**EXHIBIT10.81**

 

 

 

**SECURED PROMISSORY NOTE**

 

 

 

$100,000.00                                                                                                                                        Pasadena,California

                                                                                                                                                                     March16, 2001

 

 

 

 

**FOR VALUE RECEIVED**,the undersigned hereby jointly and severally (if applicable) promises to pay toPREFERRED BUSINESS CREDIT, INC., a California Corporation, at P.O. Box 60307,Pasadena, California 91116, or at such other address as the holder may specifyin writing, the principal sum of One Hundred Thousand and 00/100 Dollars($100,000.00) plus interest as provided below.

 

Thisnote shall bear interest at the rate of 16.5% per annum, computed on the basisof a 360 day year for actual days elapsed. This rate is based upon the prime rate of interest of 8.5%, the rate ineffect as of this date.  The prime rateof interest is the prime rate announced as being charged by Union Bank ofCalifornia, N.A., San Francisco, California, from time to time.  In the event the prime rate is from time totime hereafter changed, the rate of interest provided in this note shall becorrespondingly changed.  For each monththe rate of interest charged under this note shall be based upon the averageprime rate in effect during such month. In no event shall the rate of interest chargeable hereunder be less than1% per month.

 

Principalshall be payable in twenty four equal monthly installments of Four Thousand OneHundred Sixty Six & 00/100 Dollars ($4,166.00) commencing May 1, 2001, andcontinue thereafter on the 1st day of each month, plus interest shall bepayable monthly commencing April 1, 2001, and continue thereafter on the 1st dayof each month, and one final installment on May 20, 2003 equal to all principaloutstanding together with all accrued and unpaid interest.

 

Thisnote is secured by that certain Loan and Security Agreement (“Agreement”) datedFebruary 20, 2001 and is subject to all of the terms and conditionsthereof.  In the event of default underthe Agreement, including but not limited to, the failure to pay any installmentof principal or interest hereunder when due, the holder of this note may, atits election and without notice to the undersigned, declare the entire balancehereof immediately due and payable.

 

Ifany installment of principal or interest hereunder is not paid when due, theholder shall have the following rights in addition to the rights set forth in thepreceding paragraph: (a) the right to add unpaid interest to principal and tohave such amount thereafter bear interest as provided in this note, and (b) ifany installment is more than ten days past due, the right to collect a chargeequal to the greater of $15.00 or five percent of the delinquent payment.  This charge is the result of a reasonableendeavor by the undersigned and the holder to estimate the holder’s added costsand damages resulting from the undersigned’s failure to timely make paymentsunder this note; hence the undersigned agrees that the charge shall be presumedto be the amount of damage sustained by the holder since it is extremelydifficult to determine the actual amount necessary to reimburse the holder ofsuch damages.  If this note is not paidwhen due, the undersigned further promises to pay all costs of collection,foreclosure fees and reasonable attorneys' fees incurred by the holder whetheror not suit is filed hereon.

 

Providedthe undersigned is not then in default hereunder or under any other agreementwith the holder of this note, this note may be prepaid at any time after oneyear from the date hereof by paying the balance of principal owing plus allaccrued and unpaid interest and charges, together with a prepayment charge ofN/A on the amount prepaid.

 

Presentmentfor payment, notice of dishonor, protest, and notice of protest are expresslywaived.  This note cannot be changed,modified, amended or terminated orally.

 

**Waiver of Trial by Jury**.  THE UNDERSIGNED, TO THE EXTENT IT MAYLEGALLY DO SO, HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING ARISING UNDER OR WITH RESPECT TOTHIS NOTE, OR IN ANY WAY CONNECTED WITH, OR RELATED TO, OR INCIDENTAL TO, THEDEALINGS OF THE PARTIES HERETO WITH RESPECT TO THIS NOTE OR THE TRANSACTIONSRELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, ANDIRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.  THE UNDERSIGNED, TO THE EXTENT IT MAY LEGALLYDO SO, 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 WITNESS WHEREOF**,this Note has been executed and delivered on the date first set forth above.

 

 

 

 

|   |   | LEE PHARMACEUTICALS       |
|--------|--------|---------------------------|
|   |   | a California  Corporation |
|   |   |                      |
|   |   |                      |
|   |   |                      |
|   | By:    | RONALD G. LEE             |
|   |   | Ronald G. Lee,  President |