Document:

MOBICLEAR INC.

             

            Convertible Promissory Note

            Due September 30, 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 Seventy-Seven Thousand Seven Hundred Two (77,702.00 ) on September 30, 2009, upon presentation and surrender of this Convertible Promissory Note (“Note”), at the offices of the Company at 27th 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 September 30, 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.

             

            
                	
                             

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

                        

            

             

            1.          Term and Interest. The date of maturity of the Note shall be September 30, 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 September 30, 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 September 30, 2009, of at least $2,500,000.00. 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 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.

             

            
                

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            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:

             

            (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

             

            
                

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            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.

             

            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.

             

            
                

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            (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.

             

            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.

             

            
                

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            (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 the September 30, 2008.

                        

            

             

            
                	
                             

                        	
                             

                        	
                            MOBICLEAR INC.

                        
	
                            Attest

                        	
                             

                        	
                             

                        
	
                             

                        	
                             

                        	
                             

                        	
                             

                        
	
                            By:

                        	
                            /s/ Edward Pooley

                        	
                            By:

                        	
                            /s/ Stephen P. Cutler

                        
	
                             

                        	
                            Edward Pooley, COO

                        	
                             

                        	
                            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)This Warrant has not been registered under the Securities Act of 1933, as amended (the

“Securities Act”), or the securities laws of any state and may not be sold, transferred,

or otherwise disposed of except pursuant to an effective registration statement

or exemption from registration under the foregoing laws.

 

 

MOBICLEAR INC.

 

WARRANT TO PURCHASE 500,000 SHARES OF

COMMON STOCK, PAR VALUE $0.0001 PER SHARE

 

FOR VALUE RECEIVED, [name of warrantholder], the registered holder of this Warrant (“Warrantholder”) is entitled to purchase, subject to the provisions of this Warrant, from MOBICLEAR INC., a Pennsylvania corporation (“Company”), at any time on or after [warrant date], and not later than 5:00 p.m., on [warrant expiration date], at an exercise price per share equal to the lesser of (i) the average market closing price for the 10 days preceding the date of this Warrant, or (ii) the Holder-Initiated Conversion Rate or the Company-Initiated Conversion Rate (as defined in the Convertible Promissory Note) at which shares of the Company’s common stock were most recently issued pursuant to the Convertible Promissory Note of even date herewith (the exercise price in effect
being herein called the “Warrant Price”), 500,000 shares (“Warrant Shares”) of the Company’s common stock, par value $0.0001 per share (“Common Stock”).  The number of Warrant Shares purchasable upon exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time as described herein.

 

Section 1.          Registration.  The Company shall maintain books for the transfer and registration of the Warrant.  Upon the initial issuance of this Warrant, the Company shall issue and register the Warrant in the name of the Warrantholder.

 

Section 2.          Transfers.  As provided herein, this Warrant may be transferred only pursuant to a registration statement filed under the Securities Act or an exemption from such registration.  Subject to such restrictions, the Company shall transfer this Warrant from time to time upon the books to be maintained by the Company for that purpose, upon surrender thereof for transfer properly endorsed or accompanied by appropriate instructions for transfer and such other documents as may be reasonably required by the Company, including, if required by the Company, an opinion of its counsel to the effect that such transfer is exempt from the registration requirements of the Securities Act, to establish that such transfer is being made in accordance with the terms hereof, and a new Warrant shall
be issued to the transferee and the surrendered Warrant shall be canceled by the Company.

 

Section 3.          Exercise of Warrant.  Subject to the provisions hereof, the Warrantholder may exercise this Warrant in whole or in part at any time prior to its expiration upon surrender of the Warrant, together with delivery of the duly executed Warrant Exercise Form attached hereto as Appendix A (the “Exercise Agreement”) and payment by cash, certified check, or wire transfer of funds for the aggregate Warrant Price for that number of Warrant Shares then being purchased, to the Company during normal business hours on any business day at the Company’s principal executive offices (or such other office or agency of the Company as it may designate by notice to the Warrantholder).  In order to facilitate the foregoing, the Company
shall cooperate with licensed securities broker-dealers to or through which Warrant Shares may be sold to deposit certificates evidencing the Warrant Shares to be sold with such broker-dealer for delivery upon settlement of the sale of such Warrant Shares against transmittal to the Company of immediately available funds for the full purchase price of the Warrant Shares so sold and delivered.  The Warrant Shares so purchased shall be deemed to be issued to the Warrantholder or its designee, as the record owner of such shares, as of the close of business on the date on which this Warrant 

