ex103.htm


    THIS
      NOTE HASNOT
      BEEN REGISTERED UNDER THE SECURITIES
      ACT OF 1933, AS AMENDED.  ITMAY
      NOT BE SOLD, OFFERED FOR SALE,
      PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
      REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN
      OPINION OF COUNSEL SATISFACTORY TO THE LENDERTHAT
      REGISTRATION IS NOT REQUIRED UNDER
      SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.

    


    SECURED
      PROMISSORY
      NOTE

    
      	 	 	 
	 	 	
              Date
                of Issuance

            
	
              $1,300,000

            	 	
              December
                27,2007

            


    

     

    FOR
      VALUE RECEIVED, Golden Gate Investors,
      Inc., a Californiacorporation
      (the “Company”), hereby
      promises to pay eTelCharge.com (the
“Lender”),
      the principal sum of
One Million Three Hundred
      Thousand Dollars ($1,300,000.00)(the
“Principal
      Amount”), plus
      interest calculated pursuant to
      Section 1 below. Unless
      earlier paid under the terms
      hereof,
the principal and accrued
      interest shall be due and payable by the Company on demand by the Lender at
      any
      time after January 31, 2012
      (the “Maturity
      Date”).

     

    This
Secured
      Promissory Note(the
“Note”)is
      issued in connection with that
      certain SecuritiesPurchase
      Agreementbetween the parties hereto,
      dated as of
      the date hereof (the “Purchase Agreement”), and capitalized terms
      not defined
      herein shall have the meaning set forth in the Purchase Agreement.

     

    1.           
      Interest.  The
      Company promises to pay interest to Lender at the rate of eight percent (8.0%)
      per annum, simple interest, on the outstanding principal amount of this Note,
      which interest shall be calculated from the date of this Note, until the date
      on
      which all amounts due and payable on this Note are paid in full or this Note
      is
      otherwise cancelled, (the “Payoff Date”).  Interest hereunder shall be
      paid on a
      monthly basis, commencing on the 15th
      date of the month following the month
      of issuance of this Note. All accrued and
      unpaid
      interest shall be due and payable on the Payoff Date.  All
      computations of interest shall be made on the basis of a year of 365 or 366
      days, as the case may be, for the actual number of days (including the first
      day
      but excluding the last day) occurring in the period for which such interest
      is
      payable.  Nothing contained in this Note shall require the Company at
      any time to pay interest at a rate exceeding the maximum rate allowable under
      California law and any payments in excess of such maximum shall be refunded
      to
      the Company or credited to reduce the principal amount hereunder.

     

    2.           
      Payment.  All
      payments shall be made in lawful money of the United States of America at the
      principal office of the Company, or at such other place as the holder hereof
      may
      from time to time designate in writing to the Company.  Payment shall
      be credited first to Costs (as defined below), if any, then to accrued interest
      due and payable and any remainder applied to principal.  Prepayment of
      principal, in part or in full, together with accrued interest, may be made
      from
      time to time in the sole discretion of the Company without the Lender’s
      consent.

     

    
      
         

      

      
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    3.           
      Prepayment
      Obligation.  Notwithstanding the option of the Company to
      prepay any portion of this Note, as set forth in Section 2 hereof, the Company
      shall prepay, on a monthly basis, on the fifteenth day of each month during
      which this Note remains outstanding, provided that if such date falls on a
      day
      that is not a Business Day (as defined in the Debenture), the next such Business
      Day following such date (the “Periodic Prepayment Date”), an amount equal to
      $250,000, until all principal and accrued and unpaid interest under this Note
      has been paid, subject to the satisfaction of each of the following conditions
      on each Periodic Prepayment Date:

     

    3.1           
      The Company may immediately sell all of the Common Stock Issued at Conversion
      (as defined in the Debenture) pursuant to Rule 144 promulgated by the SEC (as
      defined in the Debenture) pursuant to the Securities Act, as such Rule may
      be
      amended from time to time, or any similar rule or regulation hereafter
      adopted by the SEC having
      substantially the same effect as such Rule;

     

