<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>v041178_ex99-1.txt
<TEXT>

                                                           Dated: April 19, 2006

      NEITHER THIS  DEBENTURE NOR THE  SECURITIES  INTO WHICH THIS  DEBENTURE IS
      CONVERTIBLE   HAVE  BEEN  REGISTERED  WITH  THE  SECURITIES  AND  EXCHANGE
      COMMISSION OR THE  SECURITIES  COMMISSION OF ANY STATE IN RELIANCE UPON AN
      EXEMPTION FROM  REGISTRATION  UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE  "SECURITIES  ACT"),  AND,  ACCORDINGLY,  MAY NOT BE  OFFERED OR SOLD
      EXCEPT  PURSUANT  TO  AN  EFFECTIVE   REGISTRATION   STATEMENT  UNDER  THE
      SECURITIES  ACT  OR  PURSUANT  TO AN  AVAILABLE  EXEMPTION  FROM,  OR IN A
      TRANSACTION  NOT  SUBJECT  TO,  THE   REGISTRATION   REQUIREMENTS  OF  THE
      SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

NO. CD-N3                                                               $100,000


                            NETFABRIC HOLDINGS, INC.

                              CONVERTIBLE DEBENTURE

                                  JUNE 17, 2006

      This  Convertible  Debenture  (the  "Debenture")  is issued  by  NETFABRIC
HOLDINGS, INC., a Delaware corporation (the "Obligor"), to (the "Holder").

      FOR VALUE  RECEIVED,  the Obligor hereby  promises to pay to the Holder or
its  successors  and assigns the principal sum of One Hundred  Thousand  Dollars
($100,000), together with accrued but unpaid interest on or before June 17, 2006
(the "Maturity Date") in accordance with the following terms:

      Interest.  Interest  shall  accrue on the  outstanding  principal  balance
hereof at an annual rate equal to 8%.  Interest shall be calculated on the basis
of a 360-day year and the actual number of days elapsed, to the extent permitted
by applicable law. Interest hereunder will be paid to the Holder or its assignee
(as  defined in Section 4) in whose name this  Debenture  is  registered  on the
records of the Obligor  regarding  registration and transfers of Debentures (the
"Debenture Register"). Interest shall be payable at Maturity.

      This Debenture is subject to the following additional provisions:

      Section 1. Events of Default.


      (a) An "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):

<PAGE>

            (i) Any default in the payment of the principal  of,  interest on or
other charges in respect of this Debenture,  free of any claim of subordination,
as and when the same shall become due and payable;

            (ii) The Obligor or any subsidiary of the Obligor shall commence, or
there shall be commenced  against the Obligor or any  subsidiary  of the Obligor
under any applicable bankruptcy or insolvency laws as now or hereafter in effect
or any  successor  thereto,  or the  Obligor or any  subsidiary  of the  Obligor
commences any other proceeding under any reorganization, arrangement, adjustment
of debt,  relief of debtors,  dissolution,  insolvency or liquidation or similar
law of any  jurisdiction  whether  now or  hereafter  in effect  relating to the
Obligor or any  subsidiary  of the  Obligor or there is  commenced  against  the
Obligor or any  subsidiary  of the Obligor any such  bankruptcy,  insolvency  or
other  proceeding  which  remains  undismissed  for a period of 90 days;  or the
Obligor or any subsidiary of the Obligor is  adjudicated  insolvent or bankrupt;
or any order of relief or other order  approving  any such case or proceeding is
entered; or the Obligor or any subsidiary of the Obligor suffers any appointment
of any custodian,  private or court appointed receiver or the like for it or any
substantial part of its property which continues  undischarged or unstayed for a
period of 90 days;  or the  Obligor or any  subsidiary  of the  Obligor  makes a
general  assignment  for  the  benefit  of  creditors;  or  the  Obligor  or any
subsidiary of the Obligor shall fail to pay, or shall state that it is unable to
pay, or shall be unable to pay,  its debts  generally as they become due; or the
Obligor or any  subsidiary  of the Obligor shall call a meeting of its creditors
with a view to  arranging a  composition,  adjustment  or  restructuring  of its
debts;  or the  Obligor or any  subsidiary  of the  Obligor  shall by any act or
failure to act expressly indicate its consent to, approval of or acquiescence in
any of the  foregoing;  or any corporate or other action is taken by the Obligor
or any  subsidiary  of the  Obligor  for the  purpose  of  effecting  any of the
foregoing;

