Exhibit 10.2

NEITHER THIS NOTE NOR THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE BEEN
THE SUBJECT OF REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNDER THE SECURITIES LAWS OF ANY STATE, AND THE SAME HAVE BEEN (OR WILL BE, WITH
RESPECT TO THE SECURITIES ISSUABLE UPON CONVERSION HEREOF) ISSUED IN RELIANCE ON
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND SUCH LAWS. NEITHER
THIS NOTE NOR THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT AS PERMITTED
UNDER SUCH SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
 
2% SECURED CONVERTIBLE PROMISSORY NOTE
 
$30,000
Ridgefield, Connecticut
January 10, 2007
 

FOR VALUE RECEIVED, the undersigned, Global Matrechs, Inc., a Delaware
corporation (the “Maker”), hereby promises to pay to Southridge Partners LP (the
“Payee”) the principal sum of thirty thousand dollars ($30,000) in one
installment due on December 31, 2007 (the “Maturity Date”) together with
interest from and after the date hereof at the rate of two percent (2%) per
annum computed on the unpaid principal balance on the basis of a 365-day year.
All payments made hereunder shall be made in immediately available funds. By
acceptance of this Note, the Payee represents, warrants, covenants and agrees
that it will abide by and be bound by its terms.
 
1. Conversion. The Payee shall have the option at any time to convert all or a
portion of the outstanding principal and interest on this Note into a number of
shares of common stock, $0.001 par value per share (the “Common Stock”) equal to
a fraction, the numerator of which shall be the amount of principal and interest
being so converted and the denominator of which shall be equal to the Conversion
Price (the “Conversion Shares”). “The “Conversion Price” shall be equal to
eighty percent (80%) of the average of the seven lowest closing bid prices for
the ten (10) trading days immediately preceding the Conversion Date. The
“Conversion Date” shall be defined as the date in which the Issuer receives
written notice by Holder of its election to convert all or a portion of the Note
pursuant to this Section 1.
 
2. Restrictions on Conversion. Notwithstanding anything to the contrary
contained herein, the number of Conversion Shares that may be acquired by the
Payee upon any conversion of this Note (or otherwise in respect hereof) shall be
limited to the extent necessary to insure that, following such conversion, the
total number of shares of Common Stock then beneficially owned by such Payee and
its affiliates and any other persons whose beneficial ownership of Common Stock
would be aggregated with the Payee’s for purposes of Section 13(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), does not
exceed 4.999% of the total number of issued and outstanding shares of Common
Stock (including for such purpose the shares of Common Stock issuable upon such
conversion). For such purposes, beneficial ownership shall be determined in
accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder.
 

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3. Prepayment The Maker shall have the right to redeem this Note at any time by
providing written notice to the Payee by making a cash payment to the Payee of
the outstanding principal amount of the Note multiplied by 120%, plus all
accrued interest: Written notice to the Payee shall be received at least 5
business days prior to the date of redemption payment (“Redemption Date”). If
the redemption payment is not made on or before the Redemption Date, the
redemption notice shall be rendered null and void and the Payee thereafter shall
have the right to convert any portion of the outstanding principal of the Note.
 
4. Adjustment for Dividends, Distributions, Subdivisions, Combinations, Mergers,
Consolidations or Sale of Assets.
 
(a) Manner of Adjustment.
 
(i) Stock Dividends, Distributions or Subdivisions. In the event the Maker shall
issue shares of Common Stock in a stock dividend, stock distribution or
subdivision, the Conversion Price in effect immediately before such stock
dividend, stock distribution or subdivision shall, concurrently with the
effectiveness of such stock dividend, stock distribution or subdivision, be
proportionately decreased and the number of shares of Common Stock issuable upon
conversion of this Note shall be proportionately increased.
 
(ii) Combinations or Consolidations. In the event the outstanding shares of
Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock, the Conversion Price
in effect immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or consolidation, be
proportionately increased and the number of shares of Common Stock issuable upon
conversion of this Note shall be proportionately decreased.
 
