Exhibit 10.2
 
CONVERTIBLE PROMISSORY NOTE
$500,000 PLUS INTEREST DUE & PAYABLE

THIS NOTE AND THE SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS NOTE AND THE
SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR
APPLICABLE EXEMPTION OR SAFE HARBOR PROVISION.

FOR VALUE RECEIVED, on the Effective Date, as defined below on the signature
page, ClearLite Holdings, Inc as Obligor ("Borrower,” or “Obligor”), hereby
promises to pay to the Lender (“Lender” or “ Holder”), as defined below on the
signature page, the Principal Sum, as defined below, along with the Interest
Rate, as defined below, according to the terms herein.

 
The "Lender" shall be:
 
JMJ Financial / Its Principal, or Its Assignees
 
The "Principal Sum" shall be:
 
$500,000 (five hundred thousand US Dollars): Subject to the following: accrued,
unpaid interest shall be added to the Principal Sum.
 
The “Consideration” shall be:
 
 
$500,000 (five hundred thousand US Dollars) in the form of the Secured &
Collateralized Promissory Note Document C-07192010a (including Security &
Collateral Agreement).
 
The "Interest Rate" shall be:
 
10% one-time interest charge on the Principal Sum.   No interest or principal
payments are required until the Maturity Date, but both principal and interest
may be included in conversion prior to maturity date.
 
The "Conversion Price" shall be the following price:
 
As applied to the Conversion Formula set forth in 2.2, 65% (sixty five percent)
of the average of the two lowest closing prices in the 22 trading days prior to
the conversion; as applies to ClearLite Holdings, Inc. voting common stock.
 
The "Maturity Date" is the date upon which the Principal Sum of this Note, as
well as any unpaid interest shall be due and payable, and that date shall be:
 
 
3 (three) years from the Effective Date, as defined below on the signature page.
 
The “Prepayment Terms” shall be:
 
Prepayment is not permitted, unless approved by Holder in writing.
 

 
 
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ARTICLE 1 PAYMENT-RELATED PROVISIONS

1.1  Interest Rate. Subject to the Holder's right to convert, interest payable
on this Note will accrue interest at the Interest Rate and shall be applied to
the Principal Sum.

ARTICLE 2 CONVERSION RIGHTS

The Holder will have the right to convert the Principal Sum and accrued interest
under this Note into Shares of the Borrower's Common Stock as set forth below.

2.1 Conversion Rights and Cashless Exercise. Subject to the terms set forth in
Section 2.7, the Holder will have the right at its election from and after the
Effective Date, and then at any time, to convert all or part of the outstanding
and unpaid Principal Sum and accrued interest into shares of fully paid and
nonassessable shares of common stock of ClearLite Holdings, Inc. (as such stock
exists on the date of issuance of this Note, or any shares of capital stock of
ClearLite Holdings, Inc.  into which such stock is hereafter changed or
reclassified, the "Common Stock") as per the Conversion Formula set forth in
Section 2.2. Any such conversion shall be cashless, and shall not require
further payment from Holder.  Unless otherwise agreed in writing by both the
Borrower and the Holder, at no time will the Holder convert any amount of the
Note into common stock that would result in the Holder owning more than 4.99% of
the common stock outstanding of ClearLite Holdings, Inc.   Shares from any such
conversion will be delivered to Holder by 2:30pm EST within 3 (three) business
days of conversion notice delivery (see 3.1) by “DWAC/FAST” electronic transfer
(see “Share Delivery” attachment).

2.2. Conversion Formula. The number of shares issued through conversion is the
conversion amount divided by the conversion price.

# Shares = Conversion Amount
     Conversion Price

2.3. This section 2.3 intentionally left blank.

2.4. This section 2.4 intentionally left blank.

2.5 Reservation of Shares. As of the issuance date of this Note and for the
remaining period during which the conversion right exists, the Borrower will
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of Common Stock upon the full conversion of
this Note. The Borrower represents that upon issuance, such shares will be duly
and validly issued, fully paid and non-assessable. The Borrower agrees that its
issuance of this Note constitutes full authority to its officers, agents and
transfer agents who are charged with the duty of executing and issuing stock
certificates to execute and issue the necessary certificates for shares of
Common Stock upon the conversion of this Note.

2.6. Delivery of Conversion Shares.  Shares from any such conversion will be
delivered to Holder by 2:30pm EST within 3 (three) business days of conversion
notice delivery (see 3.1) by “DWAC/FAST” electronic transfer (see “Share
Delivery” attachment).  If those shares are not delivered in accordance with
this timeframe stated in this Section 2.6, at any time for any reason prior to
offering those shares for sale in a private transaction or in the public market
through its broker, Holder may rescind that particular conversion to have the
conversion amount returned to the note balance with the conversion shares
returned to the Borrower. The Company will make its reasonable best efforts to
deliver shares to Holder same day / next day.
 
 
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2.6.1. Conversion Delay Penalties.  Holder may assess penalties or liquidated
damages (both referred to herein as “penalties”) as follows.  For each
conversion, in the event that shares are not delivered by the forth business day
(inclusive of the day of the conversion), a penalty of $2,000 per day will be
assessed for each day after the third business day (inclusive of the day of the
conversion) until share delivery is made; and such penalty will be added to the
principal balance of the Note (under Holder and Borrower’s expectation that any
penalty amounts will tack back to the original date of the note).  Borrower will
not be subjected to any penalties once its transfer agent processes the shares
to the DWAC system.

2.7. Discharge By Payment.  Conversions under this Convertible Promissory Note
Document B-07192010a are available only after the Conversion Amount described
herein is discharged by payment of equal or greater value from the Secured &
Collateralized Promissory Note Document C-07192010a by either, at the Holder’s
choice, cash payment, or surrender of security/collateral, or other negotiated
form of payment mutually agreed to in writing.

