Exhibit
4.2


 


THE
ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS DEBENTURE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN
THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B)
AN OPINION OF COUNSEL (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.


 


PERVASIP
CORP.


 


SENIOR SECURED, CONVERTIBLE,
REDEEMABLE DEBENTURE


 


Dated
as of: June 30, 2015Principal Amount:
$100,000.00


Effective
Date: November 18, 2015


Maturity
Date: November 18, 2016


 


This
SENIOR SECURED, CONVERTIBLE REDEEMABLE DEBENTURE (the
“Debenture”) is
issued, dated as of
June 30, 2015 and effective
as of November [●], 2015 (the “Effective Date”),
by PERVASIP CORP., a corporation incorporated under the laws of the State of New York
(the “Company”), to TCA GLOBAL CREDIT MASTER FUND, LP,
a limited partnership organized and existing under the laws of the Cayman Islands (together
with its permitted successors and assigns,
the “Holder”) pursuant to exemptions from registration under
the Securities Act of 1933, as amended. This Debenture is issued in connection with that certain Securities Purchase Agreement,
dated as of the date hereof, by and between the Company and the Holder (the “Purchase Agreement”).
All capitalized terms used in this Debenture and not otherwise defined herein shall have the meanings assigned to them in the Purchase
Agreement.


 


ARTICLE
I


 


Section
1.01Principal and Interest. For value
received, the Company hereby promises to
pay to the order of the Holder, by no later than November [●], 2016 (the “Maturity
Date”), in immediately available and lawful money
of the United States of America, One Hundred Thousand and No/100 United States
Dollars ($100,000.00), together with
interest on the outstanding principal amount under this Debenture, at
the rate of eighteen percent (18%)
per annum simple interest
(the “Interest Rate”)
from the Effective Date, until paid, as more specifically provided below.


 


Section
1.02 Optional Redemption Prior to Maturity. The
Company, at its option, shall have the right to redeem this
Debenture in full and for cash, at any time prior to the Maturity Date, with three
(3) business days advance written
notice (the “Redemption Notice”)
to the Holder. The amount required to redeem
this Debenture in full pursuant to this Section 1.02 shall be equal to: (i) the aggregate principal
amount then outstanding under
this Debenture; plus all accrued and
unpaid interest due under this Debenture
as of the redemption date; plus
(ii) all other costs, fees and charges due and
payable hereunder or under any other
“Transaction Documents” (as hereinafter defined) (collectively, the “Redemption
Amount”). The Company shall deliver
the Redemption Amount to the Holder on the third (3rd) business day after the date
of the Redemption Notice.


 


Section
1.03 Mandatory Redemption at Maturity. On the
Maturity Date, the Company shall redeem this Debenture for the Redemption Amount,
which Redemption Amount shall be due and payable to the Holder by no later than 2:00
P.M., EST, on the Maturity Date.


 


Section
1.04Payments.


 


(1)    
Monthly Payments.
The Company shall make monthly payments of principal and interest
to the Holder, while this Debenture is outstanding, until the Maturity
Date, based on the payment and amortization
schedule attached hereto as Schedule A.
In the event such day is not a Business Day, then said payment shall be
due on the first Business
Day thereafter occurring. 


 


(2)      
Interest Calculations;
Payment Application.
Interest shall be calculated on the basis of a
360-day year, and shall accrue
daily on the outstanding principal
amount outstanding from time to time for the actual number of days
elapsed, commencing on the Effective
Date until payment in full of the outstanding
principal, together with all accrued and
unpaid interest and other amounts which may become due
hereunder or under any Transaction Documents,
has been made. All payments received and actually
collected by Holder hereunder shall be applied
first to any costs and expenses
due or incurred hereunder or under any other Transaction Documents, second to accrued
and unpaid interest hereunder, and last to reduce
the outstanding principal balance of this Debenture.


 


(3)     
Late Fee. If all
or any portion of the
payments of principal, interest or
other charges due hereunder are not received
by the Holder within five (5) days of
the date such payment is due, then the
Company shall pay to the Holder a late charge (in addition to any other remedies that
Holder may have) equal to five percent (5%) of each
such unpaid payment or sum. Any payments
returned to Holder for any reason
must be covered by wire transfer of immediately
available funds to an account designated
by Holder, plus a $100.00 administrative fee charge.
Holder shall have no responsibility or liability
for payments purportedly made hereunder but
not actually received by Holder; and the
Company shall not be discharged from the obligation
to make such payments due to
loss of same in the mails or due to any other excuse or justification ultimately
involving facts where such payments were not
actually received by Holder.


