EXHIBIT 10.3

                      SUBORDINATED SECURED PROMISSORY NOTE

$962,000.00                                                    November 30, 2005
                                                              New York, New York

      For good and valuable consideration, the receipt of which is hereby
acknowledged, Gales Industries Incorporated, a Delaware corporation (the
"Company"), promises to pay to the order of Luis Peragallo or his registered
assigns (the "Holder"), the principal sum of Nine Hundred Sixty-Two Thousand
Dollars ($962,000.00), as such amount may be increased pursuant to Section 1(d)
of this Note, together with interest thereon as provided for herein, which shall
be payable (i) in twenty equal consecutive quarterly installments of principal
in the amount of Forty-eight Thousand One Hundred Dollars ($48,100), as such
amount may be increased pursuant to Section 1(d) of this Note, plus accrued
interest thereon from the date of original issuance of this Note or the
immediately preceding date of payment of interest, as the case may be, through
and including the date of payment of such interest, payable on the last business
day of each calendar quarter commencing December 31, 2005, and continuing
through and including September 30, 2010, or, if earlier, (ii) when, upon or
after the occurrence of an Event of Default (as defined below), such amount is
declared due and payable by the Holder or made automatically due and payable in
accordance with the terms hereof (the "Maturity Date").

      The Company further agrees to pay interest on the unpaid principal sum of
this Note at an adjustable rate equal to the "Prime Rate" (as hereinafter
defined), as adjusted as provided for herein, plus 0.5% per annum. Interest
shall be payable on any portion of the principal amount of this Note outstanding
from time to time from and after the scheduled date for payment thereof until
payment thereof in full, at a floating rate equal to the Prime Rate plus 7% per
annum. For purposes hereof the "Prime Rate" shall mean the rate publicly
announced by Citibank as its "prime rate" (even though Citibank may not lend
money at such rate) or, if Citibank ceases to quote such rate, the Federal Funds
rate. Interest shall be calculated on the basis of a 365/366 day year and the
actual number of days elapsed and the rate of interest charged hereunder shall
change effective on the first day of each calendar quarter (to wit, October 1,
January 1, April 1 and July 1) to the Prime Rate in effect as of the end of such
date or the immediately preceding business day. In no event shall the Holder
hereof, or any permitted successor or assign, be entitled to receive, collect or
retain any amount of interest paid hereon in excess of that permitted by
applicable law.

      This Note may be prepaid in whole or in part at any time. All payments
made pursuant to this Note shall be applied first to reimbursable expenses,
interest accrued, if any, and then principal.

      This Note is issued pursuant to that certain Stock Purchase Agreement,
dated as of July 25, 2005 (the "Stock Purchase Agreement"), entered into between
the Company, Luis Peragallo, Air Industries Machining, Corp., Jorge Peragallo,
Peter Rettaliata, and Dario Peragallo.

      The following is a statement of rights of the Holder and the conditions to
which this Note is subject, and to which the Holder, by acceptance of this Note,
agrees:


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                                                                    EXHIBIT 10.3

      1. Subordination. (a) This Note will be subordinate and inferior to the
Company's Senior Indebtedness (as hereinafter defined). The Company for itself,
its successors and assigns, covenants and agrees and the Holder of this Note,
for himself, his successors and assigns, by his acceptance of this Note likewise
covenants and agrees, that to the extent provided below the payment of all
amounts due pursuant to this Note is hereby expressly subordinated and junior in
right of payment to the extent and in the manner hereinafter set forth, to the
Company's Senior Indebtedness. As used herein, the term "Senior Indebtedness"
shall mean the principal of and interest and premium, if any, on any and all,
(i) indebtedness of the Company for borrowed money or obligations or with
respect to which the Company is a guarantor, to banks, insurance companies,
lease financing institutions or other financial institutions or entities
regularly engaged in the business of lending money, in each case as in effect as
of the date hereof, and (ii) any such indebtedness or any debentures, notes or
other evidence of indebtedness issued in exchange for or to refinance such
Senior Indebtedness, or any indebtedness arising from the satisfaction of such
Senior Indebtedness by a guarantor, provided that such indebtedness issued in
exchange for or to refinance Senior Indebtedness or arising from the
satisfaction of Senior Indebtedness by a Guarantor is on commercially reasonable
terms as of the date of incurrence.

