Exhibit 10.28.1


 


Execution Version


 


PROMISSORY NOTE


 


	
  April 1,
  2005

  	
   

  	
  $3,000,000

  



 


LANGER, INC.,
a Delaware corporation (the “Company”), hereby promises to pay to the
order of SSL Holdings, Inc., a Delaware corporation (the “Seller”), or
its assigns (the Seller and each of its assigns is a “Holder”), the
principal amount of Three Million Dollars ($3,000,000)
as may be reduced or increased from time to time pursuant to Section 1 of this
Note (as so reduced or increased from time to time, the “Principal Amount”).  This Amended and Restated Promissory Note
(the “Note”) has been issued pursuant to Section 2.4 of that certain
Stock Purchase Agreement, dated as of September 22, 2004 (the “Purchase
Agreement”), by and among the Company, the Seller, LRC North America, Inc.,
a Delaware corporation (“LRC”), and Silipos, Inc., a Delaware
corporation (“Silipos”) and that certain Settlement Agreement and
Limited Release among the Company, the Seller, LRC and Silipos dated the date
hereof.  This Note replaces, and its
terms supersede those set forth in, that certain Promissory Note dated
September 30, 2004 (the “Original Note”) in the original principal
amount of $3,000,000 made by the Company in favor of the Seller and all
obligations, covenants and agreements set forth therein.  The Original Note shall be cancelled upon
valid execution and delivery of this Note by the Company to the Holder.  Capitalized terms used herein which are not
defined shall have the respective meanings given to them in the Purchase
Agreement.


 


1.             Reduction or
Increase of the Principal Amount.


 


(a)           The Principal Amount
may be reduced or increased, as applicable, in accordance with the terms and
conditions set forth in Section 8.4(f) of the Purchase Agreement.  Upon any reduction or increase in the Principal
Amount, as applicable, the Company shall execute and deliver a new Note to the
Holder and the Holder shall return the old Note to the Company.  The failure of the Company to deliver a new
Note to the Holder at any time as required by this Note shall not affect the
Company’s obligations to the Holder to pay the Principal Amount, as applicable,
and accrued and unpaid interest thereon in accordance with the terms of this
Note.


 


(b)           To the extent that all
of the Principal Amount (as such term is defined in that certain Amended and
Restated Secured Promissory Note dated the date hereof in the original
principal amount of $8,268,000 made by the Company in favor of the Seller (the “Secured
Note”)) and the accrued and unpaid interest thereon shall have been paid in
full to the Holder on or prior to May 31, 2005, the then-current Principal
Amount of this Note shall be automatically reduced by an amount equal to
$500,000.


 


(c)           To the extent that (i)
the Principal Amount (as defined above) and all accrued and unpaid interest
thereon is paid to the Holder on or prior to March 31, 2006, and (ii) all of
the Principal Amount (as such term is defined in the Secured Note) and the
accrued and unpaid interest thereon shall have been previously paid or is
simultaneously paid to the Holder (whether or not there was an Event of Default
(as such term is defined in the Secured Note) prior to the repayment thereof), the
then-current Principal Amount of this Note shall be automatically


 





















 


reduced by an amount equal to
$500,000.  Payment of the Principal
Amount shall be subject to a right of setoff pursuant to Sections 5.19 and 5.20
of the Purchase Agreement.


 


2.             Payment
of Principal.  The Company shall
repay the entire Principal Amount outstanding on or before the earliest of (a) December
31, 2009 (the “Maturity Date”), (b) a sale or transfer (in one or more
transactions or series of transactions) of (i) all or substantially all of the
assets of Silipos, Inc. (“Silipos”) to an entity that is not a direct or
indirect subsidiary of the Company or Silipos, (ii) all or substantially all of
the assets of the Company or any of its respective successors or assigns, (iii)
a majority of the then-issued and outstanding capital stock of Silipos to an
entity that is not a direct or indirect subsidiary of the Company or Silipos,
(iv) a majority of the then-issued and outstanding capital stock of the Company
or any of its successors or assigns to an entity that is not a direct or
indirect subsidiary of the Company, or (c) a merger, consolidation, share
exchange or any other business combination between any of the Company, Silipos,
or any of their respective successors or assigns and any non-affiliated entity,
whereby the holders of a majority of the voting stock or other voting equity of
such entity prior to such transaction do not hold a majority of the voting
stock or other voting equity of the surviving or resulting entity in the
transaction immediately after consummation thereof.