 

shall have been surrendered (or evidence of loss, theft, or destruction thereof and security or indemnity satisfactory to the Company), the Warrant Price shall have been paid, and the completed Exercise Agreement shall have been delivered.  Certificates for the Warrant Shares so purchased, representing the aggregate number of shares specified in the Exercise Agreement, shall be delivered to the Warrantholder within a reasonable time, not exceeding three business days, after this Warrant shall have been so exercised.  The certificates so delivered shall be in such denominations as may be requested by the Warrantholder and shall be registered in the name of Warrantholder or such other name as shall be designated by Warrantholder.  If this Warrant shall have been exercised only in part, then, unless this Warrant has expired, the Company shall, at its expense, at the time of delivery of such certificates, deliver
to the Warrantholder a new Warrant representing the number of shares with respect to which this Warrant shall not then have been exercised.  As used herein, “business day” means a day, other than a Saturday or Sunday, on which banks in the Philippines are open for the general transaction of business.  Each exercise hereof shall constitute the reaffirmation by the Warrantholder that the representations and warranties contained in Article IV of the Securities Purchase Agreement by and between the Company and the Warrantholder of even date herewith are true and correct in all material respects with respect to the Warrantholder as of the time of such exercise.

 

Section 4.          Compliance with the Securities Act.  The Company may cause the legend set forth on the first page of this Warrant to be set forth on each Warrant or similar legend on any security issued or issuable upon exercise of this Warrant, unless counsel for the Company is of the opinion as to any such security that such legend is unnecessary.

 

Section 5.          Payment of Taxes.  The Company will pay any documentary stamp taxes attributable to the initial issuance of Warrant Shares issuable upon the exercise of the Warrant; provided, however, that the Company shall not be required to pay any tax or taxes that may be payable in respect of any transfer involved in the issuance or delivery of any certificates for Warrant Shares in a name other than that of the Warrantholder in respect of which such shares are issued, and in such case, the Company shall not be required to issue or deliver any certificate for Warrant Shares or any Warrant until the person requesting the same has paid to the Company the amount of such tax or has established to
the Company’s reasonable satisfaction that such tax has been paid.  The Warrantholder shall be responsible for income taxes due under federal, state, or other law, if any such tax is due.

 

Section 6.          Mutilated or Missing Warrants.  In case this Warrant shall be mutilated, lost, stolen, or destroyed, the Company shall issue in exchange and substitution of and upon cancellation of the mutilated Warrant, or in lieu of and substitution for the Warrant lost, stolen, or destroyed, a new Warrant of like tenor and for the purchase of a like number of Warrant Shares, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft, or destruction of the Warrant, and with respect to a lost, stolen, or destroyed Warrant, reasonable indemnity or bond with respect thereto, if requested by the Company.

 

Section 7.          Reservation of Common Stock.  The Company hereby represents and warrants that there have been reserved, and the Company shall at all applicable times keep reserved until issued (if necessary) as contemplated by this Section 7, out of the authorized and unissued shares of Common Stock, sufficient shares to provide for the exercise of the rights of purchase represented by this Warrant.  The Company agrees that all Warrant Shares issued upon due exercise of the Warrant shall be, at the time of delivery of the certificates for such Warrant Shares, duly authorized, validly issued, fully paid, and nonassessable shares of Common Stock of the Company.

 

Section 8.          Adjustments.  In order to prevent dilution of the rights granted hereunder, the Warrant Price shall be subject to adjustment from time to time in accordance with this section.

 

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 (a)         In the event the Company shall declare a stock dividend or make any other distribution on any capital stock of the Company payable in Common Stock, options to purchase Common Stock, or securities convertible into Common Stock, or the Company shall at any time subdivide (other than by means of a dividend payable in Common Stock) its outstanding shares of Common Stock into a greater number of shares or combine such outstanding stock into a smaller number of shares, then in each such event, the Warrant Price in effect immediately prior to such dividend, distribution, or effective date of such combination shall be adjusted so that the holders of the Warrants shall be entitled to receive the kind and number of shares of Common Stock or other securities of the Company that they would have owned or have been entitled to
receive, after the happening of any of the events described above, had such Warrants been exercised immediately prior to the happening of such event or any record date with respect thereto; an adjustment made pursuant to this subsection (a) shall become effective immediately after the effective date of such event retroactive to the record date for such event.

