Document:

EXHIBIT 10.3
                                                                    ------------

                               EXCHANGE AGREEMENT

          THIS AGREEMENT made as of this 31st day of January, 2005, by and
between WOODWARD LLC, a limited liability company organized under the laws of
the Cayman Islands ("Holder"), and GLOBAL MATRECHS, INC., a Delaware corporation
("GMTH" or the "Company") .

          The following terms shall have the specified definitions, unless the
context otherwise requires:

          "Common Stock" shall mean the common stock of GMTH, $0.0001 par value
per share.

                                 R E C I T A L S

          A. The Holder is the owner of good and marketable title to various
promissory notes issued by Euotech Ltd. listed on Exhibit A attached hereto,
free and clear of all liens, pledges and encumbrances (the "Securities").

          B. GMTH wishes to acquire the Securities.

          C. In consideration of the transfer to GMTH of the Securities, the
Holder will receive, subject to the terms and conditions set forth herein, a
promissory note, (the "Note") in the form and having the terms and conditions as
set forth in Exhibit B.

          NOW, THEREFORE, for and in consideration of the premises and the
mutual agreement contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

          1. On the Closing Date (as defined below), GMTH agrees to acquire from
the Holder the Securities.

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          2. In consideration therefore, GMTH agrees to issue to the Holder the
Note.

          3. MUTUAL DELIVERIES. (a) On the Closing Date the Holder shall deliver
the Securities to GMTH and GMTH shall deliver to the Holder the Note duly
endorsed for transfer (the "Exchange").

          4. CLOSING DATE. Subject to the satisfaction (or waiver) of the
conditions thereto set forth in Section 10 and Section 11 below, the date and
time of the Exchange pursuant to this Agreement (the "Closing Date") shall be
12:00 noon Eastern Standard Time on January 31, 2005 or such other mutually
agreed upon time.

         5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Holder that:

          (a) The Company has the corporate power and authority to enter into
this Agreement, and to perform its obligations hereunder. The execution and
delivery by the Company of this Agreement and the consummation by the Company of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Company. This Agreement has been duly
executed and delivered by the Company and constitutes valid and binding
obligations of the Company enforceable against it in accordance with its terms,
subject to the effects of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and to the
application of equitable principles in any proceeding (legal or equitable).

          (b) To the actual knowledge of the Company, the execution, delivery
and performance by the Company of this Agreement, and the consummation of the
transactions contemplated hereby, do not and will not breach or constitute a
default under any applicable law

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or regulation or of any agreement, judgment, order, decree or other instrument
binding on the Company which breach or default could reasonably by expected to
have a material adverse effect on the Company taken as a whole.

          (c) Except as disclosed in Schedule 5(d) hereto, to the actual
knowledge of the Company, no consent or approval of, or exemption by, or filing
with, any party or governmental or public body or authority is required in
connection with the execution, delivery and performance under this Agreement or
the taking of any action contemplated hereunder.

          (d) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation.

          (e) The execution, delivery and performance of this Agreement by the
Company, and the consummation of the transactions contemplated hereby, will not
(i) violate any provision of the Company's Certificate of Incorporation or
By-laws, (ii) violate, conflict with or result in the breach of any of the terms
of, result in a material modification of the effect of, otherwise, give any
other contracting party the right to terminate, or constitute (or with notice or
lapse of time or both constitute) a default under, any contract or other
agreement to which the Company is a party or by or to which the Company or any
of the Company's assets or properties may be bound or subject, (iii) violate any
order, judgment, injunction, award or decree of any court, arbitrator or
governmental or regulatory body by which the Company, or the assets or
properties of the Company are bound, (iv) to the Company's actual knowledge,
violate any statute, law or regulation.

