Pervasip Corp (PVSP)

[Arthur]

Yes, your comprehension is pretty bad. Read the contracts.

Section 1. Conversion .

(a) Conversion Procedure .

(i) This Debenture shall be convertible into shares of Common Stock at the option of the Holder, in whole or in part at any time and from time to time, after the Effective Date (set forth above) (subject to the limitations on conversion set forth in Sections 1(b)and 1(c) hereof). The Debenture shall continue to be convertible on and after the Demand Date, until it is satisfied in full. The number of shares of Common Stock issuable upon a conversion hereunder equals the quotient obtained by dividing (x) the outstanding amount of this Debenture to be converted by (y) the Conversion Price (as defined in Section 1(c)(i) ). The Obligor shall deliver Common Stock certificates to the Holder prior to the Fifth (5 th ) Trading Day after a Conversion Date.

(ii) The Holder shall effect conversions by delivering to the Obligor a completed notice in the form attached hereto as Exhibit A (a “ Conversion Notice ”). The date on which a Conversion Notice is delivered is the “ Conversion Date .” Unless the Holder is converting the entire principal amount outstanding under this Debenture, the Holder is not required to physically surrender this Debenture to the Obligor in order to effect conversions. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture in an amount equal to the applicable conversion. The Holder and the Obligor shall maintain records showing the principal amount converted and the date of such conversions. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

(d) Other Restrictions.
(i) Obligor shall maintain a sufficient amount of authorized common shares to enable conversion of all amounts due under this Debenture.

(ii) Unless waived by the Obligor, Holder shall not sell Common Stock issued to Holder hereunder at a rate that exceeds 20% of the average monthly trading volume for Obligor’s Common Stock.

(iii) Notwithstanding anything to the contrary contained in this Debenture, the Obligor shall have the right, exercisable on not less than three (3) days prior written notice to the Holder of the Debenture to prepay the outstanding Debenture (principal, accrued interest, Post-Closing Expenses, and any liquidated damages), in full, in accordance with this Section 1(d). 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 Obligor is exercising its right to prepay the Debenture, and (2) the date of prepayment which shall be not more than three (3) days from the date of the Optional Prepayment Notice. On the date fixed for prepayment (the “ Optional Prepayment Date ”), the Obligor 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 Obligor at least one (1) business day prior to the Optional Prepayment Date. If the Obligor exercises its right to prepay the Debenture, the Obligor shall make payment to the Holder of an amount in cash (the “ Optional Prepayment Amount ”) equal to 130%, multiplied by the sum of the outstanding principal, accrued interest, Post-Closing Expenses, and any liquidated damages due hereunder. If the Obligor 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 Debenture pursuant to this Section 1(d).

EXHIBIT “A”

NOTICE OF CONVERSION

(To be executed by the Holder in order to convert the Debenture)

The undersigned hereby irrevocably elects to convert the below listed amount of the Debenture into Shares of Common Stock of PERVASIP CORP., according to the conditions stated therein, as of the Conversion Date written below.

Conversion Date:
Applicable Conversion Price:
Amount to be Converted: $
Amount of Debenture Unconverted: $
Shares of Common Stock to be Issued:
Please issue the shares of Common Stock in the following name and to the following address:
Issue to:
Authorized Signature:
Name:
Title:
Phone Number:
Broker DTC Participant Code:
Account Number:

Source: http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=9408084

So, the CD holder sends Pervasip a fax requesting a certain amount worth of shares, at a certain discount.
Riss has 3 days to deliver the shares, or the pay the amount in cash, plus a 30% cash penalty.

That's it.

You were stating that Riss delivered a given amount of shares each month. That is not so.