 


Section
1.05. Manner of Payments. All sums payable
to the order of Holder hereunder shall be payable by ACH
transfer of lawful dollars of the
United States of America to the ACH
instructions set forth below, or at such
place as Holder, from time to time, may designate in writing. ACH Instructions for
all sums due and payable hereunder are as follows: 


 


	Bank Name: 	Bank of America
	Bank Address: 	100 W. 33rd Street, New York, NY 10001
	Beneficiary Account Name: 	TCA Fund Mgmt Group
	Beneficiary Account Number: 	898052439174
	ACH Transfer/Routing Number: 	063100277
	SWIFT: 	BOFAUS3N


 


ARTICLE
II


 


Section
2.01Secured Nature of Debenture. This
Debenture is being issued
in connection with the Purchase Agreement. The indebtedness evidenced by this
Debenture is secured by all of the
assets and property of the Company and various other instruments and documents
referred to in the Purchase Agreement as
the “Transaction Documents”.
All of the agreements, conditions, covenants,
provisions, representations, warranties
and stipulations contained in any of the Transaction
Documents which are to be kept and performed by
the Company are hereby made a part of this
Debenture to the same extent and with the same force and effect as if
they were fully set forth herein, and the Company
covenants and agrees to keep and perform them, or cause them to be kept or performed, strictly in accordance with
their terms.


 


ARTICLE
III


 


Section
3.01Events of Default. The occurrence
of any of the following
events shall constitute an “Event of Default”
hereunder: (i) the Company shall fail to pay any interest,
principal or other charges due under
this Debenture or any other
Transaction Documents on the date when any such payment
shall be due and payable; (ii) the Company makes an
assignment for the benefit of creditors; (iii) any order or decree is rendered
by a court which appoints or requires the appointment of a
receiver, liquidator or trustee for the
Company, and the order or decree is not vacated within thirty (30)
days from the date of entry thereof;
(iv) any order or decree is rendered by
a court adjudicating the
Company insolvent, and the order or decree is not vacated within thirty
(30) days from the date of entry thereof;
(v) the Company files a petition in bankruptcy under the provisions of any bankruptcy
law or any insolvency act; (vi) the Company admits, in writing, its inability to
pay its debts as they become due; (vii) a proceeding or
petition in bankruptcy is filed against
the Company and such proceeding
or petition is not dismissed within thirty
(30) days from the date it is filed; (viii) the Company files a petition
or answer seeking reorganization or arrangement under the bankruptcy laws
or any law or statute of
the United States or any other
foreign country or state; (ix) any
written warranty, representation, certificate or statement of the Company and/or Guarantors in this Debenture, the Purchase Agreement
or any other Transaction Document or any other agreement with Holder shall be false or misleading in any material respect when
made or deemed made; and (x) the
Company shall fail to perform, comply with or abide by any
of the stipulations, agreements, conditions and/or covenants contained in this
Debenture, the Purchase Agreement or any of the other Transaction
Documents on the part of the Company to be performed complied with or abided by, and
such failure continues or remains uncured for ten
(10) days following written notice from the Holder
to the Company.


 


Section
3.02Remedies. Upon the occurrence
of an Event of
Default that is not timely cured within
an applicable cure period hereunder,
the interest on this
Debenture shall immediately accrue at an interest rate equal
to the greater of twenty-two percent (22%) per annum or the maximum interest rate allowable by law, and,
in addition to all other rights or remedies the Holder
may have, at law or in equity,
the Holder may, in its sole discretion,
accelerate full repayment of all principal amounts outstanding hereunder,
together with accrued interest thereon, together
with all attorneys’ fees, paralegals’ fees and costs and expenses
incurred by the Holder in collecting or
enforcing payment hereof (whether such fees, costs or expenses are incurred
in negotiations, all trial and appellate levels, administrative
proceedings, bankruptcy proceedings or otherwise), and together with
all other sums due by the Company hereunder
and under the Transaction Documents, all
without any relief whatsoever from any valuation
or appraisement laws, and payment thereof may be enforced
and recovered in
whole or in part at any time by one
or more of the remedies provided
to the Holder at law, in equity, or
under this Debenture or any of the other Transaction Documents. In connection with the Holder’s rights hereunder upon
an Event of Default, the Holder
need not provide, and the Company hereby waives, any presentment, demand, protest
or other notice of any
kind, and the Holder may immediately enforce any and
all of its rights and remedies hereunder and all other remedies available to
it in equity or under applicable law.


 


ARTICLE IV


 


Section
4.01 Usury Savings Clause. Notwithstanding any
provision in this Debenture or the other Transaction Documents to the
contrary, the total liability for payments of interest and payments in the nature
of interest, including, without
limitation, all charges, fees, exactions, or other sums which may at any time
be deemed to be interest, shall not exceed the limit imposed by the usury
laws of the jurisdiction governing this Debenture or any other applicable
law. In the event the total liability of payments of interest and payments in the nature of interest, including, without
limitation, all charges, fees, exactions
or other sums which may at any time be deemed
to be interest, shall, for any reason whatsoever,
result in an
effective rate of interest, which for any month or other interest payment period
exceeds the limit imposed by the usury
laws of the jurisdiction governing this Debenture, all sums in excess of those
lawfully collectible as interest for the period in question shall, without
further agreement or notice by, between, or to any party hereto, be applied
to the reduction of the outstanding
principal balance due hereunder immediately
upon receipt of such sums by the Holder hereof, with the same
force and effect as though the Company had specifically designated such excess
sums to be so applied to the reduction of the principal balance
then outstanding, and
the Holder hereof had agreed to accept
such sums as a penalty-free payment of
principal; provided, however, that the Holder may, at any time and from time to time,
elect, by notice in writing to the Company,
to waive, reduce, or limit the collection
of any sums in excess of those lawfully collectible
as interest, rather than
accept such sums as a prepayment of the principal balance
then outstanding. It is the intention of
the parties that the Company does not intend
or expect to pay, nor does the Holder
intend or expect to charge or collect any
interest under this Debenture greater
than the highest non-usurious rate of interest
which may be charged under applicable law.