 

 (b)        If any capital reorganization or reclassification of the capital stock of the Company, consolidation or merger of the Company with another corporation, or the sale of all or substantially all of the Company’s assets to another corporation shall be effected in such a way that holders of Common Stock shall be entitled to receive stock, securities, or assets with respect to or in exchange for Common Stock, then, as a condition of such reorganization, reclassification, consolidation, merger, or sale, lawful adequate provisions shall be made whereby the Warrantholder shall thereafter have the right to acquire and receive on exercise of the Warrant such shares of stock, securities, or assets as would have been issuable or payable (as part of the reorganization, reclassification, consolidation, merger, or sale) with
respect to or in exchange for such number of outstanding shares of Common Stock as would have been received on exercise of the Warrant immediately before such reorganization, reclassification, consolidation, merger, or sale.  In any such case, appropriate provision shall be made with respect to the rights and interests of the Warrantholder to the end that the provisions hereof (including provisions for adjustments of the Warrant Price and for the number of shares issuable on exercise of the Warrants) shall thereafter be applicable in relation to any shares of stock, securities, or assets thereafter deliverable on the exercise of the Warrant.  In the event of a merger or consolidation of the Company with or into another corporation, or the sale of all or substantially all of the Company’s assets, as a result of which a number of shares of common stock of the surviving or purchasing corporation greater or lesser than the number of shares of Common Stock outstanding immediately
prior to such merger, consolidation, or purchase are issuable to Warrantholder, then the Warrant Price in effect immediately prior to such merger, consolidation, or purchase shall be adjusted in the same manner as though there was a subdivision or combination of the outstanding shares of Common Stock.  The Company will not effect any such consolidation, merger, or sale unless, prior to the consummation thereof, the successor corporation resulting from such consolidation or merger or the corporation purchasing such assets shall assume by written instrument mailed or delivered to the Warrantholder, at the last address appearing on the Company’s books, the obligation to deliver to Warrantholder such shares of stock, securities, or assets as, in accordance with the foregoing provisions, Warrantholder may be entitled to acquire on exercise of the Warrants.  

 

 (c)         No adjustment shall be made in the Warrant Price or the number of shares of Common Stock issuable on exercise of the Warrants solely as a result of:

 

 (i)         the offer and sale of any shares of preferred stock, Common Stock, or other securities convertible or exercisable into shares of Common Stock on a per share basis greater than the Warrant Price for the Common Stock;

 

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 (ii)        the issuance of any Common Stock, securities, or assets on conversion or redemption of shares of preferred stock; and

 

 (iii)       the purchase or other acquisition by the Company of any capital stock, evidence of its indebtedness, or other securities of the Company.  

 

 (d)        Notwithstanding anything to the contrary set forth elsewhere in this Section 8, no adjustment in the Warrant Price or number of shares purchasable hereunder shall be required unless such adjustment would require an increase or decrease of at least 5% in the Warrant Price; provided, however, that any adjustments that by reason of this subsection (d) are not required to be made shall be carried forward and taken into account in any subsequent adjustment.  

 

Section 9.          Fractional Interest.  The Company shall not be required to issue fractions of Warrant Shares upon the exercise of this Warrant.  If any fractional share of Common Stock would, except for the provisions of the first sentence of this Section 9, be deliverable upon such exercise, the Company, in lieu of delivering such fractional share, shall pay to the Warrantholder an amount in cash equal to the Market Price of such fractional share of Common Stock on the date of exercise.  “Market Price” as of a particular date (the “Valuation Date”) shall mean the following: (a) if the Common Stock is then listed on a national stock exchange, the closing sale price of one
share of Common Stock on such exchange on the last trading day prior to the Valuation Date; (ii) if the Common Stock is then quoted on The Nasdaq Stock Market, Inc. (“Nasdaq”), the closing sale price of one share of Common Stock on Nasdaq on the last trading day prior to the Valuation Date or, if no such closing sale price is available, the average of the high bid and the low asked price quoted on Nasdaq on the last trading day prior to the Valuation Date; (iii) if the Common Stock is then quoted on the OTC Bulletin Board (“OTCBB”), the closing sale price of one share of Common Stock on the OTCBB on the last trading day prior to the Valuation Date or, if no such closing sale price is available, the average of the high bid and the low asked price quoted on OTCBB on the last trading day prior to the Valuation Date; or (iv) if the Common Stock is not then
listed on a national stock exchange or quoted on Nasdaq or the OTCBB, the fair market value of one share of Common Stock as of the Valuation Date shall be determined in good faith by the Company’s board of directors and the Warrantholder.  

 

Section 10.        Benefits.  Nothing in this Warrant shall be construed to give any person, firm, or corporation (other than the Company and the Warrantholder) any legal or equitable right, remedy, or claim, it being agreed that this Warrant shall be for the sole and exclusive benefit of the Company and the Warrantholder.

 

Section 11.        Notices to Warrantholder.  Upon the happening of any event requiring an adjustment of the Warrant Price, the Company shall promptly give written notice thereof to the Warrantholder at the address appearing in the records of the Company, stating the adjusted Warrant Price and the adjusted number of Warrant Shares resulting from such event and setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.  Failure to give such notice to the Warrantholder or any defect therein shall not affect the legality or validity of the subject adjustment.

