MOBICLEAR INC.

 

Convertible Promissory Note

 

___________________________________

 

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 Eight Hundred Twenty-Nine Thousand One Hundred
Eighty-Six Dollars and Sixty-Eight Cents($829,186.68) within five business days
of the Holder’s written demand, upon presentation and surrender of this
Convertible Promissory Note (“Note”), at the offices of the Company at 9th
Floor, Summit One Tower, 530 Shaw Boulevard, Mandaluyong City, Metro Manila,
Philippines 1552, 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.

 

             This Note is subject to the following further terms and material
provisions.

 

1.          Interest. The Note shall not bear interest; however, if an Event of
Default occurs, as defined in Section 7, interest shall begin to accrue at the
rate of eighteen percent (18%) per annum until paid.

 

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 the average closing market price of the Company’s common stock for the
10 trading days immediately preceding the conversion date (the “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. If Holder surrenders this Note for conversion following an Event of
Default, the Holder shall be entitled to payment of the interest thereon from
the date of the Event of Default for interest through the date of conversion. No
fractions of Shares will be issued on conversion, but instead of any fractional
interest the Company will pay cash adjustments as provided herein.

 

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            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. Prepayment shall be effected by paying the
amount equal to the outstanding principal amount of the Note, plus all interest
accrued subsequent to an Event of Default. 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,
if any is then accruing, 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 any 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 at the 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. If the Note is converted following an Event of
Default, the Holder shall be entitled to payment of the interest thereon from
the date of the Event of Default for interest through the date of conversion. 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 and state
securities laws in the absence of registration or qualification under such
statutes, the Company shall be under no obligation to permit conversion of the
Note and issue any Shares of common stock pursuant hereto.

 

6.           Satisfaction and Discharge of Note. This Note shall cease to be of
further effect (except as to any surviving rights of conversion, transfer, or
exchange of Notes herein expressly provided for) when:

 

(a)          the Company has paid or caused to be paid all sums payable
hereunder, including all principal amounts and interest accrued under the Note;
and

 

(b)         all conditions precedent herein relating to the satisfaction and
discharge of this Note have been complied with.

 

7.          Events of Default. “Event of Default,” when used herein, whatever
the reason for such Event of Default and whether it shall be voluntary,
involuntary, or effected by operation of law pursuant to any judgment, decree,
or order of any court or any order, rule, or regulation of any administrative or
governmental body or be caused by the provisions of any paragraph herein, means
any one of the following events:

 

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             (a)          default in the payment of any interest on this Note
when it becomes due and payable and continuance of such default for a period of
30 days; or

 

(b)          default in the payment of the principal of this Note when due,
whether at maturity, upon prepayment, or otherwise; or

 

(c)          default in the performance or breach of any covenant or warranty of
the Company in this Note (other than a covenant or warranty, the breach or
default in performance of which is elsewhere in this section specifically dealt
with), and continuation of such default or breach for a period of 60 days after
there has been given to the Company, by registered or certified mail, a written
notice specifying such default or breach and requiring it to be remedied and
stating that such notice is a notice of default hereunder; or

 

 

(d)

the entry of a decree or order by a court having jurisdiction in the premises:

 

(i)          adjudging the Company a bankrupt or insolvent, or composition
thereof, or in respect of the Company under the Federal Bankruptcy Act or any
other applicable federal or state law;

 

(ii)         appointing a receiver, liquidator, assignee, trustee, sequestrator,
or other similar official of the Company or of any substantial part of its
property; or

 

(iii) ordering the winding up or liquidation of the Company’s affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
60 consecutive days; or

 

(e)          the institution by the Company of proceedings to be adjudicated a
bankrupt or insolvent or the consent by it to the institution of bankruptcy or
insolvency proceedings against it; or a filing by the Company of a petition or
answer or consent seeking reorganization or relief under the Federal Bankruptcy
Act or any other applicable federal or state law, or the consent by it to the
filing of any such petition or the appointment of a receiver, liquidator,
assignee, trustee, sequestrator, or other similar official of the Company or of
any substantial part of its property; or the making by the Company of an
assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due; or the taking of
corporate action by the Company in furtherance of any such actions.

 

8.          Acceleration of Maturity. If an Event of Default occurs and is
continuing, then, in every such case, the Holder may declare the principal to be
due and payable immediately by a notice in writing to the Company of such
default, and upon any such declaration, such principal shall become immediately
due and payable. At any time after such declaration of acceleration has been
made, and before a judgment or decree for payment of money due has been obtained
by the Holder, the Holder by written notice to the Company may rescind and annul
such declaration and its consequences if all Events of Default, other than the
nonpayment of the principal of Note that has become due solely by such
acceleration, have been cured or waived. No such rescission shall affect any
subsequent default or impair any right consequent thereon.

 

9.          Suits for Enforcement. If an Event of Default occurs and is
continuing, the Holder may, in its discretion, proceed to protect and enforce
its rights by such appropriate judicial proceedings as the Holder shall deem
most effectual to protect and enforce any such rights, whether for the specified
enforcement of any covenant or agreement under this Note, in aid of the exercise
of any power granted herein, or to enforce any other property remedy.

 

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10.        Notices to Holder; Waiver. When this Note provides for notice to
Holder of any event, such notice shall be sufficiently given if in writing and
mailed, registered, postage prepaid, to Holder at its address as it appears in
the Company’s records, not later than the latest date and not earlier than the
earliest date prescribed for the giving of such notice. When the Note provides
for notice to the Company, such notice shall be sufficiently given if in writing
and mailed, registered, postage prepaid, to the Company at its address set forth
above (or at such other address as shall be provided to the Holder in the manner
for giving notices set forth herein), not later than the latest date and not
earlier than the earliest date prescribed for the giving of such notice. When
this Note provides for notice in any manner, such notice may be waived in
writing by the person entitled to receive such notice, whether before or after
the event, and any such waiver shall be equivalent of such notice.

 

11.        Restrictions. The Holder, by acceptance hereof, both with respect to
the Note and the Shares to be issuable upon conversion of the Note (unless
issued pursuant to an effective registration statement under the Securities
Act), represents and warrants as follows:

 

(a)         The Note and the Shares are being acquired for the Holder’s own
account to be held for investment purposes only and not with a view to or for
resale in connection with any distribution of such Note or Shares or any
interest therein without registration or other compliance under the Securities
Act, and the Holder has no direct or indirect participation in any such
undertaking or in underwriting such an undertaking.

 

(b)        The Holder has been advised and understands that the Note and the
Shares have not been registered under the Securities Act and the Note and/or the
Shares must be held and may not be sold, transferred, or otherwise disposed of
for value unless they are subsequently registered under the Securities Act or an
exemption from such registration is available; except as set forth herein, the
Company is under no obligation to register the Note and/or the Shares under the
Securities Act; in the absence of such registration, sale of the Note or Shares
may be impracticable; the Company’s registrar and transfer agent will maintain
stop-transfer orders against registration of transfer of the Note and the
Shares; and the certificates to be issued for any Shares will bear on their face
a legend in substantially the following form:

 

The securities represented by this certificate have not been registered under
the Securities Act of 1933, as amended (the “Securities Act”), or under the
securities laws of any state. These securities have been acquired for investment
and may not be sold or transferred 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 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.

 

(c)         The Company may refuse to transfer the Note and/or the Shares unless
the Holder provides an opinion of legal counsel reasonably satisfactory to the
Company or a “no-action” or interpretive response from the United States
Securities and Exchange Commission to the effect that the transfer is proper;
further, unless such letter or opinion states that the Note and/or Shares are
free from any restrictions under the Securities Act, the Company may refuse to
transfer the Note and/or the Shares to any transferee that does not furnish in
writing to the Company the same representations and agree to the same conditions
with respect to such Note and Shares as set forth herein. The Company may also
refuse to transfer the Note or Shares if any circumstances are present
reasonably indicating that the transferee’s representations are not accurate.

 

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12.        Registered Holder. The Company may treat the person whose name
appears hereon as the absolute owner of this Note for the purpose of receiving
payment of, or on account of, the principal and interest due on this Note and
for all other proposes, and the Company shall not be affected by any notice to
the contrary.

 

13.        Severability. In case any provision in this Note shall be invalid,
illegal, or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

 

14.        Governing Law. This Note shall be governed by and construed and
interpreted in accordance with the laws of the state of Pennsylvania, excluding
principles of choice or conflicts of law.

 

15.        Legal Holidays. In any case when any date provided herein shall not
be a business day, then (notwithstanding any other provision of this Note), the
event required or permitted on such date shall be required or permitted, as the
case may be, on the next succeeding business day with the same force and effect
as if made on the date upon which such event was required or permitted pursuant
hereto.

 

16.        Delay or Omission; No Waiver. No delay or omission of the Holder to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or
acquiescence therein. Every right or remedy given hereby or by law may be
exercised from time to time and as often as may be deemed expedient.

 

 

17.

Miscellaneous. This Note is subject to the following additional terms and
conditions:

 

(a)         If this Note is placed with an attorney for collection, or if suit
be instituted for collection, or if any other remedy provided by law is pursued
by the Holder because of any default in the terms and conditions herein, then,
in any event, the Company agrees to pay reasonable attorneys’ fees, costs, and
other expenses incurred by the Holder in so doing.

 

(b)        None of the rights and remedies of the Holder shall be waived or
affected by failure or delay to exercise them. All remedies conferred on the
Holder shall be cumulative and none is exclusive. Such remedies may be exercised
concurrently or consecutively at the Holder’s option.

 

(c)         This Note is negotiable and transferable, subject to compliance with
the provisions of paragraph 11 hereof.

 

(d)        The makers, guarantors, and endorsers hereof severally waive
presentment for payment, protest, and notice of protest and nonpayment of this
Note.

 

 

DATED effective as of first day of September 2009.

 

 

MOBICLEAR INC.

Attest:

 

 

 

/s/ Kenneth G.C. Telford

By: /s/ Stephen P. Cutler

 

Stephen P. Cutler, President

 

 

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Notice of Conversion

 

[date]

 

 

MOBICLEAR INC.

 

 

Re:

Conversion of Note

 

Gentlemen:

 

The undersigned owner of this Note hereby irrevocably exercises the option to
convert this Note, or the portion hereof designated, into shares of common
stock, par value $0.0001 per share, of MOBICLEAR INC., in accordance with the
terms of this Note, and directs that the shares issuable and deliverable upon
the conversion, together with any check in payment for fractional shares, be
issued in the name of and delivered to the undersigned unless a different name
has been indicated below. If shares are to be issued in the name of a person
other than the undersigned, the undersigned will pay any transfer taxes payable
with respect thereto.

 

 

 

________________________(Signature)

 

FILL IN FOR REGISTRATION OF SHARES:

 

_______________________________

(Printed Name)

 

_______________________________

(Street Address)

 

_______________________________

(City/State/Zip Code)

 

_______________________________

Portion to be converted (if less than all)