Document:

Exhibit 10.3

 

KANDERS & COMPANY, INC.

One Landmark Square

Stamford, Connecticut 06901

 

November
12, 2004

 

Langer, Inc.

450 Commack Road

Deer Park, NY
11729

 

Dear Sirs:

 

We
are pleased to set forth in this agreement (the “Agreement”) the terms of the
retention of Kanders & Company, Inc. (the “Consultant”) by Langer, Inc. and
its affiliates and subsidiaries (collectively, the “Company”).

 

1.             The Consultant will act as the
non-exclusive consultant to the Company, and will, subject to the provisions
hereinafter set forth:

 

(a)                                  Render strategic consulting and corporate development services to the
Company, including, but not limited to, assisting in the development and
structuring of business strategy, and acquisition strategy for the Company. The
Company and the Consultant will execute engagement letters or letters of intent
at the appropriate time in connection with specific transactions for which the
Consultant will be entitled to receive compensation; and

 

(b)                                 Any other matter as may be mutually agreed upon by the Consultant and
the Company.

 

In connection
with the Consultant’s activities on the Company’s behalf, the Consultant will
familiarize itself with the business, operations, properties and financial
condition of the Company.  Nothing
contained in this Agreement shall require the Consultant to render a fairness
opinion to the Company.

 

2.             If the Company requests that the
Consultant assist the Company in any business transaction for the Company, or
in any acquisition by, or recapitalization of, the Company, in any form,
including but not limited to any merger, consolidation, stock or asset
acquisition or divestiture, any such further action by the Consultant will be
subject to a separate agreement containing provisions and terms to be mutually
agreed upon.  The Consultant’s
compensation for any such services shall be separately identified in such other
agreement, and shall be in addition to the compensation set forth in paragraph
4 below.

 

3.             In connection with the Consultant’s
activities on the Company’s behalf, the Company will cooperate with the
Consultant and will furnish the Consultant with all information and data
concerning the Company which the Consultant reasonably believes appropriate to
its assignment (all such information so furnished being the “Information”) and
will provide the Consultant with access to the Company’s officers, directors,
employees, independent accountants and legal counsel.  The Company recognizes and confirms that the Consultant (a) will
use and rely 

 

 

primarily on the
Information and on information available from generally recognized public
sources in performing the services contemplated by this Agreement, without
having independently verified same, (b) does not assume responsibility for the
accuracy or completeness of the Information and such other information, and (c)
will not make an independent appraisal of any of the Company’s assets.  The Information to be furnished by the
Company, when delivered, will be true and correct in all material respects and
will not contain any material misstatement of fact or omit to state any
material fact necessary to make the statements contained therein not
misleading.  The Company will promptly
notify the Consultant if it learns of any material inaccuracy or misstatement
in, or material omission from, any Information theretofore delivered to the
Consultant.  The Consultant agrees to
keep confidential and not disclose, without the Company’s prior written
consent, any Information delivered to the Consultant by the Company that the
Company has identified in writing as not publicly available and confidential
for a period of six months after termination of this Agreement.

 

4.             As compensation for the services
rendered by the Consultant hereunder, during the term of this Agreement the
Company shall pay the Consultant an annual fee of $200,000 in installments of
$16,666.67, payable in advance on the first day of each calendar month.  Under the terms of a consulting agreement
between the Consultant and the Company dated February 13, 2001, which expired
by its terms on February 13, 2004 (the “Prior Agreement”), the Company was
obligated, in the event of non-renewal of the Prior Agreement, to pay an
additional fee to the Consultant of $100,000. 
Solely for purposes of such provision of the Prior Agreement, this
Agreement shall be considered a renewal of the Prior Agreement.

 

5.             In addition to the fees described
in paragraph 4 above, the Company agrees to reimburse the Consultant, upon
request from time to time, for reasonable out-of-pocket expenses incurred
(including, but not limited to, travel and other costs, reasonable fees and
disbursements of counsel, and of other consultants retained by the Consultant).

 

6.             In connection with the execution
and delivery of this Agreement, the Company shall grant to the Consultant an
option (the “Option”) to purchase 240,000 shares of common stock, par value
$0.02 per share, of the Company, vesting in three equal annual installments
commencing on the one year anniversary of the date hereof,  at an exercise price equal to the average of
the closing bid and ask prices of the Company’s common stock on the Nasdaq
Small Cap Market on the date hereof.

