Convertible Subordinated Note Purchase Agreement

Langer, Inc., a Delaware corporation

with the Purchasers Listed on

Exhibit A Hereto

Convertible Subordinated Note Purchase Agreement

Dated as of December 7, 2006

TABLE OF CONTENTS

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Exhibit A - Purchasers

Exhibit B - Form of Note

LANGER, INC.

450 Commack Road

Deer Park, N.Y. 11729

As of December 7, 2006

To the Purchasers set forth

on Exhibit A to this Agreement

Dear Sirs/Madams:

LANGER, INC., a Delaware corporation (the "Company"), agrees with each Purchaser as follows:

I.   AUTHORIZATION OF NOTES. The Company has authorized the issuance and sale of an aggregate of up to $28,880,000 principal amount of its 5% Convertible Subordinated Notes due December 7, 2011 (the "Notes"). The Notes are convertible into shares of the Company's common stock, par value $.02 per share (such shares to be issued upon conversion of the Notes being hereinafter referred to herein as the "Shares"), at the Conversion Price defined in Article XXV of this Agreement. The Notes are to be sold pursuant to this Agreement to the purchasers listed on Exhibit A to this Agreement (the "Purchasers"). Interest on the Notes is payable semi-annually on the last day of December and June in each year, commencing on June 30, 2007 (which first interest payment shall be for the period from and including the Closing Date specified in Article III through June 30, 2007), at the interest rate specified in the form of Note attached hereto as Exhibit "B".

II.   SALE AND PURCHASE OF NOTES. Subject to the terms and conditions hereof, the Company will sell to each Purchaser, and each Purchaser will purchase from the Company, on the Closing Date specified in Article III, a Note or Notes in the aggregate principal amount set forth opposite such Purchaser's name on Exhibit A hereto, at a purchase price of 100% of such principal amount.

III.   CLOSING.

3.1   Closing . The closing (the "Closing") of the purchase and sale of the Notes will take place at the offices of Kane Kessler, P.C., 1350 Avenue of the Americas, New York, New York 10019, at 10:00 a.m., New York City time, on or about December 7, 2006. Such time and date of the Closing is herein called the "Closing Date."

3.2   Deliveries . On the Closing Date, in the case of Purchasers that are present at the Closing, or within one (1) Business Day after the Closing, in the case of all other Purchasers, the Company shall deliver to each Purchaser a Note or Notes, dated the Closing Date, in the aggregate principal amount set forth opposite such Purchaser's name on Exhibit A hereto, each such Note to be registered in the name of the Purchaser or its nominee, against delivery by the Purchaser to the Company of a certified or official bank check(s) or wire transfer(s) in an aggregate amount equal to the aggregate purchase price for such Notes, payable to the order of the Company in immediately available funds.

IV.   REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company represents and warrants that:

4.1   Organization and Existence, Authority, etc. The Company is a corporation duly organized and validly existing and in good standing under the laws of the State of Delaware, and has all requisite corporate power and authority to carry on its business as now conducted and proposed to be conducted; the Company has all requisite corporate power and authority to enter into this Agreement, to issue the Notes as contemplated herein and to carry out the provisions and conditions of this Agreement and of the Notes, including the issuance of the Shares in accordance with the terms of this Agreement and the Notes. Except as set forth on Schedule 4.1, the Company has no Subsidiaries as of the date hereof. This Agreement and the Notes have been duly executed and delivered by, and constitute the valid and binding obligations of, the Company, enforceable in accordance with their respective terms, subject to the effect of any applicable bankruptcy, moratorium, insolvency, reorganization or other similar law affecting the enforceability of creditors' rights generally and to the effect of general principles of equity which may limit the availability of remedies (whether in a proceeding at law or in equity). The Company is duly qualified and is authorized to do business and is in good standing as a foreign corporation in each jurisdiction in which the conduct of its business or ownership of its properties would so require, except where the failure to be so qualified would not have a material adverse effect on its business and financial condition, taken as a whole.

4.2   Litigation . Except as disclosed in the Company Commission Filings (as hereinafter defined), to the knowledge of the Company, there is no action, suit or proceeding pending, or threatened, against the Company before any court, administrative agency or arbitrator which could reasonably be expected to result in any material adverse change in the business, properties, or condition (financial or otherwise) of the Company, taken as a whole, or which challenges the validity of any action taken or to be taken pursuant to or in connection with this Agreement or the Notes.

