Exhibit 99.1
PROMISSORY NOTE
February 13, 2001 U.S. $500,000.00
New York, New York
THE LANGER BIOMECHANICS GROUP, INC.
PROMISSORY NOTE
DUE AUGUST 31, 2001, SUBJECT TO PREPAYMENT ON CERTAIN CONDITIONS
FOR VALUE RECEIVED, the undersigned, THE LANGER BIOMECHANICS GROUP, INC.,
a New York Corporation ("Payor"), having its principal place of business at 450
Commack Rd., Deer Park, New York 11729, hereby promises to pay to the order of
ANDREW H. MEYERS ("Payee"), having an address at 31 The Birches, Roslyn Estates,
New York 11576 on the Payment Date (as defined below), in immediately available
funds, the sum of Five Hundred Thousand Dollars ($500,000), together with all
accrued and unpaid interest thereon from the date hereof at prime rate (as
reported in the Wall Street Journal from time to time ("Prime Rate")) plus 1%,
payable monthly in arrears; provided, however, that upon the occurrence and
continuance of an Event of Default (as hereinafter defined), interest shall
accrue at the Prime Rate plus six (6%) percent per annum. All amounts referred
to herein are expressed and payable in United States dollars. This Note is
subject to the following additional terms.
1. Payment. All payments hereunder shall be payable at the offices of
Payee, or at such other place as Payee may from time to time designate by
written notice to Payor. All payments hereunder shall be applied first to any
outstanding amounts specified in paragraph 12 hereof, then to all accrued and
unpaid interest hereunder, and then to the principal amount outstanding
hereunder.
For purposes of this Note, the term "Payment Date" shall mean the date
which is the earlier of (i) August 31, 2001, or (ii) the date of a closing of
any debt financing with a commercial lending institution in the aggregate amount
of at least $1,000,000 by the Payor.
2. Absolute Obligation. No provision of this Note shall alter or impair
the obligation of the Company, which is absolute and unconditional, to pay the
principal of, and interest on, this Note at the time, place and rate herein
prescribed.
3. Events of Default. If one or more of the following described "Events of
Default" shall occur:
(a) The Payor shall default in the payment, when due, of principal
or interest on this Note; or
(b) The Payor shall (1) become insolvent; (2) admit in writing its
inability to pay its debts generally as they mature; (3) make an assignment for
the benefit of creditors or commence proceedings for its dissolution; or (4)
apply for or consent to the appointment of a trustee, liquidator or receiver for
all of its or for a substantial part of its property or business; or
(c) Bankruptcy, reorganization, insolvency or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Payor and, if
instituted against the Payor, shall not be dismissed within forty (45) days
after such institution, or the Payor shall by any action or answer approve of,
consent to, or acquiesce in any such proceedings or admit the material
allegations of, or default in answering a petition filed in any such proceeding;
then, or at any time thereafter, and as long as such Event of Default is
continuing unless such Event of Default shall have been waived in writing by the
Payee (which waiver shall not be deemed to be a waiver of any subsequent
default) at the option of the Payee and in the Payee's sole discretion, (i) all
amounts of principal and accrued interest payable hereunder, together with
collection costs (including all attorneys' fees and disbursements), shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which are hereby expressly waived, anything herein or in any
note or other instruments contained to the contrary notwithstanding, (ii) the
principal sum of, and any accrued interest on, this Note shall be irrevocably
and unconditionally payable by Payor, without offset, discount, defense, claim
or counterclaim of any nature, and (iii) the Payee may immediately, and without
expiration of any period of grace other than as contained in this Section,
enforce any and all of the Payee's rights and remedies provided herein or any
other rights or remedies afforded by law.
4. Applicable Law and Jurisdiction. This Note shall be governed by and
interpreted under the laws of the State of New York applicable to contracts made
and to be performed therein, without giving effect to the principles of
conflicts of law. Payor irrevocably consents to the service of process arising
out of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by postage prepaid certified or registered first-class
mail, return receipt requested, to Payor. The foregoing, however, shall not
limit the right of Payee to service of process in any other manner permitted by
law or to commence any legal action or proceeding or to obtain execution of
judgment in any appropriate jurisdiction. In the event of litigation between
Payee and Payor over any matter connected with this Note, the right to a trial
by jury is hereby waived by Payor and Payee.
5. Further Assurances. Payor hereby agrees to execute and deliver such
other documents and instruments as may be reasonably requested by Payee in order
to give effect to the intent and purposes of this Note.
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6. Prepayment. This Note may be prepaid, in whole or in part, at any time,
subject to the provisions below. Any prepayment shall be made at a prepayment
price equal to (i) the amount of principal to be prepaid, plus (ii) all accrued
and unpaid interest on the amount so prepaid, to the date of prepayment, and any
outstanding amounts specified in paragraph 12 hereof.
7. No Failure to Exercise. No failure on the part of Payee to exercise,
and no delay in exercising any right hereunder, shall operate as a waiver
thereof; nor shall any single or partial exercise by Payee of any right preclude
any other or further exercise thereof or the exercise of any other right.
8. Amendments. No amendment, modification or waiver of any provision of
this Note, nor any consent to any departure by Payor therefrom, shall be
effective unless the same shall be in writing and signed by Payee and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
9. Binding; Assignment. This Note shall be binding upon the Payor and its
successors and assigns, and the terms hereof shall inure to the benefit of Payee
and its heirs, legal representatives, successors and permitted assigns,
including subsequent holders hereof. The provisions of this Note are severable,
and if any provision shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall not in any
manner affect such provision in any other jurisdiction or any other provision of
this Note in any jurisdiction.
10. Notice. Any notice, request, demand or other communication permitted
or required to be given under this Note shall be in writing, shall be sent by
one of the following means to the addressee at the address provided above (or at
such other address as shall be designated hereunder by notice to the other
party) and shall be deemed conclusively to have been given: (i) on the first day
following the day timely deposited with Federal Express (or other equivalent
national overnight courier) or United States Express Mail, with the cost of
delivery prepaid or for the account of the sender; (ii) on the fifth day
following the day duly sent by certified or registered United States mail,
postage prepaid and return receipt requested; or (iii) on the day actually
received by the addressee when personally delivered.
11. Usury Savings Clause. Anything in this Note to the contrary
notwithstanding, the obligation of the Payor to make payments of interest shall
be subject to the limitation that payments of interest shall not be required to
be made to the extent that the Payee's receipt thereof would not be permissible
under the law or laws applicable to it limiting rates of interest which may be
charged or collected by it. Any such amount of interest which is not paid as a
result of the limitation referred to in the preceding sentence shall be carried
forward and paid by the Payor to the Payee on the earliest date or dates on
which any interest is payable under this Note and on which the receipt thereof
is permissible under the laws applicable to the Payee limiting rates of interest
which may be charged or collected by Payee.
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12. Attorneys' Fees; Expenses. Payor agrees to pay all costs and expenses
Payee incurs to collect this Note. This includes, subject to any limits under
applicable law, Payee's reasonable attorneys' fees and Payee's legal expenses
whether or not there is a lawsuit, including reasonable attorneys' fees and
expenses for bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), and appeals. If not prohibited by applicable law,
Payor also will pay any court costs, in addition to all other sums provided by
law.
The Langer Biomechanics Group, Inc.
/s/ Steven Goldstein
Name: Steven Goldstein
Title: Vice President
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