 


3.             Payment
of Interest. Interest shall be payable semi-annually in arrears on the last
day of February and August in each year until the Maturity Date; provided,
however, the first interest payment on this Note shall not be due and payable
until February 1, 2005.


 


At the Maturity
Date, all unpaid principal and interest shall be due and payable to the Holder
in cash. Interest shall accrue at the rate of five and one-half percent (5.5%)
per annum (based on a 360 day year comprised of twelve 30 day months) on the
unpaid Principal Amount outstanding. 
Upon the occurrence and during the continuation of an Event of Default
(as defined herein), interest shall accrue at the rate of eleven percent (11%)
per annum (based on a 360 day year comprised of twelve 30 day months) on the
unpaid Principal Amount outstanding and thereafter shall increase by three
percent (3%) every ninety (90) days until it reaches the maximum amount
permitted by applicable law.


 


4.             Time
of Payment.  If any payment of
principal or interest on this Note shall become due on a Saturday, Sunday, or
legal holiday under the laws of the State of New York, such payment shall be
made on the next succeeding day that is not a Saturday, Sunday or such legal
holiday (a “Business Day”) and such extension of time shall in such case
be included in computing interest in connection with such payment.


 


5.             Prepayment.  The Company shall have the right to prepay
the Note, in whole or in part, at any time or from time to time, without
premium or penalty, but with interest accrued and unpaid to the date of such
prepayment.


 


6.             Events
of Default.


 


(a)           Definition.  For purposes of this Note, an “Event of
Default” shall be deemed to have occurred if:


 





















 


(i)            the
Company shall default in the payment of any amount due under this Note on the
date when due, whether at maturity or other time, by acceleration or otherwise
and such default shall continue for five (5) calendar days thereafter;


 


(ii)           default
shall be made in the due observance or performance of any other covenant,
condition or agreement on the part of the Company to be observed or performed
pursuant to the terms of (a) this Note, or (b) the Secured Note, and such
default shall continue for ten (10) days after written notice thereof,
specifying such default and requesting that the same be remedied, shall have
been given to the Company by the Holder;


 


(iii)          an
Insolvency Event occurs.  “Insolvency
Event” means any dissolution, winding up, liquidation, composition or
similar relief with respect to all or substantially all of the Company’s debts,
whether voluntary or involuntary or in bankruptcy, receivership, or similar
proceedings or upon an assignment for the benefit of creditors or any other
marshalling of the assets and liabilities of the Company, and in the case of an
involuntary proceeding, it is not dismissed within sixty (60) days; or


 


(iv)          The Company shall
violate the Tangible Net Worth Covenant or the Incurrence Covenant.


 


(b)           Consequences
of Events of Default.  Without
limiting the other terms and conditions set forth in the Note,


 


(i)            If an
Event of Default of the type other than that described in clause (iii) of
subparagraph 6(a) has occurred and is continuing, the Holder may declare all or
any portion of the outstanding Principal Amount due and payable and demand
immediate payment of all or any portion of the outstanding Principal
Amount.  If the Holder demands immediate
payment of all or any portion of the Note, the Company shall immediately pay to
such Holder the Principal Amount requested to be paid together with all accrued
and unpaid interest thereon.


 


(ii)           If an
Insolvency Event occurs, all of the outstanding Principal Amount shall
automatically be immediately due and payable without any notice or other action
on the part of the Holder.


 


(iii)          If
an Event of Default has occurred, each Holder shall also have any other rights
or remedies which such Person may have pursuant to applicable law or equity.


 


7.             Subordination.


 


(a)           This Note
and the indebtedness evidenced hereby are subordinate only to the prior payment
of those amounts due under (i) that certain purchase money financing in the
principal amount of Five Million Five Hundred Thousand Dollars ($5,500,000) referred to in Section 6.1(h) of the Purchase
Agreement or any replacement up to the original amount thereof, less any
repayment thereof; (ii) the Secured Note, (iii) any facility entered into by
the Company that is intended to payoff the Secured Note and/or intended to
provide working capital to the Company, (iv) working capital financing from a
bank with a principal amount equal to or


 





















 


less than $3,500,000, any replacement
up to the original amount thereof, less any repayment thereof, and (v) any
indebtedness incurred to finance the acquisition of Poly-Gel in connection with
the exercise of the Put Option, as defined in the Purchase Agreement.
(collectively, the “Senior Debt”).


