pv106.htm


    
      

      

    

    Exhibit
10.6

     

    FOURTH AMENDED AND RESTATED
SECURED TERM NOTE

     

    FOR VALUE
RECEIVED, PERVASIP CORP. (f/k/a eLEC Communications Corp.), a New York
corporation (the “Borrower”), hereby promises to
pay to VALENS OFFSHORE SPV I, LTD. (as assignee of Laurus Master Fund, Ltd.),
c/o M&C Corporate Services Limited, P.O. Box 309 GT, Ugland House, South
Church Street, George Town, Grand Cayman, Cayman Islands, Fax: 345-949-8080 (the
“Holder”) or its
registered assigns or successors in interest, on order, the sum of One Million
Nine Hundred Sixty Six Thousand Six Hundred Sixty Seven Dollars ($1,966,667),
together with any accrued and unpaid interest hereon, on September 30, 2010 (the
“Maturity Date”) if not
sooner paid.

     

    This Note
amends and restates in its entirety (and is given in substitution for and not in
satisfaction of) that certain $1,966,667 Third Amended and Restated Secured Term
Note made by the Borrower in favor of Holder (as assignee of Laurus Master Fund,
Ltd.) on September 28, 2007.

     

    This
Fourth Amended and Restated Secured Term Note (the “Note”) is intended to be a
registered obligation within the meaning of Treasury Regulation Section
1.871-14(c)(1)(i) and the Borrower (or its agent) shall register this Note (and
thereafter shall maintain such registration) as to both principal and any stated
interest.  Notwithstanding any document, instrument or agreement
relating to this Note to the contrary, transfer of this Note (or the right to
any payments of principal or stated interest thereunder) may only be effected by
(i) surrender of this Note and either the reissuance by the Borrower of this
Note to the new holder or the issuance by the Borrower of a new instrument to
the new holder, or (ii) transfer through a book entry system maintained by the
Borrower (or its agent), within the meaning of Treasury Regulation Section
1.871-14(c)(1)(i)(B).

     

    Capitalized
terms used herein without definition shall have the meanings ascribed to such
terms in that certain Securities Purchase Agreement dated as of November 30,
2005 between the Borrower and the Holder (as assignee of Laurus Master Fund,
Ltd.) (as amended, modified or supplemented from time to time, the “Purchase
Agreement”).

     

    The
following terms shall apply to this Note:

     

    ARTICLE
I

     

    INTEREST
& AMORTIZATION

     

    1.1 Interest
Rate.

     

    (a) Subject
to Sections 3.2 and 4.6 hereof, interest payable on this Note shall accrue at a
rate per annum (the “Interest
Rate”) equal to the “prime rate” published in The Wall Street
Journal from time to time, plus two percent (2%).  The prime
rate shall be increased or decreased as the case may be for each increase or
decrease in the prime rate in an amount equal to such increase or decrease in
the prime rate; each change to be effective as of the day of the change in such
rate.  Interest shall be calculated on the basis of a 360 day
year.

     

    (b) During
the period beginning on the date hereof through and including May 31, 2009, the
Company shall pay interest on the Principal Amount in kind (the “PIK Interest”).  The
PIK Interest shall accrue monthly, in arrears, commencing on June 1, 2008, and
on the first business day of each consecutive calendar month thereafter, through
and including June 1, 2009.  The PIK Interest shall be added to the
Principal Amount and payable on the Maturity Date.  At the option of
the Holder, the increased portion of the Principal Amount shall be evidenced by
a note (a “PIK Note”) in
form and substance satisfactory to the Holder; provided, however, that such PIK
Note shall not be necessary to evidence such portion of the Principal Amount nor
shall the absence of such PIK Note relieve the Company of its obligation to pay
such portion of the Principal Amount to the Holder.

     

    (c) On and
after June 1, 2009, interest shall be payable monthly in arrears, commencing on
July 1, 2009, on the first business day of each consecutive calendar month
thereafter through and including the Maturity Date, and on the Maturity Date,
whether by acceleration or otherwise.

     

    1.2 Maturity
Date.  The principal amount outstanding under this Note,
together with any accrued and unpaid interest to date on such amount plus any
and all other amounts which are then owing under this Note, the Purchase
Agreement or any other Related Agreement but have not been paid, shall be due
and payable on the Maturity Date.

