Document:

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                                                                   Exhibit 10.02

                                 PROMISSORY NOTE

 January 1, 2004
                                                           Minnetonka, Minnesota

         FOR VALUE RECEIVED, the undersigned, LECTEC CORPORATION, a Minnesota
corporation with a mailing address of 10701 Red Circle Drive, Minnetonka, MN
55343 (hereinafter referred to as the "LecTec"), promises to pay to the order of
NOVARTIS CONSUMER HEALTH, INC. with a mailing address of 200 Kimball Drive,
Parsippany, NJ 07054 (hereinafter referred to as "Novartis"), the lesser of the
sum of Two Million ($2,000,000.00) Dollars or so much thereof as has been
advanced and remains outstanding pursuant to Section 2.5 of the Supply and
License Agreement between LecTec and Novartis dated as of January 1, 2004, (the
"Agreement") together with interest and costs thereon as set forth below, such
interest and costs being payable only in the event of default by LecTec
hereunder.

         All amounts outstanding under this Note, together with interest
thereon, shall be repaid in full on upon Novartis' acceptance of final shipment
of Product delivered by LecTec under the Agreement. This Note may be subject to
mandatory prepayment under circumstances as set forth in the Agreement.

         Interest on the principal amount outstanding hereunder shall begin to
accrue as of the date hereof, and shall be payable only in the event of default
by LecTec hereunder on the date of such default whether or not any judgment has
been issued thereon. Such default interest shall be payable at the rate per
annum which shall be two (2) percentage points higher than the "prime" rate as
reported in The Wall Street Journal on the first business day of each month,
adjusted monthly.

         This Note is the New Advance Payment Note as defined in the Agreement,
to which reference may be made for a description of the terms and conditions of
advances of principal hereof and the method of payment by way of credits for
products sold and

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delivered by LecTec to Novartis. The indebtedness described herein shall have
the benefit of the Collateral as set forth in a Security Agreement between
LecTec and Novartis of even date herewith.

         This Note may be prepaid, at any time, in whole or in part, without
premium or fee. If this Note is not paid when due, LecTec agrees to pay all
costs of collection, including reasonable attorneys' fees. LecTec hereby waives
demand, presentment, notice of dishonor, protest, and notice of protest.

         WITHOUT LIMITING OTHER RIGHTS ACCORDED TO NOVARTIS HEREUNDER, LECTEC
HEREBY CERTIFIES THAT THE TRANSACTION CONTEMPLATED BY THIS NOTE IS A COMMERCIAL
TRANSACTION AND HEREBY WAIVES (A) ITS RIGHTS TO NOTICE AND HEARING AS OTHERWISE
ALLOWED BY LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH NOVARTIS MAY DECIDE
TO USE, AND (B) ALL RIGHTS AS OTHERWISE ALLOWED BY LAW TO REQUEST THAT NOVARTIS
POST A BOND, WITH OR WITHOUT SURETY, TO PROTECT LECTEC OR ANY OTHER PERSON OR
ENTITY LIABLE UNDER THIS NOTE AGAINST DAMAGES THAT MAY BE CAUSED BY ANY
PREJUDGMENT REMEDY SOUGHT OR OBTAINED BY NOVARTIS BY VIRTUE OF ANY DEFAULT OR
PROVISION OF THIS NOTE OR THE AGREEMENT, AND LECTEC HEREBY CONSENTS TO THE
ISSUANCE OF ANY SUCH PREJUDGMENT REMEDY WITHOUT SUCH A BOND.

         IN WITNESS WHEREOF, the undersigned has executed and delivered this
Note as of the date and year first above written.

                                    LECTEC CORPORATION

                                    By       /s/ Timothy P. Fitzgerald
                                       -----------------------------------------
                                          Name
                                    Its:                 CEO
                                        ----------------------------------------
                                          Title<PAGE>
                                                                   Exhibit 10.03

                               SECURITY AGREEMENT

          THIS SECURITY AGREEMENT ("Security Agreement") dated as of January 1,
     2004 between NOVARTIS CONSUMER HEALTH, INC., 200 Kimball Drive, Parsippany,
     NJ 07054 ("Creditor"), a Delaware corporation, and LECTEC CORPORATION,
     10701 Red Circle Drive, Minnetonka, MN 55343 ("Debtor"), a Minnesota
     corporation.

                                    RECITALS

A.   Creditor has agreed to advance funds to Debtor as provided in a certain
     Supply and License Agreement of even date herewith ("Supply Agreement") and
     Debtor is otherwise indebted to Creditor. Debtor has issued it a promissory
     note (the "Note") to Creditor evidencing Debtor's obligation to repay
     advances made or to be made by Creditor to Debtor and such other
     indebtedness of Debtor to Creditor.

B.   Debtor has agreed to grant a security interest in its assets as provided in
     this Security Agreement to secure its payment obligations under the Note.