(iii) Adjustment for Reclassification, Exchange or Substitution. In the event
that the class of securities issuable upon the conversion of this Note shall be
changed into the same or a different number of shares of any class or classes of
stock, whether by capital reorganization, reclassification or otherwise, then
and in each such event the Payee shall have the right thereafter to convert this
Note for the kind and amount of shares of stock and other securities and
property receivable upon such reorganization, reclassification, or other change,
by Payees of the number of shares of the class of securities into which such
Note might have been convertible for immediately prior to such reorganization,
reclassification, or change, all subject to further adjustment as provided
herein.
 
(iv) Adjustment for Merger, Consolidation or Sale of Assets. In the event that
the Maker shall merge or consolidate with or into another entity or sell all or
substantially all of its assets, this Note shall thereafter be convertible for
the kind and amount of shares of stock or other securities or property to which
a Payee of the number of shares of Common Stock of the Maker deliverable upon
conversion of this Note would have been entitled upon such consolidation, merger
or sale; and, in such case, appropriate adjustment (as determined in good faith
by the Maker’s Board of Directors) shall be made in the application of the
provisions set forth in this Section 4 with respect to the rights and interest
thereafter of the Payee of this Note, to the end that the provisions set forth
in this Section 4 shall thereafter be applicable, as nearly as reasonably may
be, in relation to any shares of stock or other property thereafter deliverable
upon the conversion of this Note.
 

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(b) Certificate as to Adjustments. Upon the occurrence of each adjustment or
readjustment of the Conversion Price pursuant to this Section 4, the Maker at
its expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to the Payee a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based.
 
(c) Closing of Books. The Maker shall at no time close its transfer books
against the transfer of any shares of Common Stock issued or issuable upon the
conversion of this Note in any manner which interferes with the timely and
proper issuance of such shares.
 
5. Miscellaneous.
 
(a) Restricted Securities. By acceptance hereof, the Payee understands and
agrees that this Note is a “restricted security” under the federal securities
laws inasmuch as it is being acquired from the Maker in a transaction not
involving a public offering and has not been the subject of registration under
the Securities Act and that under such laws and applicable regulations such
securities may be resold in the absence of registration under the Securities Act
only in certain limited circumstances. The Payee hereby represents that it is
familiar with Rule 144, as promulgated by the Securities and Exchange Commission
under the Securities Act, as currently in effect, and understands the resale
limitations imposed thereby and by the Securities Act.
 
(b) Legends. It is understood that this Note shall bear the legend (in addition
to any legends which may be required, in the opinion of the Maker’s counsel, by
the securities laws of the state where the Payee is located) set forth on the
first page of this Note.
 

 
6. The following shall constitute an “Event of Default”:

 
a.
The Maker shall default in the payment of principal or interest on this Note and
same shall continue for a period of twenty (20) days; or

 
b.
The Maker shall (1) make an assignment for the benefit of creditors or commence
proceedings for its dissolution; or (2) apply for or consent to the appointment
of a trustee, liquidator or receiver for its or for a substantial part of its
property or business; or

 
c.
A trustee, liquidator or receiver shall be appointed for the Maker or for a
substantial part of its property or business without its consent and shall not
be discharged within sixty (60) days after such appointment; or

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d.
Any governmental agency or any court of competent jurisdiction at the instance
of any governmental agency shall assume custody or control of the whole or any
substantial portion of the properties or assets of the Maker and shall not be
dismissed within sixty (60) days thereafter; or

 
e.
Except for any judgments, settlements or related litigations or actions
disclosed in the Maker’s Annual Report on Form 10-K for the year ended December
31, 2005, any money judgment, writ or warrant of attachment, or similar process
in excess of One Hundred Fifty Thousand ($150,000) Dollars in the aggregate
shall be entered or filed against the Maker or any of its properties or other
assets and shall remain unpaid, unvacated, unbonded or unstayed for a period of
sixty (60) days; or

 
f.
Bankruptcy, reorganization, insolvency or liquidation proceedings or other
proceedings for relief under any bankruptcy law or any law for the relief of
debtors shall be instituted by or against the Maker and, if instituted against
the Maker, shall not be dismissed within sixty (60) days after such institution
or the Maker shall by any action or answer approve of, consent to, or acquiesce
in any such proceedings or admit the material allegations of, or default in
answering a petition filed in any such proceeding;