 

7.             (a)           The
Consultant and the Company have agreed to the indemnification and other
agreements set forth in the Indemnification Agreement dated as of
February 13, 2001, the provisions of which are incorporated herein by
reference and, notwithstanding any contrary provision contained therein, shall
remain in effect until the sixth anniversary of the termination of this Agreement.

 

(b)           The
Company represents and warrants to the Consultant that (x) the execution,
delivery and performance of this Agreement by the Company have been duly
authorized by all requisite corporate action on

 

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the part of the
Company, including authorization hereof by the Board of Directors of the
Company, and (y) this Agreement has been duly executed and delivered by the
Company, and constitutes the legal, valid and binding obligation of the
Company, enforceable in accordance with its terms, except to the extent that
its enforcement is limited by bankruptcy, insolvency, reorganization or other
laws relating to or affecting the enforcement of creditors’ rights generally
and by general principles of equity.

 

(c)           The Consultant represents and
warrants to the Company that (x) the execution, delivery and performance of
this Agreement by the Consultant have been duly authorized by all requisite
corporate action on the part of the Consultant, including authorization hereof
by the Board of Directors of the Consultant, and (y) this Agreement has
been duly executed and delivered by the Consultant, and constitutes the legal,
valid and binding obligation of the Consultant, enforceable in accordance with
its terms, except to the extent that its enforcement is limited by bankruptcy,
insolvency, reorganization or other laws relating to or affecting the
enforcement of creditors’ rights generally and by general principles of equity.

 

8.             This Agreement shall commence on
the date hereof and continue for a period of three years.  Either party hereto may terminate this
Agreement at any time after two years from the date hereof upon three months’
prior written notice, without liability or continuing obligation (except for
the Consultant’s confidentiality obligations and for any compensation earned,
or expenses incurred by the Consultant up to the date of termination) and
except as set forth in paragraphs 4, 5, 
6 and 7.  Upon termination of
this Agreement, the Company shall pay to the Consultant in one lump sum,
payable within five days of such termination, (i) all amounts due the
Consultant for reimbursement of expenses pursuant to Section 5 through the date
of termination, and (ii) the full amount of compensation due to Consultant
pursuant to Section 4 from the date hereof through the end of the term hereof
(i.e. the third anniversary of the date hereof), to the extent the same has not
been paid to the Consultant as of such termination date.

 

9.             (a)           As
an inducement to the Company to enter into and perform its obligations under
this Agreement, the Consultant covenants and agrees that, during the term
hereof and for a period of one (1) year after the termination of this Agreement
for any reason, neither the Consultant nor its affiliates will, directly or
indirectly, for their account or on behalf of any other Person (as defined in
Section 9(b) below) or as an employer, employee, consultant, manager, agent
broker, contractor, stockholder, director or officer of a corporation,
investor, owner, lender, partner, joint venturer, licensor, licensee, sales
representative, distributor, or otherwise:

 

(i)            Solicit
or engage in any business that engages in the business of the Company (each, a
“Competitive Business”).

 

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(ii)           Molest
or interfere with the goodwill and relationship with any of the customers or
suppliers of the Company or its affiliates.

 

(iii)          Persuade,
accept, induce or solicit any of the customers, suppliers or accounts of the
Company or its affiliates, now existing or hereafter obtained, to engage
anyone, other than the Company or its affiliates, to design, manufacture or
market foot and gait-related biomechanical products for such customers,
suppliers or accounts.

 

(iv)          Invest
in, lend money or give financial support to any Competitive Business other than
any investments or other interests that comprise less than a 5% ownership of a
public company, or any investments or other interests which are passive
investments, or in which the investment decision is made by a third party.

 

(b)           The provisions of Section 9(a) shall
not be deemed to preclude the Consultant 
from directly acquiring or holding, solely for investment, securities of
any corporation or entity some of the activities of which constitute a
Competitive Business so long as such securities do not, in the aggregate,
constitute more than five percent (5%) of any class or series of outstanding
securities of such corporation or entity. 
For the purpose of this Agreement, “Person” shall mean any individual,
entity or group within meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended.

 

10.           This Agreement will be governed by,
and construed in accordance with, the laws of the State of New York applicable
to agreements made and to be fully performed therein.  The Consultant and the Company agree to submit to the
jurisdiction of the Federal and New York State courts located in the County of
New York, State of New York, for the purpose of resolving any disputes between
them relating to this Agreement.

 

11.           The benefits of this Agreement shall
inure to the parties hereto and their respective successors and assigns, and
the obligations and liabilities assumed in this Agreement by the parties hereto
shall be binding upon their respective successors and assigns.

