Document:

Exhibit
10.1

 

STRAIGHT NOTE

 

$100,000                                                                                                                                                                                                                                    South
El Monte, California                                                                                                   March
13, 2003

 

For value received, Lee Pharmaceuticals promises to
pay Mark DiSalvo or order, at South El Monte, California the sum of ONE HUNDRED
THOUSAND DOLLARS, with interest from March 13, 2003, on unpaid principal at the
rate of twenty (20) per cent per annum; principal is payable monthly,
commencing May 10, 2003, with monthly principal payments of $5,000. Interest
shall be calculated on the basis of the unpaid principal balance daily, based
on a 365-day year, actual day month and payable monthly.  Principal and interest shall be payable in
lawful money of the United States.  If
action were instituted on this note, I promise to pay such sum as the Court may
fix as attorney’s fees.  This note is
secured by the trademark on the product brand Mapo® Bath Oil and Cam® Lotion.

 

 

	
  MARCH 13, 2003

  	
   

  	
  RONALD G. LEE

  	
   

  
	
  Date

  	
   

  	
  Lee Pharmaceuticals - Ronald G. Lee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MARCH 13, 2003

  	
   

  	
  MICHAEL L. AGRESTI

  	
   

  
	
  Date

  	
   

  	
  Lee Pharmaceuticals - Michael L. AgrestiExhibit
10.2

 

MODIFICATION OF SECURED PROMISSORY NOTE

 

 

WHEREAS, this agreement is in reference to a loan which is evidence by
an instrument entitled Secured Promissory Note, (NOTE), dated February 20,
2001, executed by LEE PHARMACEUTICALS for the original principal sum of
Three Hundred Thousand and 00/100 Dollars ($300,000.00) and payable to the
order of PREFERRED BUSINESS CREDIT, INC.

 

Principal balance outstanding on this Note as of this date is One
Hundred and Ninety Thousand and 00/100 Dollars ($190,000.00).

 

 

NOW, THEREFORE, the undersigned parties agree that the Note shall be
amended in the following respect:

 

 

The monthly principal payment of Five Thousand Dollars ($5,000.00) will
continue until this Note is paid in full.

 

The term of this Note shall be extended to May 20, 2004.

 

 

Except as noted above, all the terms, conditions and provisions of said
Note shall remain unchanged and in full force and effect.

 

 

	
  Date: February 4, 2003

  	
   

  	
  Loan Number: LEE08

  
	
   

  	
   

  	
   

  
	
  PREFERRED BUSINESS CREDIT, INC.

  	
   

  	
  LEE PHARMACEUTICALS

  
	
  a California corporation

  	
   

  	
  a California corporation

  
	
   

  	
   

  	
   

  
	
  By:

  	
  FARHAD MOTIA

  	
   

  	
  By:

  	
  RONALD G. LEE

  
	
  Farhad Motia, President

  	
   

  	
  Ronald G. Lee, PresidentExhibit
10.3

 

 

 

SECURED PROMISSORY NOTE

 

	
  $70,000.00

  	
   

  	
  Pasadena, California

  	
   

  
	
   

  	
   

  	
  November 14, 2002

  	
   

  

 

 

FOR VALUE RECEIVED, the
undersigned hereby jointly and severally (if applicable) promises to pay to
PREFERRED BUSINESS CREDIT, INC., a California Corporation, at 300 N. Lake
Avenue, Suite 930 Pasadena, California 91101, or at such other address as the
holder may specify in writing, the principal sum of Seventy Thousand and 00/100
Dollars ($70,000.00) plus interest as provided below.

 

This note shall bear interest
at the rate of 12.25% 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 4.25%, 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 Two Thousand Nine Hundred
Dollars ($2,900.00) commencing December 1, 2002 and continue thereafter on the
1st day of each month, plus interest shall be payable monthly commencing
December 1, 2002 and continue thereafter 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 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 deliquent 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 attorney’s fees incured 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
interst 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

  

 

1

 

 

November
14, 2002

 

 

Mr.
Farhad Motia

Preferred
Business Credit, Inc.

300
N. Lake Avenue, #930

Pasadena,
CA  91101

 

 

Dear
Farhad:

 

You
have this day modified the financing arrangement between Preferred Business
Credit, Inc. and LEE PHARMACEUTICALS (“Borrower”).  As Guarantor(s) of all present and future obligations of Borrower
to Preferred Business Credit, Inc., the undersigned hereby confirms that
his/her (their) Continuing Guaranty of the obligations of Borrower dated
February 20, 2001, remains in full force and effect notwithstanding the recent
modifications of your financing.

 

	
  Very
  truly yours,

  	
   

  
	
   

  	
   

  
	
  RONALD
  G. LEE

  	
   

  
	
  Ronald
  G. Lee, Guarantor

  	
   

  

 

 

2Exhibit
10.4

 

SECURED PROMISSORY
NOTE

 

	
  $50,000.00

  	
   

  	
  Pasadena, California 

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  February
  4, 2003

  	
   

  

 

 

FOR VALUE RECEIVED, the
undersigned hereby jointly and severally (if applicable) promises to pay to
PREFERRED BUSINESS CREDIT, INC., a California Corporation, at 300 N.Lake Ave.,
Pasadena, California 91101, or at such other address as the holder may specify
in writing, the principal sum of Fifty  Thousand and 00/100
Dollars ($50,000.00) plus interest as provided below.

 

This note shall bear
interest at the rate of 12.25% 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 4.25%, 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, San Francisco, 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 1.0% per month.

 

Principal shall be
payable in 15 equal monthly installments of $2,000.00 commencing March 1, 2003
and continue thereafter on the 1st day of each month, plus interest shall be
payable monthly commencing March 1, 2003 and continue thereafter 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 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 deliquent 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 attorney’s fees incurred by the holder whether
or not suit is filed hereon.

 

1

 

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 AFGREES 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 delivewred on the date first set forth above.

 

 

	
   

  	
  LEE PHARMACEUTICALS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  RONALD G. LEE

  
	
   

  	
  Ronald G. Lee,
  President

  
				

 

2

 

February 4, 2003

 

 

Mr. Farhad Motia

Preferred Business
Credit, Inc.

Pasadena, CA 91101

 

 

Dear Farhad:

 

You have this day
modified the financing arrangement between PREFERRED BUSINESS CREDIT, INC. and
Lee Pharmaceuticals (“Borrower”).  As
Guarantor(s) of all present and future obligations of Borrower to PREFERRED
BUSINESS CREDIT, INC., the undersigned hereby confirms that my Continuing
Guaranty of the obligations of Borrower dated February 20, 2001, remains in full
force and effect notwithstanding the recent modifications of your financing.

 

	
  Very truly yours,

  
	
   

  
	
  RONALD G. LEE

  	
   

  
	
  Ronald G. Lee,
  Guarantor

  

 

3

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