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                                                                   EXHIBIT 10.14

                             SECURED PROMISSORY NOTE

$5,000,000                                               As of December 20, 2002
                                                         Corona, California

1.       Promise to Pay. For good and valuable consideration, the receipt of
which is hereby acknowledged, HALSEY DRUG CO., INC., a New York corporation
("Maker"), promises to pay to WATSON PHARMACEUTICALS, INC., a Nevada corporation
("Watson"), or order (either, the "Holder"), on the Maturity Date (as defined
below), unless sooner paid as provided in Section 5 hereof, the principal sum of
Five Million Dollars ($5,000,000), plus accrued unpaid interest thereon. The
outstanding principal balance of this Note shall bear interest at a variable
rate equal to the prime rate announced from time to time by Bank of America (the
"Prime Rate") plus four and one half percent (4.5%) per annum (the "Interest
Rate") from January __, 2004 to the date the principal sum is paid in full.
Interest payments shall be made as provided in Section 2 below. All payments
under this Note shall be made to the order of the Holder at the address Holder
may designate in writing to Maker. All payments of principal under this Note
shall be made in U.S. dollars.

2.       Payment of Interest. Interest shall be paid on each March 31, June 30,
September 30 and December 31 during the term of this Note, commencing March 31,
2004 (each such date being an "Interest Payment Date"). The payment of accrued
interest on this Note shall be made in the form of Maker's common stock, par
value $.01 per share (the "Common Stock") with the number of shares of Maker's
Common Stock equal to the quotient of (x) the interest payment amount, divided
by (y) the average of the closing bid and asked prices for Maker's Common Stock
as reported in the Over-The-Counter Bulletin Board ("OTC Bulletin Board") (or
such other over-the-counter market or exchange on which the Maker's Common Stock
may then be traded or admitted for trading) for the twenty (20) trading days
immediately preceding such Interest Payment Date, rounded up to the nearest
whole share of Maker's Common Stock. No cash interest payments shall be made on
this Note.

3.       Maturity Date. The date that this Note shall mature, and the principal
amount outstanding hereunder, plus accrued unpaid interest thereon and any
charges pertaining thereto, shall become due and payable (the "Maturity Date")
shall be June 30, 2007.

4.       Loan and Security Agreements. Maker and Watson are party to that
certain Loan Agreement, dated as of March 29, 2000, as amended by that certain
Amendment to Loan Agreement dated as of March 31, 2000, as further amended by
that certain Second Amendment to Loan Agreement dated as of December 20, 2002
and as further amended by that certain Third Amendment, Waiver and Consent to
Loan Agreement dated as of January __, 2004 (as so amended, the "Loan
Agreement"). The full and punctual payment and performance of this Note by Maker
are secured and guaranteed by the Company General Security Agreement, the
Company Collateral Assignments, the Stock

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Pledge Agreement, the Guaranties, the Guarantors Security Agreement, the
Guarantor Collateral Assignments and the Mortgage, as those terms are defined in
the Loan Agreement (the "Security Agreements"). The security interest granted to
Holder under the Security Agreements extends to the proceeds of any sale or
other transfer or disposition of such assets, whether by Maker, its affiliates,
the Holder or any other person, that occurs prior to the payment in full of this
Note. Copies of the Loan Agreement and the Security Agreements may be obtained
from Maker without charge.

5.       Prepayments. Maker may voluntarily prepay this Note either in whole or
in part without penalty or premium.

6.       Waivers. Maker hereby waives diligence, presentment for payment,
demand, protest, notice of non-payment, notice of dishonor, notice of protest,
and any and all other notices and demands whatsoever. Maker shall remain bound
under this Note until all principal and interest and any other amounts that are
payable hereunder or under the Loan Agreement or the Security Agreements have
been paid in full, notwithstanding any extensions or renewals granted with
respect to this Note or the release of any party liable hereunder or any
security for the payment of this Note. Maker, and any and all endorsers hereof,
also waive the right to plead any and all statutes of limitations as a defense
to any demand on this Note or any and all obligations or liabilities arising out
of or in connection with this Note, the Loan Agreement or the Security
Agreements, to the fullest extent permitted by law.

7.       Events of Default. Any of the following events shall constitute an
event of default by Maker under this Note (an "Event of Default"):

         (a)      the failure of Maker to pay to Holder, on the Maturity Date,
any and all principal amounts due and owing under this Note;

         (b)      the failure of Maker to pay to Holder interest payments when
due; or

         (c)      there occurs any other event or circumstance that constitutes
an "Event of Default" as defined in Section 9.1 of the Loan Agreement.