4.3   Charter Documents . Neither the execution nor the delivery of this Agreement and the Notes, nor the consummation of the transactions contemplated hereby and thereby, nor compliance with the terms and provisions hereof and thereof, will conflict with, or result in a breach of or creation of a lien under, the terms, conditions or provisions of, or constitute a default under, the charter or by-laws of the Company, as amended, copies of which have been provided to the Purchasers.

4.4   Authorized and Outstanding Capital Stock . The Company has authorized 50,000,000 shares of Common Stock, par value $.02 per share (the "Common Stock"), of which 10,146,673 shares are issued and outstanding as of the date of this Agreement. All of such outstanding shares of Common Stock have been validly issued and are fully paid and non-assessable. The Company has authorized (i) the issuance and sale to the Purchasers of an aggregate of up to $35,000,000 principal amount of the Notes, and (ii) the issuance upon conversion of the Notes of the Shares into which the Notes are convertible in accordance with Article XII or XIII, as applicable, of this Agreement. The Shares, when issued in accordance with the terms of this Agreement, and the Notes will be validly issued, fully paid and non-assessable.

4.5   Broker's and Finder's Fees . The Company will pay all broker's and finder's fees incurred by the Company in connection with the sale of the Notes.

4.6   Commission Filings and Financial Statements . The Company has heretofore made available to the Purchasers true and complete copies of all reports, registration statements,

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definitive proxy statements and other documents (in each case together with all amendments and supplements thereto) filed by the Company with the Commission since January 1, 2006 (such reports, registration statements, definitive proxy statements and other documents, together with any amendments and supplements thereto, are sometimes collectively referred to as the "Company Commission Filings"). The Company Commission Filings constitute all of the documents (other than preliminary materials) that the Company was required to file with the Commission since such date. As of their respective dates, each of the Company Commission Filings complied in all material respects with the applicable requirements of the Securities Act and the Exchange Act, as applicable, and the rules and regulations under each such Act, and none of the Company Commission Filings contained as of such date any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. When filed with the Commission the financial statements (other than those financial statements which were subsequently amended or restated) included in the Company Commission Filings complied as to form in all material respects with the applicable rules and regulations of the Commission and were prepared in accordance with generally accepted accounting principles (as in effect from time to time) applied on a consistent basis (except as may be indicated therein or in the notes or schedules thereto), and such financial statements fairly present in accordance with generally accepted accounting principles in all material respects the financial position of the Company as at the dates thereof and the results of its operations and its cash flows for the periods then ended, subject, in the case of the unaudited interim financial statements, to normal, recurring year-end audit adjustments and the absence of footnotes. Since January 1, 2006, except as disclosed in (i) the Company Commission Filings filed with the Commission prior to the date hereof and (ii) the Private Placement Memorandum with respect to the Twincraft Acquisition, the Company has not incurred any liability or obligation of any kind outside of the ordinary course of business, and no other event has occurred which, in any case or in the aggregate, would have a material adverse effect on the business, assets, results of operations or financial condition of the Company.

4.7   Tax Returns and Payments . The Company has filed all tax returns required by law to be filed by it and has paid all material taxes, assessments and other governmental charges levied upon the Company and any of its properties, assets, income or franchises which are due and payable, other than those presently payable without penalty or interest or those that are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted and for which adequate reserves have been established on the books of the Company in accordance with generally accepted accounting principles. The charges, accruals and reserves on the books of the Company in respect of Federal, state and foreign income taxes for all fiscal periods are adequate in the opinion of the Company, and the Company has not been notified of any material unpaid assessment for additional Federal, state or foreign income taxes for any period or any basis for any such assessment for which adequate provision has not been made in its accounts in accordance with generally accepted accounting principles.

4.8   Indebtedness . Except for the Senior Secured Credit Facility (as defined in Article XXV), the Company Commission Filings correctly describe all material secured and unsecured Indebtedness of the Company outstanding, or for which the Company has commitments, on the date of this Agreement, and identify in all material respects the collateral securing any such secured Indebtedness. The Company is not in material default with respect to the payment of any material Indebtedness or with respect to any instrument or agreement relating thereto.

4.9   Title to Properties . The Company has good and sufficient title to its material properties and assets, including the properties and assets reflected in the financial statements as of and for the quarter ended September 30, 2006 (except properties and assets disposed of since

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such date in the ordinary course of business and properties and assets held under Capital Leases). The Company enjoys peaceful and undisturbed possession under all material leases necessary in any material respect for the operation of its material properties and assets, and all such leases are valid and subsisting and are in full force and effect.