ARTICLE 3 MISCELLANEOUS

3.1. Notices. Any notice required or permitted hereunder must be in writing and
either personally served, sent by facsimile or email transmission, or sent by
overnight courier.  Notices will be deemed effectively delivered at the time of
transmission if by facsimile or email, and if by overnight courier the business
day after such notice is deposited with the courier service for delivery.

3.2. Amendment Provision. The term "Note" and all reference thereto, as used
throughout this instrument, means this instrument as originally executed, or if
later amended or supplemented, then as so amended or supplemented.

3.3. Assignability. This Note will be binding upon the Borrower and its
successors and permitted assigns, and will inure to the benefit of the Holder
and its successors and permitted assigns, and may be assigned by the Holder.

3.4. Governing Law. This Note will be governed by, and construed and enforced in
accordance, with the laws of the State of Florida, without regard to the
conflict of laws principles thereof.  Any action brought by either party against
the other concerning the transactions contemplated by this Agreement shall be
brought only in the state courts of Florida or in the federal courts located in
Miami-Dade County, in the State of Florida.  Both parties and the individuals
signing this Agreement agree to submit to the jurisdiction of such courts.

3.5. Maximum Payments. Nothing contained herein may be deemed to establish or
require the payment of a rate of interest or other charges in excess of the
maximum permitted by applicable law. In the event that the rate of interest
required to be paid or other charges hereunder exceed the maximum permitted by
such law, any payments in excess of such maximum will be credited against
amounts owed by the Borrower to the Holder and thus refunded to the Borrower.
 
 
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3.6. Attorney Fees. In the event any attorney is employed by either party to
this Note with regard to any legal or equitable action, arbitration or other
proceeding brought by such party for the enforcement of this Note or because of
an alleged dispute, breach, default or misrepresentation in connection with any
of the provisions of this Note, the prevailing party in such proceeding will be
entitled to recover from the other party reasonable attorneys' fees and other
reasonable costs and expenses incurred, in addition to any other relief to which
the prevailing party may be entitled.

3.7. No Public Announcement. Except as required by law, no public announcement
may be made regarding this Note, payments, or conversions without written
permission by both Borrower and Holder.

3.8. Opinion of Counsel. In the event that an opinion of counsel is needed for
any matter related to this Note, Holder has the right to have any such opinion
provided by its counsel.  Holder also has the right to have any such opinion
provided by Borrower’s counsel.

3.9. Effective Date.  This Note will become effective only upon occurrence of
the two following events: execution by both parties, and delivery of valid
payment by the Lender in the form of the Secured & Collateralized Promissory
Note Document C-07192010a (including Security & Collateral Agreement).

3.10. Director’s Resolution.  Once effective, Borrower will execute and deliver
to Holder a copy of a Board of Director’s resolution resolving that this note is
validly issued, paid, and effective.

3.11. No Shorting.  Holder agrees that so long as any Notes from Borrower to
Holder remain outstanding, Holder will not enter into or effect any “short
sales” of the common stock or hedging transaction which establishes a net short
position with respect to the common stock of ClearLite Holdings, Inc.  Borrower
acknowledges and agrees that upon submission of conversion notice as set forth
in Section 3.1 (up to the amount of cash paid in under the Notes), Holder
immediately owns the common shares described in the conversion notice and any
sale of those shares issuable under such conversion notice would not be
considered short sales.

 
Signature Page to Follow

 
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BORROWER[S]:                                                                           
 

        Thomas Irvine     Paul Niedermeyer   CEO   VP of Operations   ClearLite
Holdings, Inc.   ClearLite Holdings, Inc.          

 

 
LENDER/HOLDER:

 

____________________________
JMJ Financial / Its Principal

EFFECTIVE DATE AS EXECUTED BY LENDER/HOLDER: ________________________

NOTARY FOR SIGNATURE BY LENDER/HOLDER:

 
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SAMPLE

NOTICE OF CONVERSION

(To be executed by the Holder in order to convert the Note)

The undersigned hereby elects to convert a portion of the Note issued by
ClearLite Holdings, Inc. into Shares of Common Stock of ClearLite Holdings, Inc.
according to the conditions set forth in such Note, as of the date written
below.

Date of Conversion:________________________________________________

Conversion Amount:__________________________________________________

Conversion Price:_________________________________________________

Shares To Be Delivered:_____________________________________________

Signature:________________________________________________________

Print Name:______________________________________________________

Address:________________________________________________________

_______________________________________________________________

 _______________________________________________________________

 
Shares from any such conversion will be delivered to Holder by 2:30pm EST within
2 (two) business days of conversion notice by “DWAC/FAST” electronic transfer in
accordance with Section 2.6.
 
 
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SHARE DELIVERY ATTACHMENT

EXAMPLE

2.6. Delivery of Conversion Shares.  Shares from any such conversion will be
delivered to Holder by 2:30pm EST within 2 (two) business days of conversion
notice delivery (see 3.1) by “DWAC/FAST” electronic transfer (see “Share
Delivery” attachment).  If those shares are not delivered in accordance with
this timeframe stated in this Section 2.6, at any time for any reason prior to
offering those shares for sale in a private transaction or in the public market
through its broker, Holder may rescind that particular conversion to have the
conversion amount returned to the note balance with the conversion shares
returned to the Borrower. The Company will make its best efforts to deliver
shares to Holder same day / next day.

Example:

Holder delivers conversion notice to Borrower at 5:15pm eastern time on Monday
January 1st.

Borrower’s transfer agent must deliver shares to Holder’s broker via “DWAC/FAST”
electronic transfer by no later than 10:30am eastern time on Wednesday January
3rd.

 
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