Exhibit 10.1

















 

PROMISSORY NOTE SECURED
BY DEED OF TRUST

(FIXED RATE)






 


















	

$   1,650,000.00   
	
		Date
   March 4, 2006




FOR VALUE RECEIVED, on     April
1, 2016  (the "Maturity Date"), the undersigned ("Debtor") promises to pay
to the order of UNION BANK OF CALIFORNIA, N.A. ("Bank"), the principal sum of      One
Million Six Hundred Fifty Thousand and 00/100ths    Dollars 


($   1,650,000.00     ),
or so much thereof as is disbursed, together with interest on the balance of
such principal from time to time outstanding, at the per annum rate equal to      six
and seventy three-hundredths     percent (      6.73       %) (the
"Note Rate").  All computations of interest under this note shall be made on
the basis of a year of 360 days, comprised of twelve 30-day months.




1.         PAYMENTS.  Debtors
shall pay principal and interest in      one hundred twenty      


(   120   ) equal
installments of     Eleven Thousand Three Hundred Seventy Nine and 21/100ths 
Dollars ($   11,379.21   ) on the first day of each month beginning     May
1, 2006    .  The principal and interest payments are sufficient to pay in
the aggregate principal and accrued interest due hereunder over a    three
hundred      (   300   ) month amortization period.  If the payment
is made within 10 days of the due date, it will be treated as if made on the
due date.  Each payment will be applied first to accrued but unpaid interest
then due, and then to principal.  Interest for the period from the date funds
are advanced shall be paid in advance by deducting the amount due from the
funds disbursed at closing.  The interest for this period shall be calculated
on the full amount advanced under this note.  Debtor shall pay all amounts due
under this note in lawful money of the United States to Union Bank of California,
N.A.,     Commercial Real Estate Loan Administration, 19300 Von Karman
Avenue, Suite 200, Irvine, CA 92612-1048    , or such other office as may
be designated by Bank from time to time.




2.         LATE PAYMENTS. 
If Bank has not received the full amount of any payment by the end of ten (10)
calendar days after the date it is due, Debtor will pay to Bank a late charge
in the amount of six percent (6%) of the overdue payment, such late charge to
be immediately due and payable without notice or demand by Bank.  Debtor will
pay this late charge only once on any late payment.  Debtor agrees that Bank
will incur administrative costs and other damages not compensated by payment of
interest as a result of any payment not being made when due and acknowledges
that calculation of actual damages is extremely difficult and impracticable and
that the foregoing amount is a reasonable estimate of these damages.

 

 




	
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3.         INTEREST RATE
FOLLOWING DEFAULT.  In the event of default, at the option of Bank, and to
the extent permitted by law, interest shall be payable on the outstanding
principal under this note at a per annum rate equal to five percent (5%) in
excess of the Note Rate calculated from the date of default until all amounts
payable under this note are paid in full.




4.         PREPAYMENT.


4.1       Debtor may
prepay amounts outstanding under this note in whole or in part provided Debtor
has given Bank not less than five (5) Business Days prior written notice of
Debtor's intention to make such prepayment and pays the prepayment fee due as a
result.  The prepayment fee shall also be paid if Bank, for any other reason,
including acceleration or foreclosure, receives all or any portion of principal
prior to its scheduled payment date.




4.2       Once Debtor has
exercised the Fixed Rate Conversion Option, upon any prepayment hereunder,
Debtor shall pay to Bank a prepayment fee equal to: five percent (5.00%) of the
principal prepaid during the first year of the loan term; four percent (4.00%)
of the principal prepaid during the second year of the loan term; three percent
(3.00%) of the principal prepaid during the third year of the loan term; two
percent (2.00%) of the principal prepaid during the fourth year of the loan
term and one percent (1.00%) of the principal prepaid during the fifth year.  No
prepayment fee will be due after the fifth year.  In no event shall Bank be
obligated to make any payment or refund to Debtor nor shall Debtor be entitled
to any setoff or other claim against Bank, should the return which Bank could
obtain under this prepayment formula exceed the interest that Bank would have
received if no prepayment had occurred.  A determination by Bank as to the
prepayment fee amount, if any, shall be conclusive.  Bank shall provide Debtor
a statement of the amount payable on account of prepayment.  Debtor
acknowledges that (x) Bank establishes the Fixed Note Rate upon the
understanding that it applies for the entire remaining term of this note, and
(y) Bank would not lend to Debtor at the Fixed Note Rate without Debtor's
express agreement to pay Bank the prepayment fee described above.




4.3       In no event
shall Bank be obligated to make any payment or refund to Debtor, nor shall
Debtor be entitled to any setoff or other claim against Bank, should the return
which Bank could obtain under this prepayment formula exceed the interest that
Bank would have received if no prepayment had occurred.  All prepayments shall
include payment of accrued interest on the principal amount so prepaid and
shall be applied to payment of interest before application to principal.  A
determination by Bank as to the prepayment fee amount, if any, shall be
conclusive.  In the event of partial prepayment, such prepayment shall be
applied to principal payments in the inverse order of their maturity.