4.10   Compliance with Other Instruments, Etc . The Company is not in violation of any term of its certificate or articles of incorporation or by-laws, and the Company is not in material violation of any material term of any material agreement or instrument to which it is a party or by which it is bound or any material term of any applicable law, ordinance, rule or regulation of any governmental authority or any material term of any applicable order, judgment or decree of any court, arbitrator or governmental authority, the consequences of which violation could reasonably be expected to have a materially adverse effect on the business, condition (financial or other), operations, assets or properties of the Company; the execution, delivery and performance of this Agreement and the Notes will not result in any material violation of or be in material conflict with or constitute a material default under any such term; and there is no such term which materially adversely affects the business, condition (financial or other), operations, assets, or properties of the Company, taken as a whole.

4.11   Governmental Consent . No material consent, approval or authorization of, or declaration or filing with, any governmental authority on the part of the Company or any of its Subsidiaries is required for the valid execution and delivery of this Agreement or the valid offer, issue, sale and delivery of the Notes pursuant to this Agreement, except where the failure to obtain such consent or make such filing would not have a material adverse effect on the business, operations or assets of the Company, and except for appropriate filings (i) with the Commission and the NASDAQ of an SEC Form D, (ii) with the NASDAQ of an additional listing application for the Shares, and (iii) with such state securities commissions in respect of "blue sky" laws as may be appropriate.

4.12   Use of Proceeds . The Company will apply the net proceeds of the sale of the Notes principally for funding the Company's acquisition program, for working capital, and for general corporate purposes, including capital expenditures.

4.13   Solvency . On the Closing date and after giving effect to the application of the proceeds of the Notes as specified in Section 4.12, the Company will be Solvent.

4.14   Disclosure . To the best of the Company's knowledge, there is no fact (other than matters of a general economic or political nature which does not affect the Company uniquely) known to the Company which materially adversely affects the business, condition (financial or other), operations, assets or properties of the Company which has not been set forth either in the Company Commission Filings, the Private Placement Memorandum dated as of December 5, 2006, or in this Agreement or in the other documents, certificates and instruments delivered to the Purchasers by or on behalf of the Company specifically for use in connection with the transactions contemplated by this Agreement.

V.   SUBORDINATION.

5.1   Agreement to Be Bound . (a) The Company covenants and agrees, and each holder of Notes by such holder's acceptance thereof, likewise covenants and agrees, that the Notes shall be issued subject to the provisions contained in this Article V; and each person holding any Notes, whether upon original issue or upon transfer or assignment thereof, accepts and agrees to be bound by such provisions.

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(b)   All Notes shall, to the extent and in the manner hereinafter set forth, be subordinated and subject in right of payment to the prior payment in full of all Senior Indebtedness (as defined in Section 5.7).

5.2   Priority of Senior Indebtedness . (a) No payment on account of principal or interest on the Notes shall be made, nor shall any assets be applied to the purchase or other acquisition or retirement of the Notes, if, at the time of such payment or application or immediately after giving effect thereto, there shall exist a default in the payment of any amount due on any Senior Indebtedness. Within ten (10) Business Days after knowledge of any such default referred to in this Section 5.2(a), the Company shall furnish a copy thereof to each holder of the Notes, in the manner and at the address specified pursuant to Article XVIII hereof.

(b)   If there shall have occurred an event of default (other than a default in the payment of any amount due) with respect to any issue of Senior Indebtedness, as defined herein, or in the instrument under which the same has been issued, permitting the holders thereof, after notice or lapse of time, or both, to accelerate the maturity thereof, then, unless and until such event of default shall have been cured or waived or shall have ceased to exist, no payment on account of principal or interest on the Notes shall be made, nor shall any assets be applied to the conversion, redemption or other acquisition or retirement of the Notes until the earlier to occur of (i) the date on which the Senior Indebtedness to which such event of default related is discharged in accordance with its terms, or (ii) the date such event of default is waived by the holders of such Senior Indebtedness or otherwise cured. Within ten (10) Business Days after knowledge of any such default referred to in this Section 5.2(b), the Company shall furnish a copy thereof to each holder of the Notes, in the manner and at the address specified pursuant to Article XVIII hereof.

