
Title: Chief Executive Officer  

 

 

“Claimant”

 

 

NetCapital.com LLC             By: /s/ John Fanning     Name: John Fanning    
Title: Authorized Signatory  

 

Exhibit A

FORM NOTICE OF CONVERSION

 

The undersigned hereby elects to convert principal under the Securities
Settlement Agreement of the "Company" noted below, dated February 6, 2013 into
shares of common stock (the "Common Stock") of the Company according to the
conditions hereof, as of the date written below. If shares are to be issued in
the name of a person other than the undersigned, the undersigned will pay a
reasonable transfer expense payable with respect thereto.

 

 

Company Name: Pervasip Corp.

 

Date to Effect Conversion: _____________

 

Conversion Price: $0.02 per Share:

 

Principal Amount of Agreement to be converted: ___________________

 

Number of shares of Common Stock to be issued: ___________________

 

 

NetCapital.com LLC             By: /s/     Name:     Title: Authorized Signatory
 

 

Send Shares Via Federal Express to:

 

 

 

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