          NOW, THEREFORE, the parties hereby agree as follows:

     1. Security Interest. To secure the full and prompt payment to Creditor of
     the obligations of Borrower under the Note (hereinafter, the
     "Liabilities"), Debtor has granted and hereby grants to Creditor a
     continuing security interest in and to all of Debtor's accounts receivable,
     inventory, equipment and general intangibles (hereinafter, the
     "Collateral"), whether now owned or existing or hereafter acquired or
     arising, the proceeds of the Collateral, and all books and records
     (including, without limitation, customer lists, credit files, computer
     programs, print-outs, and other computer materials and records) of Debtor
     pertaining to the Collateral.

     2. Disclosure of Security Interest. Debtor shall make appropriate entries
     upon its financial statements disclosing Creditor's security interest in
     the Collateral.

     3. Financing Statements. At Creditor's request, Debtor shall execute or
     deliver to Creditor, at any time or times hereafter, all supplemental
     documentation that Creditor may reasonably request relating to the
     perfection of the security interest granted in Section 1, in form and
     substance acceptable to Creditor, and pay the costs of any recording or
     filing of the same.

     4. Perfection and Priority; Location of Collateral. Debtor represents that:

          (A) None of the Collateral is subject to any lien, security interest
     or other encumbrance, except as disclosed on Exhibit A attached hereto and
     made a part hereof;

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(B)  The address specified above is Debtor's chief executive office and
     principal place of business and Debtor is incorporated under the laws of
     the state of Minnesota.

     5. Event of Default. The occurrence of any one or more of the following
     events shall constitute an "Event of Default:"

              (A) DEBTOR FAILS TO PAY THE LIABILITIES WHEN DUE AND
                        PAYABLE AS PROVIDED IN THE NOTE;

(B)  Debtor fails or neglects to perform, keep or observe any other term,
     provision, condition, covenant, warranty or representation contained in
     this Security Agreement which is required to be performed, kept or observed
     and the same is not cured to Creditor's satisfaction within ten (10) days
     after Creditor gives Debtor written notice thereof;

(C)  Any material representation by Debtor to Creditor concerning its financial
     condition is not true and correct when made, in all material respects;

(D)  The Collateral or any other of Debtor's material assets are attached,
     seized, levied upon or subjected to a writ or distress warrant, or come
     within the possession of any receiver, trustee, custodian or assignee for
     the benefit of creditors and the same is not cured within sixty (60) days
     thereafter; an application is made by any person other than Debtor for the
     appointment of a receiver, trustee, or custodian for the Collateral or any
     other of Debtor's assets and the same is not dismissed within sixty (60)
     days after the application therefore;

(E)  An application is made by Debtor for the appointment of a receiver, trustee
     or custodian for the Collateral or any other of Debtor's assets; a petition
     under any section or chapter of the Bankruptcy Code or any similar law or
     regulation shall be filed by Debtor; Debtor makes an assignment for the
     benefit of its creditors or any case or proceeding is filed by Debtor for
     its dissolution, liquidation, or termination; or

(F)  Debtor ceases to conduct its business as now conducted or is enjoined,
     restrained or in any way prevented by court order from conducting all or
     any material part of its business affairs; a petition under any section or
     chapter of the Bankruptcy Code or any similar law or regulation is filed
     against any Debtor or any case or proceeding is filed against Debtor for
     its dissolution or liquidation and such injunction, restraint or petition
     is not dismissed within sixty (60) days after the entry or filing thereof.

     6. Remedies. Upon and after an Event of Default, Creditor shall have the
     following rights and remedies:

(A)  All the rights and remedies of a secured party under the Uniform Commercial
     Code as in effect at the time in Minnesota, all of which rights and
     remedies shall be cumulative, and none exclusive, to the extent permitted
     by law, in addition to any other rights and remedies contained in this
     Security Agreement.

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(B)  The right to sell or to otherwise dispose of all or any Collateral in its
     then condition, or after any further manufacturing or processing thereof,
     at public or private sale or sales, with such notice as may be required by
     law, in lots or in bulk, for cash or on credit, all as Creditor, in its
     sole discretion, may deem advisable; such sales may be adjourned from time
     to time with or without notice. Creditor shall have the right to conduct
     such sales on the premises of Debtor or elsewhere and shall have the right
     to use Debtor's premises without charge for such sales for such time or
     times as Creditor may see fit. Creditor is hereby granted a license or
     other right to use, without charge, Debtor's labels, patents, copyrights,
     rights of use of any name, trade secrets, trade names, trademarks and
     advertising matter, or any property of a similar nature, as it pertains to
     the Collateral; provided, however, that the grant of license and right to
     use herein shall be subject to the license provisions of the Supply
     Agreement. Creditor shall have the right to sell, lease or otherwise
     dispose of the Collateral, or any part thereof, for cash, credit or any
     combination thereof and Creditor may purchase all or any part of the
     Collateral at public or, if permitted by law, private sale and in lieu of
     actual payment of such purchase price, may setoff the amount of such price
     against the Liabilities. The proceeds realized from the sale of any
     Collateral shall be applied first to the reasonable costs, expenses
     (including attorneys' fees and expense) incurred by Creditor for collection
     and for acquisition, completion, protection, removal, storage, sale and
     delivery of the Collateral; second to interest due upon any of the
     Liabilities; third to the principal of the Liabilities; fourth to the
     holder of any junior lien or any of the Collateral. If any deficiency shall
     arise, Debtor shall remain liable to Creditor therefore. Notwithstanding
     anything else in this Agreement, Creditor shall not sell, lease or
     otherwise dispose of that portion of the Collateral consisting of the
     Intellectual Property, as that term is defined in the Supply Agreement, in
     whole or in part, so long as the Supply Agreement is in effect.

