WWW.EXFILE.COM, INC. -- 14070 -- GLOBAL MATRECHS, INC. -- EXHIBIT 10.2 TO FORM 8-K


     

    EXHIBIT
      10.2


    THIS
      NOTE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR
      THE
      SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
      ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
      AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
      SECURITIES LAWS.

    


    


    
      	U.S.
              $250,000 	
              Original
                Issue Date: December 29,
                2005 

            
	
              Holder: Global
                Matrechs, Inc.

            	 


    

    
      
         

         

      

    

    NOTE
      DUE JANUARY 1, 2011

    


    THIS
      NOTE
      is made by TRUE
      TO
      FORM LIMITED,
      INC.,
      a
      Massachusetts corporation, having a principal place of business at 91 French
      Avenue, Braintree, Massachusetts 02184(the “Company”)
      and
      issued to GLOBAL
      MATRECHS, INC.,
      a
      Delaware corporation (the “Holder”),
      having
      a principal place of business at 90 Grove Street, Suite 201, Ridgefield,
      Connecticut 06877, as partial consideration for the sale of 100 shares of common
      stock of the Company by the Holder to Mark Allen in connection with that certain
      Stock Purchase Agreement dated the date hereof by and among the Holder, the
      Company and Mark Allen.

    


    FOR
      VALUE
      RECEIVED, the Company promises to pay to the Holder or registered assigns,
      the
      principal sum of Two Hundred Fifty Thousand and 00/100 Dollars ($250,000.00),
      with interest, which interest shall begin accruing on April 1, 2006, at an
      initial rate equal to the Prime Rate (as defined below) plus one percent (1%)
      per annum initially calculated on the March 31, 2006, such interest rate to
      be
      subsequently adjusted on the last day of each subsequent Measurement Period
      (as
      defined below) based on the Prime Rate (as defined below) plus one percent
      (1%)
      per annum on such Calculation Date. Interest shall be calculated daily on the
      basis of a 365-day year. This Note shall become payable, as
      follows:

    


    (i) Commencing
      on April 1, 2006, beginning on the 45th
      day
      following the last day of each Measurement Period (as defined below) (each
      such
      45th
      day a
“Payment
      Date”),
      the
      Company shall be required to make the Base Payment (as defined below) to the
      Holder. For avoidance of doubt, on any particular Payment Date, no Base Payment
      shall be payable unless, during the applicable Measurement Period, the Company’s
      gross sales shall have been greater than the Sales Target (as defined
      below).

    


    (ii) On
      the
      Maturity Date, all principal and interest then outstanding shall become
      immediately due and payable.

    


    On
      each
      Payment Date, the Company shall provide to the Holder a written statement,
      together with such supporting documentation as the Holder may reasonably
      require, setting forth the calculation determining whether, for such Payment
      Date, a Base Payment is payable and, if so, the calculation of such Base
      Payment. The payments described in paragraphs (i) and (ii) above shall, in
      each
      case, be applied first to accrued interest and then to outstanding principal.
      All principal and interest remaining outstanding on the Maturity Date (as
      defined below) shall be immediately payable on such date.

    


    The
      Company shall permit any authorized representatives of the Holder free and
      full
      access at all 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    reasonable
      times and upon reasonable notice to all of the books and records, including
      financial records, and properties of the Company and any of its subsidiaries
      for
      any reasonable purpose whatsoever. If the Holder shall reasonably believe that
      there has been any inaccuracy in the Company’s calculation of the Base Payment
      for any Measurement Period, or is unable to form a reasonable belief due to
      the
      inadequacy of the Company’s books and records for such purpose, the Holder may
      require the Company to retain an independent auditor of regional reputation
      mutually satisfactory to the Company and the Holder to audit the Company’s
      financial records. If, in the course of such audit, it is determined that the
      Holder’s calculations of the Base Payments due for all Payment Dates preceding
      the completion of such audit have resulted in understating amounts properly
      due
      under the Note by five percent or more in the aggregate (such understatement
      “Material
      Underpayments”),
      any
      such Material Underpayments shall become immediately due and payable and the
      Company shall bear the full expense of such audit and shall reimburse the Holder
      for any costs incurred by it in connection with such audit (including, but
      not
      limited to, costs associated with allocation of Company personnel for the
      purposes of overseeing such audit). If the audit does not reveal any Material
      Underpayments, all direct third-party costs of such audit shall be borne by
      the
      Holder. In any event, any underpayments, whether or not they constitute Material
      Underpayments, shall be immediately remitted to the Holder upon their
      discovery.

    


    As
      used
      herein the following terms shall have the following meanings:

    


    “Base
      Payment”
shall,
      with respect to any Payment Date, be equal to three percent of gross sales
      in
      excess of the Sales Target for the most recently completed Measurement Period
      preceding such Payment Date.

