MOBICLEAR INC.
Convertible Promissory
Note
Due August 31,
2009
_______________________
This Note has not been registered
under the Securities Act of 1933, as amended (the “
Securities
Act
”) or under the securities
laws of certain states. These securities have been acquired
for
investment and may not be
transferred or sold in the absence of an effective
registration
or other compliance under the
Securities Act or the laws of the applicable state, or
a
“no action” or
interpretive letter from the United States Securities and
Exchange
Commission or an opinion of
counsel, reasonably satisfactory to the issuer
and its counsel, to the effect
that the sale or transfer is exempt from
registration under the Securities
Act and such state statutes.
MOBICLEAR INC., a corporation duly
organized and existing under the laws of the state of Pennsylvania
(hereinafter referred to as the “ Company ”),
for value received, hereby promises to pay to the registered holder
of this Note (the “ Holder ”), the principal sum
of Fifty Thousand (50,000.00 ) on August 31, 2009, upon
presentation and surrender of this Convertible Promissory Note
(“ Note ”), at the offices of the Company at 27
th Floor, Chatham House, 116 Valero Street, Salcedo
Village, Makati City 1227, Philippines], in such lawful money of
the United States of America as at the time of payment shall be
legal tender for the payment of public and private debt, and to pay
in like lawful tender interest thereon, from and after August 19,
2008 at the interest rate set forth below, until the principal
hereof is paid or made available for payment as herein provided.
There interest so payable, as provided below, will be paid to the
person in whose name this Note is registered at the close of
business on the regular record date for such interest.
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This Note is subject to the following further
terms and material provisions.
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1.
Term and Interest . The date of maturity of the Note shall
be August 31, 2009, subject to prepayment as set forth in paragraph
3 hereof. The Note shall bear simple interest at an annual rate of
ten percent (10%). Interest shall be payable in arrears as of the
last day of each succeeding calendar quarter, until the principal
amount of the Note is paid or made available for payment, and will
be payable to the person in whose name the Note is registered or,
if no such address is listed, at the office of the Company. The
principal on the Note is payable on August 31, 2009, subject to
prepayment as set forth in paragraph 3 hereof, and will be paid at
the office of the Company pursuant hereto.
2.
Conversion by Holder . Subject to, and in compliance with,
the provisions contained herein, the Holder is entitled, at its
option, at any time prior to maturity, or in the event this Note or
some portion hereof shall have been called for prepayment prior to
such date, then, in respect of this Note or such portion hereof,
until and including, but not after the close of business within 30
days of the date of notice of prepayment, to convert this Note (or
any portion of the principal amount hereof) into fully paid and
nonassessable shares (calculated as to each conversion to the
nearest share) of common stock, par value $0.0001 per share, of the
Company (the “ Shares ”), using a conversion
price equal to 80% of the average closing market price of the
Company’s common stock for the 10 trading days immediately
preceding the conversion date (the “ Holder-Initiated
Conversion Rate ”), subject to such adjustment in such
conversion price, if any, as may be required by the provisions of
this Note, by surrender of this Note to the Company at its offices,
duly endorsed (if so required
by the Company) or assigned or in blank,
accompanied by written notice to the Company in the form set forth
herewith that the Holder elects to convert this Note or if less
than the entire principal amount hereof is to be converted, the
portion hereof to be converted. On conversion, no adjustment for
interest is to be made, but if Holder surrenders this Note for
conversion between the record date for the payment of an
installment of interest and the next interest payment date, the
Holder when surrendered for conversion shall be entitled to payment
of the interest thereon from the last preceding record date for
interest through the date of conversion that the Holder is entitled
to receive on such conversion date. No fractions of Shares will be
issued on conversion, but instead of any fractional interest the
Company will pay cash adjustments as provided herein.
3.
Prepayment . This Note is subject to prepayment, in whole or
in part, at any time upon not less than 30 days’ notice by
registered mail at the election of the Company, and shall be
prepaid out of the net proceeds of any public offering by the
Company of its Shares that results in net proceeds to the Company
on or before August 31, 2009, of at least $1,500,000.00. Prepayment
shall be effected by paying the amount equal to the outstanding
principal amount of the Note, plus all interest accrued to the date
of prepayment. During the 30 days following the date of any notice
of prepayment, the Holder will have the right to convert the
outstanding principal amount of the Note, or any portion thereof,
to common stock of the Company, on the terms and conditions
provided for in paragraph 2 above. On the date fixed for
prepayment, the Note shall cease to bear interest with respect to
the amount of principal actually paid. Upon surrender of any Note
for prepayment in accordance with said notice of prepayment by the
Company, the amount of principal and interest due shall be paid in
cash or certified funds. Any Note that is prepaid only in part
shall be presented for notation thereon by the Company of such
partial prepayment.
4.
Conversion by the Company . Subject to, and in compliance
with, the provisions contained herein, Company is entitled, at its
option, at any time prior to maturity, to convert this Note (or any
portion of the principal amount hereof) into the Shares using a
conversion price equal to 75% of the average closing market price
of the Company’s common stock for the 10 trading days
immediately preceding the conversion date (the “
Company-Initiated Conversion Rate ”), subject to such
adjustment in such conversion price, if any, as may be required by
the provisions of this Note, by providing a notice of conversion to
the Holder at the address provided by the Holder to the Company. On
conversion, no adjustment for interest is to be made, but if the
Note is converted between the record date for the payment of an
installment of interest and the next interest payment date, the
Holder shall be entitled to payment of the interest thereon from
the last preceding record date for interest through the date of
conversion that the Holder is entitled to receive on such
conversion date. No fractions of Shares will be issued on
conversion, but instead of any fractional interest the Company will
pay cash adjustments as provided herein.
5.
Limitations on Right of Conversion . Following receipt of
the written notice of intention to convert the Note, the Company
shall take such steps as it deems appropriate to permit conversion
of the Note as specified in the notice without registration or
qualification under applicable federal and state securities
laws; provided
, that in no event shall the
Company be required to consent to the general service of process or
qualify as a foreign corporation in any jurisdiction where the
Holder resides if such jurisdiction is different than such
Holder’s residence when the Note was originally offered and
sold. In order to comply with exemptions from the registration
requirements of the Securities Act and certain state securities
statutes, the Company may require the Holder to make certain
representations and execute and deliver to the Company certain
documents as a condition to exercise of the conversion rights
hereunder, all in form and substance satisfactory to the Company as
determined in its sole discretion. In the event the Company
reasonably determines that the Note cannot be converted in
compliance with applicable federal
