THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
MOREOVER, THIS NOTE IS NON-NEGOTIABLE AND, AS SUCH, NON-TRANSFERABLE. REGARDLESS
OF WHETHER THIS NOTE CONTINUES TO BE NON-NEGOTIABLE OR IS AMENDED TO BE
NEGOTIABLE, NO INTEREST IN THIS NOTE MAY BE OFFERED OR SOLD EXCEPT PURSUANT TO
(i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR (ii) AN EXEMPTION FROM REGISTRATION UNDER SAID ACT WHERE THE HOLDER
HAS FURNISHED TO THE COMPANY AN OPINION OF ITS COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
LASER ENERGETICS, INC.
NON-NEGOTIABLE PROMISSORY NOTE
$100,000.00 As of December 14, 2004
Mercerville, New Jersey
FOR VALUE RECEIVED, the undersigned, Laser Energetics, Inc., a
Florida corporation (the "Payor"), having its executive office and principal
place of business at 0000 Xxxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxx, Xxx Xxxxxx
00000, hereby promises to pay Xxxx X. XxXxxxxx, M.D. (the "Payee"), on the
"Maturity Date" (as defined below) at the Payee's address as indicated by the
records of the Payor or, at such other place as the Payee shall hereafter
specify in writing, the principal sum of One Hundred Thousand Dollars
($100,000.00), or so much thereof as shall be advanced by the Payee to the
Payor, pursuant to the terms hereof, in such coin or currency of the United
States of America as at the time shall be legal tender for the payment of public
and private debts.
1. Payment; Maturity Date.
1.1. The Payor is a party to a certain financing transaction with
Cornell Capital Partners, LP pursuant to the Securities Purchase Agreement dated
November 19, 2004 between the Payor and Cornell Capital Partners, LP (the
"Cornell Agreement"). The entire unpaid principal amount of this Note, plus
interest on the unpaid principal balance of the Note in a fixed amount of
$10,000 (regardless of when the Maturity Date occurs), shall be paid by the
Payor to the Payee upon occurrence the "Second Closing" of the Cornell financing
(as defined in the Cornell Agreement) (the "Maturity Date").
1.2. In no event shall the Payee be entitled to receive interest,
however characterized and including other consideration received in connection
with this Note, at an effective rate in excess of the maximum rate permitted by
law. In the event that a court of competent jurisdiction shall determine that
such amounts paid or agreed to be paid by the Payor in connection with this Note
causes the effective interest rate on this Note to exceed the maximum rate
permitted by law, such interest or other consideration shall automatically be
reduced to a rate which results in an effective interest rate under this Note
equal to the maximum rate permitted by law over the term hereof, and, in such
event, the Payee shall, at the Payee's sole and absolute discretion, either
apply to the reduction of the unpaid principal balance of this Note any amounts
received by it deemed to constitute excessive interest or refund such excess to
Payor.
2. Replacement of Note.
2.1. In case this Note is mutilated, destroyed, lost or stolen, the
Payor shall, at its sole expense, execute, register and deliver, a new Note, in
exchange and substitution for this Note, if mutilated, or in lieu of and
substitution for this Note, if destroyed, lost or stolen. In the case of
destruction, loss or theft, the Payee shall furnish to the Payor indemnity
reasonably satisfactory to the Payor, and in the case of mutilation, the Payee
shall also furnish to the Payor evidence to its reasonable satisfaction of the
mutilation, destruction, loss or theft of this Note and of the ownership
thereof. Any replacement Note so issued shall be in the same outstanding
principal amount as this Note and dated the date to which interest shall have
been paid on this Note, or if no interest shall have yet been paid, dated the
date of this Note.
2.2. Every Note issued pursuant to the provisions of Section 2.1
hereof in substitution for this Note shall constitute an additional contractual
obligation of the Payor, whether or not this Note shall be found at any time, or
be enforceable by anyone.
3. Prepayment. At the option of the Payor, this Note may be prepaid in
whole at any time, or in part from time to time, without penalty or premium.
Except as set forth in Section 1.2 above, each partial prepayment of this Note
shall first be applied to interest accrued through the date of prepayment, and
then to outstanding principal.
4. Events of Default. If any of the following conditions events or acts
shall occur:
4.1. The dissolution of the Payor or any vote in favor thereof by
the Board of Directors and shareholders of the Company; or
4.2. Upon the appointment of a trustee, receiver or custodian of all
or any part of the properties or assets of the Payor; upon an assignment for the
benefit of creditors by, the calling of a meeting of creditors of, or the
commencement of any proceeding under any bankruptcy laws of any state or of the
United States by the Payor, or the commencement of any proceeding under any
bankruptcy laws of any state or of the United States against the Payor; or
4.3. The failure by the Payor to make any payment of any amount of
principal on, or accrued interest under, this Note, which failure shall continue
for a period of five (5) days, as and when the same shall become due and
payable; or
4.4. The admission in writing of the Payor's inability to pay its
debts as they mature.