      (b) During the time that any portion of this Debenture is outstanding,  if
any Event of Default has occurred,  the full principal amount of this Debenture,
together with interest and other amounts owing in respect  thereof,  to the date
of  acceleration  shall become at the  Holder's  election,  immediately  due and
payable in cash,  provided  however,  the Holder may request  (but shall have no
obligation  to request)  payment of such amounts in Common Stock of the Obligor.
In addition to any other remedies,  the Holder shall have the right (but not the
obligation)  to convert this Debenture at any time after (x) an Event of Default
or (y) the Maturity Date at the Conversion Price then in-effect. The Holder need
not provide and the Obligor hereby waives any  presentment,  demand,  protest or
other notice of any kind, and the Holder may immediately and without  expiration
of any grace period enforce any and all of its rights and remedies hereunder and
all other remedies available to it under applicable law. Such declaration may be
rescinded and annulled by Holder at any time prior to payment hereunder. No such
rescission or annulment  shall affect any subsequent  Event of Default or impair
any right  consequent  thereon.  Upon an Event of Default,  notwithstanding  any
other provision of this Debenture or any Transaction Document,  the Holder shall
have no obligation to comply with or adhere to any  limitations,  if any, on the
conversion of this Debenture or the sale of the Underlying Shares.

      Section 2. Conversion and Adjustment.

      (a) 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 Original  Issue Date.  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.  The Obligor shall deliver Common Stock  certificates to the Holder prior
to the Fifth (5th) Trading Day after a Conversion  Date.  The  conversion  price
(the  "Conversion  Price")  in effect on any  Conversion  Date shall be equal to
$.50, which may be adjusted pursuant to the other terms of this Debenture.

                                       2
<PAGE>

      (b) 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 plus all accrued and unpaid interest thereon 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.

      (c) If the Obligor, at any time while this Debenture is outstanding, shall
(i) pay a stock dividend or otherwise make a distribution  or  distributions  on
shares of its Common Stock or any other equity or equity  equivalent  securities
payable in shares of Common Stock, (ii) subdivide  outstanding  shares of Common
Stock into a larger number of shares, (iii) combine (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller number of shares,
or (iv) issue by  reclassification  of shares of the Common  Stock any shares of
capital stock of the Obligor, then the Conversion Price shall be multiplied by a
fraction of which the  numerator  shall be the number of shares of Common  Stock
(excluding  treasury shares, if any) outstanding  before such event and of which
the denominator  shall be the number of shares of Common Stock outstanding 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.

      (d) In case of any (1)  merger  or  consolidation  of the  Obligor  or any
subsidiary  of the  Obligor  with or into  another  Person,  or (2)  sale by the
Obligor or any  subsidiary of the Obligor of more than one-half of the assets of
the Obligor in one or a series of relat1d transactions,  a Holder shall have the
right to (A) convert the aggregate  amount of this  Debenture  then  outstanding
into the shares of stock and other securities, cash and property receivable upon
or  deemed  to be held  by  holders  of  Common  Stock  following  such  merger,
consolidation  or sale,  and such Holder  shall be  entitled  upon such event or
series of related events to receive such amount of securities, cash and property
as the shares of Common Stock into which such aggregate principal amount of this
Debenture  could  have  been  converted   immediately   prior  to  such  merger,
consolidation or sales would have been entitled,  or (B) in the case of a merger
or  consolidation,  require  the  surviving  entity  to  issue  to the  Holder a
convertible  Debenture with a principal amount equal to the aggregate  principal
amount of this Debenture  then held by such Holder,  plus all accrued and unpaid
interest and other amounts owing  thereon,  which such newly issued  convertible
Debenture shall have terms  identical  (including with respect to conversion) to
the terms of this  Debenture,  and shall be  entitled  to all of the  rights and
privileges of the Holder of this  Debenture set forth herein and the  agreements
pursuant to which this  Debentures  were issued.  In the case of clause (B), the
conversion price applicable for the newly issued shares of convertible preferred
stock or  convertible  Debentures  shall be based upon the amount of securities,
cash and  property  that  each  share of  Common  Stock  would  receive  in such
transaction  and  the  Conversion  Price  in  effect  immediately  prior  to the
effectiveness  or  closing  date for  such  transaction.  The  terms of any such
merger, sale or consolidation shall include such terms so as to continue to give
the Holder the right to receive the  securities,  cash and property set forth in
this  Section upon any  conversion  or  redemption  following  such event.  This
provision shall similarly apply to successive such events.

                                       3
<PAGE>

      (e) Upon a conversion hereunder the Obligor shall not be required to issue
stock certificates representing fractions of shares of the Common Stock, but may
if otherwise permitted,  make a cash payment in respect of any final fraction of
a share based on the Closing Bid Price at such time. If the Obligor  elects not,
or is unable,  to make such a cash  payment,  the Holder  shall be  entitled  to
receive,  in lieu of the final  fraction  of a share,  one whole share of Common
Stock.

      (f) The issuance of certificates for shares of the Common Stock on
      conversion of this  Debenture  shall be made without  charge to the Holder
thereof
for any documentary stamp or similar taxes that may be payable in respect of the
issue or delivery of such certificate, provided that the Obligor shall not be
required to pay any tax that may be payable in respect of any transfer involved
in the issuance and delivery of any such certificate upon conversion in a name
other than that of the Holder of such Debenture so converted and the Obligor
shall not be required to issue or deliver such certificates unless or until the
person or persons requesting the issuance thereof shall have paid to the Obligor
the amount of such tax or shall have established to the satisfaction of the
Obligor that such tax has been paid.

      Section 3. Notice.

      (a) Any notices,  consents,  waivers or other  communications  required or
permitted  to be given  under the terms  hereof  must be in writing  and will be
deemed to have been delivered: (i) upon receipt, when delivered personally; (ii)
upon receipt,  when sent by facsimile (provided  confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or  (iii)  one (1)  trading  day  after  deposit  with a  nationally  recognized
overnight  delivery  service,  in each case  properly  addressed to the party to
receive the same.  The addresses and facsimile  numbers for such  communications
shall be:

                                       4
<PAGE>


If to the Company, to:            NetFabric Holdings, Inc.
                                  Three Stewart Court
                                  Denville, NJ 07834
                                  Attention: Vasan Thatham

                                  Telephone:        (973) 887-2785
                                  Facsimile:        (973) 442-0540



If to the Holder, to


or at such other address and/or facsimile number and/or to the attention of such
other person as the  recipient  party has  specified by written  notice given to
each other  party three (3)  business  days prior to the  effectiveness  of such
change.  Written  confirmation  of receipt  (i) given by the  recipient  of such
notice,   consent,   waiver  or  other   communication,   (ii)  mechanically  or
electronically  generated by the sender's facsimile machine containing the time,
date,  recipient  facsimile  number  and an  image  of the  first  page  of such
transmission  or (iii) provided by a nationally  recognized  overnight  delivery
service, shall be rebuttable evidence of personal service,  receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

      Section 4. Definitions. For the purposes hereof, the following terms shall
have the following meanings:"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  are  authorized  or  required  by law or other
government action to close.

      "Commission" means the Securities and Exchange Commission.


      "Common  Stock" means the common stock,  par value $0.001,  of the Obligor
and stock of any other class into which such shares may  hereafter be changed or
reclassified.

      "Exchange Act" means the Securities Exchange Act of 1934, as amended.

      "Original  Issue Date"  shall mean the date of the first  issuance of this
Debenture  regardless of the number of transfers and regardless of the number of
instruments, which may be issued to evidence such Debenture.

                                       5
<PAGE>

      "Closing Bid Price" means the price per share in the last  reported  trade
of the Common Stock on the OTC or on the exchange which the Common Stock is then
listed as quoted by Bloomberg, LP.

      "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.

      "Trading  Day" means a day on which the shares of Common  Stock are quoted
on the OTC or quoted or traded on such Subsequent  Market on which the shares of
Common  Stock are then  quoted or listed;  provided,  that in the event that the
shares of Common  Stock are not listed or quoted,  then Trading Day shall mean a
Business Day.

      "Underlying  Shares"  means  the  shares  of Common  Stock  issuable  upon
conversion of this  Debenture or as payment of interest in  accordance  with the
terms hereof.

      Section  5. This  Debenture  shall not  entitle  the  Holder to any of the
rights of a stockholder of the Obligor,  including without limitation, the right
to vote, to receive dividends and other distributions,  or to receive any notice
of, or to attend,  meetings  of  stockholders  or any other  proceedings  of the
Obligor,  unless  and to the extent  converted  into  shares of Common  Stock in
accordance with the terms hereof.

      Section 6. If this Debenture is mutilated,  lost, stolen or destroyed, the
Obligor shall  execute and deliver,  in exchange and  substitution  for and upon
cancellation of the 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, and indemnity,  if requested,  all reasonably  satisfactory to
the Obligor.

      Section 7. This Debenture shall be governed by and construed in accordance
with the laws of the State of New Jersey,  without giving effect to conflicts of
laws thereof.  Each of the parties  consents to the jurisdiction of the Superior
Courts of the State of New Jersey sitting in Hudson  County,  New Jersey and the
U.S. District Court for the District of New Jersey sitting in Newark, New Jersey
in connection  with any dispute  arising under this Debenture and hereby waives,
to the maximum extent  permitted by law, any objection,  including any objection
based on forum non  conveniens  to the bringing of any such  proceeding  in such
jurisdictions.

