Document:

f8k071910ex10ii_clearlite.htm

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.

 

7ex10_1.htm

Exhibit 10.1

FORM OF PROMISSORY NOTE

 

 

	
Principal Amount:

	 Date: July 19, 2010

 

1.           General.  FOR VALUE RECEIVED, Encorium Group, Inc., a Delaware corporation, with an address of 435 Devon Park Drive, Building 500, Wayne Pennsylvania 19087 (the “Debtor”), promises to pay to ________________  (the “Payee”), the principal sum of ______________ (the “Principal Amount”), together with accrued interest thereon at a rate per annum equal to six percent (5.0%) for periods after July 19, 2010, in accordance with the provisions of this Promissory Note (this “Note”).

 

2.            The outstanding Principal Amount and all accrued but unpaid interest thereon shall be immediately due and payable in full on or after 5:00 Central European Time July 28, 2010.  All payments under this Note will be made in Euros by wire transfer to the Payee pursuant to the instructions set forth in the signature page hereof or to such other party as Payee may direct in ________________.

 

3.           Interest.  Interest for any period other than a full annual period shall be computed on the basis of a 360-day year of twelve 30-day months.

 

4.           Security Agreement.  IF DEBTOR SHALL FAIL TO PAY ANY AMOUNT DUE UNDER THIS NOTE WHEN DUE, PAYEE'S NON-EXCLUSIVE RECOURSE SHALL BE TO EXERCISE OF ITS RIGHTS UNDER THAT CERTAIN SECURITY AGREEMENT ENTERED INTO BY THE PARTIES HERETO ON THE DATE FIRST WRITTEN ABOVE (THE "SECURITY AGREEMENT").

 

5.           Voluntary Prepayment.  This Note may be prepaid in full or in part at any time in Debtor’s sole discretion without payment to Payee of a premium or penalty and after any prepayment in full, no interest or other amounts shall accrue or otherwise be due to the Payee in respect of this Note.

 

6.           Headings. The headings used in this Note are for convenience only and are not intended to define or limit the contents or substance of any provision of this Note.

 

7.           Waivers. Any waiver by the Payee with respect to the Payee’s rights and remedies upon and during the continuance of an Event of Default shall not be effective unless in writing and signed by the Payee.  No failure or delay on the part of the Payee in the exercise of any power or right under this Note shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right. The Payee’s waiver of any breach of any provision of this Note shall not operate or be construed as a waiver of any other or subsequent breach under this Note.

 

  

  

  

 

8.           Event of Default; Remedies.

 

(a)           Events of Default.  The happening of any one or more of the following after the date of this Note shall be an event of default under this Note (each, an “Event of Default”):

 

(i)           The Debtor shall fail to make any payment under this Note as and when such payment is due under this Note;

 

(ii)           The Debtor shall (A) file an application, petition or order in bankruptcy, liquidation, dissolution, winding-up or similar proceeding, (B) seek the appointment of a receiver, administrator or trustee with respect to any of the Debtor’s  properties, or (C) otherwise seek or submit to any other debtor’s relief law or procedure;

 

(iii)           The Debtor breaches any provision of the Security Agreement; or

 

(iv)           The Debtor shall (A) be the subject of any involuntary application, petition or order in bankruptcy, liquidation, dissolution, winding-up or similar proceeding, (B) suffer the involuntary appointment of a receiver, administrator or trustee with respect to any of the Debtor’s properties, or (C) involuntarily be made subject to any other debtor’s relief law or procedure, and any such application, petition, order or appointment shall not be dismissed or stayed within sixty (60) days after the commencement date thereof.

 

(b)      Remedies.  Upon an Event of Default, all of the then-unpaid Principal Amount and any accrued interest thereon pursuant to this Note shall be due and payable immediately and the Payee shall have all rights and remedies due to it at law or in equity, including, without limitation, those rights and remedies set forth in the Security Agreement.

 

9.            Notices. All notices, requests, consents and other communications under this Note shall be in writing and delivered in person or duly sent by reputable overnight courier, charges prepaid, or first class registered or certified mail, return receipt requested, postage prepaid, to the respective addresses set forth in Section 1 of this Note; or such other address as may, from time to time, be designated by that party in accordance with this Section 9. All such notices, requests, consents and other communications shall be deemed to have been received (i) in the case of personal delivery on the date of such delivery, (ii) in the case of overnight courier, on the second business day after deposit with the overnight courier, and (iii) in the case of mailing, on the fifth day after the posting thereof.

 

10.           Governing Law; Jurisdiction.  This Note shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania without giving effect to the conflict of laws rules of the Commonwealth of Pennsylvania or any other jurisdiction.  THE DEBTOR AND BY ITS ACCEPTANCE OF THIS NOTE, THE PAYEE, HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENT TO THE EXCLUSIVE JURISDICTION AND VENUE OF THE STATE AND FEDERAL COURTS SERVING CHESTER COUNTY, PENNSYLVANIA.

 

[Remainder of Page Intentionally Left Blank; Signature Page Follows]

 

  

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IN WITNESS WHEREOF, Debtor has caused this Promissory Note to be executed on the date first written above.

 

 

 

	 	 	
DEBTOR:

	 	 	 
	 	 	 Encorium Group, Inc.
	 	 	 
	 	 	 
	 	 By:	 
	 	 	 	 , its	 

 

Agreed and Accepted on the date first written above:

 

 

 

	
PAYEE:

	 	
 

	 
	 
	 
	 Print Name:	 

 

WIRING INSTRUCTIONS:

 

 

 

 

 

[signature page to Promissory Note]

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