Subject to the forbearance provisions contained in Section 9.4 of the Loan
Agreement, upon the occurrence of any Event of Default, as defined herein above,
at Holder's option, Holder may declare immediately due and payable, and on any
such declaration there shall become immediately due and payable, the entire
unpaid principal balance of this Note, together with all accrued and unpaid
interest under this Note and any other sums owing at the time of such
declaration pursuant to this Note, the Loan Agreement or the Security
Agreements, and Holder shall be entitled to exercise all rights and remedies
available to Holder under this Note, under the Loan Agreement and the Security
Agreements and under applicable law, all of which rights and remedies shall be
cumulative. Without limiting the generality of the foregoing, upon the
occurrence of an Event of Default, the interest rate at which interest shall
accrue on the principal sum and any other amounts that are due under this Note
shall increase to the lower of (i) the Prime Rate plus six and

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one-half percent (6.5%) per annum or (ii) the maximum interest rate permitted
under applicable law (the "Default Rate"), until all such amounts have been paid
in full.

8.       No Waiver by Holder. Subject to the forbearance provisions contained in
Section 9.4 of the Loan Agreement, any delay or omission on the part of Holder
to exercise any of Holder's rights or remedies hereunder, under the Loan
Agreement or the Security Agreements or under applicable law, including, without
limitation, the right to accelerate amounts owing under this Note, shall not be
deemed a waiver of that right or remedy or of any other right or remedy of
Holder in respect thereof. The acceptance by Holder of any payment pursuant to
the terms of this Note which is less than payment in full of all amounts due and
payable at the time of such payment shall not constitute a waiver of the right
to exercise any of the Holder's rights or remedies under this Note, the Loan
Agreement, the Security Agreements or under applicable law at that time or at
any subsequent time or nullify any prior exercise of any such rights or remedies
without the express written consent of Holder, except as and to the extent
provided to the contrary by applicable law.

9.       Governing Law. This Note shall be governed by and construed according
to and enforced under the internal laws of the State of New York without giving
effect to its choice of laws rules.

10.      Enforcement of the Note. Maker agrees that the Superior Court in and
for the County of New York, New York shall have exclusive jurisdiction over any
disputes, between the Maker and Holder and any action, suit or other proceeding
brought by Maker or Holder relating to the interpretation or enforcement of this
Note, and Maker agrees as follows: (a) Maker shall accept and not contest the
personal or subject matter jurisdiction of such Court; (b) Maker shall accept
and not object to or challenge the venue of such Court or assert the doctrine of
forum non conveniens with respect to such Court; (c) Maker shall accept and not
contest the validity or effectiveness of service of process in any such action,
suit or other proceeding by registered or certified first class mail; and (d) TO
THE MAXIMUM EXTENT PERMITTED BY LAW, MAKER WAIVES AND SHALL WAIVE ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR OTHER PROCEEDING BROUGHT WITH RESPECT TO THIS
NOTE OR ITS ENFORCEMENT OR INTERPRETATION. If Maker fails to pay any amounts due
hereunder when due, then Maker shall pay all costs of enforcement and
collection, including, without limitation, reasonable attorneys' fees and costs
incurred by Holder, whether or not enforcement and collection includes the
filing of a lawsuit, and whether or not that lawsuit is prosecuted to judgment.
The costs of enforcement and collection shall be added to the principal amount
of the Note and shall accrue interest at the Default Rate from the Date incurred
until the date paid by Maker.

11.      Binding Nature. The provisions of this Note shall be binding on Maker
and shall inure to the benefit of Holder.

12.      Usury Savings Provisions. In the event Holder receives any sums under
this Note which constitute interest in an amount in excess of that permitted by
any applicable law,

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then, all such sums constituting interest in excess of that permitted to be paid
under applicable law shall, at Holder's option, either be credited to the
payment of principal owing hereunder or returned to Maker. The provisions of
this Section 12 control the other provisions of this Note and any other
agreement between Maker and Holder.

13.      Severability. If, but only to the extent that, any provision of this
Note shall be invalid or unenforceable, then, such offending provision shall be
deleted from this Note, but only to the extent necessary to preserve the
validity and effectiveness of this Note to the fullest extent permitted by
applicable law.

14.      Interpretation. No provision of this Note shall be interpreted for or
against Maker or Holder because that person or that person's legal
representative drafted such provision. Unless otherwise indicated elsewhere in
this Note, (a) the term "or" shall not be exclusive, (b) the term "including"
shall mean "including, but not limited to," and (c) the terms "below," "above,"
"herein," "hereof," "hereto," "hereunder" and other terms similar to such terms
shall refer to this Note as a whole and not merely to the specific section,
subsection, paragraph or clause where such terms may appear. The section and
sub-section headings in this Note are included for convenience of reference only
and shall be ignored in the construction or interpretation of this Note.

15.      Amended and Restated Note. This Note is issued in accordance with that
certain Third Amendment to Loan Agreement dated as of January __, 2004, between
Maker and Watson (the "Third Amendment"), and is issued by Maker as an amendment
and restatement of that certain Secured Promissory Note issued by Maker to
Watson in the principal amount of $17,500,000 dated December 20, 2002 (the
"Original Note"). Upon execution and delivery of this Note to Watson, the
Original Note shall be null and void and of no further legal force or effect.

                           [SIGNATURE PAGE TO FOLLOW]

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                                      "MAKER"

                                      HALSEY DRUG CO., INC.

                                      __________________________________________
                                      By: Andrew Reddick
                                      Its: President and Chief Executive Officer

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