(c)   Upon the occurrence and during the continuance of any Event of Default under this Agreement or the Notes, or upon the occurrence of an event described in Sections 5.2(a) or (b) which gives rise to the non-payment of principal or interest due on the Notes, and notwithstanding any other provision contained herein or in the Notes to the contrary, each Purchaser hereby agrees, for the benefit of the holders of Senior Indebtedness, not to ask for, demand, sue for, take or receive any amount owing under the Notes or exercise any remedy (whether pursuant hereto, including, without limitation, acceleration of the Notes, at law, in equity or otherwise) with respect thereto until the earliest of (i) the date on which all Senior Indebtedness is accelerated, (ii) if applicable, the date on which the Senior Indebtedness to which such event of default related is discharged in accordance with its terms or such event of default is waived by the holders of such Senior Indebtedness or otherwise cured or (iii) any voluntary or involuntary petition in bankruptcy filed by or against the Company. Within ten (10) Business Days after knowledge of any Event of Default under this Agreement or the Notes, the Company shall furnish a copy thereof to the holders of Senior Indebtedness in the manner and at the addresses specified in the documents and/or agreements evidencing the applicable Senior Indebtedness.

5.3   Acceleration of Notes; Insolvency . (a) Upon (i) any acceleration of the principal amount due on the Notes or Senior Indebtedness or (ii) any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to creditors upon any dissolution or winding up or total or partial liquidation or reorganization of the Company, whether voluntary or involuntary or in bankruptcy, insolvency, receivership or other proceedings, all amounts due or to become due upon all Senior Indebtedness shall first be paid in full, or payment thereof duly provided for, to the full satisfaction of the holders of Senior Indebtedness before the holders of the Notes shall be entitled to receive or retain any assets so paid or distributed in respect thereof; and upon any such dissolution or winding up or liquidation or reorganization, any payment

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or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to which the holders of the Notes would be entitled, except for these provisions, shall be paid by the Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other person making such payment or distribution, or by the holders of the Notes if received by them or it, as the case may be, directly to the holders of Senior Indebtedness, to the extent necessary to pay all such Senior Indebtedness in full, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness before any payment or distribution is made to the holders of the Notes, except that the holders of Senior Indebtedness of the type described in clause (i) of the definition of Senior Indebtedness shall be entitled to receive payment in full of such Senior Indebtedness (or provisions satisfactory to the holders of such Senior Indebtedness shall be made for such payment) before the holders of other types of Senior Indebtedness shall be entitled to receive payment on such other Senior Indebtedness.

(b)   In the event that, notwithstanding the provision of the preceding paragraph or of Section 5.2 hereof, any payment or distribution of assets of the Company prohibited by the preceding paragraph or by Section 5.2 hereof shall be received by the holders of the Notes before all Senior Indebtedness is paid in full, or provision made for such payment, to the full satisfaction of the holders of Senior Indebtedness, in accordance with its terms, such payment or distribution shall be held in trust for the benefit of, and shall be paid over or delivered to, the holders of Senior Indebtedness or their representative or representatives, or to the trustee or trustees under any indenture pursuant to which any instruments evidencing any Senior Indebtedness may have been issued, as their respective interests may appear, for application to the payment of all Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior Indebtedness in full in accordance with its terms, after giving effect to any concurrent payment or distribution to or for the holders of such Senior Indebtedness. All payments applied to Senior Indebtedness pursuant to this paragraph of Section 5.3 shall be allocated among the holders of Senior Indebtedness in accordance with the provisions of the preceding paragraph of this Section 5.3.

5.4   Subrogation, Etc. Upon payment in full of all Senior Indebtedness, the holders of Notes shall be subrogated to the rights of the holders of Senior Indebtedness to receive payments or distributions of assets of the Company pro   rata in proportion to the respective amounts then owing to the holders of Notes; and for purposes of such subrogation, no payments or distributions to the holders of Senior Indebtedness of any cash, property or securities to which the holders of Notes would be entitled except for the provisions of this Article V, and no payment over pursuant to such provisions to the holders of Senior Indebtedness, shall, as between the Company and its creditors (other than the holders of Notes and the holders of the Senior Indebtedness), be deemed to be a payment by the Company to or on account of Senior Indebtedness, it being understood that the provisions of this Article V are and are intended solely for the purpose of defining the relative rights of the holders of Notes on the one hand and the holders of Senior Indebtedness on the other hand. The holders of Senior Indebtedness may amend, modify and otherwise deal with Senior Indebtedness without any notice to or approval of any holder of Indebtedness ranking junior to Senior Indebtedness.