            (b) Upon the acceleration of any Senior Indebtedness or upon the
maturity of all or any portion of the principal amount of any Senior
Indebtedness by lapse of time, acceleration or otherwise, all such Senior
Indebtedness which has been so accelerated or matured shall first indefeasibly
be paid in full before any payment is made by the Company or any person acting
on behalf of the Company on account of any obligations evidenced by this Note.

            (c) The Company shall not pay any principal portion of this Note, or
interest accrued thereon, before the scheduled due date thereof if at such time
there exists a Blockage Event (as hereafter defined) and written notice thereof
has been given to the Company and the Holder by the holders of the Senior
Indebtedness.

            (d) A "Blockage Event" is deemed to exist for the period of time
commencing on the date of receipt by the Holder of written notice of the
occurrence of a Default or an Event of Default (as defined in the instruments
evidencing the Senior Indebtedness), which notice shall specify such Default or
Event of Default, and ending on:

                  (i) the date such Default or Event of Default under the Senior
Indebtedness, as applicable, is cured or waived, provided that such Default or
Event of Default is in the payment of any amount due thereunder; or

                  (ii) in the case of any other Default or Event of Default
under the Senior Indebtedness, the earlier of (A) the date on which such Default
or Event of Default shall have been cured or waived and (B) the date that is 180
days after the occurrence of such Default or Event of Default, provided that a
Blockage Event with respect to a single specified Default or Event of Default
may be deemed to occur only once for each twelve-month period, provided,
further, that no Default or Event of Default that existed at the commencement
of, or during the pendency of, a Blockage Event shall serve as the basis for the
institution of any subsequent Blockage Event.

The Holder has the right, but not the obligation, to cure any such Default or
Event of Default under Senior Indebtedness to the extent it can be cured by the
payment of money. If the Holder shall have cured any such Default or Event of
Default under Senior Indebtedness to the extent such Default or Event of Default
can be cured by the payment of money, then such amount (each, an "Additional


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Principal Amount") shall be added to the aggregate principal amount then owing
to the Holder pursuant to this Note. The Company shall pay equal quarterly
installments of each Additional Principal Amount pursuant to the first paragraph
of this Note from the date such Additional Principal Amount is incurred pursuant
to the first paragraph through and including September 30, 2010, subject to all
principal amounts being declared due and payable or made automatically due and
payable when, upon or after the occurrence of an Event of Default under this
Note.

            (e) At any time there exists a Blockage Event, (i) the Company shall
not, directly or indirectly, make any payment of any part of this Note, (ii) the
Holder shall not demand or accept from the Company or any other person any such
payment or cancel, set-off or otherwise discharge any part of the indebtedness
represented by this Note, and (iii) neither the Company nor the Holder shall
otherwise take or permit any action prejudicial to or inconsistent with the
priority position of any holder of Senior Indebtedness over the Holder of this
Note.

            (f) The holders of more than fifty percent in principal amount of
the Senior Indebtedness are hereby authorized to demand specific performance of
this Note, whether or not the Company shall have complied with the provisions
hereof applicable to it, at any time when the Holder shall have failed to comply
with any provision hereof applicable to such Holder. The Holder hereby
irrevocably waives any defense based on the adequacy of a remedy at law which
might be asserted as a bar to the remedy of specific performance hereof in any
action brought therefor by any holder of Senior Indebtedness.