     7. Subordination by Creditor. On no more than a single occasion and upon
     the written request of Debtor, Creditor shall subordinate its security
     interest in the Collateral to a security interest that Debtor may propose
     to grant to an institutional lender to secure a new loan to Debtor in a
     principal amount of not less than $1,000,000. Such subordination shall have
     the effect only of making Creditor's security interest in the Collateral
     junior to the security interest granted to such new lender notwithstanding
     the priority of the perfection of Creditor's security interest and shall
     not otherwise affect any of Creditor's rights under the Note or this
     Security Agreement.

     8. Waiver. Each party acknowledges and agrees that any failure on the part
     of the other party to enforce at any time, or for any period of time, any
     of the provisions of this Security Agreement shall not be deemed or
     construed to be a waiver of such provisions or of the right of such other
     party thereafter to enforce each and every such provision.

     9. Enforcement. If and to the extent that any provision of this Security
     Agreement is determined by any legislature, court or administrative agency
     to be, in whole or in part, invalid or unenforceable, such provision or
     part thereof shall be deemed to be surplusage and, to the extent not so
     determined to be invalid or unenforceable, each provision hereof shall
     remain in full force and effect unless the purposes of this Security
     Agreement cannot be achieved. In the event any provisions shall be held
     invalid, illegal or

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     unenforceable the parties shall use commercially reasonable efforts to
     substitute a valid, legal and enforceable provision which insofar as
     practical implements the purposes hereof.

     10. Choice of Law. This Agreement shall be governed by, and construed in
     accordance with, the laws of the State of Minnesota as though made and to
     be fully performed in said State.

     11. Notices. All notices required or permitted hereunder shall be given in
     writing and sent by confirmed facsimile transmission, or mailed postage
     prepaid by first-class certified or registered mail, or sent by a
     nationally recognized express courier service, or hand-delivered to the
     following addressees:

         Creditor:                  Novartis Consumer Health, Inc.
                                    200 Kimball Drive
                                    Parsippany, New Jersey 07054
                                    Attn: General Counsel

         Debtor:                    LecTec Corporation
                                    10701 Red Circle Dr.
                                    Minnetonka, Minnesota 55343
                                    Attn: Chief Executive Officer

     or to such other address as may be specified in a notice given to the other
     party in accordance with this Section 11. Any notice, if sent properly
     addressed, postage prepaid, shall be deemed made three (3) days after the
     date of mailing as indicated on the certified or registered mail receipt,
     or on the next business day if sent by express courier service or on the
     date of delivery or transmission (if delivered or sent during ordinary
     business hours, otherwise on the next business day) if hand-delivered or
     sent by confirmed facsimile transmission.

     12. Captions. The captions of each section of this Security Agreement are
     inserted only as a matter of convenience and for reference and in no way
     shall be deemed to define, limit, enlarge, or describe the scope of this
     Security Agreement and the relationship of the parties hereto, and shall
     not in any way affect this Security Agreement or the construction of any
     provisions herein.

     13. Entire Agreement; Amendment. This Security Agreement, including Exhibit
     A annexed hereto, and the Supply Agreement represent and incorporate the
     entire understanding between the parties hereto with respect to the subject
     matter of this Security Agreement and supersedes any prior offers,
     proposals, drafts or other communications with respect thereto. In the
     event of a conflict between the terms of this Security Agreement and the
     Supply Agreement, the provisions of the Supply Agreement shall prevail.
     Each party acknowledges that there are no warranties, representations,
     covenants or understandings of any kind, nature or description whatsoever
     made by any

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     party to any other, except such as are expressly hereinabove set forth.
     This Security Agreement shall not be subject to change or modification
     except by the execution of a writing specified to be an explicit amendment
     to this Security Agreement duly executed by all parties hereto.

     14 Counterparts. This Security Agreement may be executed in two or more
     counterparts, each of which shall constitute an original and all of which
     together shall constitute a single instrument.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

LECTEC CORPORATION

By:      /s/ Timothy P. Fitzgerald
    ------------------------------------

Name:         Timothy P Fitzgerald
      ----------------------------------

Title:              CEO
       ---------------------------------

NOVARTIS CONSUMER.HEALTH, INC.

By:       /s/ Lynne Millheiser
    ------------------------------------

Name:         Lynne Millheiser
      ----------------------------------

Title:          SVP   OTC  NA
       ---------------------------------

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