 

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12.           For the convenience of
the parties hereto, any number of counterparts of this Agreement may be
executed by the parties hereto.  Each
such counterpart shall be, and shall be deemed to be, an original instrument,
but all such counterparts taken together shall constitute one and the same
Agreement.  This Agreement may not be
modified or amended except in writing signed by the parties hereto.

 

If the foregoing correctly sets forth our
Agreement, please sign the enclosed copy of this letter in the space provided
and return it to us.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  KANDERS & COMPANY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Warren B. Kanders, President

  

 

	
  AGREED TO AND ACCEPTED: 

  	
   

  
	
   

  	
   

  
	
  Langer, Inc. hereby accepts the terms and
  provisions of, and agrees to be bound by the terms and provisions of the
  foregoing letter, as of the date of the foregoing letter.

  	
   

  
	
   

  	
   

  
	
  LANGER, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Andrew H. Meyers, Chief Executive Officer

  	
   

  

 

 

5Exhibit 10.33

 

EMPLOYMENT
AGREEMENT

 

                EMPLOYMENT
AGREEMENT (the “Agreement”), dated as of October 1, 2004 (the
“Commencement Date”), between Langer, Inc., a Delaware corporation, (the
“Company”) and W. Gray Hudkins (the “Employee”).

 

W I T N E S S E T H :

 

                WHEREAS,
the Company desires to employ the Employee and to be assured of his services on
the terms and conditions hereinafter set forth; and

 

                WHEREAS,
the Employee is willing to accept such employment on such terms and conditions.

 

                NOW
THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, the Company and the Employee hereby agree as
follows:

 

                1.             Term.

 

                                The term of this
Agreement shall commence on the Commencement Date and shall expire on the third
anniversary of Commencement Date (the “Term”), subject to earlier termination
as provided herein.

 

                2.             Duties.

 

                                (a)  During the Term of this Agreement, the
Employee shall serve as the Chief Operating Officer of the Company, or in such
other executive capacity as may be assigned to him, and shall perform all
duties commensurate with his position and as may be assigned to him by the
Chairman of the Board of Directors or the Chief Executive Officer of the
Company or such other person(s) as may be designated by the Board of Directors
of the Company (the “Board”). The Employee shall devote his full business time
and energies to the business and affairs of the Company and shall use his best
efforts, skills and abilities to promote the interests of the Company, and to
diligently and competently perform the duties of his position.

 

                (b)  The Employee shall report to the Chairman of
the Board or the Chief Executive Officer or such other person(s) as may be
designated by the Board and shall at all times keep the Chairman of the Board
and the Chief Executive Officer (or such other officer as the Chairman of the
Board, the Chief Executive Officer or the Board may designate from time to
time) promptly and fully informed (in writing if so requested) of his conduct
and of the business or affairs of the Company, and provide such explanations of
his conduct as may be required.

 

 

                3.             Compensation, Bonus, Stock
Options, Benefits, etc.

 

                                (a)  Salary.   During the Term of this Agreement, the Company shall pay to the
Employee, and the Employee shall accept from the Company, as compensation for
the performance of services under this Agreement and the Employee’s observance
and performance of all of the provisions hereof, an annual salary at the rate
of $200,000 (the “Base Compensation”). 
The Base Compensation shall be payable in accordance with the normal
payroll practices of the Company and shall be subject to withholding for
applicable taxes and other amounts. The Employee’s performance and the Base Compensation
shall be subject to annual review by the Company.

 

                                (b)  Bonus. 
In addition to the Base Compensation described above, the Employee
shall, in the sole and absolute discretion of the Compensation Committee of the
Board, be entitled to performance bonuses which may be based upon a variety of
factors, including the Employee’s performance and the achievement of Company
goals, all as determined in the sole and absolute discretion of the Board or
Compensation Committee of the Board. 
Any bonus paid to the Employee shall be subject to withholding for
applicable taxes and other amounts. In addition, the Employee may be entitled
to participate in such other bonus plans, whether during the term of this
Agreement as the Compensation Committee of the Board may, in its sole and
absolute discretion, determine.