    3.2           
      No Event of Default (as defined in the Debenture) has occurred under the
      Debenture;

     

    3.3           
      The average Volume Weighted Average Price (as defined in the Debenture) for
      the
      ten Trading Days (as defined in the Debenture) immediately preceding the
      Periodic Prepayment Date is not less than $0.01 per share (as adjusted for any stock splits,
      stock
      dividends, combinations, subdivisions, recapitalizations or the like);
      and

     

    3.4           
      The Lender shall have honored all Conversion Notices (as defined in the
      Debenture) submitted by the Holder (as defined in the Debenture) within the
      applicable time period set forth in the Debenture.

     

    The
      amount of any such prepayment made by the Company under the terms of this
      Section 3 (each such prepayment referred to herein as a “Periodic Prepayment”)
      shall be credited first to Costs, if any, then to accrued interest due and
      payable under this Note and the remainder applied to principal.  Any
      prepayment made by the Company under this Note in excess of any otherwise
      required Periodic Prepayment may be applied to any future required Periodic
      Prepayment at the option of the Company, subject to the sole and absolute
      discretion of the Company.  In the event that the Company fails to
      deliver any Periodic Prepayment that is otherwise required under the terms
      of
      this Section 3, the Lender’s sole and exclusive remedy shall be limited to the
      Interest Rate being increased by 0.25 percentage points per Periodic Prepayment
      required under this Section 3 that is not paid by the Company to the Lender,
      provided however, that in no event shall the Interest Rate exceed an amount
      equal to twelve and one-half percent (12.5%).  In no event shall any
      failure by the Company to pay any Periodic Prepayment required hereunder give
      any right to the Lender to collect upon the Collateral or otherwise collect
      any
      outstanding sums under this Note.

     

    4.           
      Recourse.  Each
      party hereto accepts and agrees that this Note is a full recourse promissory
      note and that subject to the terms of this Note, Lender may exercise any and
      all
      remedies available to it under law.

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    5.           
      Security
      Interest.

     

    5.1           
      To secure the payment and performance of the Company’s obligations under this
      Note, provided however that any obligations of the Company to prepay any amounts
      under this Note pursuant to Section 3 are not so secured, the Company hereby
      grants to Lender a security interest in the Company’s entire right, title, and
      interest in and to all of the following, wherever located and whether now
      existing or owned or hereafter acquired or arising (collectively, the
“Collateral”):

     

    (a)           
      all accounts, accounts receivable, contract rights, rights to payment, letters
      of credit, documents, securities, promissory notes, debentures, money, and
      investment property, whether held directly or through a securities intermediary,
      and other obligations of any kind owed to the Company, however evidenced;

     

    (b)           
      all inventory, including, without limitation, all materials, components, work
      in
      progress, finished goods, merchandise, and all other goods which are held for
      sale, lease or other disposition or furnished under contracts of service or
      consumed in the Company’s business;

     

    (c)           
      all equipment, including, without limitation, all machinery, furniture,
      furnishings, fixtures, tools, parts, automobiles, trucks, and other vehicles,
      appliances, computer and other electronic data processing equipment and other
      office equipment, computer programs and related data processing software, and
      all additions, substitutions, replacements, parts, accessories, and accessions
      to and for the foregoing;

     

    (d)           
      all books, records and other written, electronic or other documentation in
      whatever form maintained by or for the Company in connection with the ownership
      of its assets or the conduct of its business; and

     

    (e)           
      all products and proceeds, including insurance proceeds, of any and all of
      the
      foregoing.

     

    Notwithstanding
      the foregoing, no security interest is granted in any contract rights if such
      grant causes a default enforceable under applicable law or if a third party
      has
      the right enforceable under applicable law to terminate the Company’s rights
      under or with respect to any such contract and such third party has exercised
      such right of termination.

     

    5.2           
      The security interest on the Collateral granted by this Note shall continue
      and
      remain in effect until terminated pursuant to subsection 5.4 below.

     

    5.3           
      The Company shall execute any further documents reasonably requested by Lender,
      which are necessary or appropriate to perfect Lender’s security interest in the
      Collateral.