    


    “Maturity
      Date”
shall
      mean January 1, 2011.

    


    “Measurement
      Period”
shall
      mean any of the three-month periods immediately preceding each of April 1,
      2006 and the 1st
      of each
      April, July, October and January thereafter until, and not including, the
      Maturity Date.

    


    “Prime
      Rate”
shall
      mean that annual rate of interest announced from time to time by Citibank,
      N.A.
      called its “prime rate”.

    


    “Sales
      Target”
shall
      mean $315,000.

    


    This
      Note
      is subject to the following additional provisions:

    


    Section
      1. Default.

    


    “Event
      of Default”
      wherever
      used herein, means any one of the following events (whatever the reason and
      whether it shall be voluntary or involuntary or effected by operation of law
      or
      pursuant to any judgment, decree or order of any court, or any order, rule
      or
      regulation of any administrative or governmental body):

    


    (i) any
      default by the Company in the payment of principal or interest payable in
      respect of this Note, which default continues for a period of twenty (20)
      calendar days after the receipt of notice from the Holder of such
      default;

    


    (ii) any
      failure to observe or perform any other material covenant, agreement or warranty
      contained in, or otherwise commit any material breach of, this
      Note;

    


    (iii) the
      Company shall commence a voluntary case under the United States Bankruptcy
      Code
      or insolvency laws as now or hereafter in effect or any successor thereto (the
      

     

    
      
         

      

      
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    “Bankruptcy
      Code”);
      or an
      involuntary case is commenced against the Company under the Bankruptcy Code
      and
      the petition is not controverted within thirty (30) days, or is not dismissed
      within sixty (60) days, after commencement of such involuntary case; or a
      "custodian" (as defined in the Bankruptcy Code) is appointed for, or takes
      charge of, all or any substantial part of the property of the Company or the
      Company commences any other proceeding under any reorganization, arrangement,
      adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
      or
      similar law of any jurisdiction whether now or hereafter in effect relating
      to
      the Company or there is commenced against the Company any such proceeding which
      remains undismissed for a period of sixty (60) days; or the Company is
      adjudicated insolvent or bankrupt; or any order of relief or other order
      approving any such case or proceeding is entered; or the Company suffers any
      appointment of any custodian or the like for it or any substantial part of
      its
      property which continues undischarged or unstayed for a period of sixty (60)
      days; or the Company makes a general assignment for the benefit of creditors;
      or
      the Company shall fail to pay, or shall state that it is unable to pay its
      debts
      generally as they become due; the Company shall call a meeting of all of its
      creditors with a view to arranging a composition or adjustment of its debts;
      or
      the Company shall by any act or failure to act indicate its consent to, approval
      of or acquiescence in any of the foregoing; or any corporate or other action
      is
      taken by the Company for the purpose of effecting any of the
      foregoing;

    


    (iv) the
      Company shall default in any of its obligations under any mortgage, credit
      agreement or other facility, indenture, agreement or other instrument under
      which there may be issued, or by which there may be secured or evidenced any
      indebtedness of the Company or an amount exceeding Fifty Thousand Dollars
      ($50,000.00), whether such indebtedness now exists or shall hereafter be created
      and such default shall result in such indebtedness becoming or being declared
      due and payable prior to the date on which it would otherwise become due and
      payable; or

    


    (vi) the
      Company has entered against it by any court or other adjudicatory body of
      competent jurisdiction any judgment in an amount equal to at least Fifty
      Thousand Dollars ($50,000.00).

    


    Section
      2. Interest
      Rate Limitation.
      The
      parties intend to conform strictly to the applicable usury laws in effect from
      time to time during the term hereof. Accordingly, if any transaction
      contemplated hereby would be usurious under such laws, then notwithstanding
      any
      other provision hereof: (i) the aggregate of all interest that is contracted
      for, charged, or received under this Note shall not exceed the maximum amount
      of
      interest allowed by applicable law (the “Highest
      Lawful Rate”),
      and
      any excess shall be promptly credited to the Company by the Holder (or, to
      the
      extent that such consideration shall have been paid, such excess shall be
      promptly refunded to the Company by the Holder); (ii) neither the Company nor
      any other Person now or hereafter liable hereunder shall be obligated to pay
      the
      amount of such interest to the extent that it is in excess of the Highest Lawful
      Rate; and (iii) the effective rate of interest shall be reduced to the Highest
      Lawful Rate. All sums paid, or agreed to be paid, to the Holder for the use,
      forbearance, and detention of the debt of the Company to the Holder shall,
      to
      the extent permitted by applicable law, be allocated throughout the full term
      of
      the Note until payment is made in full so that the actual rate of interest
      does
      not exceed the Highest Lawful Rate in effect at any particular time during
      the
      full term thereof. If at any time the rate of interest under the Note exceeds
      the Highest Lawful Rate, the rate of interest to accrue pursuant to this Note
      shall be limited, notwithstanding anything to the contrary in this Note, to
      the
      Highest Lawful Rate, but any subsequent reductions in the Base Rate shall not
      reduce the interest to accrue pursuant to this Note below the Highest Lawful
      Rate until the total amount of interest accrued equals the amount of interest
      that would have accrued if a varying rate per annum equal to the interest rate
      under the Note had at all times been in effect. If the total amount of interest
      paid or accrued pursuant to this Note under the foregoing provisions is less
      than the total amount of interest that would have accrued if a varying rate
      per
      annum equal to the interest rate under the Note had been in effect, then