Upon the occurrence of an Event of Default, or at any time thereafter, and in
each and every such case, unless such Event of Default shall have been waived in
writing by the Payee (which waiver shall not be deemed to be a waiver of any
subsequent default) at the option of the Payee and in the Payee's sole
discretion, the Payee may consider all obligations under this Note immediately
due and payable, without presentment, demand, protest or notice of any kind, all
of which are hereby expressly waived by the Company, anything herein or in any
note or other instruments contained to the contrary notwithstanding, and the
Payee may immediately enforce any and all of the Payee's rights and remedies
provided herein or any other rights or remedies afforded by law. Upon the
occurrence of any Event of Default as set forth herein and during any period
that the Company shall have failed to make payment of any principal or Interest
due hereunder, at the option of Payee and without notice to the Company, the
Interest shall be added to the outstanding principal balance hereof, and the
entire outstanding principal balance, as so adjusted, shall bear interest
thereafter until paid at an annual rate of eighteen percent (18%) (the “Default
Rate”).

 
7. Presentment. Except as set forth herein, the Maker waives presentment, demand
and presentation for payment, notice of nonpayment and dishonor, protest and
notice of protest and expressly agrees that this Note or any payment hereunder
may be extended from time to time by the Payee without in any way affecting the
liability of the Maker.
 
8 . All provisions herein made are expressly limited so that in no event
whatsoever, whether by reason of advancement of proceeds hereof, acceleration of
maturity of the unpaid balance hereof or otherwise, shall the amount paid or
agreed to be paid to Payee for the use of the money advanced or to be advanced
hereunder exceed the maximum rate of interest allowed to be charged under
applicable law (the “Maximum Rate”), regardless of whether or not there has been
an acceleration of the payment of principal as set forth herein. If, from any
circumstances whatsoever, the fulfillment of any provision of this Note or any
other agreement or instrument now or hereafter evidencing, securing or in any
way relating to the indebtedness evidenced hereby shall involve the payment of
interest in excess of the Maximum Rate, then, ipso facto, the obligation to pay
interest hereunder shall be reduced to the Maximum Rate; and if from any
circumstance whatsoever, Payee shall ever receive interest, the amount of which
would exceed the amount collectible at the Maximum Rate, such amount as would be
excessive interest shall be applied to the reduction of the principal balance
remaining unpaid hereunder and not to the payment of interest. This provision
shall control every other provision in any and all other agreements and
instruments existing or hereafter arising between the Maker and Payee with
respect to the indebtedness evidenced hereby.
 

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9. In the event this Note is placed in the hands of an attorney for collection,
or if Payee incurs any costs incident to the collection of the indebtedness
evidenced hereby, the Maker agrees to pay to Payee an amount equal to all such
costs, including without limitation all reasonable attorneys' fees and all court
costs.
 
10. Notices.
 
(c) Notices to the Payee. Whenever any provision of this Note requires a notice
to be given or a request to be made to the Payee by the Maker, then and in each
such case, any such notice or request shall be in writing and shall be sent by
registered or certified mail, return receipt requested with postage thereon
fully prepaid to the Payee at its address set forth on the first page of this
Note or at such other address as the Payee may from time to time designate in
writing.
 
(d) Notices to the Maker. Whenever any provision of this Note requires a notice
to be given or a request to be made to the Maker by the Payee, any such notice
or request shall be in writing and shall be sent by registered or certified
mail, return receipt requested with postage thereon fully prepaid to the Maker
at its address set forth on the signature page or at such other address as the
Maker may from time to time designate in writing.
 
11. Construction; Governing Law. The validity and construction of this Note and
all matters pertaining hereto are to be determined in accordance with the laws
of the state of New York without regard to the conflicts of law principles
thereof.
 
12. Amendments. Neither this Note nor any of its provisions may be changed,
waived or modified without the written consent of both the Maker and the Payee.
 
13. Successors. This Note shall be a binding obligation of any successor of the
Maker.
 

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IN WITNESS WHEREOF, the Maker, by its appropriate officers thereunto duly
authorized, has executed this Note as of this 10th day of January 2007.
 

 
Global Matrechs, Inc.
             
By:
/s/ Michael Sheppard    
Name: Michael Sheppard
   
Title: President
         
Address: 90 Grove Street, Suite 201
   
 Ridgefield, CT 06877

 

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