 

(c)  Stock
Options. The Company shall issue and grant to Employee, under
the Company’s 2001 Stock Incentive Plan (the “Plan”), options to purchase
150,000 shares of the Company’s common stock (“Common Stock”) having an
exercise price equal to the closing price of the Common Stock on the date of
grant, of which (i) 50,000 shall vest on the first anniversary of the date
of grant; (ii) 50,000 shall vest on the second anniversary of the date of
grant; and (iii) 50,000 shall vest on the third anniversary of date of
grant.  During the Term of this
Agreement the Employee agrees not to sell, pledge, hypothecate or otherwise
transfer the Common Stock issuable upon the exercise of each tranche of options
identified above within a one year period after vesting of such tranche without
the consent of the Board of Directors. The terms and provisions of such options shall
be set forth in a stock option agreement in a form satisfactory to the Company
and consistent with the Company’s standard form of stock option agreement under
the Plan.   In addition, the Employee
may be entitled, during the term of this Agreement, to receive such additional
options, at such exercise prices and other terms as the Compensation Committee
of the Board may, in its sole and absolute discretion, determine.

 

(d)  Intentionally deleted.

 

(e)  Benefits.  During the Term of this Agreement, the Employee shall be entitled
to participate in or benefit from, in accordance with the eligibility and other
provisions thereof, the Company’s medical insurance and other fringe benefit
plans or policies as the Company may make available to, or have in effect for,
its senior executive officers from time to time.  The
Company and its affiliates retain the right to terminate or alter any such
plans or policies from time to time.  In addition, during the Term the

 

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Company shall maintain term
life insurance on the Employee in the amount of $1,000,000 for the benefit of
the Employee’s designees (the “Life Insurance”).  The
Employee shall also be entitled to four weeks paid vacation each year, sick
leave and other similar benefits in accordance with policies of the Company
from time to time in effect for its senior executive officers.

 

(f)  Reimbursement
of Business Expenses. 
During the Term of this Agreement, upon submission of proper invoices,
receipts or other supporting documentation reasonably satisfactory to the
Company and in accordance with and subject to the Company’s expense reimbursement
policies, the Employee shall be reimbursed by the Company for all reasonable
business expenses actually and necessarily incurred by the Employee on behalf
of the Company in connection with the performance of services under this
Agreement.

 

                4.             Representations of Employee.

 

                                (a)  The Employee represents and warrants that he
is not party to, or bound by, any agreement or commitment, or subject to any
restriction, including but not limited to agreements related to previous
employment containing confidentiality or noncompetition covenants, which
presently has or may in the future have a possibility of adversely affecting
the business of the Company or the performance by the Employee of his duties
under this Agreement.

 

                                (b) 
During the Term and the Severance Period, if any, the Employee agrees
that he will not offer for sale, sell, pledge, assign, hypothecate or
otherwise create any interest in or dispose of (or enter into any transaction
or device that is designed to, or could reasonably be expected to, result in any
of the foregoing) any shares of Common Stock owned by him on the Commencement
Date or any shares of Common Stock owned or acquired by him after the
Commencement Date upon the conversion or exercise of options or any securities
convertible into or exercisable or exchangeable for Common Stock, without first notifying the Board in
writing to inquire as to whether there exists any facts or circumstances that
would make it inadvisable for the Company if the Employee engaged in such
transaction.

 

(c)  The representations, warranties and
covenants of this Section 4 shall survive termination of the Employee’s
employment hereunder and the expiration of the Term hereof.

 

5.             Confidentiality,
Noncompetition, Nonsolicitation and Non-Disparagement.

 

                                For purposes of this
Section 5, all references to the Company shall be deemed to include the
Company’s affiliates and subsidiaries and their respective subsidiaries,
whether now existing or hereafter established or acquired. In consideration for
the compensation and benefits provided to the Employee pursuant to this
Agreement, the Employee agrees with the provisions of this Section 5.

 

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                                (a)  Confidential Information.  (i) 
The Employee acknowledges that as a result of his retention by the
Company, the Employee has and will continue to have knowledge of, and access
to, proprietary and confidential information of the Company, including, without
limitation, research and development plans and results, software, databases, technology,
inventions, trade secrets, technical information, know-how, plans,
specifications, methods of operations, product and service information, product
and service availability, pricing information (including pricing strategies),
financial, business and marketing information and plans, and the identity of
customers, clients and suppliers (collectively, the “Confidential
Information”), and that the Confidential Information, even though it may be
contributed, developed or acquired by the Employee, constitutes valuable,
special and unique assets of the Company developed at great expense which are
the exclusive property of the Company. 
Accordingly, the Employee shall not, at any time, either during or
subsequent to the Term of this Agreement, use, reveal, report, publish,
transfer or otherwise disclose to any person, corporation or other entity, any
of the Confidential Information without the prior written consent of the
Company, except to responsible officers and employees of the Company and other
responsible persons who are in a contractual or fiduciary relationship with the
Company and who have a need for such Confidential Information for purposes in
the best interests of the Company, and except for such Confidential Information
which is or becomes of general public knowledge from authorized sources other
than the Employee.