          6. REPRESENTATIONS AND WARRANTIES OF THE HOLDER. The Holder hereby
represents and warrants to the Company that:

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          (a) The Holder has the corporate power and authority to enter into
this Agreement and to perform its obligations hereunder. The execution and
delivery by the Holder of this Agreement, and the consummation by the Holder of
the transactions contemplated hereby, have been duly authorized by all necessary
corporate action on the part of the Holder. This Agreement has been duly
executed and delivered by the Holder and constitutes valid and binding
obligations of the Holder, enforceable against it in accordance with its terms,
subject to the effects of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and to the
application of equitable principles in any proceeding (legal or equitable).

          (b) The execution, delivery and performance by the Holder of this
Agreement, and the consummation of the transactions contemplated hereby, do not
and will not breach or constitute a default under any applicable law or
regulation or of any agreement, judgment, order, decree or other instrument
binding on the Holder.

          (c) The Holder is a sophisticated investor (as described in Rule
506(b)(2)(ii) of Regulation D) and an accredited investor (as defined in Rule
501 of Regulation D), and the Holder has such experience in business and
financial matters that it is capable of evaluating the merits and risks of an
investment in the Preferred Stock. The Holder acknowledges that an investment in
the Preferred Stock is speculative and involves a high degree of risk.

          (d) Holder has received all documents, records, books and other
information pertaining to Holder's investment in the Company that have been
requested by Holder.

          (e) At no time was Holder presented with or solicited by or through
any leaflet, public promotional meeting, television advertisement or any other
form of general solicitation or advertising.

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          (f) Except as specifically set forth herein, Holder makes no
representations or warranties any other matter.

          (g) The Holder has taken no action which would give rise to any claim
by any person for brokerage commissions, finder's fees or similar payments
relating to this Agreement or the transaction contemplated hereby.

          (h) The Holder is the owner of good and marketable title to the
Securities, free and clear of all liens, pledges and encumbrances.

          7. GOVERNING LAW; MISCELLANEOUS

          (a) Governing Law; Jurisdiction. This Agreement shall be deemed to be
made in and in all respects shall be interpreted, construed and governed by and
in accordance with New York law without regard to the conflict of law principles
thereof, except that matters relating to the corporate governance of the Company
shall be governed by Delaware law. The parties hereby irrevocably and
unconditionally consent to submit to the exclusive jurisdiction of the courts of
the State of New York and of the United States of America located in the Borough
of Manhattan (the "New York Courts") for any litigation arising out of or
relating to this Agreement and the transactions contemplated by this Agreement
(and agree not to commence any litigation relating thereto except in such New
York Courts), waive any objection to the laying of venue of any such litigation
in the New York Courts and agree not to plead or claim in any New York Court
that such litigation brought therein has been brought in an inconvenient forum.
Each party acknowledges and agrees that any controversy which may arise under
this Agreement is likely to involve complicated and difficult issues, and
therefore each party hereby irrevocably and

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unconditionally waives any right such party may have to a trial by jury in
respect of any litigation directly or indirectly arising out of or relating to
this Agreement, or the transactions contemplated by this Agreement.

          (b) Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other parties.

          (c) Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.

          (d) Severability. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement or
the validity or enforceability of this Agreement in any other jurisdiction.

          (e) Entire Agreement; Amendments. This Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor the Holder make any representation,
warranty, covenant or undertaking with respect to such matters. No provision of
this Agreement may be waived other than by an instrument in writing signed by
the party to be charged with enforcement and no provision of this Agreement may
be amended other than by an instrument in writing signed by the Company and the
Holder.

          (f) Notices. Any notices required or permitted to be given under the
terms of this Agreement shall be sent by certified or registered mail (return
receipt requested) or delivered

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personally or by courier, overnight delivery service or by confirmed telecopy,
and shall be effective five days after being placed in the mail, if mailed, or
upon receipt or refusal of receipt, if delivered personally or by courier,
overnight delivery service or confirmed telecopy, in each case addressed to a
party. The addresses for such communications shall be:

         If to the Company:
                                    Michael Sheppard
                                    Global Matrechs, Inc.
                                    90 Grove Street
                                    Ridgefield CT 06877
                                    Telephone: 1.203.431.6665
         with copy to:

                                    Foley Hoag LLP
                                    155 Seaport Boulevard
                                    Boston, MA 02210
                                    Attention: David A. Broadwin, Esq.
                                    Telephone: (617) 832-1000
                                    Fax: (617) 832-7000

         If to the Holder:
                                    Harbour House, 2nd Floor
                                    Waterfront Drive
                                    PO Box 972
                                    Road Town
                                    Tortola, British Virgin Islands

         with a copy to:
                                    Krieger & Prager, LLP
                                    39 Broadway
                                    New York, NY  10006
                                    Attn:  Sam Krieger, Esq.
                                    Telephone: (212) 363-2900

          Each party shall provide notice to the other parties of any change in
address.

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          (g) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns. Neither
the Company, nor the Holder shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other.

          8. FURTHER ASSURANCES. Each party shall do and perform or cause to be
done and perform, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

          9. REGISTRATION RIGHTS. Beginning six (6) months from the date of this
Agreement, if the Company proposes to register any of its securities under the
Securities Act of 1933, as amended ("Act") (except for registrations on Forms
S-8 or S-4 or their equivalent), it will give written notice by registered mail,
at least twenty (20) days prior to the filing of each such registration
statement, to the Purchaser of its intention to do so. If the Purchaser notifies
the Company within ten (10) days after receipt of any such notice of its desire
to include any of the Conversion Shares (the "Underlying Shares"), the Company
shall afford the Purchaser the opportunity to have any such Underlying Shares
registered under such registration statement at the Company's sole cost and
expense.

          Limitations on Registration.

          (a) Termination of Registration Rights. These rights may be exercised
at any time on an unlimited number of occasions after the date hereof until such
time when all Underlying Shares may be sold without volume restrictions pursuant
to Rule 144(k) as

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determined by the counsel to the Company pursuant to a written
opinion letter to such effect, addressed and acceptable to the Company's
transfer agent and the Purchaser.

          (b) Underwritten Offerings. In connection with any offering involving
an underwriting of shares being issued by the Company, the Company shall not be
required to include any Underlying Shares in such underwriting unless such
Purchaser accepts the terms of the underwriting as agreed upon between the
Company and the underwriters selected by it, and then only in such quantity as
will not, in the reasonable opinion of the underwriters, jeopardize the success
of the offering by the Company. If the underwriters reasonably believe the total
amount of Underlying Shares which the Purchaser requests to be included in an
underwritten offering pursuant to this Section, together with any other shares
of Common Stock for which registration has been requested by holders with
similar rights, exceeds the amount of securities that the underwriters
reasonably believe compatible with the success of the offering, the Company
shall only be required to include in the offering so many of the Underlying
Shares and such other shares of Common Stock as the underwriters reasonably
believe will not jeopardize the success of the offering, such shares so included
to be apportioned pro rata among the Purchaser and other holders based on the
number of shares for which registration was initially requested.

          10. CONDITIONS TO THE HOLDER'S OBLIGATION TO EXCHANGE. The obligation
of the Holder to deliver the certificate(s) representing the Securities to GMTH
on the Closing Date is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions thereto, provided that these
conditions are for the Holder's sole benefit and may be

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waived by the Holder at any time in its sole discretion:

          (a) GMTH shall have executed this Agreement and delivered the same to
the Holder.

          (b) The representations and warranties of GMTH shall be true and
correct in all material respects as of the date when made and as of the Closing
Date as though made at that time (except for representations and warranties that
speak as of a specific date), and GMTH shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by GMTH
on or prior to the Closing Date.

          (c) GMTH shall have delivered to the Holder the Note in accordance
with the terms herein.

          (d) No litigation, statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by or in any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
hereby which prohibits the consummation of any of the transactions contemplated
by this Agreement.

          11. CONDITIONS TO GMTH's OBLIGATION TO EXCHANGE The obligation of GMTH
hereunder to deliver the Note on the Closing Date is subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for GMTH's sole benefit and may
be waived by GMTH at any time in its sole discretion.

