ESCALON MEDICAL CORP
SECURED PROMISSORY NOTE DATED AUGUST 31,2002
<DOCUMENT>
<TYPE>EX-10.36
<SEQUENCE>4
<FILENAME>w68886exv10w36.txt
<DESCRIPTION>SECURED PROMISSORY NOTE DATED AUGUST 31,2002
<TEXT>
<PAGE>
                                                                   Exhibit 10.36


                            SECURED PROMISSORY NOTE

$500,000                                                   San Diego, California
                                                                 August 31, 2002

     FOR VALUE RECEIVED, the undersigned, Danam Acquisition Corp., a Delaware
corporation ("Maker"), having its principal place of business located at 178
Christian Street, Oxford, CT 06478, hereby promises to pay to Synbiotics
Corporation, a California corporation ("Holder"), having its principal place of
business located at 11011 Via Frontera, San Diego, California 92127, the sum of
Five Hundred Thousand Dollars ($500,000), as hereinafter provided.

     This Secured Promissory Note is issued pursuant to that certain Asset
Purchase Agreement (the "Purchase Agreement"), of even date herewith, among
Maker, Holder and Drew Scientific Group PLC and is subject to all rights of
offset as set forth in Section 6.2 of the Purchase Agreement.

     The outstanding principal amount of this Secured Promissory Note (this
"Secured Promissory Note") shall be payable in sixty (60) equal monthly
installments of Eight Thousand Three Hundred Thirty-Three Dollars and
Thirty-Three Cents ($8,333.33), payable on the last day of each calendar month
commencing on September 30, 2002 and ending on August 31, 2007, at which later
time the entire principal amount of this Secured Promissory Note then
outstanding together with any outstanding accrued and unpaid interest thereon
shall be due and payable.

     Maker hereby also promises to pay interest on the unpaid principal amount
hereof in like money, payable monthly commencing on September 1, 2002 and ending
with the final payment of principal due hereunder from the date hereof until
payment of the principal amount hereof has been made in full, at a fixed rate of
five percent (5%) per annum as set forth on Schedule A attached hereto. Interest
shall be computed on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed.

     Principal of this Secured Promissory Note and accrued but unpaid interest
thereon is payable in lawful money of the United States of America, in cash, by
bank or certified check or by wire transfer of immediately available funds to
the Holder at the address set forth below or, in the case of a wire transfer, to
the account designated by Holder set forth below.

For Checks:

  Comerica Bank - California
  9920 La Cinega Blvd., Suite 623
  Inglewood, California 90301
  Attention: Thomas G. Kinzel, Vice President

<PAGE>
For Wire Transfers:

    Comerica Bank - California
    Wire Transfer Corporate Service Center
    2015 Manhattan Beach Blvd.
    Redondo Beach, California 90278-1205
    ABA No. #122201444
    Account No. #2505100529
    Attention: Tom Kinzel; X5760
    Reference: Synbiotics Corporation Loan #00708054423; Note #6

          This Secured Promissory Note shall be secured by such of Maker's
assets as described in the Security Agreement of even date herewith between
Maker and Holder (the "Security Agreement"), and filings reflecting such
security interests shall be filed with the appropriate authorities according to
the Security Agreement.

          Drew Scientific Group PLC, a company organized under the laws of
England and Wales ("Guarantor"), which indirectly owns one hundred percent
(100%) of the issued and outstanding capital stock of Maker, has guaranteed
payment of this Secured Promissory Note pursuant to that certain Guaranty of
even date herewith executed by Guarantor (the "Guaranty").

          If any payment required hereunder shall become due on a Saturday,
Sunday or legal holiday under the laws of the State of California, the State of
Massachusetts or the United Kingdom or any other day on which banking
institutions in the City of San Diego, the City of Boston or the City of London
are obligated or authorized by law or executive order to close, such payment
shall be made on the next succeeding business day.

          If (i) Maker fails to make complete payment of any payment due
hereunder on any date on which such payment is due, (ii) an order of relief
under any bankruptcy, reorganization or insolvency laws has been entered against
Maker by a court having jurisdiction, or (iii) Maker admits in writing its
inability to pay its debts generally as they become due, files a petition for
relief under any bankruptcy, reorganization or insolvency laws, consents to the
filing of a bankruptcy proceeding against it or the appointment of a receiver
for itself or for all or substantially all of its property, a petition in
bankruptcy is filed against it or it makes an assignment for the benefit of its
creditors, then, in any such event, Holder, at its option, may exercise any of
its rights and remedies set forth in the Security Agreement and may accelerate
this Secured Promissory Note and without notice to Maker declare the entire
unpaid principal amount of this Secured Promissory Note to be immediately due
and payable, whereupon the entire principal amount shall become and be forthwith
due and payable, without presentment, due diligence, demand, protest or notice
of any kind.

          This Secured Promissory Note may be prepaid in whole or in part,
without premium or penalty, at any time, but with interest accrued to the date
of prepayment. Any prepayment of this Secured Promissory Note in part shall be
applied to the installments of principal payable hereunder in the order of
maturity thereof.