 

                                                (ii)  The Employee acknowledges that the Company
would not enter into this Agreement without the assurance that all the
Confidential Information will be used for the exclusive benefit of the Company.

 

                                (b)  Return of Confidential Information.  Upon the termination of this Agreement or
upon the request of the Company, the Employee shall promptly return to the
Company all Confidential Information in his possession or control, including
but not limited to all drawings, manuals, computer printouts, computer
databases, disks, data, files, lists, memoranda, letters, notes, notebooks,
reports and other writings and copies thereof and all other materials relating
to the Company’s business, including without limitation any materials
incorporating Confidential Information.

 

                                (c)  Inventions, etc.  During the Term and for a period of one year
thereafter, the Employee will promptly disclose to the Company all designs,
processes, inventions, improvements, developments, discoveries, processes,
techniques, and other information related to the business of the Company
conceived, developed, acquired, or reduced to practice by him alone or with
others during the Term of this Agreement, whether or not conceived during
regular working hours, through the use of Company time, material or facilities
or otherwise (“Inventions”).

 

                                The
Employee agrees that all copyrights created in conjunction with his service to
the Company and other Inventions, are “works made for hire” (as that term is
defined under the Copyright Act of 1976, as amended).  All such copyrights, trademarks, and other Inventions shall be
the sole and exclusive property of the Company, and the

 

4

 

Company shall be the sole owner of all patents, copyrights, trademarks,
trade secrets, and other rights and protection in connection therewith.  To the extent any such copyright and other
Inventions may not be works for hire, the Employee hereby assigns to the
Corporation any and all rights he or she now has or may hereafter acquire in
such copyrights and any other Inventions. Upon request the Employee shall
deliver to the Company all drawings, models and other data and records relating
to such copyrights, trademarks and Inventions. The Employee further agrees as
to all such Inventions, to assist the Company in every proper way (but at the
Company’s expense) to obtain, register, and from time to time enforce patents,
copyrights, trademarks, trade secrets, and other rights and protection relating
to said Inventions in and all countries, and to that end the Employee shall
execute all documents for use in applying for and obtaining such patents,
copyrights, trademarks, trade secrets and other rights and protection on and
enforcing such Inventions, as the Company may desire, together with  any assignments thereof to the Company or
persons designated by it.  Such
obligation to assist the Company shall continue beyond the termination of the
Employee’s service to the Company, but the Company shall compensate the
Employee at a reasonable rate after termination of service for time actually
spent by the Employee at the Company’s request for such assistance. In the
event the Company is unable, after reasonable effort, to secure the Employee’s
signature on any document or documents needed to apply for or prosecute any
patent, copyright, trademark, trade secret, or other right or protection
relating to an Invention, whether because of the Employee’s physical or mental
incapacity or for any other reason whatsoever, the Employee hereby irrevocably
designates and appoints the Company and its duly authorized officers and agents
as his agent coupled with an interest and attorney-in-fact, to act for and in
his behalf and stead to execute and file any such application or applications
and to do all other lawfully permitted acts to further the prosecution and
issuance of patents, copyrights, trademarks, trade secrets, or similar rights
or protection thereon with the same legal force and effect as if executed by
the Employee.

 

(d)           Non-competition.  The Employee will not utilize his special
knowledge of the business operations of the Company and his relationships with
customers, suppliers of the Company and others to compete with the Company.  During the Term of this Agreement and (i) for a
period of (A) one year after the termination of this Agreement pursuant to
Sections 7(a), 7(b) or 7(e) hereof, as applicable; or (B) in the event of
termination pursuant to Section 7(c), the duration of the Severance Period (as
defined in Section 7(f)); or (ii) in the event the Agreement is not renewed,
the Severance Period, if any; the Employee shall not engage, directly or
indirectly, or have an interest, directly or indirectly, anywhere in the United
States of America or any other geographic area where the Company does business or in which its products or
services are marketed, alone or in association with others, as principal,
officer, agent, Employee, director, partner or stockholder (except with respect
to his employment by the Company), or through the investment of capital,
lending of money or property, rendering of services or otherwise, in any
business competitive with or substantially similar to that engaged in by the
Company during the Term of this Agreement (it being understood hereby, that the
ownership by the Employee of five percent (5%) or less of the stock of any
company listed on a national securities exchange shall not be deemed a
violation of this Section 5).

 

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(e)           Non-solicitation.  During the Term of this Agreement and (i) for a period of (A)
one year after the termination of this Agreement pursuant to Sections 7(a),
7(b) or 7(e) hereof, as applicable; or (B)in the event of termination pursuant
to Section 7(c), the duration of the Severance Period (as defined in Section
7(f)); or (ii) in the event the Agreement is not renewed, the Severance Period,
if any; the Employee
shall not, and shall not permit any of his employees, agents or others under
his control to, directly or indirectly, on behalf of himself or any other
person, (i) call upon, accept competitive business from, or solicit the
competitive business of any individual or entity who is, or who had been at any
time during the preceding two years, a customer of the Company or any successor
to the business of the Company, or otherwise divert or attempt to divert any
business from the Company or any such successor, or (ii) directly or indirectly
recruit or otherwise solicit or induce any person who is an Employee of, or
otherwise engaged by, the Company or any successor to the business of the
Company to terminate his employment or other relationship with the Company or
such successor, or hire or enter into any business with any person is employed
by or who has left the employ of the Company or any such successor during the
preceding two years.  The Employee shall
not at any time, directly or indirectly, use or purport to authorize any person
to use any name, mark, logo, trade dress or other identifying words or images
which are the same as or similar to those used at any time by the Company in
connection with any product or service, whether or not such use would be in a
business competitive with that of the Company. 
Any breach or violation by the Employee of the provisions of this
Section 5 shall toll the running of any time periods set forth in this Section
5 for the duration of any such breach or violation.

 

(f)  Non-Disparagement.     The Employee
shall not at any time, directly or indirectly, take any action (whether orally
or in writing or otherwise) which has or may be expected to have the effect of
disparaging the Company or any of its subsidiaries or affiliates or their
directors, officers or executives or their respective reputations, including,
but not limited to, their business models, practices, relationships, internal
workings, financial condition or operations, in any manner whatsoever at any
time.

 

                6.             Remedies. The restrictions set forth
in Section 5 are considered by the parties to be fair and reasonable.  The Employee acknowledges that the
restrictions contained in Section 5 will not prevent him from earning a
livelihood.  The Employee further acknowledges
that the Company would be irreparably harmed and that monetary damages would
not provide an adequate remedy in the event of a breach of the provisions of
Section 5.  Accordingly, the Employee
agrees that, in addition to any other remedies available to the Company, the
Company shall be entitled to injunctive and other equitable relief to secure
the enforcement of these provisions, and shall be entitled to receive
reimbursement from the Employee for all reasonable attorneys’ fees and expenses
incurred by the Company in enforcing these provisions.  In connection with seeking any such
equitable remedy, including, but not limited to, an injunction or specific
performance, the Company shall not be required to post a bond as a condition to
obtaining such remedy.  If any
provisions of Sections 5 or 6 relating to the time period, scope of activities
or geographic area of restrictions is declared by a court of competent

 

6

 

jurisdiction to exceed the maximum
permissible time period, scope of activities or geographic area, the maximum
time period, scope of activities or geographic area, as the case may be, shall
be reduced to the maximum which such court deems enforceable. If any provisions
of Sections 5 or 6 other than those described in the preceding sentence are
adjudicated to be invalid or unenforceable, the invalid or unenforceable
provisions shall be deemed amended (with respect only to the jurisdiction in
which such adjudication is made) in such manner as to render them enforceable
and to effectuate as nearly as possible the original intentions and agreement
of the parties.  For purposes of this
Section 6, all references to the Company shall be deemed to include the
Company’s affiliates and subsidiaries, whether now existing or hereafter
established or acquired.

 

                7.             Termination; Non-renewal.   This Agreement may be terminated prior to
the expiration of the Term set forth in Section 1 upon the occurrence of any of
the events set forth in, and subject to the terms of, this Section 7.

 

(a)  Death or Permanent Disability.  If the Employee dies or becomes
permanently disabled, this Agreement shall terminate effective at the end of
the calendar month during which his death occurs or when his disability is
deemed to have become permanent.  If the
Employee is unable to perform his normal duties for the Company because of
illness or incapacity (whether physical or mental) for 45 consecutive days
during the Term of this Agreement, or for 60 days (whether or not consecutive)
out of any calendar year during the Term of this Agreement, his disability shall
be deemed to have become permanent.  If
this Agreement is terminated on account of the death or permanent dis­abi­lity
of the Employee, then the Employee or its estate shall be entitled to receive
accrued Base Compensation through the date of such termination and the Employee
and the Employee’s estate shall have no further entitlement to Base
Compensation, bonus, or benefits, except in the case of the Employee’s death,
the proceeds of the Life Insurance, from the Company following the effective
date of such termination.