            (g) No right of any holder of Senior Indebtedness to enforce the
subordination provisions of this obligation shall be impaired by any act or
failure to act by the Company or the Holder or by their failure to comply with
this Note or any other agreement or document evidencing, related to or securing
the obligations hereunder. Without in any way limiting the generality of the
preceding sentence, the holders of Senior Indebtedness may, at any time and from
time to time, without the consent of or notice to the Holder, without incurring
responsibility to the Holder and without impairing or releasing the
subordination provided in this Note or the obligations of the Holder to the
holders of Senior Indebtedness, do any one or more of the following: (i) change
the manner, place or terms of payment of any Senior Indebtedness; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing any Senior Indebtedness; (iii) release any person or entity
liable in any manner for the collection of any Senior Indebtedness; and (iv)
exercise or refrain from exercising any rights against the Company or any other
person or entity.

            (h) In the event that the Issuer shall make any payment or
prepayment to the Holder on account of the obligations under this Note which is
prohibited by this Section, such payment shall be held by the Holder, in trust
for the benefit of, and shall be paid forthwith over and delivered to, the
holders of Senior Indebtedness (pro rata as to each of such holders on the basis
of the respective amounts and priorities of Senior Indebtedness held by them) to
the extent necessary to pay all Senior Indebtedness due to such holders of
Senior Indebtedness in full in accordance with its terms (whether or not such
Senior Indebtedness is due and owing), after giving effect to any concurrent
payment or distribution to or for the holders of such Senior Indebtedness.


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            (i) After all Senior Indebtedness indefeasibly is paid in full and
until the obligations under the Note are paid in full, the Holder shall be
subrogated to the rights of holders of Senior Indebtedness to the extent that
distributions otherwise payable to the Holder have been applied to the payment
of Senior Indebtedness. For purposes of such subrogation, no payments or
distributions to holders of such Senior Indebtedness of any cash, property or
securities to which the Holder would be entitled except for the provisions of
this Section and no payment over pursuant to the provisions of this Section to
holders of such Senior Indebtedness by the Holder, shall, as between the
Company, its creditors other than holders of such Senior Indebtedness, and the
Holder, be deemed to be a payment by the Issuer to or on account of such Senior
Indebtedness, it being understood that the provisions of this Section are solely
for the purpose of defining the relative rights of the holders of such Senior
Indebtedness, on the one hand and the Holder, on the other hand.

            (j) In any insolvency, receivership, bankruptcy, dissolution,
liquidation or reorganization proceeding, or in any other proceeding, whether
voluntary or involuntary, by or against the Company under any bankruptcy or
insolvency law or laws relating to relief of debtors, to compositions,
extensions or readjustments of indebtedness:

                  (i) the claims of any holders of Senior Indebtedness against
the Company shall be paid indefeasibly in full in cash or such payment shall
have been provided for in a manner acceptable to the holders of at least a
majority of the then outstanding principal amount of the Senior Indebtedness
before any payment is made to the Holder;

                  (ii) until all Senior Indebtedness is indefeasibly paid in
full in cash or such payment shall have been provided for in a manner acceptable
to the holders of at least a majority of the then outstanding principal amount
of the Senior Indebtedness, any distribution to which the Holder would be
entitled but for this Section shall be made to holders of Senior Indebtedness,
except for distribution of securities issued by the Company which are
subordinate and junior in right of payment to the Senior Indebtedness; and

                  (iii) the holders of Senior Indebtedness shall have the right
to enforce, collect and receive every such payment or distribution and give
acquittance therefor. If, in or as a result of any action case or proceeding
under Title 11 of the United States Code, as amended from time to time , or any
comparable statute, relating to the Company, the holders of the Senior
Indebtedness return, refund or repay to the Company or any trustee or committee
appointed in such case or proceeding any payment or proceeds of any Collateral
in connection with such action, case or proceeding alleging that the receipt of
such payments or proceeds by the holders of the Senior Indebtedness was a
transfer voidable under state or federal law, then the holders of the Senior
Indebtedness shall not be deemed ever to have received such payments or proceeds
for purposes of this Note in determining whether and when all Senior
Indebtedness has been paid in full. In the event the holders of Senior
Indebtedness receive amounts in excess of payment in full (cash) of amounts
outstanding in respect of Senior Indebtedness (without giving effect to whether
claims in respect of the Senior Indebtedness are allowed in any insolvency
proceeding), the holders of the Senior Indebtedness shall pay such excess
amounts to the Holder.


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            (k) By its acceptance of this Note, the Holder agrees to execute and
deliver such documents as may be reasonably requested from time to time by the
Company or the holder of any Senior Indebtedness in order to implement the
foregoing provisions of this Section.

      2. Events of Default. If any of the events specified in this Section shall
occur (herein individually referred to as an "Event of Default"), the Holder
may, so long as such condition exists, in addition to any other right, power or
remedy granted to the Holder under this Note, the Stock Purchase Agreement, the
Security Agreement (as hereinafter defined), or applicable law, either by suit
in equity or by action at law, or both, declare the entire principal amount (and
accrued interest thereon) and all other amounts immediately due and payable,
without presentment, demand or notice of any kind, all of which are expressly
waived, provided, however, that upon the occurrence of any Event of Default
described in Section 2(c) or 2(d) hereof, the entire principal amount (and
accrued interest thereon) and all other amounts shall automatically become due
and payable:

            (a) Payment of any portion of the principal of this Note or interest
accrued thereon shall be delinquent for a period of 10 days or more after the
due date thereof;

            (b) If the Company shall fail to observe any covenant or other
provision contained in this Note (other than with respect to payment), the Stock
Purchase Agreement or the Security Agreement and such failure of observance
shall be continuing for 10 days after the Holder has given written notice
thereof;

            (c) The institution by the Company of proceedings to be adjudicated
as bankrupt or insolvent, or the consent by it to institution of bankruptcy or
insolvency proceedings against it or the filing by it of a petition or answer or
consent seeking reorganization or release under the federal Bankruptcy Act, or
any other applicable federal or state law, or the consent by it to the filing of
any such petition or the appointment of a receiver, liquidator, assignee,
trustee or other similar official of the Company, or of any substantial part of
its property, or the making by it of an assignment for the benefit of creditors,
or the taking of corporate action by the Company in furtherance of any such
action;

            (d) If, within 45 days after the commencement of an action against
the Company (and service of process in connection therewith on the Company)
seeking any bankruptcy, insolvency, reorganization, liquidation, dissolution or
similar relief under any present or future statute, law or regulation, such
action shall not have been resolved in favor of the Company or all orders or
proceedings thereunder affecting the operations or the business of the Company
stayed, or if the stay of any such order or proceeding shall thereafter be set
aside, or if, within 45 days after the appointment without the consent or
acquiescence of the Company of any trustee, receiver or liquidator of the
Company or of all or any substantial part of the properties of the Company, such
appointment shall not have been vacated;

            (e) Any declared default of the Company under any Senior
Indebtedness whether now existing or hereafter created that gives the holder
thereof the right to accelerate such Senior Indebtedness, and such Senior
Indebtedness is in fact accelerated by the holder.


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            (f) One or more judgments for the payment of money in an amount in
excess of $100,000 in the aggregate shall be rendered against the Company or any
of its subsidiaries (or any combination thereof) and shall remain undischarged
for a period of ten consecutive days during which execution shall not be
effectively stayed, or any action is legally taken by a judgment creditor to
levy upon any such judgment; or

            (g) Any representation or warranty made by the Company in the
Security Agreement is false or incorrect in any material respect when made.

      4. Security Agreement. This Note is secured by a security interest in
substantially all of the personal property of the Company pursuant to the
Security Agreement dated as of November 30, 2005 (as amended from time to time,
the "Security Agreement') by and between the Company and the Holder.

      5. Miscellaneous.

            (a) Waiver and Amendment. The rights and remedies herein reserved to
any party shall be cumulative and in addition to any other or further rights and
remedies available at law or in equity. The waiver by any party hereto of any
breach of any provision of this Note shall not be deemed to be a waiver of the
breach of any other provision or any subsequent breach of the same provision.
This Note and its terms may be changed, waived or amended only by the written
consent of the Company and the Holder and, if any such change, waiver, or
amendment is with respect to the subordination provisions, the holders of at
least a majority in the then-outstanding principal amount of the Senior
Indebtedness.