          (a) The Holder shall have executed this Agreement and delivered same
to GMTH.

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          (b) The Holder shall have delivered to GMTH the Securities in
accordance with the terms herein.

          (c) The representations and warranties of the Holder shall be true and
correct in all material respects as of the date when made and as of the Closing
Date as though made at such time (except for representations and warranties that
speak as of a specific date) and the Holder shall have performed, satisfied and
complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Holder on or prior to the Closing Date.

          (d) No litigation, statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or endorsed
by or in any court or governmental authority of competent jurisdiction or any
self-regulatory organization having authority over the matters contemplated
hereby which prohibits the consummation of any of the transactions contemplated
by this Agreement.

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          IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

                                            GLOBAL MATRECHS, INC.

                                            By: /s/ Michael Sheppard
                                                --------------------------
                                            Name: Michael Sheppard
                                            Title: President

                                            WOODWARD LLC

                                            By: __________________________
                                            Name: ________________________
                                            Title: _______________________

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                                    EXHIBIT A

                               LIST OF SECURITIES

                      $30,000 note issued by Eurotech Ltd.

                      $30,000 note issued by Eurotech Ltd.

                      $60,000 note issued by Eurotech Ltd.

                      $45,000 note issued by Eurotech Ltd.

                     $125,000 note issued by Eurotech Ltd.

                                       13EXHIBIT 10.4
                                                                    ------------

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.

              NONNEGOTIABLE 2% SECURED CONVERTIBLE PROMISSORY NOTE
              ----------------------------------------------------

$250,000                                                 Ridgefield, Connecticut
January 31, 2005

     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 two hundred fifty thousand dollars ($250,000) in
one installment due on January 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 360-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. Capitalized terms not otherwise
defined herein shall have the meaning set forth in that certain Securities
Purchase Agreement dated January 31, 2005 by and between the Maker and the
Payee.

     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 $0.02.

     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.

<PAGE>

     3. Prepayment. If at any time the Market Price (as defined below) of the
Maker's Common Stock remains less than $0.03 cents for ten (10) consecutive
trading days, then at the written election of the Payee provided not later than
the 10th calendar day following the last day of such 10 trading day period, the
Maker shall within 60 days of the receipt of such election prepay the principal
amount outstanding at the time of such prepayment plus a premium (a "Prepayment
Premium") equal to 40% of the principal amount being prepaid plus accrued
interest. For the purposes of this Section 3, the "Market Price" shall equal the
closing price per share of the Common Stock on such date as reported by a
nationally recognized stock exchange price determined by the first of the
following clauses that applies: (a) if the Common Stock is then listed or quoted
on the New York Stock Exchange, the American Stock Exchange, the Nasdaq National
Market, the Nasdaq SmallCap Market or the OTC Bulletin Board, the bid price per
share of the Common Stock on the primary market or exchange on which the Common
Stock is then listed or quoted; (b) if prices for the Common Stock are then
reported in the "Pink Sheets" published by the National Quotation Bureau
Incorporated (or a similar organization or agency succeeding to its functions of
reporting prices), the most recent bid price per share of the Common Stock so
reported; or (c) in all other cases, the fair market value of a share of Common
Stock as determined by an independent qualified appraiser selected in good faith
and paid for by the Payee.

     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

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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.

          (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.

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<PAGE>

     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

                  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, 2003, 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;

Then, 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

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<PAGE>

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.

     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.

                                        5
<PAGE>

     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.

     IN WITNESS WHEREOF, the Maker, by its appropriate officers thereunto duly
authorized, has executed this Note as of this 31st day of January, 2005.

                                       GLOBAL MATRECHS, INC.

                                       By: /s/ Michael Sheppard
                                           ----------------------------
                                       Name: Michael Sheppard
                                             --------------------------
                                       Title: President
                                              -------------------------

                                        6

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