 


ARTICLE V


 


Section
5.01No Exemption. The Company hereby waives and
releases all benefit that might accrue to the Company by virtue of any present
or future laws exempting any property that may serve
as security for
this Debenture, or any other property,
real or personal, or any part of the proceeds
arising from any sale of
any such property, from attachment, levy,
or sale under execution, exemption from civil process, or
extension of time for payment; and
the Company agrees that any property that may
be levied upon pursuant to a judgment obtained by virtue hereof, on any
writ of execution issued thereon, may
be sold upon any such writ in whole or in part in any order or manner desired by Holder.


 


Section
5.02 Exercise of Remedies.
The remedies of the Holder as
provided herein and in any of the other Transaction Documents shall be
cumulative and concurrent and may
be pursued singly, successively or together, at the sole discretion of the Holder,
and may be exercised as often as occasion therefor
shall occur; and the failure to exercise any such right
or remedy shall in no event be construed as a waiver or release thereof.


 


Section
5.03 Waivers.
The Company and all others who are, or may become liable
for the payment hereof: (i) severally waive
presentment for payment, demand, notice of nonpayment or dishonor,
protest and notice of protest of
this Debenture or any other Transaction Documents,
and all other notices in connection
with the delivery, acceptance, performance, default, or enforcement
of the payment of this Debenture
and the other Transaction Documents, except as specifically
provided in this Debenture or any other Transaction Document;
(ii) expressly consent to all extensions of time, renewals or postponements of
time of payment of this Debenture and any other Transaction
Documents from time to time prior to or after the maturity of this
Debenture without notice, consent or further consideration to any
of the foregoing; (iii) expressly agree
that the Holder shall not be
required first to institute any suit, or to exhaust its remedies against the
Company or any other person or party
to become liable hereunder or against any collateral that may
secure this Debenture in order to enforce
the payment of this Debenture; and (iv) expressly agree that,
notwithstanding the occurrence of any of the foregoing (except
the express written release by the Holder
of any such person), the undersigned shall
be and remain, directly and primarily liable for
all sums due under this Debenture.


 


Section
5.04 No Waiver. Holder shall not be
deemed, by any act of omission or commission, to
have waived any of its rights or remedies hereunder unless such
waiver is in writing and
signed by Holder, and then only to
the extent specifically set forth in the
writing. A waiver on one event shall not
be construed as continuing or as a bar to or
waiver of any right or remedy to a subsequent
event.


 


ARTICLE
VI


 


Section
6.01 Notice. Any notices, consents,
waivers, or other communications required or permitted to be given under
the terms of this Debenture must be in
writing and in each case properly addressed to the party to receive the same in accordance
with the information below, and will be deemed to have been delivered: (i)
if mailed by certified mail, return receipt requested, postage prepaid and properly
addressed to the address below, then
three (3) business days after
deposit of same in a regularly
maintained U.S. Mail receptacle; or (ii) if
mailed by Federal Express, UPS
or other nationally recognized overnight courier service, next business morning
delivery, then one (1) business day after deposit of same in a
regularly maintained receptacle of such overnight courier; or (iii) if hand
delivered, then upon hand delivery thereof
to the address indicated on or
prior to 5:00 p.m ., EST,
on a business day. Any notice hand delivered after 5:00 p.m., EST,
shall be deemed delivered on the
following business day. Notwithstanding the foregoing, notice, consents, waivers or
other communications referred to in this
Debenture may be sent by facsimile, e-mail, or other method of delivery, but shall
be deemed to have been delivered only when
the sending party has
confirmed (by reply e-mail or some other form of
written confirmation from the receiving party) that the notice has been received
by the other party. The addresses and facsimile numbers for such communications
shall be as set forth below, unless such
address or information is changed
by a notice conforming to the requirements hereof.