 

(b)  Cause. 
This Agreement may be terminated at the Company’s option, immediately
upon written notice to the Employee, upon: (i) the Employee’s commission of a
misdemeanor or felony that, in the Board’s reasonable judgment, adversely affects
the Company’s or any of the Company’s affiliates’ reputation, business or
interests, or the ability of the Employee to perform his duties as an employee
of the Company; (b) the Employee’s act of fraud or dishonest act upon, or
misappropriation of funds of, the Company or any of the Company’s affiliates;
(c) the Employee’s  gross negligence,
willful or intentional act or omission in the performance of his duties under
this Agreement as determined by the Board; (d) the Employee’s disregard of a
lawful direction of the Board or the executive officer to whom the Employee
reports; (e) the Employee’s appropriation for himself of a Company corporate
opportunity without the express prior written consent of the Board; (f) the
Employee’s material breach of any of his obligations under this Agreement
(other than Section 5 of this Agreement) that continues unremedied for 14 days
following the Employee’s receipt of written notice from the Board thereof; (g)
the Employee’s breach of any of his obligations of any of the provisions of
Section 5 of this Agreement; or (h) the Employee is convicted of a felony.

 

7

 

If this Agreement is terminated by the
Company for cause, then the Employee shall be entitled to receive accrued Base
Compensation through the date of such termination.

 

(c)  Without Cause.  This Agreement may be terminated, at any
time by the Company without cause immediately upon giving written notice to the
Employee of such termination.  In such
event, Company shall continue to pay to the Employee his Base Compensation on a
bi-monthly basis in accordance with the normal payroll practices of the Company
for a period of six months commencing with the effective date of any
termination pursuant to this Section 7(c), provided, however, Employee’s right
to receive any such payment shall be subject to the Employee complying with the
terms of this Agreement.  Additionally,
the Company shall have the right, at its election if made on or before the time
of termination, to continue to pay the Employee his Base Compensation for an
additional period of up to six months, and if the Company so elects, the
Employee shall be bound by the provisions of Sections 5(d) and 5(e) of this
Agreement for such additional period.

 

(d)  Non-renewal.  In the event the Company fails to renew or extend the Term, the
Company shall have the right, at its election, to continue to pay the Employee
his Base Compensation for an additional period of up to one year after the
expiration of the Term, and if the Company so elects, the Employee shall be
bound by the provisions of Sections 5(d) and 5(e) of this Agreement for such
additional period, provided, however, Employee’s right to receive any such
payment shall be subject to the Employee complying with the terms of this
Agreement.  Any such election shall be
made in writing at least 90 days prior to the expiration of the Term and shall
specify the length of such additional period.

 

(e)  By Employee.  The Employee may terminate the Agreement at anytime upon
providing the Company with two weeks prior written notice. If this Agreement is
terminated by the Employee pursuant to this Section 7(e), then the Employee
shall be entitled to receive his accrued Base Compensation and benefits through
the effective date of such termination and the Employee shall have no further
entitlement to Base Compensation, bonus, or benefits from the Company following
the effective date of such termination.

 

                                (f)  Severance Payment.  The period of time during which the Company
continues to pay (or would continue to pay, but for any breach by the Employee
of this Agreement) the Employee following the termination or expiration of this
Agreement pursuant to Sections 7(c) or 7(d) shall be referred to as the
“Severance Period”, and the amounts due thereunder shall be referred to as the
“Severance Payment.”  The Severance
Payment shall be payable, bi-monthly in accordance with the normal payroll
practices of the Company and shall be subject to withholding for applicable
taxes and other amounts. In lieu of cash, at the option of the Company, the
Severance Payment may be payable through the issuance of Common Stock on the
effective date of such termination or expiration, based upon the closing price
of the Common Stock on such date.

 

8

 

                8.             
Miscellaneous.

 

                                (a)  Survival.  The provisions of Sections 5, 6, 7, and 8
shall survive the termination of this Agreement.

 

                                (b)  Entire Agreement.  This Agreement sets forth the entire
understanding of the parties and, except as specifically set forth herein,
merges and supersedes any prior or contemporaneous agreements between the
parties pertaining to the subject matter hereof.

