Prepared by MERRILL CORPORATION









EXHIBIT

10.81




 




 




 




SECURED PROMISSORY NOTE




 




 




 




$100,000.00                                                                                                                                        Pasadena,

California




                                                                                                                                                                     March

16, 2001




 




 




 




 




FOR VALUE RECEIVED,

the undersigned hereby jointly and severally (if applicable) promises to pay to

PREFERRED BUSINESS CREDIT, INC., a California Corporation, at P.O. Box 60307,

Pasadena, California 91116, or at such other address as the holder may specify

in writing, the principal sum of One Hundred Thousand and 00/100 Dollars

($100,000.00) plus interest as provided below.




 




This

note shall bear interest at the rate of 16.5% per annum, computed on the basis

of a 360 day year for actual days elapsed. 

This rate is based upon the prime rate of interest of 8.5%, the rate in

effect as of this date.  The prime rate

of interest is the prime rate announced as being charged by Union Bank of

California, N.A., San Francisco, California, from time to time.  In the event the prime rate is from time to

time hereafter changed, the rate of interest provided in this note shall be

correspondingly changed.  For each month

the rate of interest charged under this note shall be based upon the average

prime rate in effect during such month. 

In no event shall the rate of interest chargeable hereunder be less than

1% per month.




 




Principal

shall be payable in twenty four equal monthly installments of Four Thousand One

Hundred Sixty Six & 00/100 Dollars ($4,166.00) commencing May 1, 2001, and

continue thereafter on the 1st day of each month, plus interest shall be

payable monthly commencing April 1, 2001, and continue thereafter on the 1st day

of each month, and one final installment on May 20, 2003 equal to all principal

outstanding together with all accrued and unpaid interest.




 




This

note is secured by that certain Loan and Security Agreement (“Agreement”) dated

February 20, 2001 and is subject to all of the terms and conditions

thereof.  In the event of default under

the Agreement, including but not limited to, the failure to pay any installment

of principal or interest hereunder when due, the holder of this note may, at

its election and without notice to the undersigned, declare the entire balance

hereof immediately due and payable.




 




If

any installment of principal or interest hereunder is not paid when due, the

holder shall have the following rights in addition to the rights set forth in the

preceding paragraph: (a) the right to add unpaid interest to principal and to

have such amount thereafter bear interest as provided in this note, and (b) if

any installment is more than ten days past due, the right to collect a charge

equal to the greater of $15.00 or five percent of the delinquent payment.  This charge is the result of a reasonable

endeavor by the undersigned and the holder to estimate the holder’s added costs

and damages resulting from the undersigned’s failure to timely make payments

under this note; hence the undersigned agrees that the charge shall be presumed

to be the amount of damage sustained by the holder since it is extremely

difficult to determine the actual amount necessary to reimburse the holder of

such damages.  If this note is not paid

when due, the undersigned further promises to pay all costs of collection,

foreclosure fees and reasonable attorneys' fees incurred by the holder whether

or not suit is filed hereon.













 




Provided

the undersigned is not then in default 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 by paying the balance of principal owing plus all

accrued and unpaid interest and charges, 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 be changed,

modified, amended or terminated orally.




 




Waiver of Trial by Jury.  THE UNDERSIGNED, TO THE EXTENT IT MAY

LEGALLY 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 TO

THIS NOTE, OR IN ANY WAY CONNECTED WITH, OR RELATED TO, OR INCIDENTAL TO, THE

DEALINGS OF THE PARTIES HERETO WITH RESPECT TO THIS NOTE OR THE TRANSACTIONS

RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND

IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE.  THE UNDERSIGNED, TO THE EXTENT IT MAY LEGALLY

DO SO, HEREBY AGREES THAT ANY SUCH CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR

PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT THE HOLDER

OF THIS NOTE MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH

ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE UNDERSIGNED TO THE WAIVER

OF 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