 





	If to the Company:	Pervasip Corp.
	 	430 North Street
	White Plains, NY 10605	 
	Attention:  Paul H. Riss	 
	 	E-Mail: phriss@canalytix.com
	 	 
	With a copy to:	Kevin Kreisler, Esq. 
	(which shall not constitute notice)	5950 Shiloh Road East, Suite N 
	 	Alpharetta, GA 33305
	 	E-Mail: kkreisler@gmail.com
	 	 
	If to the Holder:	TCA Global Credit Master Fund, LP
	 	3960 Howard Hughes Parkway, Suite 500
	 	Las Vegas, NV 89196
	 	Attn: Mr. Robert Press
	 	E-Mail:  bpress@tcaglobalfund.com
	 	 
	With a copy to:	Lucosky Brookman LLP
	(which shall not constitute notice)	101 Wood Avenue South, 5th Floor 
	 	Woodbridge, NJ 08830
	 	Attn: Seth A. Brookman, Esq.
	 	E-Mail:  sbrookman@lucbro.com







 





Section
6.02 Governing Law and Venue.
The Company and Holder each
irrevocably agrees that any dispute arising under, relating to, or in connection with, directly
or indirectly, this Debenture or related
to any matter which is the subject of or incidental to this Debenture (whether
or not such claim is based upon breach of contract or tort) shall be subject to the
exclusive jurisdiction and venue of the state and/or federal courts located in Broward County, Florida. This provision is intended
to be a “mandatory” forum selection clause and governed by and interpreted
consistent with Florida law. The Company and
Holder each hereby consents to the exclusive jurisdiction
and venue of any state or
federal court having its situs in said county,
and each waives any objection based on forum non conveniens. The Company hereby
waives personal service of any and all process and
consent that all such service of process may be made by certified mail, return receipt requested, directed
to the Company, as set forth herein
in the manner provided by
applicable statute, law, rule of court
or otherwise. Except for the
foregoing mandatory forum selection clause, all terms
and provisions hereof and the rights and
obligations of the Company and
Holder hereunder shall be governed, construed and interpreted in accordance with the
laws of the State of Nevada, without reference to conflict of
laws principles.


 


Section 6.03 Severability.
In the event any one or more of the provisions of this Debenture shall for any reason be held to be invalid, illegal, or unenforceable,
in whole or in part, in any respect, or in the event that any one or more of the provisions of this Debenture operates or would
prospectively operate to invalidate this Debenture, then and in any of those events, only such provision or provisions shall be
deemed null and void and shall not affect any other provision of this Debenture. The remaining provisions of this Debenture shall
remain operative and in full force and effect and shall in no way be affected, prejudiced, or disturbed thereby.


 


Section 6.04 Entire
Agreement and Amendments. This Debenture, together with the other Transaction Documents represents the entire agreement between
the parties hereto with respect to the subject matter hereof and thereof, and there are no representations, warranties or commitments,
except as set forth herein and therein. This Debenture may be amended only by an instrument in writing executed by the parties
hereto.


 


Section 6.05 Binding
Effect. This Debenture shall be binding upon the Company and the successors and assigns of the Company and shall inure to the
benefit of the Holder and the successors and assigns of the Holder.


 


Section 6.06 Assignment.
The Holder may from time to time sell or assign, in whole or in part, or grant participations in, this Debenture and/or the obligations
evidenced hereby without the consent of the Company. The holder of any such sale, assignment or participation, if the applicable
agreement between Holder and such holder so provides, shall be: (i) entitled to all of the rights obligations and benefits of Holder
(to the extent of such holder’s interest or pa1ticipation); and (ii) deemed to hold and may exercise the rights of setoff
or banker’s lien with respect to any and all obligations of such holder to the Company (to the extent of such holder s interest
or participation), in each case as fully as though the Company was directly indebted to such holder. Holder may in its discretion
give notice to the Company of such sale, assignment or participation; however, the failure to give such notice shall not affect
any of Holder’s or such holder’s rights hereunder.


 


Section 6.07Lost
or Mutilated Debenture. If this Debenture shall be mutilated, lost, stolen or destroyed the Company shall execute and deliver,
in exchange and substitution for and upon cancellation of a mutilated Debenture or in lieu of or in substitution for a lost, stolen
or destroyed Debenture a new Debenture for the principal amount of this Debenture so mutilated, lost stolen or destroyed, but only
upon receipt of evidence of such loss, theft or destruction of such Debenture, and of the ownership hereof, reasonably satisfactory
to the Company.


 


Section
6.08 WAIVER OF JURY TRIAL. THE COMPANY
HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY WAIVES ALL RIGHT
TO A TRIAL BY JURY WITH RESPECT TO ANY
LITIGATION BASED ON THIS DEBENTURE, OR ARISING OUT
OF, UNDER OR IN CONNECTION WITH, THIS DEBENTURE OR ANY OTHER TRANSACTION DOCUMENTS,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF OR BETWEEN ANY PARTY HERETO, AND
THE COMPANY AGREES AND CONSENTS TO THE
GRANTING TO HOLDER OF RELIEF FROM ANY STAY ORDER
WHICH MIGHT BE ENTERED BY ANY COURT AGAINST HOLDER AND TO ASSIST HOLDER
IN OBTAINING SUCH RELIEF. THIS PROVISION IS A MATERIAL INDUCEMENT FOR HOLDER ACCEPTING THIS DEBENTURE FROM THE COMPANY. THE COMPANY’S
REASONABLE RELIANCE UPON SUCH INDUCEMENT I HEREBY ACKNOWLEDGED.