     

    
      
         

      

      
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    5.4           
      Upon the Payoff Date, the security interest granted pursuant to this Section
      5
      shall terminate, and Lender shall promptly execute and deliver to the Company
      such documents and instruments reasonably requested by the Company as shall
      be
      necessary to evidence termination of all security interests given by the Company
      to Lender hereunder.

     

    5.5           
      So long as an Event of Default does not exist, the Company shall have the right
      to possess the Collateral, manage its property and sell its inventory in the
      ordinary course of business.

     

    5.6           
      The Company represents and warrants that the value of the Collateral is not
      less
      than the principal amount of this Note.

     

    6.           
      Event of
      Default.  An “Event of Default” shall exist under this Note
      upon the happening of a failure of the Company to pay the outstanding Principal
      Amount and all other outstanding sums under this Note, including accrued and
      unpaid interest thereon, on the Maturity Date, provided that such sums have
      not
      previously been paid, at the Company’s sole option, prior to the Maturity Date,
      which failure is not cured within 30 days after the receipt of written notice
      thereof by Lender to the Company.  Any failure by the Company to pay
      any Periodic Prepayment that may otherwise be due under this Note shall not
      be
      an Event of Default under this Note.  Upon the occurrence of an Event
      of Default, Lender shall have all of the rights and remedies afforded by the
      Uniform Commercial Code as from time to time in effect in the State of
      California or afforded by other applicable law.

     

    7.           
      Subordination.  The
      indebtedness evidenced by this Note shall be subordinated to any Senior
      Indebtedness of the Company.  For the purposes of this Note, “Senior
      Indebtedness” shall mean the principal of (and premium, if any) and unpaid
      interest on, indebtedness of the Company, or with respect to which the Company
      is a guarantor, to banks, insurance companies, lease financing institutions
      or
      other lending or financial institutions regularly engaged in the business of
      lending money, which is for money borrowed (or purchase or lease of equipment
      in
      the case of lease financing) by the Company, and which is approved by the Board
      of Directors of the Company, whether or not secured, and whether or not
      previously incurred or incurred in the future.  Senior Indebtedness
      shall include all obligations of the Company pursuant to any modifications,
      renewals and extensions of such Senior Indebtedness.  Lender
      acknowledges that the Company may incur additional Senior Indebtedness and
      that
      such Senior Indebtedness shall be senior in repayment preference to the
      Note.  Upon written request of the Company, Lender agrees to execute a
      subordination agreement from any lender of Senior Indebtedness in order to
      give
      effect to this Section 7.

     

    8.           
      Amendments and
      Waivers; Cure Period.  This Note may not be amended without the
      prior written consent of each of the Company and the Lender.  Any
      waiver by the Company or the Lender of a breach of any provision of this Note
      shall not operate as or be construed to be a waiver of any other breach of
      such
      provision or of any breach of any other provision of this Note.  The
      failure of the Company or the Lender to insist upon strict adherence to any
      term
      of this Note on one or more occasions shall not be considered a waiver or
      deprive that party of the right thereafter to insist upon strict adherence
      to
      that term or any other term of this Note.  Any waiver by the Company
      or the Lender must be in writing.  Any amendment or waiver effected in
      accordance with this Section 8 shall be binding upon Lender and Lender’s
      successors and assigns.  Any party to this Note shall have a cure
      period of not less than thirty (30) days after receipt of written notice of
      any
      alleged breach or default under the terms of this Note to cure such alleged
      breach or default.

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    9.           
      Transmittal of
      Notices.  Except as may be otherwise provided herein, any
      notice or other communication or delivery required or permitted hereunder shall
      be in writing and shall be delivered personally, or sent by telecopier machine
      or by a nationally recognized overnight courier service, and shall be deemed
      given when so delivered personally, or by telecopier machine or overnight
      courier service as follows:

     

    (1)           
      If to the Lender, to:

    


    eTelCharge.com

    1636
      N.
      Hampton, Suite 270

    Desoto,
      Texas

    Telephone:                                
      972-298-3800

    Facsimile:                                
      [_______________________]

    


    (2)           
      If to the Company, to:

    Golden
      Gate Investors, Inc.