     

    ARTICLE
II

     

    REPAYMENT

     

    2.1 Optional Redemption in
Cash.  The Borrower will have the option of prepaying this Note
in whole or in part (“Optional
Redemption”) by paying to the Holder a sum of money (the “Redemption Amount”) equal to
the principal amount of this Note together with accrued but unpaid interest
thereon and any and all other sums due, accrued or payable to the Holder arising
under this Note, the Purchase Agreement or any Related Agreement outstanding on
the Redemption Payment Date (as defined below).  The Borrower shall
deliver to the Holder a written notice of redemption (the “Notice of Redemption”)
specifying the date for such Optional Redemption (the “Redemption Payment Date”),
which date shall be no more than ten (10) business days after the date of the
Notice of Redemption (the “Redemption Period”), and the
principal amount of this Note to be redeemed.  On the Redemption
Payment Date, the relevant Redemption Amount must be paid in good funds to the
Holder.  In the event the Borrower fails to pay the relevant
Redemption Amount on the Redemption Payment Date as set forth herein, then such
Redemption Notice will be null and void.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    ARTICLE
III

     

    EVENTS
OF DEFAULT

     

    3.1 Events of
Default.  The occurrence of any of the following events set
forth in subparagraphs (a) through  (i), inclusive, is an “Event of
Default”:

     

    (a) Failure to Pay Principal,
Interest or other Fees.  The Borrower fails to pay when due any
installment of principal, interest or other fees hereon in accordance herewith,
and in any such case, such failure shall continue for a period of three (3) days
following the date upon which any such payment was due.

     

    (b) Breach of
Covenant.  The Borrower breaches any covenant or any other term
or condition of this Note or the Purchase Agreement in any material respect, or
the Borrower or any of its Subsidiaries breaches any covenant or any other term
or condition of any Related Agreement in any material respect and, in any such
case, such breach, if subject to cure, continues for a period of fifteen (15)
days after the occurrence thereof.

     

    (c) Breach of Representations
and Warranties.  Any representation or warranty made by the
Borrower in this Note or the Purchase Agreement, or by the Borrower or any of
its Subsidiaries in any Related Agreement, shall, in any such case, be false or
misleading in any material respect on the date that such representation or
warranty was made or deemed made.

     

    (d) Receiver or
Trustee.  The Borrower or any of its Subsidiaries 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.

     

    (e) Judgments.  Any
money judgment, writ or similar final process shall be entered or filed against
the Borrower or any of its Subsidiaries or any of their respective property or
other assets for more than $250,000, and shall remain unvacated, unbonded or
unstayed for a period of sixty (60) days.

     

    (f) Bankruptcy.  Bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings or
relief under any bankruptcy law or any law for the relief of debtors, voluntary
or involuntary, shall be instituted by or against the Borrower or any of its
Subsidiaries and, only in the case of an involuntary case commenced against the
Borrower or any of its Subsidiaries, the petition is not controverted within ten
(10) days, or is not dismissed within sixty (60) days after commencement of the
case, or the Borrower or any of its Subsidiaries shall (i) become insolvent,
cease operations, dissolve and/or terminate its business existence, (ii) apply
for, consent to, or suffer to exist the appointment of, or the taking of
possession by, a receiver, custodian, trustee, liquidator or other fiduciary of
itself or of all or a substantial part of its property, (iii) make a general
assignment for the benefit of creditors or (iv) take any action for the purpose
of effecting any of the foregoing.

     

    (g) Stop
Trade.  An SEC stop trade order or Principal Market trading
suspension of the Common Stock shall be in effect for five (5) consecutive days
or five (5) days during a period of ten (10) consecutive days, excluding in all
cases a suspension of all trading on a Principal Market, provided that the
Borrower shall not have been able to cure such trading suspension within thirty
(30) days of the notice thereof or list the Common Stock on another Principal
Market within sixty (60) days of such notice.  The “Principal Market”
for the Common Stock shall include the NASD OTC Bulletin Board, NASDAQ Capital
Market, NASDAQ National Market System, American Stock Exchange, or New York
Stock Exchange (whichever of the foregoing is at the time the principal trading
exchange or market for the Common Stock).