 

Section 12.        Identity of Transfer Agent.  The transfer agent for the Common Stock is Continental Stock Transfer and Trust Company, 17 Battery Place, Eighth Floor, New York, NY  10004.  Upon the appointment of any subsequent transfer agent for the Common Stock or other shares of the Company’s capital stock issuable upon the exercise of the rights of purchase represented by the Warrant, the Company will mail to the Warrantholder a statement setting forth the name and address of such transfer agent.

 

4

 

 

Section 13.        Notices.  Unless otherwise provided, any notice required or permitted under this Warrant shall be given in writing and shall be deemed effectively given as hereinafter described: (a) if given by personal delivery, then such notice shall be deemed given upon such delivery; (b) if given by telex or facsimile, then such notice shall be deemed given upon receipt of confirmation of complete transmittal; (c) if given by mail, then such notice shall be deemed given upon the earlier of receipt of such notice by the recipient or three days after such notice is deposited in first class mail, postage prepaid; and (d) if given by an internationally recognized overnight air courier, then such notice shall be deemed given one day after delivery to such carrier.  All notices shall
be addressed as follows:  if to the Warrantholder, at its address as set forth in the Company’s books and records, and if to the Company, at 27th Floor, Chatham House   , Salcedo Village, Makati City, Philippines 1227, or at such other addresses as the Warrantholder or the Company may designate by 10 days’ advance written notice to the other.

 

Section 14.        Successors.  All the covenants and provisions hereof by or for the benefit of the Warrantholder shall bind and inure to the benefit of its respective successors and assigns hereunder. 

 

Section 15.        Governing Law.  This Warrant shall be governed by, and construed in accordance with, the internal laws of the state of Pennsylvania, without reference to the choice of law provisions thereof.  Service of process in connection with any such suit, action, or proceeding may be served on each party hereto anywhere in the world by the same methods as are specified for the giving of notices under this Warrant.  

 

Section 16.        No Rights as Stockholder.  Prior to the exercise of this Warrant, the Warrantholder shall not have or exercise any rights as a stockholder of the Company by virtue of its ownership of this Warrant.

 

Section 17.        Amendment; Waiver.  Any term of this Warrant may be amended or waived (including the adjustment provisions included in Section 8 of this Warrant) only upon the written consent of the Company and the Warrantholder.  

 

Section 18.        Section Headings.  The section headings in this Warrant are for the convenience of the Company and the Warrantholder and in no way alter, modify, amend, limit, or restrict the provisions hereof.

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed as of the [warrant date].

 

	
             
 	
             
 	
            MOBICLEAR INC.
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 	
             
 
	
             
 	
             
 	
            By:
 	
            /s/ Stephen P. Cutler
 
	
             
 	
             
 	
             
 	
             
 

 

 

5

 

 

Appendix A

 

MOBICLEAR INC.

 

WARRANT EXERCISE FORM

 

To: MobiClear Inc.

 

The undersigned hereby irrevocably elects to exercise the right of purchase represented by the within Warrant (“Warrant”) for, and to purchase thereunder by the payment of the Warrant Price and surrender of the Warrant, _______________ shares of Common Stock (“Warrant Shares”) provided for therein, and requests that certificates for the Warrant Shares be issued as follows: 

 

	
             
 
	
            Name
 
	
             
 
	
            Address
 
	
             
 
	
            and delivered by:
 	
            certified mail to the above address, or
 
	
             
 	
            electronically (provide DWAC instructions: _______________________)
 
	
             
 	
            other (specify): _______________________________________________
 

 

and, if the number of Warrant Shares shall not be all the Warrant Shares purchasable upon exercise of the Warrant, that a new Warrant for the balance of the Warrant Shares purchasable upon exercise of this Warrant be registered in the name of the undersigned Warrantholder or the undersigned’s assignee as below indicated and delivered to the address stated below.

 

Dated: ___________________, ____

 

 

	
            Note:
 	
            The signature must correspond with
 	
            Signature
 
	
             
 	
            the name of the registered holder as
 	
             
 
	
             
 	
            written on the first page of the 
 	
             
 
	
             
 	
            Warrant in every particular, without 
 	
            Name (please print)
 
	
             
 	
            alteration or enlargement or any 
 	
             
 
	
             
 	
            change whatsoever, unless the 
 	
             
 
	
             
 	
            Warrant has been assigned.
 	
             
 
	
             
 	
             
 	
            Address
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
            Assignee:  
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 
	
             
 	
             
 	
             
 

 

 

SCHEDULE TO FORM OF WARRANT

 

	
            Name of Warrantholder
 	
            Warrant Date
 	
            Warrant Expiration Date
 
	
             
 	
             
 	
             
 
	
            Charter Finance Group, Ltd.
 	
            August 19, 2008
 	
            August 31, 2013
 
	
            Raleston Consultants, Inc.
 	
            September 18, 2008
 	
            September 30, 2013
 
	
            DBP Holdings Limited
 	
            September 30, 2008
 	
            September 30, 2013

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