1.      Issue of up to 250 secured debenture units of $1000 each (the “Debenture Units”) of the Company.

2.      Issue of 338,133,000 share warrants (the “Share Warrants”) for conversion into shares of the Company

Units:

Each Unit will consist of one 7.5% interest bearing secured debenture in the principal amount of $1,000 (a “Debenture” or the “Debentures”) and 1,352,532 common share purchase warrants (a “Warrant”).

Each Warrant will entitle the holder to purchase one common share of the Company (being the highest ranking share of the Company) (a “Share”) for a period of 24 months from the date of issuance at a price of $0.0075 per Share (“Purchase Rights”). The Subscriber may exercise its Purchase Rights in whole or in part and on a total of 2 occasions.

The Company will, within 5 Business Days of receipt by the Company of the funds from investors in relation to the Units Offering, issue to the Subscriber the

same number of Share Warrants as are issued under the Units Offering, enter the name of the Subscriber into the register of the Company and issue to the Subscriber a certificate for all of the Share Warrants registered in its name.

Share Warrants may be transferred by means of an instrument of transfer

in any usual form or any other form approved by the Board.

If the Company undergoes a subdivision, consolidation or reclassification

of its shares, then the Company shall adjust the Purchase Rights accordingly, so that the Subscriber is not in any way prejudiced by any such event.

For so long as any Share Warrants remain exercisable, the Company shall

procure that the Board of the Company shall at all times during the exercise

period have authority to grant Share Warrants and to issue shares on

exercise of any Purchase Rights in accordance with the terms set out herein.

If an effective resolution for the winding up of the Company is passed,

the Subscriber with unexercised Purchase Rights shall be treated as if it had,

immediately before the passing of the resolution, fully exercised its outstanding

Purchase Rights.

The Debentures shall be secured by way of a mortgage on the assets of the Company, and will be ranked after the existing bridge loan mortgage and line of

credit.

 The Company makes the following representations and warranties to the Subscriber on the date of this term sheet:

Due incorporation

The Company is a duly incorporated company validly existing under the law of its jurisdiction of incorporation; and has the power to own its assets and carry on its business as it is being conducted.

Powers

The Company has the power to enter into, deliver and perform, and has taken all necessary action to authorise its entry into, delivery and performance of, this term sheet and all Definitive Documents. No limit on its powers will be exceeded as a result of any of the terms of this term sheet.

Non-contravention

The entry into and performance by it of, and the transactions contemplated by, this term sheet do not and will not contravene or conflict with: the Company’s constitutional documents; any agreement or instrument binding on it or its assets or constitute a default or termination event (however described) under any such agreement or instrument; or any law or regulation or judicial or official order, applicable to it.

Authorisations

The Company has obtained all required or desirable authorisations to enable it to enter into, exercise its rights and comply with its obligations under this term sheet. Any such authorisations are in full force and effect.

Binding obligations

Subject to any general principles of law limiting its obligations specifically referred to in any legal opinion that has been delivered to the Subscriber prior to the date below:

the Company’s obligations under this term sheet are legal, valid, binding and enforceable; and

the Units Offering and Issue under this term sheet creates:

valid, legally binding and enforceable obligations on the Company.

No filing or stamp taxes

Under the law of its jurisdiction of incorporation, it is not necessary to file, record or enrol this term sheet with any court or other authority in that jurisdiction or pay any stamp, registration or similar taxes.

No default

No Event of Default (as defined below) and, on the date of this term sheet, potential Event of Default, is continuing or might reasonably be expected to result from the making of the Units Offering and/or the Issue.

No other event or circumstance is outstanding which constitutes (or, with the expiry of a grace period, the giving of notice, the making of any determination or any combination thereof, would constitute) a default or termination event (howsoever described) under any other agreement or instrument which is binding on it or to which any of its assets is subject which has or is likely to have a material adverse effect on the Company or its ability to meet any of its obligations under this term sheet.

Information

The information, in written or electronic format, supplied by, or on behalf of, the Company to the Subscriber in connection with the Units Offering and/or Issue

was, at the time it was supplied or at the date it was stated to be given (as the case may be):

if it was factual information, complete, true and accurate in all material respects;

if it was a financial projection or forecast, prepared on the basis of recent

historical information and on the basis of reasonable assumptions and was

arrived at after careful consideration;

if it was an opinion or intention, made after careful consideration and was fair

and made on reasonable grounds; and

not misleading in any material respect, nor rendered misleading by a failure to

disclose other information,

except to the extent that it was amended, superseded or updated by more recent information supplied by, or on behalf of, the Company to the Subscriber.

Any financial statements delivered to the Subscriber by the Company were

prepared in accordance with consistently applied accounting principles,

standards and practices generally accepted in its jurisdiction of incorporation

unless expressly disclosed to the Subscriber in writing to the contrary before the

date below, and fairly represents the Company's financial condition and

operations during the relevant accounting period and was approved by the

Company's directors in compliance with laws and regulations of its jurisdiction.

No material adverse change

There has been no material adverse change in the business, assets, financial

condition, trading position or prospects of the Company since the date of the

publication of its most recent financial statements. The Company will continue

to operate and be managed in the same way after the date below as it was before

such date.

No litigation

No litigation, arbitration or administrative proceedings are taking place, pending

or, to the Company's knowledge, threatened against it, any of its directors or any

of its assets.

No breach of law

The Company has not breached any law or regulation which breach has or is

likely to have a material adverse effect on the Company or its ability to repay .

Pari passu

The Company's payment obligations under this agreement rank at least pari

passu with all existing and future unsecured and unsubordinated obligations

(including contingent obligations), except for those mandatorily preferred by law

applying to companies generally.

Ownership of assets

The Company is the sole legal and beneficial owner of, and has good, valid and marketable title to, all its assets and no security exists over its assets except for

any security approved by the Subscriber.

Company’s right to early redemption:

The Company has the right to redeem the Debentures at any time after the expiry

of the Hold Period but prior to the Repayment Date, subject to paying the

Subscribers (a) the Principal amount; (b) all interest accrued up to the date

of redemption of the Debentures; and (c) an additional amount of three months of

interest calculated at 7.5% per annum on the Principal. For the avoidance of

doubt any redemption of Debentures will not have any effect upon the Warrants

issued in the Units offering.

If an Event of Default occurs and is continuing at any time thereafter (unless the same has been remedied) the Debenture(s) and all other amounts accrued or outstanding under this term sheet shall become immediately due and payable by the Company together with all accrued interest and all other sums then owed by the Company.

The Company indemnifies the Subscriber on demand against all reasonable claims, costs, losses and expenses certified by the Subscriber as incurred by the Subscriber as a consequence of default by the Company in the due performance of any of the obligations expressed to be assumed by the Company in the term sheet.

A certificate of the Subscriber as to the amount for the time being required to indemnify it in respect of any of the circumstances set out above, shall be conclusive evidence thereof in any legal action or proceeding arising out of or in connection with the term sheet save in the case of manifest error.