**Exhibit 10.94**

 

**SECURED PROMISSORY NOTE**

 
| $50,000.00 |   | Pasadena,  California |
|------------|--------|-----------------------|
|       |   | August  22, 2002      |

 

 

**FOR VALUERECEIVED**, the undersigned hereby jointly and severally (ifapplicable) promises to pay to PREFERRED BUSINESS CREDIT, INC., a CaliforniaCorporation, at 300 N. Lake Avenue, Suite 930 Pasadena, California 91101, or atsuch other address as the holder may specify in writing, the principal sum ofFifty Thousand and 00/100 Dollars ($50,000.00) plus interest as provided below.

 

This note shall bear interest at the rate of12.75% per annum, computed on the basis of a 360 day year for actual dayselapsed. This rate is based upon the prime rate of interest of 4.75%, the ratein effect as of this date. The prime rate of interest is the prime rateannounced as being charged by Union Bank of California, N.A., San FranciscoCalifornia, from time to time. In the event the prime rate is from time to timehereafter changed, the rate of interest provided in this note shall becorrespondingly changed. For each month the rate of interest charged under thisnote shall be based upon the average prime rate in effect during such month. Inno event shall the rate of interest chargeable hereunder be less than 1% permonth.

 

Principal shall be payable in twenty fourequal monthly installments of Two Thousand Dollars ($2000.00) commencingSeptember 1, 2002 and continue thereafter on the 1st day of each month, plusinterest shall be payable monthly commencing September 1, 2002 and continuethereafter on the 1st day of each month, and one final installment on May 20,2004 equal to all principal outstanding together with all accrued and unpaidinterest.

 

This note is secured by that certain Loan andSecurity Agreement (“Agreement”) dated February 20, 2001 and is subject to allof the terms and conditions thereof. In the event of default under theAgreement, including but not limited to, the failure to pay any installment ofprincipal or interest hereunder when due, the holder of this note may, at itselection and without notice to the undersigned, declare the entire balancehereof immediately due and payable.

 

If any installment of principal or interesthereunder is not paid when due, the holder shall have the following rights inaddition to the rights set forth in the preceding paragraph: (a) the right toadd unpaid interest to principal and to have such amount thereafter bearinterest as provided in this note, and (b) if any installment is more than tendays past due, the right to collect a charge equal to the greater of $15.00 orfive percent of the delinquent payment. This charge is the result of areasonable endeavor by the undersigned and the holder to estimate the holder’sadded costs and damages resulting from the undersigned’s failure to timely makepayments under this note; hence the undersigned agrees that the charge shall bepresumed to be the amount of damage sustained by the holder since it isextremely difficult to determine the actual amount necessary to reimburse theholder of such damages. If this note is not paid when due, the undersignedfurther promises to pay all costs of collection, foreclosure fees andreasonable attorneys’ fees incurred by the holder whether or not suit is filedhereon.

 

1

----

 

 

Provided the undersigned is not then indefault hereunder or under any other agreement with the holder of this note,this note may be prepaid at any time after one year from the date hereof bypaying the balance of principal owing plus all accrued and unpaid interest andcharges, together with a prepayment charge of N/A on the amount prepaid.

 

Presentment for payment, notice of dishonor,protest, and notice of protest are expressly waived. This note cannot bechanged, modified, amended or terminated orally.

 

**Waiver ofTrial by Jury.  **THEUNDERSIGNED, TO THE EXTENT IT MAY LEGALLY DO SO, HEREBY EXPRESSLY WAIVES ANYRIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION, ORPROCEEDING ARISING UNDER OR WITH RESPECT TO THIS NOTE, OR IN ANY WAY CONNECTEDWITH, OR RELATED TO, OR INCIDENTAL TO, THE DEALINGS OF THE PARTIES HERETO WITHRESPECT TO THIS NOTE OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHERNOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER SOUNDING INCONTRACT, TORT OR OTHERWISE. THE UNDERSIGNED, TO THE EXTENT IT MAY LEGALLY DOSO, HEREBY AGREES THAT ANY SUCH CLAIM, DEMAND, ACTION, CAUSE OF ACTION, ORPROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT THE HOLDEROF THIS NOTE MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITHANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE UNDERSIGNED TO THE WAIVEROF ITS RIGHT TO TRIAL BY JURY.

 

**IN WITNESSWHEREOF,**this Note has been executed and delivered on thedate first set forth above.

 

 
|   | LEE PHARMACEUTICALS      |
|--------|--------------------------|
|   | a California corporation |
|   |                     |   |
|   | By:                      | /s/ Ronald G. Lee |
|   | Ronald G. Lee, President |
|   |                     |   |

 

2

----