            (b) Governing Law. This Note shall be governed by and construed in
accordance with the law of the State of New York without regard to conflict of
law provisions. Any legal suit, action or proceeding arising out of or based
upon this Note shall be instituted in any federal or state court only in the
City and County of New York, State of New York. The aforementioned choice of
venue is intended to be mandatory and not permissive in nature, thereby
precluding the possibility of litigation arising out of this Note in any
jurisdiction other than that specified in this Section. The Holder and the
Company each waive, to the fullest extent permitted by applicable law, any right
it may have to assert the doctrine of forum non conveniens or similar doctrine
or to object to venue with respect to any proceeding brought in accordance with
this Section, and stipulates that the state and federal courts located in the
City and County of New York, State of New York, shall have in personam
jurisdiction and venue over them for the purpose of litigation any dispute,
controversy or proceeding arising out of or related to this Note.

            (c) Successors and Assigns. All of the terms and provisions of this
Note shall be binding upon and inure to the benefit of the parties hereto and
their respective successors, heirs and permitted assigns.

            (d) Headings. The section headings contained in this Note are
intended solely for convenience of reference and do not themselves constitute a
part of this Note.

            (e) Severability. In case any provision contained herein (or part
thereof) shall for any reason be held to be invalid, illegal, or unenforceable
in any respect, such invalidity, illegality, or other unenforceability shall not
affect any other provision (or the remaining part of the affected provision)
hereof; but this Note shall be construed as if such invalid, illegal, or
unenforceable provision (or part thereof) had never been contained herein, but
only to the extent that such provision is invalid, illegal, or unenforceable.


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            (f) Costs of Collection. The Company shall reimburse Holder for all
reasonable costs and expenses, including without limitation, reasonable
attorneys' fees and expenses, incurred in connection with (i) drafting,
negotiating, executing and delivering any amendment, modification or waiver of,
or consent with respect to, any matter relating to the rights of Holder
hereunder; (ii) creating, perfecting and maintaining perfection of the Liens (as
defined in the Security Agreement) and security interests in the Collateral (as
defined in the Security Agreement) in favor of the Holder and (iii) enforcing
any provisions of this Note or the Security Agreement and/or collecting any
amounts due under this Note.

            (g) Notices. All notices, requests, demands or other communications
which are required to be or may be given or permitted hereunder shall be in
writing and shall be deemed to have been duly given when delivered in person or
after dispatch by a recognized overnight courier to the appropriate party to
whom the same is so given or made:

            To Holder at:  Luis Peragallo
                           53 Willow Ridge Drive
                           Smithtown, New York 11787

            To Company at: Gales Industries Incorporated
                           333 East 66th Street, 9th Floor,
                           New York, New York 10021

or to such other address as a party has designated by notice in writing to the
other party in the manner provided by this Section. All such notices, requests,
demands or other communications shall be deemed to have been received on the
date of delivery thereof (if delivered by hand) and on the next day after
sending thereof (if by overnight courier).

            (h) Assignment by the Company. Neither this Note nor any of the
rights, interests or obligations hereunder may be assigned, by operation of law
or otherwise, in whole or in part, by the Company, without the prior written
consent of the Holder.

            (i) No Set-Off. All payments by the Company under this Note shall be
made free and clear of and without any deduction for or on account of any
set-off or counterclaim.

            (j) Waiver of Presentment, Demand, Etc. To the fullest extent
permitted by applicable law, the Company expressly waives presentment, demand,
protest, notice of dishonor, notice of non-payment, notice of maturity, notice
of protest, presentment for the purpose of accelerating maturity of the
obligations under this Note, diligence in collection, and the benefit of any
exemption or insolvency laws.


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      IN WITNESS WHEREOF, the Company has caused this Note to be duly executed
and issued as of the date first written above.

                                                   GALES INDUSTRIES INCORPORATED


                                                   By: /s/ Michael A. Gales
                                                       -------------------------
                                                   Name: Michael A. Gales
                                                   Title: Executive Chairman


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