4.4       Bank shall provide
Debtor a statement of the amount payable on account of prepayment.  Debtor
acknowledges that (i) Bank establishes an interest rate upon the understanding
that it applies for the entire interest Period, and (ii) Bank would not lend to
Debtor without Debtor's express agreement to pay Bank the prepayment fee
described above.




DEBTOR INITIALS HERE:    ________     
_________      ________     ________

 

 




	
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5.         DEFAULT AND
ACCELERATION OF TIME FOR PAYMENT. Default shall include, but not be limited
to, any of the following:  (a) the failure of Debtor to make any payment
required under this note when due; (b) any breach, misrepresentation or other
default by Debtor, any guarantor, co-maker, endorser, or any person or entity
other than Debtor providing security for this note (thereinafter individually
and collectively referred to as the "Obligor") under any deed of trust,
security agreement, guaranty or other agreement between Bank and any Obligor;
(c) the insolvency of any Obligor or the failure of any Obligor generally to
pay such Obligor's debts as such debts become due; (d) the commencement as to
any Obligor of any voluntary or involuntary proceeding under any laws relating
to bankruptcy, insolvency, reorganization, arrangement, debt adjustment or
debtor relief; (e) the assignment by any Obligor for the benefit of such
Obligor's creditors; (f) the appointment, or commencement of any proceeding for
the appointment of a receiver, trustee, custodian or similar official for all
or substantially all of any Obligor's property; (g) the commencement of any
proceeding for the dissolution or liquidation of any Obligor; (h) the
termination of existence or death of any Obligor; (i) the revocation of any
guaranty or subordination agreement given in connection with this note; (j) the
failure of any Obligor to comply with any order, judgment, injunction, decree,
writ or demand of any court or other public authority; (k) the filing or
recording against any Obligor, or the property of any Obligor, of any notice of
levy, notice to withhold, or other legal process for taxes other than property
taxes; (l) the default by any Obligor personally liable for amounts owed
hereunder on any obligation concerning the borrowing of money; (m) a default
occurs under any instrument encumbering or affecting all or any portion of the
property of any Obligor, of any writ of attachment, execution, or other
judicial lien; or (o) the deterioration of the financial condition of any
Obligor which results in Bank deeming itself, in good faith, insecure.  Upon
the occurrence of any such default, Bank, in its discretion, may cease to
advance funds hereunder and may declare all obligations under this note
immediately due and payable; however, upon the occurrence of an event of
default under d, e, f, or g, all principal and interest shall automatically
become immediately due and payable.


 

 




	
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6.         ADDITIONAL
AGREEMENTS OF DEBTOR.  If any amounts owning under this note are not paid
when due, Debtor promises to pay all costs and expenses, including reasonable  attorneys'
fees (including the fees and costs of Bank's in-house counsel and legal staff)
incurred by Bank in the negotiation, documentation and modification of this
note and all related documents and in the collection or enforcement of any
amount outstanding hereunder.  Debtor and any Obligor, for the maximum period
of time and to the full extent permitted by law, (a) waive diligence,
presentment, demand, notice of nonpayment, protest, notice of protest, and
notice of every kind; (b) waive the right to assert the defense of any statute
of limitations to any debt or obligation hereunder; and (c) consent to renewals
and extensions of time for the payment of any amounts due under this note.  If
this note is signed by more than one party, the term "Debtor" includes each of
the undersigned and any successors in interest thereof; all of whose liability
shall be joint and several.  Any married person who signs this note agrees that
recourse may be had against the separate property of that person for any
obligations hereunder.  The receipt of any check or other item of payment by
Bank, at its option, shall not be considered a payment on account until such
check or other item of payment is honored when presented for payment at the
drawee bank.  Bank may delay the credit of such payment based upon Bank's
schedule of funds availability, and interest under this note shall
accrue until the funds are deemed collected.  In any action brought
under or arising out of this note, Debtor and any Obligor, including their
successors and assigns, hereby consent to the jurisdiction of any competent
court within the State of Nevada, as provided in any alternative dispute
resolution agreement executed between Debtor and Bank, and consent to service
of process by any means authorized by said state's law.  The term "Bank"
includes, without limitation, any holder of this note.  This note shall be
construed in accordance with and governed by the laws of the State of Nevada.  This note hereby incorporates any alternative dispute resolution agreement previously,
concurrently or hereafter executed between Debtor and Bank.  The deed of trust
securing this note permits the Bank to declare all obligations hereunder
immediately due and payable upon the occurrence of certain events described
therein.




DEBTOR:




Pro-Dex, Inc. a Colorado
corporation




By:/s/ Jeffrey J. Ritchey                        


       Jeffrey J. Ritchey, CFO




By:/s/ Patrick L. Johnson                     


       Patrick L. Johnson,
President/CEO

 

 

 

 


































	
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