<PAGE>
          No delay or omission of Holder in exercising any right or remedy
hereunder shall constitute a waiver of any such right or remedy. Acceptance by
Holder of any payment after demand therefor shall not be deemed a waiver of such
demand. A waiver on one occasion shall not operate as a bar to or waiver of any
such right or remedy on any future occasion.

      Maker, regardless of the time, order or place signing, waives presentment
for payment, demand, notice of nonpayment, notice of dishonor, protest of any
dishonor, notice of protest and protest of this Secured Promissory Note, and
Maker agrees that its liability hereunder shall not be in any manner affected by
any indulgences, extension of time, renewal, waiver or modification granted by
Holder; and Maker consents to every extension of time, renewal, waiver or
modification that may be granted by Holder with respect to the payment or other
provisions of this Secured Promissory Note.

          Maker agrees to pay all reasonable expenses of the Holder of this
Secured Promissory Note in connection with the collection and enforcement of
this Secured Promissory Note, including court costs and reasonable attorneys'
fees and disbursements.

          This instrument shall be governed by and construed in accordance with
the internal laws of the State of New York, without regard to its conflicts of
laws principles. Maker hereby agrees that all actions or proceedings arising in
connection with this Secured Promissory Note shall be initiated and tried
exclusively in the courts located in the County of San Diego, State of
California. The aforementioned choice of venue is intended to be mandatory and
not permissive in nature, thereby precluding the possibility of litigation
between Maker and Holder with respect to or arising out of this Secured
Promissory Note in any jurisdiction other than that specified in this paragraph.
Maker waives any right it may have to assert the doctrine of forum non
conveniens or similar doctrine or to object to venue with respect to any
proceeding brought in accordance with this paragraph, and stipulates that the
courts located in the County of San Diego, State of California, shall have in
personam jurisdiction and venue over Maker for the purposes of litigating any
dispute, controversy or proceeding arising out of or related to this Secured
Promissory Note. Maker hereby authorizes and accepts service of process
sufficient for personal jurisdiction in any action against it as contemplated by
this paragraph by registered or certified mail, return receipt requested,
postage prepaid, to its address for the giving of notices as set forth in the
first paragraph of this Secured Promissory Note. Any final judgment rendered
against Maker in any action or proceeding shall be conclusive as to the subject
of such final judgment and may be enforced in other jurisdictions in any manner
provided by law.

          None of the obligations of Maker under this Secured Promissory Note,
including, without limitation, Maker's obligation to pay the indebtedness
evidenced hereby nor any part thereof, may be assigned (whether by operation of
law or otherwise) by Maker without the express prior written consent of Holder,
and consent to any proposed assignment shall not constitute consent to any
subsequent proposed assignment. Any attempted assignment in contravention hereof
shall be null and void and of no force or effect.

          Holder shall have the right to freely assign this Secured Promissory
Note and the right to receive the principal amount hereof and any and all
accrued and unpaid interest thereon upon written notice to Maker and without
seeking or obtaining any consent or approval of

<PAGE>
Maker; provided, however, that any such assignment shall be of this Secured
Promissory Note in its entirety.

     The obligations and rights contained herein shall be binding on and inure
to the benefit of any permitted assigns, successors, heirs, representatives,
agents and other successors in interest.

     Executed as an instrument under the laws of the State of New York as of
the date first above written.

                              DANAM ACQUISITION CORP.

                              By: ___________________________
                              Name:
                              Title:
<PAGE>
                                   SCHEDULE A

                                 See attached.
<PAGE>
                                                               08/16/2002 Page 1
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Drew Loan
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Compound Period......................: Monthly

Nominal Annual Rate..................: 5.000  %
Effective Annual Rate................: 5.116  %
Periodic Rate........................: 0.4167 %
Daily Rate...........................: 0.01370%

CASH FLOW DATA


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
  Event       Start Date          Amount         Number Period       End Date
--------------------------------------------------------------------------------
<S>          <C>                <C>              <C>                 <C>
1 Loan       08/31/2000         500,000.00               1
2 Payment    09/30/2002           8,333.33        60 Monthly         08/31/2007
</TABLE>

     Fixed Payment (+ Interest)

AMORTIZATION SCHEDULE -- Normal Amortization

<TABLE>
<CAPTION>
     Date           Payment        Interest       Principal           Balance
--------------------------------------------------------------------------------
<S>               <C>              <C>             <C>                <C>
Loan 08/31/2002                                                       500,000.00

 1   09/30/2002    10,416.66        2,083.33        8,333.33          491,666.67
 2   10/31/2002    10,381.94        2,048.61        8,333.33          483,333.34
 3   11/30/2002    10,347.22        2,013.89        8,333.33          475,000.01
 4   12/31/2002    10,312.50        1,979.17        8,333.33          466,666.68
2002 Totals        41,458.32        8,125.00       33,333.32