 


Section
6.09 NON-US STATUS. THE HOLDER IS A NON-US PERSON AS THAT TERM IS DEFINED
IN THE UNITED STATES INTERNAL REVENUE
CODE. IT IS HEREBY AGREED AND UNDERSTOOD THAT THE OBLIGATIONS
HEREUNDER MAY BE SOLD ONLY TO NON-U.S.
PERSON. THE INTEREST PAYABLE HEREUNDER IS PAYABLE ONLY OUTSIDE THE UNITED
STATES. ANY U.S. PERSON WHO HOLDS THIS OBLIGATION WILL
BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES
INCOME TAX LAW. BY ACCEPTING THIS OBLIGATION, THE HOLDER REPRESENTS AND WARRANT THAT IT IS NOT A UNITED
STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SEC 6049(8)(4)
OF THE INTERNAL REVENUE CODE AND REGULATIONS THEREUNDER) AND THAT IT IS NOT ACTING FOR OR ON BEHALF
OF A UNITED STATE PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED
IN SEC. 6049(B)(4) OF THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER).


 


ARTICLE
VII


 


Section
7.01 Conversion of Debenture. At any
time and from time to time while this Debenture
is outstanding on or after the Closing Date, at the sole option of the Holder upon the
occurrence of an Event of
Default, this Debenture
may be, convertible into
shares of the
Company’s common stock, $0.00001 par
value per
share (the “Common
Stock”) in accordance
with the terms and conditions set forth in
this Article VII.


 


(1)                  
Voluntary Conversion.
At any time while this Debenture
is outstanding on or after the Closing Date, at the sole option of the Holder upon
the occurrence of an
Event of Default, the
Holder may convert all
or any portion of the outstanding principal
accrued and unpaid interest and
any other sums due and payable hereunder
or under any of the
other Transaction Documents (such
total amount, the “Conversion Amount”)
into shares of Common Stock of the Company
(the “Conversion Shares”) at a price
equal to: (i) the
Conversion Amount (the numerator);
divided by
(ii) eighty-five percent (85%) of the lowest of the average daily
volume weighted average price of the
Company’s Common Stock
during the five
(5) trading days immediately prior to the
Conversion Date (as
defined
below), as indicated
in the conversion notice
(in the form attached hereto as
Exhibit “B” the “Conversion
Notice”) (the denominator)
(the “Conversion Price”).
The Holder shall
submit a Conversion
Notice indicating
the amount of the Debenture
being converted and the number of
Conversion Shares issuable upon such conversion, and where
the Conversion Shares should be
delivered.


 


(2)                 
The Holder’s Conversion
Limitations.
The Company shall not
affect any conversion of this Debenture, and
the Holder shall
not have the right to convert any portion
of this Debenture, to the extent that after giving
effect to the conversion set forth
on the Conversion Notice submitted by the Holder, the Holder (together
with the Holder’s affiliates (as
defined herein) and any Persons
acting as a group together with the Holder or any of the Holder’s affiliates)
would beneficially own
in excess of the Beneficial Ownership Limitation
(as defined herein). To ensure compliance with this restriction, prior to delivery
of any Conversion Notice, the Holder shall have the right to request that the
Company provide to the Holder a
written statement of the percentage ownership of the
Company’s Common Stock that would
by beneficially owned by the Holder
and its affiliates in the Company if the Holder
converted such portion of this Debenture then intended to be converted by Holder.
The Company shall, within two (2) business days of such request, provide Holder
with the requested information in
a written statement, and the Holder shall be entitled
to rely on such written statement from the Company in issuing its Conversion Notice
and ensuring that its ownership of the Company’s
Common Stock is not in excess of the Beneficial
Ownership Limitation. The restriction described in this Section may be waived
by Holder, in whole or in part, upon notice
from the Holder to the Company. For purposes of
this Debenture, the “Beneficial Ownership Limitation” shall be
4.99% of the number of shares of Common Stock outstanding immediately after giving effect
to the issuance of shares of
Common Stock issuable upon conversion of this Debenture. The limitations contained
in this Section shall apply to any successor holder of this Debenture. For purposes
of this Debenture, “Person” means an individual, a
limited liability company, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization
or a government or any department or agency thereof.


 


(3)                  
Mechanics of Conversion.The conversion
of this Debenture shall be conducted in the following manner:


 


(a)              
Holder’s Delivery Requirements.
To convert this Debenture into shares of Common Stock on any date set forth in the
Conversion Notice by the Holder (the “Conversion Date”), the
Holder shall transmit by facsimile or electronic mail (or otherwise deliver) a copy
of the fully executed Conversion Notice to the
Company (or, under certain circumstances as set forth below, by delivery of
the Conversion Notice to the Company’s transfer agent).


