Common use of Debt Offering Clause in Contracts

Debt Offering. (I) the Company issues debentures, including debentures convertible into common stock, in exchange for at least U.S.$3,000,000 of net proceeds; (II) the effective amount of interest for such debentures is no higher than 10% per annum; (III) the maturity date of such debentures is no sooner than eighteen (18) months from the date of issuance for 50% of the debentures and two (2) years from the date of issuance on the other 50%; (IV) the common stock issued pursuant to a conversion of such debentures is issued at a conversion price (the “Conversion Price”) which is no less than 90% of the prevailing market price at the time of issuance of the debentures; (V) for each share of common stock that is issuable upon conversion of the debentures assuming the debenture was converted on the date of issuance, an investor may receive warrants to purchase up to a maximum of 1.0 shares of common stock at a warrant exercise price not less than offering price of the common stock; (VI) such warrants shall be exercisable for a term no greater than five (5) years; (VII) the warrants shall have broad based anti-dilution protections that are no more favorable to the holder of the warrants than the anti-dilution protections set forth in Exhibit C.1; and (VIII) the Lancer Entities’ Beneficial Ownership Percentage of the Corporation will not, without the consent of the Receiver, decrease by more than 20% as a result of the offering (i.e. the relative percentage decrease, and not the absolute percentage decrease, will not be more than 20%) . For purposes of this paragraph “Beneficial Ownership Percentage” is defined to be the quotient of (x) the number of Shares beneficially owned by the Lancer Entities, divided by (y) the number of outstanding shares of the Corporation, plus any shares of the Corporation issuable upon conversion or exercise of derivative securities. Broad Based Anti-Dilution Protection In the event that the Corporation issues additional common stock after the date hereof at an Effective Price (as defined below) that is less than the Exercise Price or the Debenture Warrant Exercise Price, then the Exercise Price or the Debenture Warrant Exercise Price, respectively, shall be adjusted as follows: The Exercise Price or the Debenture Warrant Exercise Price (as applicable) shall be multiplied by a fraction, the numerator of which shall be (x) the sum of (A) the number of shares of common stock (on an as converted, fully diluted basis assuming exercise of all then outstanding convertible or exercisable securities, including convertible debentures, options and warrants, (a “Fully Diluted Basis”)) outstanding on the record date of such issuance plus (B) the quotient obtained by dividing the Total Consideration (as defined below) by the Exercise Price or Debenture Warrant Exercise Price (as applicable) then in effect, and the denominator of which shall be (y) the number of shares of common stock (on a Fully Diluted Basis) outstanding on the record date of such issuance or sale plus the maximum number of additional shares of common stock issued by the Corporation or deemed to be issued pursuant to this Exhibit C.1 in connection with such issuance or sale.

Debt Offering. (I) the Company issues debentures, including debentures convertible into common stock, in exchange for at least U.S.$3,000,000 of net proceeds; (II) the effective amount of interest for such debentures is no higher than 10% per annum; (III) the maturity date of such debentures is no sooner than eighteen (18) months from the date of issuance for 50% of the debentures and two (2) years from the date of issuance on the other 50%; (IV) the common stock issued pursuant to a conversion of such debentures is issued at a conversion price (the “Conversion Price”) which is no less than 90% of the prevailing market price at the time of issuance of the debentures; (V) for each share of common stock that is issuable upon conversion of the debentures assuming the debenture was converted on the date of issuance, an investor may receive warrants to purchase up to a maximum of 1.0 shares of common stock at a warrant exercise price not less than offering price of the common stock; (VI) such warrants shall be exercisable for a term no greater than five (5) years; (VII) the warrants shall have broad based anti-dilution protections that are no more favorable to the holder of the warrants than the anti-dilution protections set forth in Exhibit C.1; and (VIII) the Lancer Entities’ Beneficial Ownership Percentage of the Corporation will not, without the consent of the Receiver, decrease by more than 20% as a result of the offering (i.e. the relative percentage decrease, and not the absolute percentage decrease, will not be more than 20%) . For purposes of this paragraph “Beneficial Ownership Percentage” is defined to be the quotient of (x) the number of Shares beneficially owned by the Lancer Entities, divided by (y) the number of outstanding shares of the Corporation, plus any shares of the Corporation issuable upon conversion or exercise of derivative securities. Broad Based Anti-Dilution Protection In the event that the Corporation issues additional common stock after the date hereof at an Effective Price (as defined below) that is less than the Exercise Price or the Debenture Warrant Exercise Price, then the Exercise Price or the Debenture Warrant Exercise Price, respectively, shall be adjusted as follows: The Exercise Price or the Debenture Warrant Exercise Price (as applicable) shall be multiplied by a fraction, the numerator of which shall be (x) the sum of (A) the number of shares of common stock (on an as converted, fully diluted basis assuming exercise of all then outstanding convertible or exercisable securities, including convertible debentures, options and warrants, (a “Fully Diluted Basis”)) outstanding on the record date of such issuance plus (B) the quotient obtained by dividing the Total Consideration (as defined below) by the Exercise Price or Debenture Warrant Exercise Price (as applicable) then in effect, and the denominator of which shall be (y) the number of shares of common stock (on a Fully Diluted Basis) outstanding on the record date of such issuance or sale plus the maximum number of additional shares of common stock issued by the Corporation or deemed to be issued pursuant to this Exhibit C.1 in connection with such issuance or sale.