      Section 8. If the Obligor fails to strictly  comply with the terms of this
Debenture,  then the Obligor shall  reimburse the Holder  promptly for all fees,
costs and expenses, including, without limitation,  attorneys' fees and expenses
incurred  by the  Holder  in any  action  in  connection  with  this  Debenture,
including, without limitation, those incurred: (i) during any workout, attempted
workout,  and/or in  connection  with the  rendering  of legal  advice as to the
Holder's rights, remedies and obligations, (ii) collecting any sums which become
due  to the  Holder,  (iii)  defending  or  prosecuting  any  proceeding  or any
counterclaim to any proceeding or appeal;  or (iv) the protection,  preservation
or enforcement of any rights or remedies of the Holder.

                                       6
<PAGE>

      Section 9. Any waiver by the Holder of a breach of any  provision  of this
Debenture  shall  not  operate  as or be  construed  to be a waiver of any other
breach  of such  provision  or of any  breach  of any  other  provision  of this
Debenture. The failure of the Holder to insist upon strict adherence to any term
of this Debenture on one or more  occasions  shall not be considered a waiver or
deprive that party of the right  thereafter  to insist upon strict  adherence to
that term or any other term of this Debenture. Any waiver must be in writing.

      Section 10. If any  provision  of this  Debenture  is invalid,  illegal or
unenforceable,  the balance of this Debenture shall remain in effect, and if any
provision is inapplicable to any person or circumstance,  it shall  nevertheless
remain applicable to all other persons and  circumstances.  If it shall be found
that any interest or other amount deemed  interest due  hereunder  shall violate
applicable laws governing  usury,  the applicable rate of interest due hereunder
shall  automatically be lowered to equal the maximum permitted rate of interest.
The Obligor  covenants  (to the extent that it may lawfully do so) that it shall
not at any time insist upon,  plead, or in any manner  whatsoever  claim or take
the benefit or advantage of, any stay, extension or usury law or other law which
would  prohibit  or forgive  the  Obligor  from paying all or any portion of the
principal of or interest on this  Debenture  as  contemplated  herein,  wherever
enacted,  now or at any time  hereafter  in  force,  or  which  may  affect  the
covenants or the performance of this  indenture,  and the Obligor (to the extent
it may lawfully do so) hereby  expressly waives all benefits or advantage of any
such law,  and  covenants  that it will not, by resort to any such law,  hinder,
delay or impeded the  execution of any power herein  granted to the Holder,  but
will  suffer and permit  the  execution  of every such as though no such law has
been enacted.

      Section 11.  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.

      Section 12. THE PARTIES HEREBY  KNOWINGLY,  VOLUNTARILY AND  INTENTIONALLY
WAIVE  THE  RIGHT  ANY OF THEM  MAY HAVE TO A TRIAL  BY JURY IN  RESPECT  OF ANY
LITIGATION  BASED  HEREON OR ARISING OUT OF,  UNDER OR IN  CONNECTION  WITH THIS
AGREEMENT  OR ANY  TRANSACTION  DOCUMENT  OR ANY  COURSE OF  CONDUCT,  COURSE OF
DEALING,  STATEMENTS  (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY.  THIS
PROVISION  IS  A  MATERIAL  INDUCEMENT  FOR  THE  PARTIES'  ACCEPTANCE  OF  THIS
AGREEMENT.


      IN WITNESS WHEREOF, the Obligor has caused this Convertible Debenture to
be duly executed by a duly authorized officer as of the date set forth above.

                                 NETFABRIC HOLDINGS, INC.

                                 By:
                                 Name:  Jeff Robinson
                                 Title: Chairman and Chief Executive Officer

                                       7
<PAGE>

                                   EXHIBIT "A"


                              NOTICE OF CONVERSION

        (TO BE EXECUTED BY THE HOLDER IN ORDER TO CONVERT THE DEBENTURE)


TO:


      The undersigned  hereby  irrevocably  elects to convert $ of the principal
amount of the above Debenture into Shares of Common Stock of NetFabric Holdings,
Inc.,  according to the conditions  stated  therein,  as of the Conversion  Date
written below.

CONVERSION DATE:                       _________________________________________
APPLICABLE CONVERSION PRICE:           _________________________________________
SIGNATURE:                             _________________________________________
NAME:                                  _________________________________________
ADDRESS:                               _________________________________________
AMOUNT TO BE CONVERTED:                $________________________________________
AMOUNT OF DEBENTURE UNCONVERTED:       $________________________________________
CONVERSION PRICE PER SHARE:            $________________________________________
NUMBER OF 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:                        _________________________________________


</TEXT>
</DOCUMENT>
