Voluntary Conversion Price

Voluntary Conversion Price. The conversion prior to maturity into the same securities or the same terms as the subsequent capital raised in connection with a public offering of the Company's securities. The conversion price shall be calculated as ninety percent (90%) of the average closing price the ten (10) days prior to conversion, unless the Company has an offering pending. If there is an offering pending, the conversion price would be the same price as the offering. Conversion of Outstanding Balance. Beginning six (6)... months after the Original Issue Date and until this Debenture is no longer outstanding, this Debenture shall be convertible, in whole or in part, into fully paid and nonassessable shares of Common Stock at the option of the Holder, upon thirty (30) days' written notice to the Company, at the Voluntary Conversion Price, or at a subsequent offering. The number of shares of Common Stock into which the Debenture may be converted shall be determined by dividing the aggregate principal amount together with all accrued interest to the date of conversion by the Voluntary Conversion Price. The conversion price is subject to a floor of one dollar ($1 USD) per share. The Company stock is subject to a nineteen and nine tenths percent (19.9%) beneficial ownership limitation; any ownership by one individual investor of more than nineteen and nine tenths percent (19.9%) of the Company stock requires approval by the Company's shareholders. Additionally, the Company is subject to a nineteen and nine tenths percent (19.9%) issuance limitation for the 300,000 warrant issuance and $3,000,000 Secured Subordinate Convertible Note both referred to in the Subscription Agreement dated August 2, 2013 Any issuance of Company common stock from this particular transaction above nineteen and nine tenths percent (19.9%) of the total outstanding shares as of June 26, 2013 requires Shareholder approval. The Company intends to seek required Shareholder approval if necessary. View More

Voluntary Conversion Price. $0.20 per share as subject to adjustment from time to time pursuant to the provisions of this Note.