Summary of WHISPERING OAKS INTERNATIONAL INC

Item 1.01: Entry into a Material Definitive Agreement.

On June 29, 2007, we sold convertible notes, plus warrants, to two private investors for $3,000,000. These notes bear interest annually at a rate of prime (as adjusted monthly) plus 2.75% per year. These notes were due and payable on June 29, 2010 and are secured by substantially all of our assets.

Interest on these notes is payable monthly and is due the first of every month. We were also required to make monthly payments of $100,000 towards the principal amount of the notes. Our failure to make any interest or principal payment when due, results in the notes becoming immediately due and payable. At the holder's option, the notes were convertible into shares of our common stock at a conversion price of $0.60.

We failed to make certain required principal payments on the notes when due, resulting in a default. On August 31, 2009, we entered into a Loan Modification Agreement with the holders of those notes. Under this agreement, the defaults were waived and the terms of the notes were amended as follows:

Х The maturity date of the notes has been extended to December 31, 2012 and, except as provided below, no principal payments are due on the notes prior to the maturity date.

Х All interest due on the notes through June 30, 2009 was added to the outstanding principal balance and as a result the aggregate principal amount of the notes at June 30, 2009 was $2,150,000.

Х The interest rate on the notes remains at prime (as adjusted monthly) plus 2.75% per year and accrues from July 1, 2009 and is payable in arrears on the first day of each month.

Х Our failure to close a public offering of our common stock (including a sale of units which include shares of our common stock) for gross proceeds of at least $3,000,000 on or before February 19, 2010 (a "Qualified Offering") will result in a default under the notes.

Х Upon the closing of a Qualified Offering, we must offer to prepay the principal of the notes in an amount equal to the greater of 20% of the net proceeds we receive from such Qualified Offering or $600,000. If the underwriter(s) of the Qualified Offering elect to exercise their option to cover over-allotments, we must offer to prepay the principal amount of the notes in an amount equal to 50% of the gross proceeds we receive from such transaction.

Х If we sell any equity or debt securities other than in a Qualified Offering, we must offer to prepay the principal amount of the notes in an amount equal to 30% of the gross proceeds we receive from such transaction. If we receive any revenue from licensing arrangements, we must offer to prepay the principal amount of the notes in an amount equal to 10% of such revenues.

Х The holders of the notes have ten business days to decide whether or not to accept any prepayment offer.

Х Although we may only offer to prepay the notes, if such offer is declined we may elect to deposit with an escrow agent an amount, in cash, sufficient to pay all of the then outstanding principal and interest accruing to the maturity date of the notes, in which event all of the covenants in the notes (except for the conversion rights) will be terminated and the holders will release their security interest in all of our property, except for such cash collateral.

Х The conversion price under the notes has been reset at $0.14 per share of our common stock. Effective upon a Qualified Offering, the conversion price will be further reset at two-times the public offering price of our common stock, subject to certain possible adjustments as described in Section 5 of the notes attached as exhibits A and B to the Loan Modification Agreement included as Exhibit 10.1 to this Current Report on Form 8-K. The notes further provide that the maximum number of shares that we are obligated to issue upon the exercise of the holder's conversion right may not exceed 4.99% of the total number of shares outstanding after giving effect to the conversion of the notes.