 


(b)             
Company’s Response. Upon receipt
by the Company of a copy of a Conversion
Notice, the Company shall as soon as practicable, but in no event later than two (2) Business Days after receipt
of such Conversion Notice, send, via facsimile or electronic mail (or otherwise
deliver) a confirmation of receipt of such Conversion Notice
(the “Conversion Confirmation”)
to the Holder indicating
that the Company will process such Conversion
Notice in accordance with the terms herein. In the
event the Company fails to issue its Conversion Confirmation within said two (2)
Business Day time period, the Holder
shall have the absolute and irrevocable right and authority to deliver the fully
executed Conversion Notice to the Company’s transfer agent, and pursuant
to the terms of the Purchase Agreement,
the Company’s transfer agent shall issue the applicable
Conversion Shares to Holder as hereby provided.
Within five (5) Business Days after the date of the Conversion Confirmation (or
the date of the Conversion Notice, if the Company fails to issue the Conversion Confirmation), provided that the Company’s
transfer agent is participating in the Depository
Trust Company (“DTC”) Fast Automated Securities Transfer
(“FAST”) program, the
Company shall cause the transfer agent to (or, if
for any reason the Company fails to instruct or cause its transfer agent to
so act, then pursuant to the Purchase Agreement,
the Holder may request and require the Company’s transfer agent to) electronically
transmit the applicable Conversion Shares
to which the Holder shall be entitled
by crediting the account of
the Holder’s prime broker with DTC through its Deposit Withdrawal Agent Commission
(“DWAC”) system, and provide
proof satisfactory to the Holder
of such delivery. In the event that
the Company’s transfer agent is not participating
in the DTC FAST program and is not otherwise
DWAC eligible (or in the event the Holder otherwise requests),
within five (5) Business Days
after the date of the Conversion Confirmation (or the date
of the Conversion Notice, if
the Company fails to issue the Conversion
Confirmation), the Company shall instruct and cause its transfer agent to (or, if
for any reason the Company fails to instruct or cause its transfer agent
to so act, then pursuant to the Purchase
Agreement, the Holder may request and require the Company’s transfer agent to)
issue and surrender to a nationally recognized overnight
courier for delivery to the address specified in the Conversion Notice, a certificate,
registered in the name of the Holder or
its nominee, for the number of Conversion
Shares to which the Holder shall be entitled.
To effect conversions hereunder, the Holder shall not be required to physically surrender
this Debenture to the Company unless the entire
principal amount of this Debenture, plus all accrued and
unpaid interest thereon and other sums due hereunder, has been so converted.
Conversions hereunder shall have the effect of lowering the outstanding principal
amount of this Debenture in an amount equal to
the applicable Conversion Amount. The
Holder and the Company shall maintain records showing the principal amount(s) converted
and the date of such conversion(s). The Holder, and any
assignee by acceptance of this
Debenture, acknowledge and agree that, by reason of the provisions of this
paragraph, following conversion of a portion of
this Debenture, the unpaid and unconverted principal amount of this Debenture may be
less than the amount stated on the
face hereof.


 


(c)               
Record Holder.
The Person(s) entitled to receive
the shares of Common Stock issuable upon
a conversion of this Debenture shall be treated for all purposes
as the record holder(s) of such shares of Common Stock as
of the Conversion Date.


 


(d)                 
Failure to Deliver Certificates. If in the case of any Conversion Notice, the certificate
or certificates are not delivered to or as directed by the Holder by the date required hereby, the Holder shall be entitled to
elect by written notice to the Company at any time on or before its receipt of such certificate or certificates, to rescind such
Conversion Notice, in which event the Company shall promptly return to the Holder any original Debenture delivered to the Company
and the Holder shall promptly return to the Company the Common Stock certificates representing the principal amount of this Debenture
unsuccessfully tendered for conversion to the Company.


 


(e)               
Obligation Absolute; Partial
Liquidated Damages. The Company’s
obligations to issue and deliver the Conversion
Shares upon conversion of this Debenture in accordance
with the terms hereof are absolute
and unconditional, irrespective
of any action
or inaction by the Holder to enforce the
same, any waiver or consent with respect to any provision hereof, the recovery
of any judgment against any person or entity
or any action to
enforce the same, or any setoff, counterclaim, recoupment, limitation or termination,
or any breach or alleged breach by the Holder
or any other person or entity of any obligation to the
Company or any violation or alleged violation
of law by the Holder or any other
person or entity, and irrespective of any other circumstance which might otherwise limit such obligation of the Company
to the Holder in connection with the issuance of such Conversion Shares; provided,
however, that such delivery shall not
operate as a waiver by the Company
of any such action the Company may have against
the Holder . In
the event
the Holder of this Debenture shall elect to
convert any or all of the outstanding principal amount hereof and accrued but unpaid interest thereon in accordance with
the terms of this Debenture, the Company may not refuse conversion based on any claim that the Holder or anyone associated or affiliated
with the Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court,
on notice to Holder, restraining and or enjoining conversion of all or part of this Debenture shall have been sought and obtained,
and the Company posts a surety bond for the benefit of the Holder in the amount of 150% of the outstanding principal amount of
this Debenture being converted, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation
of the underlying dispute and the proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the absence
of such injunction, the Company shall issue Conversion Shares upon a properly noticed conversion. If the Company fails for any
reason to deliver to the Holder such certificate or certificates representing Conversion Shares pursuant to timing and delivery
requirements of this Debenture, the Company shall pay to such Holder, in cash, as liquidated damages and not as a penalty, for
each $1,000 of principal amount being converted, $1.00 per day for each day after the date by which such certificates should have
been delivered until such certificates are delivered. Nothing herein shall limit a Holder’s right to pursue actual damages
or declare an Event of Default pursuant to this Debenture or any agreement securing the indebtedness under this Debenture for the
Company’s failure to deliver Conversion Shares within the period specified herein and such Holder shall have the right to
pursue all remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance
and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant
to any other Section hereof or under applicable law. Nothing herein shall prevent the Holder from having the Conversion Shares
issued directly by the Company’s transfer agent in accordance with the Purchase Agreement, in the event for any reason the
Company fails to issue or deliver, or cause its transfer agent to issue and deliver, the Conversion Shares to the Holder upon exercise
of Holder’s conversion rights hereunder.