 5   01/31/2003    10,277.77        1,944.44        8,333.33          458,333.35
 6   02/28/2003    10,243.05        1,909.72        8,333.33          450,000.02
 7   03/31/2003    10,208.33        1,875.00        8,333.33          441,666,69
 8   04/30/2003    10,173.61        1,840.28        8,333.33          433,333.35
 9   05/31/2003    10,138.89        1,805.56        8,333.33          425,000.03
10   06/30/2003    10,104.16        1,770.83        8,333.33          416,666.70
11   07/31/2003    10,069.44        1,736.11        8,333.33          408,333.37
12   08/31/2003    10,034.72        1,701.39        8,333.33          400,000.04
13   09/30/2003    10,000.00        1,666.67        8,333.33          391,666.71
14   10/31/2003     9,965.27        1,631.94        8,333.33          383,333.38
15   11/30/2003     9,930.55        1,597.22        8,333.33          375,000.05
16   12/31/2003     9,895.83        1,562.50        8,333.33          366,666.72
2003 Totals       121,041.62       21,041.66       99,999.96

17   01/31/2004     9,861.11        1,527.78        8,333.33          358,333.39
18   02/29/2004     9,826.39        1,493.06        8,333.33          350,000.06
19   03/31/2004     9,791.66        1,458.33        8,333.33          341,666.73
20   04/30/2004     9,756.94        1,423.61        8,333.33          333,333.40
21   05/31/2004     9,722.22        1,388.89        8,333.33          325,000.07
22   06/30/2004     9,687.50        1,354.17        8,333.33          316,666.74
23   07/31/2004     9,652.77        1,319.44        8,333.33          308,333.41
24   08/31/2004     9,618.05        1,284.72        8,333.33          300,000.08
25   09/30/2004     9,583.33        1,250.00        8,333.33          291,666.75
26   10/31/2004     9,548.61        1,215.28        8,333.33          283,333.42

</TABLE>
<PAGE>
                                                               08/16/2002 Page 2
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Drew Loan
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<Table>
      Date           Payment        Interest     Principal      Balance
---------------    -----------    ----------    ----------     ----------
<S>                <C>           <C>           <C>            <C>
  27 11/30/2004       9,513.89      1,180.56      8,333.33     275,000.09
  28 12/31/2004       9,479.16      1,145.83      8,333.33     266,666.76
2004 Totals         116,041.63     16,041.67     99,999.96

  29 01/31/2005       9,444.44      1,111.11      8,333.33     258,333.43
  30 02/28/2005       9,409.72      1,076.39      8,333.33     250,000.10
  31 03/31/2005       9,375.00      1,041.67      8,333.33     241,666.77
  32 04/30/2005       9,340.27      1,006.94      8,333.33     233,333.44
  33 05/31/2005       9,305.55        972.22      8,333.33     225,000.11
  34 06/30/2005       9,270.83        937.50      8,333.33     216,666.78
  35 07/31/2005       9,236.11        902.78      8,333.33     208,333.45
  36 08/31/2005       9,201.39        868.06      8,333.33     200,000.12
  37 09/30/2005       9,166.66        833.33      8,333.33     191,666.79
  38 10/31/2005       9,131.94        798.61      8,333.33     183,333.46
  39 11/30/2005       9,097.22        763.89      8,333.33     175,000.13
  40 12/31/2005       9,062.50        729.17      8,333.33     166,666.80
2005 Totals         111,041.63     11,041.67     99,999.96

  41 01/31/2006       9,027.78        694.45      8,333.33     158,333.47
  42 02/28/2006       8,993.05        659.72      8,333.33     150,000.14
  43 03/31/2006       8,958.33        625.00      8,333.33     141,666.81
  44 04/30/2006       8,923.61        590.28      8,333.33     133,333.48
  45 05/31/2006       8,888.89        555.56      8,333.33     125,000.15
  46 06/30/2006       8,854.16        520.83      8,333.33     116,666.82
  47 07/31/2006       8,819.44        486.11      8,333.33     108,333.49
  48 08/31/2006       8,784.72        451.39      8,333.33     100,000.16
  49 09/30/2006       8,750.00        416.67      8,333.33      91,666.83
  50 10/31/2006       8,715.28        381.95      8,333.33      83,333.50
  51 11/30/2006       8,680.55        347.22      8,333.33      75,000.17
  52 12/31/2006       8,645.83        312.50      8,333.33      66,666.84
2006 Totals         106,041.64      6,041.68     99,999.96

  53 01/31/2007       8,611.11        277.78      8,333.33      58,333.51
  54 02/28/2007       8,576.39        243.06      8,333.33      50,000.18
  55 03/31/2007       8,541.66        208.33      8,333.33      41,666.85
  56 04/30/2007       8,506.94        173.61      8,333.33      33,333.52
  57 05/31/2007       8,472.22        138.89      8,333.33      25,000.19
  58 06/30/2007       8,437.50        104.17      8,333.33      16,666.86
  59 07/31/2007       8,402.78         69.45      8,333.33       8,333.53
  60 08/31/2007       8,368.05         34.52      8,333.53           0.00
2007 Totals          67,916.65      1,249.81     66,666.84

Grand Totals        563,541.49     63,541.49    500,000.00
</Table>

<PAGE>
                                                               08/16/2002 Page 3

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Drew Loan
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Last interest amount decreased by 0.20 due to rounding.

</TEXT>
</DOCUMENT>