5.5   Enforcement . (a) The foregoing subordination provisions shall be for the benefit of the holders of Senior Indebtedness and may be enforced directly by such holders against the holders of the Notes. Each holder of Notes by his (or its) acceptance thereof shall be deemed to acknowledge and agree that the subordination provisions of this Article V are, and are intended to be, an inducement and a consideration to each holder of any Senior Indebtedness, whether such Senior Indebtedness was created or acquired before or after the issuance of the Notes, to acquire and continue to hold, or to continue to hold, such Senior Indebtedness and each holder of Senior

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Indebtedness shall be deemed conclusively to have relied on such subordination provisions in acquiring and continuing to hold, or in continuing to hold, such Senior Indebtedness.

(b)   Upon any payment or distribution of assets of the Company, the holders of the Notes shall be entitled to rely upon a certificate of the receiver, trustee in bankruptcy, liquidation trustee, Company, agent or other person making such payment or distribution, delivered to the holders of the Notes, for the purpose of ascertaining the persons entitled to participate in such distribution, the holders of the Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertaining thereto or to the provisions of this Article V.

5.6   Obligations Unimpaired . Nothing contained in this Article V, or elsewhere in this Agreement, or in the Notes, is intended to or shall impair as between the Company, its creditors other than the holders of Senior Indebtedness, and the holders of the Notes, the obligation of the Company, which shall be absolute and unconditional, to pay the holders of the Notes the principal of and interest on the Notes as and when the same shall become due and payable in accordance with the terms thereof, or affect the relative rights of the holders of the Notes and other creditors of the Company other than the holders of Senior Indebtedness, nor shall anything herein or therein prevent the holder of any Notes from exercising all remedies otherwise permitted by applicable law upon default under this Agreement, subject to the rights, if any, under this Article V of the holders of Senior Indebtedness in respect to cash, property or securities of the Company received upon the exercise of any such remedy. Nothing contained in this Article V or elsewhere in this Agreement, or in any of the Notes, shall prevent the Company from making payment of the principal of or interest on the Notes at any time except under the conditions described in Section 5.2 or 5.3 or during the pendency of any dissolution, winding up, liquidation or reorganization of the Company.

5.7   Definition of Senior Indebtedness . The term "Senior Indebtedness" shall mean the principal and interest on (i) all Indebtedness of the Company and its Subsidiaries for money borrowed from time to time, including that owing to banks or other financial institutions, an agency or agencies of the federal government or other institutions engaged in the business of lending money, (ii) all Capital Leases of the Company and its Subsidiaries, (iii) obligations of the Company for the reimbursement of any obligor on any Letter of Credit, banker's acceptance or similar credit transaction, and (iv) any deferrals, renewals and extensions of any indebtedness described in clauses (i) through (iii) above, unless under the express provisions of the instrument creating or evidencing any such indebtedness, or pursuant to which the same is outstanding, such indebtedness is not superior in right of payment to the Notes; provided , however , that Senior Indebtedness shall not include Indebtedness owed or owing to any Subsidiary or any officer, director or employee of the Company or any Subsidiary. For purposes hereof, the Senior Indebtedness includes any and all Indebtedness under the Senior Secured Credit Facility, including without limitation Indebtedness arising under letters of credit.

5.8   Amendment . Subject to Article XVI, it is understood and agreed that the terms of this Article V may be subject to change in accordance with the terms that a senior lender that provides Senior Indebtedness to the Company may request.

VI.   REPRESENTATIONS OF THE PURCHASERS.

6.1   Resale Restrictions . Each Purchaser hereby represents that it is capable of evaluating the risk of its investment in the Notes and is able to bear the economic risk of such investment, that it is purchasing the Notes for its own account (or as trustee for one or more trust or pension funds) and that in each such case the Notes are being purchased by such Purchaser (or

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such funds) for investment and not with a view to any resale or distribution thereof in violation of securities laws or of the Shares issuable upon conversion thereof. If any Purchaser should in the future decide to dispose of the Notes or the Shares (which it does not now contemplate), it is understood that it may do so only in complete compliance with the Securities Act and any applicable state Blue Sky or securities laws. If Purchaser is purchasing the Notes as trustee for one or more trust or pension funds, it represents that it is acting as sole trustee and has sole investment discretion and that the determination and decision on its behalf to purchase the Notes for all such funds is being made by the same individual or group of individuals who customarily approves such investments.

