Valor Energy Corp (fka VLEN)

[edfei2000]

On April 29, 2007, the Company and the investors agreed to increase the discount
percentage on the notes from 70% to 75%. If, at any time, the Company issues or
sells any shares of common stock for no or below market consideration (dilutive
issuance), then immediately upon the dilutive issuance, the fixed conversion
price will be reduced to the amount of the consideration per share received by
the Company in such dilutive issuance. The number of common shares issuable upon
the conversion of the debentures is limited to 4.9 percent in beneficial
ownership by the debenture holders and its affiliates of the outstanding shares
of common stock. Once the maximum amount of common shares has been issued, in
lieu of any further right to convert the debentures, the Company shall pay to
the debenture holder, an amount equal to 130 percent of the then outstanding
principal amount of the debenture plus accrued and unpaid interest and other
related charges within fifteen business days of the maximum conversion date. If


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AQUATIC CELLULOSE INTERNATIONAL CORP. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 2007 (UNAUDITED)



the Company exercises its right to prepay the debentures, the Company will make
payment to the debenture holders in an amount equal to 150 percent of the sum of
the then outstanding principal amount of the debentures plus accrued and unpaid
interest on the unpaid principal amount of the debenture to the optional
prepayment date plus any other related penalties. The debentures do not
automatically convert to common shares on their due dates.