Debt Offering. (I) the Company issues debentures, including debentures convertible into common stock, in exchange for at least U.S.$3,000,000 of net proceeds; (II) the effective amount of interest for such debentures is no higher than 10% per annum; (III) the maturity date of such debentures is no sooner than eighteen (18) months from the date of issuance for 50% of the debentures and two (2) years from the date of issuance on the other 50%; (IV) the common stock issued pursuant to a conversion of such debentures is issued at a conversion price (the “"Conversion Price”") which is no less than 90% of the prevailing market price at the time of issuance of the debentures; (V) for each share of common stock that is issuable upon conversion of the debentures assuming the debenture was converted on the date of issuance, an investor may receive warrants to purchase up to a maximum of 1.0 shares of common stock at a warrant exercise price not less than offering price of the common stock; (VI) such warrants shall be exercisable for a term no greater than five (5) years; (VII) the warrants shall have broad based anti-dilution protections that are no more favorable to the holder of the warrants than the anti-dilution protections set forth in Exhibit C.1; and (VIII) the Lancer Entities’ ' Beneficial Ownership Percentage of the Corporation will not, without the consent of the Receiver, decrease by more than 20% as a result of the offering (i.e. the relative percentage decrease, and not the absolute percentage decrease, will not be more than 20%) . For purposes of this paragraph “"Beneficial Ownership Percentage” " is defined to be the quotient of (x) the number of Shares beneficially owned by the Lancer Entities, divided by (y) the number of outstanding shares of the Corporation, plus any shares of the Corporation issuable upon conversion or exercise of derivative securities. Broad Based Anti-Dilution Protection In the event that the Corporation issues additional common stock after the date hereof at an Effective Price (as defined below) that is less than the Exercise Price or the Debenture Warrant Exercise Price, then the Exercise Price or the Debenture Warrant Exercise Price, respectively, shall be adjusted as follows: The Exercise Price or the Debenture Warrant Exercise Price (as applicable) shall be multiplied by a fraction, the numerator of which shall be (x) the sum of (A) the number of shares of common stock (on an as converted, fully diluted basis assuming exercise of all then outstanding convertible or exercisable securities, including convertible debentures, options and warrants, (a “"Fully Diluted Basis”")) outstanding on the record date of such issuance plus (B) the quotient obtained by dividing the Total Consideration (as defined below) by the Exercise Price or Debenture Warrant Exercise Price (as applicable) then in effect, and the denominator of which shall be (y) the number of shares of common stock (on a Fully Diluted Basis) outstanding on the record date of such issuance or sale plus the maximum number of additional shares of common stock issued by the Corporation or deemed to be issued pursuant to this Exhibit C.1 in connection with such issuance or sale. The "Effective Price" of any additional common stock shall mean the quotient determined by dividing the total number of shares of common stock issued or sold, or deemed to have been issued or sold by the Corporation under this Exhibit C.1, into the aggregate consideration received, or deemed to have been received by the Corporation for such issuance under this Exhibit C.1, for such additional common stock (the "Total Consideration").