 


(b)           Within ten
(10) business days after a default or event of default with respect to the
Senior Debt, the Company shall furnish a written notice thereof, including a
copy of any written notice received by the Company from the holder of such
Senior Debt, to the Holder in the manner and at the address specified pursuant
to Section 10 hereof.  From and after the
time that the Company receives such notice from the holder of the Senior Debt,
the Company’s obligation to make payment on account of principal or interest on
the Note is subject to subsection 7(c).


 


(c)           If there
shall have occurred an event of default with respect to the Senior Debt, or in
the instrument or instruments under which the Senior Debt has been issued,
permitting the holders thereof, after notice or lapse of time, or both, to
accelerate the maturity thereof, then no payment on account of principal or
interest on the Note shall be made, nor shall any assets be applied to the
conversion, redemption or other acquisition or retirement of the Note until the
earliest to occur of (i) 60 days after the date of such default, or (ii) the
date on which the Senior Note to which such event of default related is
discharged or accelerated, or (iii) the date such event of default is waived by
the holders of such Senior Debt or otherwise cured, or (iv) the filling of any
voluntary or involuntary petition in bankruptcy by or against the Company.  Within three (3) business days after
resolution of such default or event of default in accordance with the
immediately preceding sentence, the Company shall furnish written notice
thereof to the Holder, in the manner and at the address specified pursuant to
Section 10 hereof.


 


8.             Amendment
and Waiver.  This Note may be amended
and the Company may take any action herein prohibited, or omit to perform any
act herein required to be performed by it, only if the Company has obtained the
prior written consent of the Holder.


 


9.             Loss,
Theft, Destruction or Mutilation of Note. 
Upon receipt of evidence of the loss, theft, destruction or mutilation
of this Note, and, in the case of any such loss, theft or destruction, upon
receipt of an affidavit of loss from the Holder in form reasonably satisfactory
to the Company, the Company will make and deliver, in lieu of this Note, a new
Note of like tenor.


 


10.           Place
of Payment; Notices.  Payments of
principal and any notice hereunder are to be delivered to the Holder at the
following address: 3585 Engineering Drive #200, Norcross, GA 30092-9214, Attn:
Accounting Department or to such other address as specified in a written notice
delivered to the Company by Holder. 
Notices sent by the Company shall be deemed received when delivered
personally or one (1) Business Day after being sent by Federal Express or other
nationally recognized overnight carrier or three (3) Business Days after being
sent by certified or registered mail to the following address:


 


Langer, Inc.


450 Commack Road


Deer Park, New York 11729


 





















 


Attention: Chief Executive Officer


Facsimile: (631) 667-1203


 


with a copy to:


 


Kane Kessler, P.C.


1350 Avenue of the Americas


New York, New York 10019


Attention: Robert L. Lawrence, Esq.


Facsimile: (212) 245 3009


 


11.           Jurisdiction.  This Note shall be subject to the exclusive
jurisdiction of the courts of New York County, New York. Any Event of Default
hereunder shall be deemed to be a default occurring in the State of New York by
virtue of a failure to perform an act required to be performed in the State of
New York, and the Company and the Holder, for themselves and their successors,
irrevocably and expressly agree to submit to the exclusive jurisdiction of the
courts of the State of New York for the purpose of enforcing the terms of this
Note or the transactions contemplated hereby. 
The Company and the Holder irrevocably waive (for themselves and their
successors), to the fullest extent permitted by law, any objection which they
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Note or any judgment entered by
any court located in New York County, New York, and further irrevocably waive
any claim that any suit, action or proceeding brought in New York County, New
York has been brought in an inconvenient forum.


 


12.           Assignment.  This Note may be assigned by the Company to
any wholly-owned subsidiary of the Company; provided, however, that the Company
shall (i) provide written notice of such assignment to the Holder within five
(5) days of such assignment, (ii) provide a written assumption signed by the assignee
of this Note agreeing to be bound by the provisions of this Note, and (iii)
remain jointly and severally liable with any such assignee for the obligations,
liabilities and provisions of this Note.


 


13.           Governing
Laws.  The validity, construction, and
interpretation of this Note shall be governed by the internal laws of the State
of New York without respect to the principles of conflicts of laws of the State
of New York or any other jurisdiction.


 


[Signature
Page Follows; Remainder of Page Intentionally Left Blank]


 





















 


IN WITNESS
WHEREOF, the Company has executed and delivered this Amended and Restated
Promissory Note on the date first above written.


 


 


	
   

  	
  LANGER,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
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  Name:

  
	
   

  	
   

  	
  Title: