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Exhibit 10.1
SHARE PURCHASE AGREEMENT

AGREEMENT dated as of May 2nd, 2008 among Lakeland do Brasil Empreendimentos e
Participações Ltda., a limited company (sociedade limitada) organized under the
laws of Brazil (the “Purchaser”),  Lakeland Industries, Inc., a Delaware
corporation (“Lakeland”), Miguel Antonio dos Guimarães Bastos, Brazilian
Citizen, married, businessman, bearer of the identification Card RG N. 4607520
SSP/BA, enrolled with the Brazilian Taxpayers’ Registry (CPF/MF) under N.
125.891.957-53, resident and domiciled in the City of Lauro de Freitas, State of
Bahia, at Condominio Encontro das Águas, Quadra I, Lote 39, 42700-000
(“Miguel”), Elder Marcos Vieira da Conceição, Brazilian Citizen, single,
businessman, bearer of the identification Card RG N. 05746155.47 SSP/BA,
enrolled with the Brazilian Taxpayers’ Registry (CPF/MF) under N.
793.295.605-63, resident and domiciled in the City of Salvador, State of Bahia,
at Rua Clarival do Prado Valladares, 371, Condomínio Monte Trianon – Bairro
Caminho das Arvores, CEP 41820-700, (“Elder”), Márcia Cristina Vieira da
Conceição Antunes, Brazilian Citizen, married, businesswoman, bearer of the
identification Card RG N. 02504273.46 SSP/BA, enrolled with the Brazilian
Taxpayers’ Registry (CPF/MF) under N. 507.932.685-91, resident and domiciled in
the City of Salvador, State of Bahia, at Alameda Cabo Frio, Quadra 34, Lote 10,
Bairro Praias do Flamengo, CEP 41603-115  (“Márcia”, and together with Miguel
and Elder, the “Sellers”), Nordeste Empreendedor Fundo Mútuo de Investimento em
Empresas Emergentes, enrolled with the Taxpayers’ Registry (CNPJ/MF) under N.
05.047.787/0001-60, by its legal representative UBS Pactual Serviços Financeiros
S.A. – Distribuidora de Títulos e Valores Mobiliários, with offices in the City
of Rio de Janeiro, State of Rio de Janeiro, at Praia do Botafogo, 501, 6º andar,
parte, enrolled with the Taxpayers’ Registry (CNPJ/MF) under N.
29.650.082/0001-00 ("Nordeste Empreendedor”), Qualytextil S.A., a corporation
(sociedade por ações) organized under the laws of Brazil (the “Company”),
Conceição Maria Passos de Queiróz, Brazilian Citizen, married, doctor, bearer of
the Identification Card RG N. 1190033, enrolled with the Brazilian Taxpayers’
Registry (CPF/MF) under N. 183.884.185-72, resident and domiciled in the City of
Lauro de Freitas, State of Bahia, at Condominio Encontro das Águas, Quadra I,
Lote 39, 42700-000, and Elton de Carvalho Antunes, Brazilian, married,
industrial, bearer of ID Card N. 9012051018 SSP/BA, enrolled with the Brazilian
Taxpayers’ Registry under CPF/MF N. 294.962.250-04, resident and domiciled in
the City of Salvador, State of Bahia, at Alameda Cabo Frio, s/n., Quadra 34,
Lote 10, Praia do Flamengo, 40280-440 (“Elton”).

W I T N E S S E T H

WHEREAS, on or prior to the Closing Date, the Sellers will be the record and
beneficial owners of all of the outstanding capital stock of the Company,
comprised of 1,507,701 shares, being 1,492,624 shares of common stock and 15,077
shares of Class A preferred stock, without par value, of the Company (the
“Shares”), to be distributed among the Sellers, in accordance with the table
contained in Exhibit A hereto;

 

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WHEREAS, the Sellers desire to sell the Shares to the Purchaser and the
Purchaser desires to purchase the Shares, free and clear of any Lien, on the
terms and conditions hereinafter set forth;

WHEREAS, to induce the Purchaser to enter into this Agreement and to purchase
the Shares hereunder, the Sellers have agreed to make certain representations,
warranties, covenants, indemnities and other agreements hereunder for the
benefit of the Company, the Purchaser and its shareholders;

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements set forth herein, the parties hereto agree to enter into this Share
Purchase Agreement ("Agreement"), under the terms and conditions as follows:

ARTICLE 1
Definitions

Section 1.01.  Definitions.  The following terms, when used in this Agreement,
shall have the following meanings (given that such meanings are to be equally
applicable to the singular and plural forms of the terms defined):

“2008 Adjusted Purchase Price” shall have the meaning set forth in Section 2.05
of this Agreement;

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with such Person,
as control is defined in Article 116 of Brazilian Corporation Law;

“Agreement” means this Share Purchase Agreement and Exhibits attached herein;

“Brazilian Corporation Law” means Law No. 6,404/76 as amended;

“Brazilian GAAP” means generally accepted accounting principles in Brazil;

“Business” means production, manufacture, and sale of personnel protective
equipment;

“Business Day” means any day other than a Saturday, Sunday, or other day on
which commercial banks in the City of São Paulo, State of São Paulo are
authorized by law to close;

“CDI” means the average daily rate offered for Extra-Group Overnight Interbank
Deposits, calculated and released daily by Central de Custódia e Liquidação
Financeira de Títulos - CETIP and capitalized on an annual basis (for a
252-business-day year), or, in case of temporary unavailability or
discontinuance thereof, another National Financial System benchmark rate
replacing it, as agreed on between the parties.

“Claim” shall have the meaning set forth in Section 10.03 of this Agreement;

“Closing” shall have the meaning set forth in Section 8.01 of this Agreement;

“Closing Date” shall have the meaning set forth in Section 8.01 of this
Agreement;

 
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“Closing Transactions” shall have the meaning set forth in Section 8.02 of this
Agreement;

“Company” means Qualytextil S.A.;

“Confidential Information” shall have the meaning set forth in Section 6.02 of
this Agreement;

“2007 EBITDA” shall mean the amount of R$3,118,000.00;

“Employees” shall mean the registered employees (including those who are retired
but still registered) and appointed officers of the Company or any of its
Affiliates, including, but not limited to the employees of Prestserv, as of the
date of this Agreement;

“Environmental Laws” shall mean any Law, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of the environment or natural resources;

“Financial Statements” shall have the meaning set forth in Section 3.05 of this
Agreement;

“Governmental Authority” means any government, governmental entity, regulatory
authority, department, commission, board, agency or instrumentality, any
recognized stock exchange and any court, arbitrator, tribunal, whether foreign
or domestic with jurisdiction over the Parties;

“Indemnified Party” shall have the meaning set forth in Section 10.01 hereof;

“Intellectual Property” shall mean the intellectual property listed in Exhibit
3.12 attached herein and any other existing technical documentation related to
that;

“Law” shall mean any federal, state, or local statute, law, ordinance,
regulation, rule, code, decree, other requirement or rule of law of Brazil or
any other jurisdiction, and any other similar act or law;

“Liens” shall mean liens, security interests, options, rights of first refusal,
easements, charges, indentures, encroachments, licenses to third parties, leases
to third parties, security agreements, or any other encumbrances and other
restrictions or limitations on the transfer, license, sale, disposal or use of
real or personal property;

“Loss” shall have the meaning set forth in Section 10.1 hereof. Any Losses due
under this Agreement shall be paid by the Sellers net of any negative or
positive Tax effect or potential effect on the Indemnified Party thereof;

“Outstanding Debts” shall mean the actual amount of the outstanding debts of the
Company listed in Exhibit B of this Agreement as of the Closing Date;

“Parties” means the Purchaser, Lakeland, the Sellers, and the Company; and
“Party” means any of them;

“Permits” shall have the meaning set forth in Section 3.11 of this Agreement;

 
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“Person” means any individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof;

“Prestserv” means Prestserv Serviços Ltda., a limited company (sociedade
limitada) organized under the laws of Brazil, enrolled with the Brazilian
Taxpayers Registry under nº 05.411.989/0001-40, an Affiliate of the Company.

“Purchase Price” shall mean the amount in Reais equivalent to seven (7) times
the 2007 EBITDA less all Outstanding Debts;

“R$” or “Reais” shall mean the lawful currency in Brazil;

“Retained Amount” shall mean the aggregate of: (i) up to R$ 649,000.00 to
satisfy indemnification regarding the contingencies of the Company, as detailed
in Exhibit C hereto, which funds will remain in escrow for five (5) years or
upon expiration of the statute of limitations applicable to such contingencies
(whichever occurs first) and will only be released by mutual agreement between
the Parties; (ii) the amounts of R$ 355,369.00 corresponding to 10% of the
receivables and R$ 268,874.00, corresponding to 10% of the stocks of the Company
both on December 31, 2007, to satisfy indemnification regarding contingencies of
the Company, as detailed in Exhibit C hereto, which funds will remain in escrow
for a period of (a) 6 months with respect to the receivables, and (b) one (1)
year with respect to the stocks, and will only be released by mutual agreement
between the Parties; (iii) 10% of the Purchase Price to satisfy indemnifications
for unknown contingencies, representations and warranties, including but not
limited to any tax issues, which funds will remain in escrow for the period of
two (2) years from the Closing Date, and will only be released by mutual
agreement between the Parties; and (iv) 20% of the Purchase Price, which funds
shall remain in escrow until the 2008 EBITDA is determined, in order to satisfy
the payment of eventual 2008 Adjusted Purchase Price, as set forth in Section
2.05 below;

“Right of First Refusal” shall have the meaning set forth in Section 2.10 of
this Agreement;

“Shares” shall mean the shares of common stock and shares of preferred stock of
the Company, representing, in the aggregate, 100% of the Company’s voting and
total capital stock;

“Supplementary Purchase Price” shall have the meaning set forth in Section 2.06
hereof; and

“Tax” means all taxes, charges, fees, levies or other assessments imposed by any
taxing authority, including, without limitation, income, gross receipts, sales,
use, goods and services, capital transfer, bulk transfer, franchise, profits,
license, withholding, payroll, employment, employer health, social
contributions, social security, excise, estimated, severance, stamp, occupation,
property, or other taxes, customs duties, fees, assessments or charges of any
kind whatsoever, together with any interest and any penalties, additions to tax
or additional amounts, including any amounts payable as a result of the
application of monetary correction or any other similar factor imposed by any
taxing authority.

 
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ARTICLE 2
Purchase and Sale of Shares

Section 2.01.  Purchase and Sale of Shares.  Upon the terms and subject to the
conditions of this Agreement, and upon the basis of the representations and
warranties contained herein, the Sellers agree to sell, convey, assign, transfer
and deliver to the Purchaser, and the Purchaser agrees to purchase and acquire
from the Sellers, all of the Shares, free and clear of any Lien, at the Closing.

Section 2.02.  Purchase Price.  In consideration for the sale of all the Shares,
the Purchaser shall pay to the Sellers proportionally to the capital stock held
by each one of them, on the Closing Date, the Purchase Price (taking into
account the actual amount of the Outstanding Debts as of the Closing Date),
payable in cash as provided in Section 2.03,  less the Retained Amount, which
shall be deposited in one or more escrow accounts with a reputable bank or agent
specialized in providing escrows (the “Escrow Agent”) to be designated by mutual
agreement among the Purchaser and the Sellers.

Section 2.03.  Payment Conditions.  The Purchase Price (less the Retained
Amount) shall be paid on the Closing Date to the Sellers by means of  electronic
transfer (TED) or a bank draft or any other similar mean of immediately
available funds, in Reais, to the bank accounts set forth in Schedule 2.03
hereto.

Section 2.04.  Escrow.  The Retained Amount shall be held in escrow by the
Escrow Agent pursuant to the terms and conditions set forth in the Escrow
Agreements to be executed on the Closing Date, substantially in the form of
Schedule 2.04 hereto, and the funds in escrow shall only be released:

(a) to the Purchaser or, at the Purchaser’s discretion, the Company to satisfy
(i) indemnifications regarding the contingencies specified in Exhibit C hereto,
(ii) indemnifications for unknown contingencies of the Company or
representations and warranties provided by the Sellers, including but not
limited to any tax issues, or (iii) the payment of eventual 2008 Adjusted
Purchase Price, as set forth in Section 2.05 below; or

(b) to the Sellers upon expiration of the terms established in Section 1.01
above (see  definition of Retained Amount), for each Retained Amount.

Section 2.05.  Purchase Price Adjustment.  To the extent that the Company’s
EBITDA in 2008 is less than the 2007 EBITDA, the Purchase Price shall be
automatically adjusted to an amount in Reais equal to seven (7) times the
Company’s EBTIDA in 2008 (the “2008 Adjusted Purchase Price”). For the purposes
of determining the Company’s EBITDA in 2008, within up to 90 (ninety) days after
December 31, 2008, the Purchaser shall cause the Company to provide the Sellers
with a written and audited statement describing the Company’s EBITDA in 2008,
prepared in accordance with Brazilian GAAP and in a manner consistent with the
manner in which the 2007 EBITDA was determined by the Parties. Should the
Purchaser and the Sellers agree on the amounts so presented as the Company’s
EBITDA in 2008, then the amount of the difference between the Purchase Price and
the 2008 Adjusted Purchase Price (plus the amount to be determined in accordance
with Section 2.07(b)(i), if any) shall, within 30 (thirty) Business Days after
the presentation of the mentioned statement by the

 
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Company, be released from the Escrow Account in benefit of the Purchaser,
provided however that in no event the adjustment shall exceed the amount
equivalent to 20% of the Purchase Price accrued of interests (if any), obtained
with the investments permitted under the Escrow Agreement, specifically in
relation to the portion of Retained Amount corresponding to the 2008 Adjusted
Purchase Price. Should the Purchaser and the Sellers disagree with the amounts
presented by the Company as the Company’s EBITDA in 2008, and should the Parties
and their respective external auditors not be able to reach an agreement upon
such values within 30 (thirty) Business Days as from the presentation of
referred original statement, then the Parties shall jointly appoint (and equally
bear the costs of) another auditing firm selected among Deloitte Touche
Tomahatsu, KPMG, Ernst&Young or PriceWaterhouseCoopers. Should the Parties not
reach an agreement as to the third auditing firm within the immediately
subsequent 5 (five) Business Days, then it shall be chosen following the order
that they appear above. The retained third auditing firm shall, within 15
(fifteen) Business Days following its engagement, issue a final and binding
statement contemplating the Company’s EBITDA in 2008 (the third auditing firm
shall prepare and issue its final statement in accordance with Brazilian GAAP
and in a manner consistent with the manner in which the 2007 EBITDA was
determined by the Parties). The payment of the Adjusted Purchase Price (plus the
amount to be determined in accordance with Section 2.07(b)(i), if any), if any,
derived from the final statement by the third auditing firm shall be made within
5 (five) Business Days as from the issuance of such final statement.

Section 2.06.  Supplementary Purchase Price.  (a) Subject to the Company’s
EBITDA in 2010 being equal to or greater than R$ 4,449,200, the Purchaser shall
then pay to the Sellers the difference between six (6) times the Company’s
EBITDA in 2010 and seven (7) times the 2007 EBITDA (R$ 21,826,000.00), less any
unpaid disclosed or undisclosed contingencies (other than Outstanding Debts)
from pre-closing which exceeds R$ 100,000.00 ("Supplementary Purchase Price").
The Supplementary Purchase Price in no event shall be greater than R$
27,750,000.00. For the purposes of determining the Company’s EBITDA in 2010,
within up to ninety (90) days after December 31, 2010, the Purchaser shall cause
the Company to provide the Sellers with a written and audited statement
describing the Company’s EBITDA in 2010, prepared in accordance with Brazilian
GAAP and in a manner consistent with the manner in which the 2007 EBITDA was
determined by the Parties. Should the Purchaser and the Sellers agree on the
amounts so presented as the Company’s EBITDA in 2010, then the Supplementary
Purchase Price shall, within 30 (thirty) Business Days after the presentation of
the mentioned statement by the Company, be paid by the Purchaser to the Sellers.
Should the Purchaser and the Sellers disagree with the amounts presented by the
Company as the Company’s EBITDA in 2010, and should the Parties and their
respective external auditors not be able to reach an agreement upon such values
within 30 (thirty) Business Days as from the presentation of referred original
statement, then the Parties shall jointly appoint (and equally bear the costs
of) another auditing firm selected among Deloitte Touche Tomahatsu, KPMG,
Ernst&Young or PriceWaterhouseCoopers. Should the Parties not reach an agreement
as to the third auditing firm within the immediately subsequent 5 (five)
Business Days, then it shall be chosen following the order that they appear
above. The retained third auditing firm shall, within 15 (fifteen) Business Days
following its engagement, issue a final and binding statement contemplating the
Company’s EBITDA in 2010 (the third auditing firm shall prepare and issue its
final statement in accordance with Brazilian GAAP and in a manner consistent
with the manner in which the 2007 EBITDA was determined by the Parties). The
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statement by the third auditing firm shall be made within 5 (five) Business Days
as from the issuance of such final statement. To the extent that the Company’s
EBITDA in 2010 is greater than R$6,356,000, the Supplementary Purchase Price
will be payable in February 2011 based on a multiple of six (6) times such
capped amount of R$6,356,000 and the remaining amount of the Supplementary
Purchase Price shall be paid in February 2012, provided however that this
remainder will be due only if the actual Company’s EBITDA in 2011 corresponds to
at least 90% of the Company’s EBITDA in 2010.

(b) If the Management Agreement contemplated by Section 5.04 hereto is
terminated either by the Company without cause or by any of the Sellers with
cause as provided for in Section 7.5 of the Management Agreement, then the
Supplementary Purchase Price shall amount R$ 27,750,000.00, regardless of the
actual amount of the Company’s EBITDA in 2010 and the Supplementary Purchase
Price will then be payable in full in February 2011. For the avoidance of any
doubt, the Management Agreement will be deemed to be terminated without cause by
the Company if termination is made without the occurrence of any of the events
described in Section 7.3 of the Management Agreement.

Section 2.07.  Outstanding Debts.  On the Closing Date the Purchaser undertakes
to transfer to the Company the funds in the amount then estimated by the Parties
for the debt described in Exhibit C with a view to repaying all Outstanding
Debts, including without limitation the debentures issued by the Company,
provided that the Sellers must obtain the consent of all lenders of the Company
to accept the repayment of the debts without penalties and under the same terms
and conditions set forth in the respective agreements and to the change in
control of the Company. If it is not possible to pay any of the Outstanding
Debts on the Closing Date, the Purchaser shall pay the remaining Outstanding
Debts within thirty (30) days from the Closing Date, except for the debentures
issued by the Company that must be paid on the Closing Date. The Parties hereby
expressly agree that due to the nature of the Outstanding Debts the actual
amounts that shall be paid may vary from the estimated amount of the Outstanding
Debts on the Closing Date and the Parties shall make adjustments to the Purchase
Price in order to reflect such variations should such difference be greater than
R$20,000.00. If the actual amount of the Outstanding Debts is: (i) greater than
the estimated amount of the Outstanding Debts on the Closing Date, then the
Purchaser shall be entitled to adjust the Purchase Price to deduct the
difference between the estimated amount of the Outstanding Debts on the Closing
Date and the actual amount of the Outstanding Debts from the Purchase Price,
with due observance to Section 2.05 above; and (ii) less than the estimated
amount of the Outstanding Debts on the Closing Date, then the Purchaser shall
cause the Company to pay to the Sellers the difference between the amount of the
estimated amount of the Outstanding Debts on the Closing Date and the actual
amount of the Outstanding Debts within thirty days as of the payment in full of
the Outstanding Debts.

Section 2.08. Penalty upon Default. In case the Purchaser fails to pay any and
all amounts due hereunder at its due date, such amounts shall be duly adjusted
by the CDI from the date any of the payments are effectively due until the date
the respective amount is paid by the Purchaser. Additionally, the Purchaser
shall pay a punitive penalty (multa punitiva não-compensatória) of 2% over the
outstanding amount duly adjusted by CDI, as described above.

 
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Section 2.09. Lakeland’s Guarantee. The Parties additionally agree that Lakeland
shall guarantee to the Sellers any and all payments due hereunder by the
Purchaser, provided, however, that the Sellers shall necessarily proceed first
against the Purchaser before proceeding to enforce this guaranty and as a
condition to payment or performance by Lakeland hereon.

Section 2.10. Right of First Refusal and Pledge of Shares.  (a) If the
Purchaser, at any time before the payment of the Supplementary Purchase Price,
receives an offer to sell its shares in the Company, it shall (i) give the
Sellers the right to acquire those shares on the same terms and conditions set
forth in such offer (“Right of First Refusal”), exercisable by written notice
given by the Sellers to the Purchaser within thirty (30) days after the receipt
of a notice from the Purchaser informing the terms and conditions of the offer
and (ii) concurrently with the sale of the shares to a third party and as a
condition of the latter to acquire shares in the Company, grant, or cause the
third party acquiring the shares to grant, to the Sellers as security for the
payment of the Supplementary Purchase Price a first priority security interest
in and to shares representing 30% of the total issued and outstanding capital
stock of the Company.

(b) The Purchaser shall not be bound to transfer shares to the Sellers as a
result of the exercise of the Right of First Refusal by the Sellers if those
shares do not represent all of the shares contemplated in the offer made by the
third party.

(c) If the Sellers elect not to exercise its Right of First Refusal or if they
fail to timely exercise the Right of First Refusal, then the Purchaser may sell
the shares to the third party offering to purchase the shares.

ARTICLE 3
Representations and Warranties of the Sellers and Nordeste Empreendedor

A)    The Sellers severally represent and warrant to the Purchaser that each of
the following representations and warranties is, as of the date hereof, and will
be, on the Closing Date, true and correct and in full force and effect:

Section 3.01.  Existence and Power.  (a) Each of the Company and its Affiliates
(including Prestserv) is duly organized, validly existing and in good standing
under the laws of the Federative Republic of Brazil. The Company has all
corporate powers, governmental licenses, authorizations, permits, consents and
approvals required to own its respective properties and to carry on its business
as presently conducted. The Exhibit 3.01 contains a true and complete copy of
the amended and restated bylaws of the Company, as currently in effect and shall
be on the Closing Date duly registered before the appropriate trade board or
applicable authorities. The Company has and will have as of the Closing Date all
clearance certificates that enable the transaction contemplated herein to be
performed as described in the Agreement. Except for Prestserv, the Company has
no and will have no direct or indirect subsidiary.

Section 3.02.  Authorization, Required Filings and Consents.  (a) The execution,
delivery and performance by the Sellers and the Company of this Agreement and
the consummation of the transactions contemplated hereby are duly and validly
authorized by all necessary corporate action,

 
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and no other corporate proceedings on the part of the Sellers, or the Company
are necessary to consummate the transactions contemplated herein.

(b) Except for any contrary disposition hereof, no filing or registration with,
or notification by the Sellers or the Company to, and no permit, authorization,
consent or approval of, any Governmental Authority is necessary for the
execution and delivery of this Agreement by the Sellers, or the consummation by
the Sellers of the transactions contemplated by this Agreement.

Section 3.03.  Noncontravention.  The execution, delivery and performance of
this Agreement and any other agreement or document related hereto and the
consummation of the transactions contemplated hereby by the Sellers or the
Company do not and will not (i) violate the organizational documents or its
article of association, (ii) conflict with or violate any Law applicable to the
Sellers, (iii) require any consent or other action by any Person, constitute a
default, or give rise to any right of termination, cancellation, vesting or
acceleration of any right or obligation, of the Company, or to a loss of any
benefit to which the Company is entitled under any provision of any agreement or
other instrument binding upon the Company, or (iv) result in the creation or
imposition of any Lien on any asset of the Company.

Section 3.04.  Capitalization.  (a) Currently, the capital stock of the Company,
totally subscribed and paid in, is of R$1,507,701.00, comprised of 1,492,624
shares of common stock and 15,077 shares of preferred stock and there are no (i)
other outstanding shares (voting or not), other securities (voting or not)
issued by the Company nor other ownership interests of the Company, (ii)
securities issued by the Company convertible into or exchangeable for shares of
capital stock, voting securities or other ownership interests of the Company,
except for the debentures described in Exhibit 3.04 hereto, which shall be
totally redeemed on the Closing Date as set forth in Section 8 or (iii) options
or other rights to acquire from the Company or from the Seller or, or other
obligation of the Company to issue, any shares of capital stock, voting
securities or securities convertible into or exchangeable for shares of capital
stock, voting securities or other ownership interests of the Company. There are
no outstanding obligations of the Company to repurchase, redeem or otherwise
acquire any shares of capital stock of the Company.

(b) The Sellers shall be on the Closing Date the legal holder and registered
owner of shares of common stock and shares of preferred stock of the Company,
representing, in the aggregate, 100% of the Company’s voting and total capital
stock. Exhibit 3.04(b) contains a table indicating the current ownership
structure of the Company as of this date. Sellers further represents and
warrants to Purchaser that, as of the date hereof until the Closing Date,
Sellers will have full and valid title of the Shares, free and clear of any Lien
or any third party rights, except for any contrary disposition in this
Agreement.

Section 3.05.  Financial Statements.  Exhibit 3.05 hereto contains a true copy
of the audited consolidated financial statements of the Company for the fiscal
year ended on December 31, 2007 (the “Financial Statements”), which have been
prepared in accordance with the Brazilian GAAP and consistent with the Company’s
past practices. The Financial Statements are true, correct and complete, can be
reconciled with the books and records of the Company in all aspects and
adequately reflect the financial situation of the Company on such dates, as well
as the results of the Company’s

 
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activities in the time periods, not having occurred any transactions out of the
ordinary course of business.  All accounts, notes receivable and other
receivables reflected in the Financial Statements are valid, genuine and fully
collectible in the aggregate amount thereof, subject to normal and customary
trade discounts, less any reserves for doubtful accounts recorded on the
Financial Statements. Except as disclosed by the Sellers in this Agreement or in
its Exhibits, all the financial or other debts of the Company, duly reflected in
the Financial Statements, are not due on the date hereof and there is no current
default under any obligation of the Company.

Section 3.06.  Properties.  (a) Except for the mortgages described in Exhibit
3.06(a), the Company has good and marketable, indefeasible, legitimate title,
free and clear of any Liens, or, in the case of leased property and assets, has
valid leasehold interests in, all property and assets (whether real, personal,
tangible or intangible) reflected on the Financial Statements. Except for the
mortgages described in Exhibit 3.06(a), none of such property or assets is
subject to any Lien.

(b) The properties and assets owned, leased or subleased or licensed by the
Company, or which it otherwise has the right to use, constitute all of the
properties and assets used or held for use in connection with the business of
the Company and are adequate to conduct such business as currently
conducted.  All of the Company’s properties and assets are in good working
condition and repair, ordinary wear and tear excepted, and have been maintained
in a manner consistent with generally accepted industry practice.

Section 3.07.  Absence of Certain Changes.  Except as (a) approved in writing by
the Purchaser or (b) otherwise permitted or required by this Agreement, or (c)
required by Law, any judgement, decree or order, or (d) in the ordinary course
of business and consistent with past practices, as from December 31, 2007 and up
to the date hereof, there has been:

(i) no physical damage, destruction, loss or abandonment of any asset or
property of the Company;

(ii) no acquisition, sale, assignment, transfer, lease, sublease, license or
other disposal of any asset or property of the Company;

(iii) no change in the management practices of the Company;

(iv) no change in the accounting policies and practices of the Company;

(v) no creation of any Liens on all or any portion of any asset or property of
the Company;

(vi) no amendment, modification, alteration, failure to renew or termination of
any contract;

(vii) no waiver of any rights of the Company or any cancellation of any claims,
debts or accounts receivable owing to the Company, other than in the ordinary
course of business;

(viii) no redemption of capital stock or declaration or payment of any dividends
or distributions (whether in cash, securities or other property) to the current
holders of capital stock of the Company and no other forms of transfer of funds
from the Company to its shareholders;

 
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(ix) no issuance of shares of capital stock, notes, bonds or other securities,
convertible or not into shares of capital stock, or any option, warrant or other
right to acquire the same, or any other interest in the Company;

(x) no advance or capital contribution to or investment by the Company;

(xi) no entering into any joint venture or similar arrangement by the Company;

(xii) no entering into any form of financial agreement;

(xiii) no revaluation of any tangible or intangible assets of the Company;

(xiv) no litigation, which has had or could have an adverse effect on the
Company or its financial condition;

(xv) no incurrence of any damage, destruction or similar loss, whether or not
covered by insurance;

(xvi) no material adverse change in the Company’s financial condition, business,
operations or prospects;

(xvii) no change in the labor conditions of the Employees, or increase in the
compensation or benefits or establishment of any new bonus, insurance,
severance, retirement, profit sharing, or other similar employee benefit plans
to any Employees;

(xviii) no event that could reasonably be expected to prevent or materially
delay the performance of the Sellers or the Company's obligation pursuant to
this Agreement and the consummation of the transaction contemplated herein; and

(xix) no commitment by the Sellers or the Company to do any of the foregoing.

Section 3.08.  Contracts.  (a) Exhibit 3.08 (a)(i) hereto contains a list of all
agreements entered into and executed by the Company in force as of this date.
All the agreements presently in force to which the Company is a party were
entered into and executed in the ordinary course of business, having conformed
to all the required legal formalities, are valid, binding and in full force and
effect and are enforceable against the Company. Except for those listed in
Exhibit 3.08 (a)(ii), the Company is not in default of any obligations arising
from these agreements, there is no event, occurrence, condition or act
(including the Closing of the transaction contemplated herein) which, with the
giving of notice or the lapse of time or both would become a default by the
Company.

(b) Except for the agreements described in Exhibit 3.08(b), no consent or
approval is required in order to consummate the transactions contemplated
herein, including without limitation the change of control of the Company.

 
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Section 3.09.  Guaranties.  The Company has not secured any third parties’
obligations, including obligations of the Sellers.

Section 3.10.  Litigation.  (a) Except as disclosed in Exhibit 3.10(a) hereto,
there is no, and on the Closing Date there will not be any, claim, action, suit,
investigation or proceeding (or any basis thereof) pending against, threatened
against or affecting, the Company or any of their respective properties before
any court or arbitrator or any Governmental Authority.  Except as disclosed in
Exhibit 3.10(a) hereto, the Company is not subject to any judgment, injunction,
order, decree or arbitration award. There is no, and on the Closing Date there
will not be any, claim, action, suit, litigation, investigation or proceeding
(or any basis therefor) outstanding or pending against, threatened against or
affecting the Company or any of their respective properties before any court or
arbitrator or any Governmental Authority that would prevent the Company from
entering into or implementing the transactions contemplated in this Agreement.

(b) The Sellers are not aware of any facts or circumstances which could result
in a private or governmental claim, action, suit, investigation or proceeding
(or any basis therefor) against the Company. On the Closing Date there will be
no judgement, decree or order against the Company that could prevent, enjoy, or
alter or delay any of the transactions contemplated herein.

Section 3.11.  Licenses and Permits.  Exhibit 3.11 correctly describes each
license, permit, certificate, approval or other similar authorization affecting,
or relating in any way to, the assets or business of the Company (the “Permits”)
together with the name of the Government Authority or other entity issuing such
Permit.  The Seller represents and warrants that, as of the date hereof, and on
the Closing Date (i) each Permit is valid and in full force and effect, (ii) the
Company is not in default under, and no condition exists that with notice or
lapse of time or both would constitute a default under, any Permit and (iii)
none of the Permits will be terminated or impaired or become terminable, in
whole or in part, as a result of the transactions contemplated hereby.  The
Permits constitute all of the material licenses, franchises, permits,
certificates, approvals or other similar authorization necessary to conduct the
Company’s business as currently conducted.