 

                                (c)  Modification.  This Agreement may not be modified or
terminated orally, and no modification, termination or attempted waiver of any
of the provisions hereof shall be binding unless in writing and signed by the
party against whom the same is sought to be enforced.

 

                                (d)  Waiver.  Failure of a party to enforce one or more of
the provisions of this Agreement or to require at any time performance of any
of the obligations hereof shall not be construed to be a waiver of such
provisions by such party nor to in any way affect the validity of this
Agreement or such party’s right thereafter to enforce any provision of this
Agreement, nor to preclude such party from taking any other action at any time
which it would legally be entitled to take.

 

                                (e)  Successors and Assigns.  Neither party shall have the right to assign
this Agreement, or any rights or obligations hereunder, without the consent of
the other party; provided, however, that upon the sale of all or
substantially all of the assets, business and goodwill of the Company to
another company, or upon the merger or consolidation of the Company with an­other
company, this Agreement shall inure to the benefit of, and be binding upon,
both Employee and the company purchasing such assets, business and goodwill, or
surviving such merger or consolidation, as the case may be, in the same manner
and to the same extent as though such other company were the Company;  and provided, further, that the Company shall
have the right to assign this Agreement to any affiliate or subsidiary of the
Company.  Subject to the foregoing, this
Agreement shall inure to the benefit of, and be binding upon, the parties
hereto and their legal representatives, heirs, successors and assigns.

 

                                (f)  Communications.  All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been given at the time personally delivered or when mailed in any United
States post office enclosed in a registered or certified postage prepaid
envelope and addressed to the addresses set forth below, or to such other
address as any party may specify by notice to the other party; provided,
however, that any notice of change of address shall be effective
only upon receipt.

 

9

 

	
  If to the Company:

  Langer,
  Inc.

  450
  Commack Road

  Deer
  Park, New York 11729

  Facsimile:
  (631) 667-1203

  Attention:
  Chief Executive Officer

  	
  With a copy to:

  Kane
  Kessler, P.C.

  1350
  Avenue of the Americas

  New
  York, New York 10019

  Facsimile:
  (212) 245-3009

  Attention:
  Robert L. Lawrence, Esq.

  
	
   

  	
   

  
	
  If to the Employee, to:

  	
  With a copy to:

  
	
  W.
  Gray Hudkins

  	
   

  
	
  24
  Fifth Avenue, Apt 701

  	
  Facsimile:

  
	
  New
  York, NY 10011

  	
  Attention:

  
	
  Facsimile:

  	
   

  

 

                                (g)  Severability.  If any provision of this Agreement is held
to be invalid or unenforceable by a court of competent jurisdiction, such
invalidity or unenforceability shall not affect the validity and enforceability
of the other provisions of this Agreement and the provisions held to be invalid
or unenforceable shall be enforced as nearly as possible according to its
original terms and intent to eliminate such invalidity or unenforceability.

 

                                (h)  Jurisdiction; Venue.  This Agreement shall be subject to the
exclusive jurisdiction of the courts of New York County, New York.  Any breach of any provision of this
Agreement shall be deemed to be a breach 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 parties irrevocably and expressly agree to submit to the
exclusive jurisdiction of the courts of New York County, New York for the
purpose of resolving any disputes among them relating to this Agreement or the
transactions contemplated by this Agreement and waive any objections on the
grounds of forum non conveniens or otherwise. 
The parties hereto agree to service of process by certified or
registered United States mail, postage prepaid, addressed to the party in
question.

 

                                (i)  Governing Law; Indemnification.  This Agreement is made and executed and
shall be governed by the laws of the State of New York, without regard to the
conflicts of law principles thereof. 
Notwithstanding the foregoing, the Employee shall have the right to be
indemnified by the Company in accordance with the provisions of the Company’s
certificate of incorporation, bylaws, and the provisions of Delaware law.

 

                                (j)  Counterparts.  This Agreement may be executed in any number
of counterparts, but all counterparts will together constitute but one
agreement.

 

                This Agreement is
for the sole and exclusive benefit of the parties hereto and shall not be
deemed for the benefit of any other person or entity.

 

[SIGNATURE PAGE FOLLOWS]

 

10

                IN WITNESS
WHEREOF, each of the parties hereto has duly executed this
Employment Agreement as of the date set forth above.

 

	
  Langer, Inc.

  	
   

  	
  Employee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
  W. Gray Hudkins

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  

 

11

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