6.2   Accredited Investor . Each Purchaser hereby represents that it is an "accredited investor" within the meaning of Regulation D of the General Rules and Regulations promulgated under the Securities Act ("Regulation D") and hereby agrees to provide the Company and its counsel with such information (including, but not limited to, a completed and signed Confidential Purchaser Questionnaire in the form of Exhibit "C" attached hereto) as is reasonably necessary to enable the Company to file a Form D with the Commission with respect to the transactions contemplated hereby. In furtherance of the foregoing, each Purchaser acknowledges that a purchase of the Notes is only available to a Purchaser who is an "accredited investor." In connection therewith, each Purchaser represents and warrants to the Company that it qualifies as an "accredited investor" within the meaning of Regulation D, since it meets one of the following standards for determination of "accredited investor" status of Regulation D set forth below:

6.3   Review of Information . Each Purchaser hereby represents that it (i) has received and carefully reviewed (A) the Company Commission Filings and (B) the Private Placement Memorandum, and (ii) has had the opportunity to ask questions and receive answers from the

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Company concerning the Company Commission Filings, the Private Placement Memorandum, and the terms and conditions of the offering of the Notes, and to obtain any documents relating to the Company which are publicly available and any additional information or documents relating to the Company which the Company possesses or can acquire without unreasonable effort or expense.

6.4   Due Authority . Each Purchaser hereby represents that the execution, delivery and performance by it of this Agreement and the purchase by it of the Notes (i) has been duly authorized by all requisite action on the part of such Purchaser, (ii) does not violate any charter, bylaws, partnership agreement, trust instrument or other organizational document applicable to such Purchaser, and (iii) does not violate any material term of any law, rule, regulation, court order, judgment or contractual or other obligation applicable to such Purchaser, the consequences of which violation might have a materially adverse effect on the business, condition (financial or other), operations, assets or properties of such Purchaser.

VII.   CERTAIN CONSIDERATIONS. The Purchasers acknowledge that they are aware of the risks inherent in an investment in the Company and specifically the risks of an investment in the Notes, and that they are capable of bearing a complete loss of such investment. In connection with and in furtherance of the foregoing, each Purchaser further acknowledges that it has received and carefully reviewed the Private Placement Memorandum (including the Risk Factors contained therein) relating to the Notes, and that it is aware that (i) the Company currently contemplates growth through an acquisition strategy, and that there can be no assurance that such acquisition strategy will be successfully implemented, (ii) the Company will incur costs in connection with pursuing such acquisition strategy, whether or not any such acquisitions are completed, (iii) dilution may result in the event that acquisitions are completed by issuing stock in the Company as consideration, in whole or in part, for such acquisitions, and (iv) there can be no assurance of the future viability or profitability of the Company, nor can there be any assurance relating to the current or future price of the Company's Common Stock.

VIII.   CONDITIONS TO OBLIGATIONS. The Purchasers' obligation to purchase the Notes hereunder is subject to satisfaction of the following conditions at the Closing:

8.1   Accuracy of Representations and Warranties . The representations and warranties of the Company herein or in any certificate or document delivered pursuant hereto shall be true and correct on and as of the Closing Date with the same effect as though made on and as of the Closing Date.

8.2   Performance; No Default . The Company shall have performed and complied, in each case in all material respects, with all material agreements and conditions contained in this Agreement required to be performed or complied with by it prior to or at the Closing and at the time of the Closing, no Event of Default shall have occurred and be continuing.

8.3   Officers' Certificate . The Purchasers shall have received a certificate dated the Closing Date and signed by the President, a Vice President or Chairman or Vice Chairman of the Company and by the Secretary, the Treasurer, an Assistant Secretary or an Assistant Treasurer of the Company, to the effect that the conditions of Sections 8.1 and 8.2 hereof have been satisfied.

8.4   Proceedings . All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents incident thereto shall be in form and substance reasonably satisfactory to you, and your counsel shall have received all such originals or certified or other copies of such documents as you and they may reasonably request.

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8.5   Legal Investment . On the Closing Date, there shall have been no change in applicable law or material facts in respect of the Company or any Purchaser, making the purchase of the Notes no longer a legal investment for any Purchaser.

8.6   No Litigation . No action, suit or proceeding before any court or any governmental or regulatory authority shall have been commenced and still be pending, and no investigation by any governmental or regulatory authority shall have been commenced and still be pending, against the Company seeking to restrain, prevent or change the transactions contemplated hereby or questioning the validity or legality of any of such transactions.

8.7   Sales to Other Purchasers . The Company shall have concurrently sold to the other Purchasers the Notes to be purchased by each of them at the Closing and shall have received payment in full therefor and shall have delivered or caused to be delivered to each of the other Purchasers such Notes in accordance with the terms hereof.

8.8   Purchase Permitted by Applicable Laws . The offering, issuance, purchase and sale of, and payment for, the Notes to be purchased by the Purchasers on the Closing date on the terms and conditions herein provided (including the use of the proceeds of such Notes by the Company) shall not violate any law or governmental regulation applicable to the Purchasers.