     

    
      
         

      

      
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    the
      Company agrees to pay to the Holder an amount equal to the difference between
      (x) the lesser of (A) the amount of interest that would have accrued if the
      Highest Lawful Rate had at all times been in effect, or (B) the amount of
      interest that would have accrued if a varying rate per annum equal to the
      interest rate under the Note had at all times been in effect, and (y) the amount
      of interest accrued in accordance with the other provisions of this
      Note.

    


    Section
      3. Except
      as
      expressly provided herein, no provision of this Note shall alter or impair
      the
      obligation of the Company, which is absolute and unconditional, to pay the
      principal of, interest and liquidated damages (if any) on, this Note at the
      time, place, and rate, and in the coin or currency, herein prescribed. This
      Note
      is a direct obligation of the Company. 

    


    Section
      4. If
      this
      Note shall be mutilated, lost, stolen or destroyed, the Company shall execute
      and deliver, in exchange and substitution for and upon cancellation of a
      mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed
      Note, a new Note for the principal amount of this Note so mutilated, lost,
      stolen or destroyed but only upon receipt of evidence of such loss, theft or
      destruction of such Note, and of the ownership hereof, and indemnity, if
      requested, all reasonably satisfactory to the Company.

    


    Section
      5. This
      Note
      shall be governed by and construed in accordance with the laws of The
      Commonwealth of Massachusetts. Each of the parties consents to the exclusive
      jurisdiction of the federal courts or the state courts of The Commonwealth
      of
      Massachusetts in connection with any dispute arising under this Note and hereby
      waives, to the maximum extent permitted by law, any objection, including any
      objection based on forum
      non coveniens,
      to the
      bringing of any such proceeding in such jurisdictions. To the extent determined
      by such court, the Company shall reimburse the Holder for any reasonable legal
      fees and disbursements incurred by the Holder in enforcement of or protection
      of
      any of its rights under this Note. THE
      COMPANY HEREBY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT,
      PROCEEDING, OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS
      NOTE.

    


    Section
      6. Any
      waiver
      by the Company or the Holder 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 Holder 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 must be in writing.

    


    Section
      7. Severability.
      If any
      provision of this Note is invalid, illegal or unenforceable, the balance of
      this
      Note shall remain in effect, and if any provision is inapplicable to any person
      or circumstance, it shall nevertheless remain applicable to all other persons
      and circumstances.

    


    Section
      8. Business
      Day.
      Whenever
      any payment or other obligation hereunder shall be due on a day other than
      a
      Business Day, such payment shall be made on the next succeeding Business Day
      (or, if such next succeeding Business Day falls in the next calendar month,
      the
      preceding Business Day in the appropriate calendar month). As used herein,
      “Business
      Day”
      means
      any day except Saturday, Sunday and any day which shall be a legal holiday
      or a
      day on which banking institutions in the State of New York are authorized or
      required by law or other government action to close.

    


    Section
      9. Notices.
      All
      notices, requests, consents and other communications hereunder to any party
      shall be contained in a written instrument addressed to such party at the
      address set forth in the preamble hereto or such other address as may hereafter
      be designated in writing by the addressee to the 

     

    
      
         

      

      
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    addressor
      listing all parties and shall be deemed given (a) when delivered in person
      or
      duly sent by fax showing confirmation of receipt, (b) two days after being
      duly
      sent by first-class mail postage prepaid, or (c) one day after being duly
      sent by DHL, Federal Express or other recognized express courier
      service.

     

    
      
         

      

      
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    IN
      WITNESS WHEREOF,
      the
      Company has caused this instrument to be duly executed by an officer duly
      authorized for such purpose, as of the date first above indicated.

     

    
      	 	 	 
	 	
              TRUE
                TO FORM LIMITED, INC.

            
	 
 	 
 	 
 
	 	By:  	/s/ Mark
              J. Allen
	 	
              

              Mark
                J. Allen

            
	 	 




     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
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