    7817
      Herschel Avenue, Suite 200

    La
      Jolla,
      California 92037

    Telephone:                                
      858-551-8789

    Facsimile:                                
      858-551-8779

    Each
      of
      the Lender or the Company may change the foregoing address by notice given
      pursuant to this Section 9.

     

    10.           
      Successors and
      Assigns.  This Note applies to, inures to the benefit of, and
      binds the successors and assigns of the parties hereto.  Neither the
      Lender nor the Company may assign its rights under this Note without the written
      consent of the other party to this Note, provided, however, that the Company
      may
      assign its obligations under this Note to any Affiliate of the Company in the
      sole and absolute discretion of the Company, without any prior consent by the
      Lender, provided that such transferee or assignee agrees in writing to be bound
      by and subject to the terms and conditions of this Note.  Upon any
      such transfer of this Note by the Company or the Lender, the Lender shall,
      upon
      notice, surrender this Note to the Company for reissuance of a new note to
      the
      transferee.  Any transfer of this Note may be effected only pursuant
      to the terms hereof and by surrender of this Note to the Company and reissuance
      of a new note to the transferee.  The Lender and any subsequent holder
      of this Note receives this Note subject to the foregoing terms and conditions,
      and agrees to comply with the foregoing terms and conditions for the benefit
      of
      the Company and any other Lenders.

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

    11.           
      Officers and Directors
      Not Liable.  In no event shall any officer or director of the
      Company be liable for any amounts due and payable pursuant to this Note.

     

    12.           
      Expenses.  Should
      any party hereto employ an attorney for the purpose of enforcing or construing
      this Note, or any judgment based on this Note, in any legal proceeding
      whatsoever, including insolvency, bankruptcy, arbitration, declaratory relief
      or
      other litigation, the prevailing party shall be entitled to receive from the
      other party or parties thereto reimbursement for all reasonable attorneys'
      fees
      and all reasonable costs, including but not limited to service of process,
      filing fees, court and court reporter costs, investigative costs, expert witness
      fees, and the cost of any bonds, whether taxable or not (collectively, “Costs”),
      and that such reimbursement shall be included in any judgment or final order
      issued in that proceeding.  The "prevailing party" means the party
      determined by the court to most nearly prevail and not necessarily the one
      in
      whose favor a judgment is rendered.

     

    13.           
      Remedies Not
      Waived.  No course of dealing between the parties hereto or any
      delay in exercising any rights hereunder shall operate as a waiver by such
      party.

     

    14.           
      Governing
      Law.  This Note shall be governed by and construed under the
      laws of the State of California as applied to other instruments made by
      California residents to be performed entirely within the State of
      California.  With respect to any suit, action or proceedings relating
      to this Note, the Company irrevocably submits to the exclusive jurisdiction
      of
      the courts of the State of California sitting in San Diego and the United States
      District Court located in the City of San Diego and hereby waives, to the
      fullest extent permitted by applicable law, any claim that any such suit, action
      or proceeding has been brought in an inconvenient forum.  Subject to
      applicable law, each of the Company and the Lender agrees that final judgment
      against it in any legal action or proceeding arising out of or relating to
      this
      Note shall be conclusive and may be enforced in any other jurisdiction within
      or
      outside the United States by suit on the judgment, a certified copy of which
      judgment shall be conclusive evidence thereof and the amount of the
      indebtedness, or by such other means provided by law.

     

    15.           
      Counterparts.  This
      Note may be executed in two or more counterparts, each of which shall be deemed
      an original, but all of which together shall constitute one and the same
      instrument.  Facsimile executions of this Note shall be deemed
      original.

     

    


     

    GOLDEN
      GATE INVESTORS, INC.

     

    By:

    Name:                                                           
      

    Its:                                                           
      

    


    


    ETELCHARGE.COM

     

    By:

    Name:                                                           
      

    Its:                                                           
      

    


    
      
         

      

      
        -6-