 


(f)          
Transfer Taxes. The issuance
of certificates for shares of the
Common Stock on conversion of this Debenture shall be
made without charge to the Holder hereof for any documentary stamp
or similar taxes, or any other
issuance or transfer fees of any nature
or kind that may be payable in respect
of the issue or delivery of such certificates, any such taxes or fees, if payable,
to be paid by the Company.


 


(4)                
Reservation of Common Stock. Beginning
on the ninetieth (90th) day following the First Closing Date, the he Company shall take all action necessary to at all
times have authorized, and reserved for the purpose of issuance, three (3) times such number of shares of Common Stock as shall
be necessary to effect the full conversion of the Debenture in accordance with its terms (the “Share Reserve”). 
If upon receipt of a conversion notice from the Holder, the Share Reserve is insufficient to effect the full conversion of the
Debenture then outstanding, the Company shall increase the Share Reserve accordingly.  If the Company does not have sufficient
authorized and unissued shares of Common Stock available to increase the Share Reserve, the Company shall cause its authorized
and unissued shares to be increased within forty-five (45) days to an amount of shares equal to three (3) times the Conversion
Shares. The Company’s management shall recommend to the shareholders to vote in favor of increasing the number of shares
of Common Stock authorized.


 


(5)                
Make-Whole Rights.
Upon liquidation by the Holder
of Conversion Shares issued pursuant
to a Conversion Notice, provided that the Holder realizes a net amount from
such liquidation equal to less than
the Conversion Amount specified in the relevant Conversion
Notice (such net realized amount, the “Realized
Amount”), the Company shall issue to the
Holder additional shares of the
Company’s Common Stock equal to:
(i) the Conversion
Amount specified in the relevant Conversion
Notice; minus (ii) the Realized Amount, as evidenced
by a reconciliation statement from the
Holder (a “Sale Reconciliation”) showing
the Realized Amount from the sale of
the Conversion Shares; divided by (iii) the
average volume weighted average price
of the Company’s
Common Stock during the five (5)
Business Days immediately prior to
the date upon which the Holder delivers
notice (the “Make-Whole Notice”) to the Company that such additional
shares are requested by the Holder (the “Make-Whole Stock Price”)
(such number of additional shares to be
issued, the “Make-Whole Shares”). Upon receiving
the Make-Whole Notice and Sale Reconciliation evidencing
the number of Make-Whole Shares requested,
the Company shall instruct its transfer agent to issue certificates representing the Make-Whole Shares, which
Make-Whole Shares shall be
issued and delivered in the same
manner and within the
same time frames as set forth herein. The Make-Whole
Shares, when issued, shall be deemed to be validly issued,
fully paid, and non-assessable shares of the Company’s Common Stock. Following
the sale of the Make-Whole Shares by
the Holder: (i) in the event that the Holder receives
net proceeds from such sale which, when added to
the Realized Amount from the prior relevant
Conversion Notice, is less than the Conversion Amount specified in the relevant Conversion
Notice, the Holder shall deliver an additional Make-Whole
Notice to the Company following the procedures
provided previously in this paragraph, and such procedures and
the delivery of Make-Whole Notices and issuance of Make-Whole Shares shall continue
until the Conversion Amount has been fully satisfied;
and (ii) in the event that
the Holder received net proceeds
from the sale of Make-Whole Shares
in excess of the Conversion Amount specified in the relevant Conversion Notice,
such excess amount shall be applied to satisfy
any and all amounts owed hereunder in excess
of the Conversion Amount specified in
the relevant Conversion Notice. Holder agrees to sell a maximum of twenty-five
percent (25%) of the average daily trading volume of the Company’s Common Stock and reports sales to the company on a weekly
basis upon request of the Company.


 


(6)                
Adjustments to Conversion Price.