8.9   Compliance with Securities Laws . The offering and sale of the Notes at or prior to the Closing under this Agreement shall have complied in all material respects with all applicable requirements of federal and state securities laws.

IX. AFFIRMATIVE COVENANTS.

9.1   Financial Information . The Company and each Subsidiary will maintain its books and records in accordance with generally accepted accounting principles. So long as any of the Notes shall remain outstanding, the Company will deliver to each holder of the Notes:

(a)   as soon as practicable, and in any event within 105 days after the close of each fiscal year of the Company, (i) a consolidated balance sheet of the Company and its Subsidiaries as of the end of such fiscal year-end, and (ii) consolidated statements of income, cash flow and common stock and other stockholders' equity of the Company and its Subsidiaries for such fiscal year, in each case setting forth in comparative form the corresponding figures for the preceding fiscal year and to be in reasonable detail and certified without material exception by BDO Seidman LLP or other nationally recognized independent public accountants selected by the Company; provided , however , that the timely filing of the Annual Report on Form 10-K of the Company for such fiscal year with the Commission (together with copies of the financial statements required to be included therein) shall be deemed to satisfy the requirements of this clause (a);

(b)   as soon as practicable, and in any event within 50 days after the close of each of the first three fiscal quarters of the Company during such fiscal year, (i) a consolidated balance sheet of the Company and its Subsidiaries as of the end of such fiscal quarter, and (ii) consolidated statements of income, cash flow and common stock and other stockholders' equity of the Company and its Subsidiaries for the portion of the fiscal year ended with the end of such quarter, in each case setting forth in comparative form the corresponding figures for the comparable period of the preceding fiscal year; provided ,

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however , that the timely filing of the Quarterly Report on Form 10-Q of the Company for such quarterly period timely with the Commission shall be deemed to satisfy the requirements of this clause (b);

(c)   as soon as practicable, copies of all financial statements, proxy materials or reports sent to the Company's stockholders and of all final registration statements filed with the Commission pursuant to the Securities Act or the Exchange Act; and

(d)   with reasonable promptness, such other information and data with respect to the Company or any of its Subsidiaries as from time to time may be reasonably requested.

9.2   Office for Payment, Exchange and Registration . So long as any of the Notes are outstanding, the Company will maintain an office or agency in the United States where the Notes may be presented for payment, conversion, exchange or registration of transfer as provided in this Agreement. Such office or agency initially shall be the office of the Company set forth in Article XVIII hereof, which place may thereafter from time to time be changed by notice to the holders of all Notes then outstanding.

9.3   Notices . The Company will give notice to all holders of Notes within five Business Days after it learns of the existence of any Event of Default or any event which, with the giving of notice or the lapse of time or both, would become an Event of Default, describing the same and the period of existence thereof, and what action the Company has taken, is taking or proposes to take with respect thereto.

9.4   Corporate Existence, Etc. The Company will at all times preserve and keep in full force and effect its corporate existence, and rights and franchises deemed material to its business, and those of each of its material Subsidiaries, except that the corporate existence of any Subsidiary of the Company may be terminated if, in the good faith judgment of the Board of Directors, such termination is in the best interest of the Company.

9.5   Payment of Taxes . The Company will, and will cause each of its Subsidiaries to, pay all taxes, assessments and other governmental charges imposed upon it or any of its properties or assets or in respect of any of its franchises, business, income or profits before any penalty or interest accrues thereon, provided that no such tax, assessment, charge or claim need be paid if being contested in good faith by appropriate proceedings promptly initiated and diligently conducted and if such reserve or other appropriate provision, if any, as shall be required by generally accepted accounting principles shall have been made therefor.

9.6   Maintenance of Properties; Insurance . The Company will maintain or cause to be maintained in reasonably good repair, working order and condition, normal wear and tear excepted, all material properties used in the business of the Company and its Subsidiaries. The Company will maintain or cause to be maintained, with financially sound and reputable insurers, insurance with respect to its properties and business and the properties and business of its Subsidiaries against loss or damage of the kinds customarily insured against by corporations of established reputation engaged in the same or similar business and similarly situated, of such types and in such amounts as are customarily carried under similar circumstances by such other corporations.

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9.7   Compliance with Laws . The Company will, and will cause each Subsidiary to, comply in all material respects with all applicable laws, ordinances, rules, regulations, and requirements of governmental authorities except where (i) noncompliance could not reasonably be expected to have a material adverse effect on the business, operations or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole, or (ii) the necessity of compliance therewith is contested in good faith by appropriate proceedings.