     

    (h) The Purchase Agreement and
Related Agreements.  (i) An Event of Default shall occur under
and as defined in (A) the Purchase Agreement or any other Related Agreement, (B)
that certain Securities Purchase Agreement dated as of May 31, 2006 (as amended,
modified and/or supplemented from time to time, the “May 2006 Purchase Agreement”) by and
between the Company and Valens Offshore SPV I, Ltd. (as assignee of Laurus
Master Fund, Ltd.) or any other Related Agreement (as defined in the May 2006
Purchase Agreement)(collectively, the “May 2006 Related Agreements”), (C) that
certain Securities Purchase Agreement dated as of September 28, 2007 (as
amended, modified and/or supplemented from time to time, the “September 2007 Purchase Agreement”) by and
among the Company, the purchasers from time to time party thereto and LV
Administrative Services, Inc., as administrative and collateral agent, or any
other Related Agreement (as defined in the September 2007 Purchase
Agreement)(collectively, the “September 2007 Related
Agreements”) and/or (D) that that certain Securities Purchase Agreement
dated as of the date hereof (as amended, modified and/or supplemented from time
to time, the “May 2008
Purchase Agreement” and
together with the Purchase Agreement, May 2006 Purchase Agreement and September
2007 Purchase Agreement, collectively, the “Valens Purchase Agreements”
and each a “Valens Purchase
Agreement”) by and among the Company, the purchasers from time to time
party thereto and LV Administrative Services, Inc., as administrative and
collateral agent, or any other Related Agreement (as defined in the May 2008
Purchase Agreement)(collectively, the “May 2008 Related Agreements”
and together with the Related Agreements, May 2006 Related Agreements and
September 2007 Related Agreements, collectively, the “Valens Related Agreements” and
each a “Valens Related
Agreement”), (ii) the Company or any of its Subsidiaries shall breach any
term or provision of any Valens Purchase Agreement or any other Valens Related
Agreement in any material respect and such breach, if capable of cure, continues
unremedied for a period of fifteen (15) days after the occurrence thereof, (iii)
the Company or any of its Subsidiaries attempts to terminate, challenges the
validity of, or its liability under, any Valens Purchase Agreement or any other
Valens Related Agreement, (iv) any proceeding shall be brought to challenge the
validity, binding effect of any Valens Purchase Agreement or any other Valens
Related Agreement or (v) any Valens Purchase Agreement or any other Valens
Related Agreement ceases to be a valid, binding and enforceable obligation of
the Company or any of its Subsidiaries (to the extent such persons or entities
are a party thereto);

     

    
      
        
        

      

      
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    (i) the
occurrence of an Event of Default under and as defined in any document,
instrument or agreement by and between any Company and/or any guarantor of the
Company’s indebtedness (the “Credit Parties”) and
LV Administrative Services, Inc., as administrative and collateral agent, Valens
Offshore SPV I, Ltd. and/or Valens Offshore SPV II, Corp. (and their respective
assignees, collectively the “Creditor Parties”)
shall constitute an Event of Default under and as defined in each other
document, instrument and agreement by and between any Credit Party and any
Creditor Party; or

     

    (j) Change in
Control.  (i) Any “Person” or “group” (as such terms are
defined in Sections 13(d) and 14(d) of the Exchange Act, as in effect on the
date hereof) is or becomes the “beneficial owner” (as defined in Rules 13(d)-3
and 13(d)-5 under the Exchange Act), directly or indirectly, of 35% or more on a
fully diluted basis of the then outstanding voting equity interest of the
Borrower or (ii) the Board of Directors of the Borrower shall cease to consist
of a majority of the Board of Directors of the Borrower on the date hereof (or
directors appointed by a majority of the Board of Directors in effect
immediately prior to such appointment).

     

    3.2 Default Interest
Rate.  Following the occurrence and during the continuance of
an Event of Default, the Borrower shall pay additional interest on this Note in
an amount equal to one percent (1%) per month, and all outstanding obligations
under this Note, including unpaid interest, shall continue to accrue such
additional interest from the date of such Event of Default until the date such
Event of Default is cured or waived.

     

    3.3 Default
Payment.  Following the occurrence and during the continuance
of an Event of Default, the Holder, at its option, may demand repayment in full
of all obligations and liabilities owing by Borrower to the Holder under this
Note, the Purchase Agreement and/or any other Related Agreement and/or may
elect, in addition to all rights and remedies of the Holder under the Purchase
Agreement and the other Related Agreements and all obligations and liabilities
of the Borrower under the Purchase Agreement and the other Related Agreements,
to require the Borrower to make a default payment (“Default
Payment”).  The Default Payment shall be 110% of the
outstanding principal amount of the Note, plus accrued but unpaid interest, all
other fees then remaining unpaid, and all other amounts payable
hereunder.  The Default Payment shall be applied first to any fees due
and payable to the Holder pursuant to this Note, the Purchase Agreement, and/or
the other Related Agreements, then to accrued and unpaid interest due on this
Note and then to the outstanding principal balance of this Note.  The
Default Payment shall be due and payable immediately on the date that the Holder
has exercised its rights pursuant to this Section 4.3.