 


(a)               
Stock Dividends and Stock
Splits. If the Company, at any time while this
Debenture is outstanding: (i) pays a
stock dividend or otherwise makes a distribution or distributions payable in shares
of Common Stock on outstanding shares of
Common Stock, (ii) subdivides outstanding
shares of Common Stock into a larger number of shares, (iii)
combines (including by way of a reverse stock split) outstanding
shares of Common Stock into
a smaller number of shares, or (iv)
issues, in the event of a reclassification of shares of Common Stock, any shares of
capital stock of the Company, then the
Conversion Price shall be multiplied by a fraction, the numerator of which shall
be the number of shares of Common Stock (excluding
any treasury shares of the Company) outstanding immediately before such event, and
the denominator of which shall be the number of shares of Common Stock
outstanding immediately after such event. Any
adjustment made pursuant to this Section shall become effective immediately after
the record date for the determination of stockholders entitled to
receive such dividend or distribution and shall
become effective immediately after the
effective date in the case of a subdivision, combination, or re-classification.


 


(b)              
Fundamental Transaction.
If, at any time while this Debenture is
outstanding: (i) the Company effects any merger or consolidation of the Company with
or into another Person that is not a subsidiary of the Company, (ii) the
Company effects any sale of all or substantially all of
its assets in one transaction or
a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company
or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange
their shares for other securities, cash
or property, or (iv) the Company effects
any reclassification of the Common Stock or any compulsory share exchange pursuant to which
the Common Stock is effectively converted into
or exchanged for other securities, cash or property
(in any such case, a “Fundamental Transaction”), then
upon any subsequent conversion of this Debenture,
the Holder shall have the right to receive, for each Conversion Share that would
have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the
same kind and amount of securities, cash or property as it
would have been entitled to receive upon the
occurrence of such Fundamental Transaction if
it had been, immediately prior to such Fundamental Transaction, the holder
of one (1) share of Common Stock (the “Alternate Consideration”).
For purposes of any such conversion,
the determination of the Conversion Price shall be appropriately adjusted to apply
to such Alternate Consideration based
on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock
in such Fundamental Transaction, and the Company shall apportion the Conversion
Price among the Alternate Consideration
in a reasonable manner reflecting the relative value
of any different components of the Alternate Consideration.
If holders of Common Stock are given
any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be
given the same choice as to the Alternate
Consideration it receives upon any conversion of this Debenture following such Fundamental Transaction. To the extent necessary
to effectuate the foregoing provisions, any successor to
the Company or surviving entity
in such Fundamental Transaction
shall issue to the Holder a new note
consistent with the foregoing provisions and evidencing the
Holder’s right to convert such note into Alternate Consideration.
The terms of any agreement pursuant to
which a Fundamental Transaction is effected shall include terms requiring
any such successor or surviving entity to comply with the provisions of this
Section and insuring that this Debenture (or any such
replacement security) will be similarly adjusted upon any
subsequent transaction analogous to a Fundamental Transaction.


 


(c)               
Adjustment to Conversion Price.
Whenever the Conversion Price is adjusted pursuant
to any provision of this Debenture, the Company shall promptly deliver to Holder a notice
setting forth the Conversion Price after
such adjustment and setting forth a brief statement
of the facts requiring such adjustment.


 


(d)              
Notice to Allow Conversion by Holder.
If (A) the Company shall declare a
dividend (or any other distribution in whatever
form) on the Common Stock, (B) the Company shall declare
a special nonrecurring cash dividend on
or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock of rights or
warrants to subscribe for
or purchase any shares of capital stock of
any class or of any rights, (D) the approval
of any stockholders of the Company shall be required
in connection with any reclassification of the Common Stock, any consolidation
or merger to which the Company is a party, any sale or transfer of
all or substantially all of the assets of the Company,
of any compulsory share exchange
whereby the Common Stock is converted into
other securities, cash or property, or (E) the Company shall
authorize the voluntary or involuntary dissolution, liquidation or winding up
of the affairs of the Company, then, in each case, the
Company shall cause to be filed at each office or agency maintained
for the purpose of conversion of this Debenture, and shall cause to be delivered
to the Holder at its last address as it
shall appear upon the Company’s records, at least twenty (20) calendar
days prior to the applicable record or effective
date hereinafter specified, a notice stating: (x) the date on which a record
is to be taken for the purpose of such dividend, distribution, redemption,
rights or warrants, or if a record
is not to be taken, the date as of
which the holders of the Common Stock of
record to be entitled to such dividend,
distributions, redemption, rights or warrants are to
be determined, or
(y) the date on which such reclassification,
consolidation, merger, sale, transfer or share
exchange is expected to become
effective or close, and the date
as of which it is expected that holders
of the Common Stock of record shall be entitled to exchange their
shares of the Common Stock for securities, cash
or other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected
that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash
or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that
the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate
action required to be specified in such notice. The Holder is entitled to convert this Debenture during the 10-day period commencing
on the date of such notice through the effective date of the event triggering such notice.


[signature
page follows]



     

     

    

 


 


IN
WITNESS WHEREOF with the
intent to be legally bound hereby, the
Company as executed this Senior Secured,
Convertible, Redeemable Debenture as of the date
first written above.


 


PERVASIP CORP.


 


 


 


By: ______/s/ Paul H. Riss


Name: Paul H. Riss


Title: Chief Executive Officer