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5. Suits for Enforcement and Remedies. If Payor defaults in the
performance of any of the terms or provisions of this Note, or in any agreement
or document referred to herein, the principal sum or so much of the principal
remaining unpaid with all interest accrued thereon, shall, at the option of the
Payee, become due and payable immediately, and interest on the principal sum
shall be computed at the lesser of eighteen (18%) percent per annum or the
highest interest rate permitted to be charged by applicable law. If any one or
more defaults shall occur and be continuing, the Payee may proceed to protect
and enforce such Payee's rights either by suit in equity or by action at law, or
both, whether for the specific performance of any covenant, condition or
agreement contained in this Note, or in any agreement or document referred to
herein or in aid of the exercise of any power granted in this Note, or in any
agreement or document referred to herein, or proceed to enforce the payment of
this Note or to enforce any other legal or equitable right of the Payee of this
Note. No right or remedy herein or in any other agreement or instrument
conferred upon the holder of this Note is intended to be exclusive of any other
right or remedy, and each and every such right or remedy shall be cumulative and
shall be in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or by statute or otherwise.
6. Unconditional Obligation; Fees, Waivers, Other.
6.1. The obligations to make the payments provided for in this Note
are absolute and unconditional and not subject to any defense, set-off,
counterclaim, rescission, recoupment or adjustment whatsoever.
6.2. If the Payee shall institute any action to enforce the
collection of any amount of principal of and/or interest on this Note, there
shall be immediately due and payable from the Payor, in addition to the then
unpaid sum of this Note, all reasonable costs and expenses incurred by the Payee
in connection therewith, including, without limitation, reasonable attorneys'
fees and disbursements, except in the event the action by Payee is not
meritorious.
6.3. No forbearance, indulgence, delay or failure to exercise any
right or remedy with respect to this Note shall operate as a waiver, nor as an
acquiescence in any default, nor shall any single or partial exercise of any
right or remedy preclude any other or further exercise thereof or the exercise
of any other right or remedy.
6.4. This Note may not be modified except by a writing duly executed
by the Payor and the Payee.
6.5. The Payor hereby expressly waives demand and presentment for
payment, notice of nonpayment, notice of dishonor, protest, notice of protest,
bringing of suit, and diligence in taking any action to collect amounts called
for hereunder, and shall be directly and primarily liable for the payment of all
sums owing and to be owing herein, regardless of and without any notice,
diligence, act or omission with respect to the collection of any amount called
for hereunder or in connection with any right, lien, interest or property at any
and all times which the Payee had or is existing as security for any amount
called for hereunder.
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6.6. The Payee and Payor shall bear all of their own expenses,
including attorneys' fees incurred in connection with the execution,
preparation, delivery and negotiation of this Note.
7. Restriction on Transfer. By its acceptance of this Note, the Payee
acknowledges that this Note is non-negotiable and, as such, non-transferable and
has not been registered under the securities laws of the United States of
America or any state thereof and represents that this Note has been acquired for
investment and, even if subsequently amended to be negotiable, no interest in
this Note may be offered for sale, sold, delivered after sale, transferred,
pledged, or hypothecated in the absence of registration and qualification of
this Note under applicable federal and state securities laws or an opinion of
counsel of the Payee reasonably satisfactory to the Payor that such registration
and qualification are not required.
8. Miscellaneous.
8.1. The headings of the various paragraphs of this Note are for
convenience of reference only and shall in no way modify any of the terms or
provisions of this Note.
8.2. All notices required or permitted to be given hereunder shall
be in writing and shall be deemed to have been duly given when personally
delivered or three (3) days after being sent by registered or certified mail,
return receipt requested, postage prepaid, to the address of the intended
recipient as indicated by the records of the Payor or at such other address as
the intended recipient shall have hereafter given to the other party hereto
pursuant to the provisions hereof.
8.3. This Note and the obligations of the Payor and the rights of
the Payee shall be governed by and construed in accordance with the laws of the
State of New Jersey with respect to contracts made and to be fully performed
therein.
8.4. This Note shall bind the Payor and its successors and assigns.
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IN WITNESS WHEREOF, the undersigned have executed this Note as of the date
first written above.
LASER ENERGETICS, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Xxxxxx X. Xxxxxx, Founder,
President & CEO
/s/ XXXX X. XxXXXXXX
-----------------------------
XXXX X. XxXXXXXX, M.D.
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