X. NEGATIVE COVENANTS. The Company covenants and agrees as follows:

10.1   Transactions with Affiliates . The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, engage in any transaction, including, without limitation, the purchase, sale or exchange of assets or the rendering of any service, with any Affiliate of the Company, except in the ordinary course of and pursuant to the reasonable requirements of the Company's or such Subsidiary's business and upon fair and reasonable terms that are no less favorable to the Company or such Subsidiary, as the case may be, than those which might be obtained in an arm's length transaction at the time from persons which are not Affiliates, provided that the foregoing restrictions shall not apply to any transaction between the Company and a wholly-owned Subsidiary of the Company or between one wholly-owned Subsidiary of the Company and another wholly-owned Subsidiary of the Company.

10.2   Restricted Indebtedness . The Company will not, directly or indirectly, incur any Indebtedness the proceeds of which will be used to pay dividends upon shares of the Company's Common Stock or any other capital stock of the Company that may from time to time be outstanding.

10.3   Guaranties by Subsidiaries . Other than in the ordinary course of business or to the holders of Senior Indebtedness, or unless the holders of a majority in principal amount of the Notes shall approve, the Company shall cause its Subsidiaries not to guaranty the Indebtedness of the Company or of any other party.

XI. DEFAULTS. If any of the following events (herein called an "Event of Default") shall occur and be continuing:

(a)   If the Company shall default in the payment (whether or not such payment is prohibited under Article V hereof) of (i) any part of the principal on any Note, when the same shall become due and payable, whether at maturity or by acceleration or otherwise, or (ii) the interest on any Note, when the same shall become due and payable, and such default in the payment of interest shall have continued for five (5) days;

(b)   If the Company shall default in the performance of any agreement or covenant contained in this Agreement or the Notes and such default shall continue for thirty (30) days after notice thereof from any holder of a Note; or

(c)   If any representation or warranty by the Company herein or any certificate delivered by the Company pursuant hereto shall prove to have been incorrect in any material respect when made; or

(d)   If (i) the Company shall fail to make any payment in respect of any Indebtedness when due or within any applicable grace period; or (ii) any other event of

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default, as defined in any material indenture or material instrument evidencing or under which there is at the time outstanding any Indebtedness of the Company, shall occur which (1) results in the acceleration of the maturity of such Indebtedness or (2) enables (or, with the giving of notice, would enable) the holder of such Indebtedness or any person acting on such holder's behalf to accelerate the maturity thereof if, in the case of subclause (2) hereof, such event or condition has been in existence for 180 days without being cured or waived; provided , that , the aggregate principal amount of the Indebtedness referred to in clause (i) or (ii) (together with any other defaulted Indebtedness) exceeds $5,000,000; or

(e)   If a final judgment which, either alone or together with other outstanding final judgments against the Company and its Subsidiaries, exceeds an aggregate of $5,000,000 shall be rendered against the Company or any Subsidiary and such judgment shall have continued undischarged or unstayed for sixty (60) days after entry thereof; or

(f)   If the Company or any Subsidiary shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts; or if the Company or any Subsidiary shall suffer the appointment of a receiver or trustee for it or substantially all of its assets and, if appointed without its consent, not to be discharged or stayed within sixty (60) days; or if the Company or any Subsidiary shall suffer proceedings under any law relating to bankruptcy, insolvency or the reorganization or relief of debtors to be instituted by or against it, and, if contested by it, not to be dismissed or stayed within sixty (60) days; or if the Company or any Subsidiary shall fail generally to pay its debts as they become due; or if the Company or any Subsidiary shall suffer any writ of attachment or execution or any similar process to be issued or levied against it or any significant part of its property with respect to claims in excess of $5,000,000, which is not released, stayed, bonded or vacated within sixty (60) days after its issue or levy; or if the Company or any Subsidiary takes corporate action in furtherance of any of the aforesaid purposes or conditions; or

(g)   If a Change in Control shall occur;

then and in each such event the holders of forty percent (40%) or more in aggregate principal amount of the Notes then outstanding may at any time (unless all defaults shall theretofore have been remedied) at its or their option, by written notice or notices to the Company, declare all the Notes to be due and payable, whereupon the same shall forthwith mature and become due and payable, together with all interest accrued thereon, without presentment, demand, protest or notice, all of which are hereby waived; provided , however , that this provision is subject to the condition that if, at any time after the principal of the