     

    3.4 Cumulative
Remedies.  The remedies under this Note shall be
cumulative.

     

    ARTICLE
IV

     

    MISCELLANEOUS

     

    4.1 Failure or Indulgence Not
Waiver.  No failure or delay on the part of the Holder hereof
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 privilege.  All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.

     

    4.2 Notices.  Any
notice herein required or permitted to be given shall be in writing and shall be
deemed effectively given:  (a) upon personal delivery to the party
notified, (b) when sent by confirmed telex or facsimile if sent during normal
business hours of the recipient, if not, then on the next business day, (c) five
days after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (d) one day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt.  All communications shall be sent to the
Borrower at the address provided in the Purchase Agreement executed in
connection herewith, with a copy to Pryor Cashman LLP, 410 Park Avenue, New
York, New York 10022, Attention: Eric M. Hellige, Esq., facsimile number (212)
798-6380 and to the Holder at the address provided in the Purchase Agreement for
such Holder, with a copy to Portfolio Services  335 Madison Avenue,
10th
Floor, New York, New York 10017, facsimile number (212) 541-4434, or at such
other address as the Borrower or the Holder may designate by ten days advance
written notice to the other parties hereto.

     

    4.3 Amendment
Provision.  The term “Note” and all reference thereto, as used
throughout this instrument, shall mean this instrument as originally executed,
or if later amended or supplemented, then as so amended or supplemented, and any
successor instrument issued, as it may be amended or supplemented.

     

    4.4 Assignability.  This
Note shall be binding upon the Borrower and its successors and assigns, and
shall inure to the benefit of the Holder and its successors and assigns, and may
be assigned by the Holder in full or in part at any time .  This Note
shall not be assigned by the Borrower without the consent of the
Holder.

     

    
      
        
        

      

      
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    4.5 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 Agreement shall be
brought only in the state courts of New York or in the federal courts located in
the State of New York.  Both parties and the individual signing this
Note on behalf of the Borrower agree to submit to the jurisdiction of such
courts.  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 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 this Note. Nothing contained herein shall be deemed or
operate to preclude the Holder from bringing suit or taking other legal action
against the Borrower in any other jurisdiction to collect on the Borrower’s
obligations to Holder, to realize on any collateral or any other security for
such obligations, or to enforce a judgment or other court in favor of the
Holder.

     

    4.6 Maximum
Payments.  Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law.  In the event that
the rate of interest required to be paid or other charges hereunder exceed the
maximum permitted by such law, any payments in excess of such maximum shall be
credited against amounts owed by the Borrower to the Holder and thus refunded to
the Borrower.

     

    4.7 Security Interest and
Guarantee.  The Holder and/or LV Administrative Services, Inc.,
as administrative and collateral agent, has been granted a security interest in
certain assets of the Borrower and its Subsidiaries, and the obligations of the
Borrower under this Note are guaranteed by certain Subsidiaries of the Borrower,
in each case, as more fully described in the Valens Purchase Agreements and
other Valens Related Agreements.

     

    4.8 Construction.  Each
party acknowledges that its legal counsel participated in the preparation of
this Note and, therefore, stipulates that the rule of construction that
ambiguities are to be resolved against the drafting party shall not be applied
in the interpretation of this Note to favor any party against the
other.

     

    4.9 Cost of
Collection.  If default is made in the payment of this Note,
the Borrower shall pay to Holder reasonable costs of collection, including
reasonable attorney’s fees.

     

    4.10 Business
Day.  If any day on which a payment is due is a Saturday,
Sunday or a day on which banking  institutions in New York City are
not required  to be open
for  business  (each,  a “Legal  Holiday”),
payment of any such amount may be made on the next  succeeding day
that is not a Legal Holiday.

     

     

     

    [Balance
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    IN WITNESS WHEREOF, the
Borrower has caused this Fourth Amended and Restated Note to be signed in its
name effective as of this 28th day of May 2008.

     

     

    PERVASIP
CORP. (f/k/a eLEC Communications Corp.)

     

    
    

    
      	 	By:
      /s/ Paul H.
      Riss
	
               
      

            	
              Name:
      Paul H. Riss

            


    

    
      	
               
      

            	
              Title:
      Chief Executive Officer:

            


    

     

    WITNESS:

     

    /s/ Lauri
Vertrees

     

    

      
        
           


        

        
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