Section 3.12.  Intellectual Property Rights.  (a) Exhibit 3.12 contains a true
and complete list of all Intellectual Property Rights owned by the Company and
all Intellectual Property Rights used by the Company by license or other
agreement.  The Intellectual Property Rights represent all items of intellectual
property necessary to permit the Company to conduct its operations as currently
conducted. Company's Intellectual Property Rights are duly registered, or may be
the case, filed for registry, with INPI and are in good standing with all fees
and filings due as of the date hereof and the Closing Date. Company's
Intellectual Property Rights are not licensed in any way to any third party and
the use thereof by any third party is not in any way authorized.

(b) There is no claim, action, suit, investigation or proceeding (or any basis
therefor) pending against the use by the Company of any Intellectual Property
Right. Neither the Sellers nor the Company has received notice of any claims (i)
challenging the validity, effectiveness or ownership of the Intellectual
Property, or (ii) to the effect that the use, distribution, licensing,
sublicensing, sale or any other exercise of rights in any product, work,
technology or process as now used or offered or proposed for use, licensing,
sublicensing or sale by the Company infringes on or misappropriates any

 
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intellectual property or other proprietary or personal right of any Person. All
of the rights within the Intellectual Property are valid. There is no
unauthorized use, infringement or misappropriation of any Company's Intellectual
Property by any third party or by any Employee or former employee.

Section 3.13.  Taxes.  (a) Except as set forth in Exhibit 3.13 hereto, all Taxes
and Tax Liabilities of the Company for all taxable periods before the date
hereof and due until the Closing Date, were and shall be duly and timely
performed, paid or accrued for. There is no proceeding against, or audit of, the
Company now pending or threatened by any Governmental Authority regarding any
Taxes assessed on and due by the Company.

(b) Except as set forth in Exhibit 3.13 hereto: (i) the Company has filed in a
timely manner (or there has been filed on its behalf) with the appropriate
Governmental Authorities all Tax Returns required to be filed by it and all such
Tax Returns are true, complete and correct as filed; (ii) all Taxes required to
be paid by the Company (including Taxes required to be deducted or withheld and
paid over to a taxing authority) have been timely paid in full or are reflected
as Tax reserve on the Financial Statements of the Company; (iii) there are no
outstanding agreements or waivers extending the statutory period of limitations
applicable to any Taxes or Tax Returns of the Company; (iv) no audits or other
administrative proceedings or court proceedings have formally commenced or are
presently pending with regard to any Taxes or Tax Return of or including the
Company, and no notification has been received by the Company or the Seller that
such an audit or other proceeding is pending or threatened with respect to any
Taxes due from or with respect to the Company or any Tax Return filed (or
required to have been filed) by or with respect to the Company; (v) there are no
Liens for Taxes upon the assets of the Company; (vi) the Company is not a party
to, is bound by, or has any obligation under any agreement or arrangement
providing for the allocation, sharing or indemnification of Taxes or is
otherwise obligated to indemnify any party for any Taxes; and (vii) the Company
has not requested an extension of time within which to file any Tax Return in
respect of any taxable year, which Tax Return has not since been filed.

Section 3.14.  Employee Matters.  (a) Exhibit 3.14(a) hereto sets forth an
accurate and complete list of the names, titles, hiring dates, accrued vacation
time, current monthly rates of salary, bonus, employee benefits and other
compensation of all employees (including, without limitation, managers, officers
and directors) of the Company and of Prestserv, including any such employee who
is on disability leave or any other leave of absence.

(b) There is no liability of any kind with respect to amounts withheld or
deducted amounts from employees' earnings, for the period ending on or the date
hereof and there will be no liability of any kind ending on or the Closing Date.
The Company is in compliance with all Brazilian federal, state, municipal and
other applicable laws and regulations relating to the employment of labour,
including all such laws, regulations and orders relating to wages and hours,
labour relations, civil rights, safety and health, workers' compensation, and
social security and other taxes.

(c) There is no (and has not been during the last five years) labour strike,
slow down, stoppage or other material labour difficulty, actual or threatened,
against or affecting the Company.

 
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(d) The Company has established an adequate accounting reserve for all labour
obligations, dues and liabilities with respect to the period until the date
hereof. There are no overdue and payable sums owed to Employees, other than the
respective accounting provisions.

(e) Neither the Seller nor the Company is a party to, and has no obligations
under or with respect to, any collective bargaining or other labor union
contract applicable to the Employees and no collective bargaining agreement is
being negotiated by the Company that may obligate it thereunder.

Section 3.15.  Environmental Matters.  The Company has at all times been in
compliance with all applicable Environmental Laws. The Company has applied for
and received all permits required under Environmental Laws for their respective
assets and business (“Environmental Permits”) and has, and will have until the
Closing Date obtained or filed for all the Environmental Permits, approvals,
licenses and authorizations required by law to carry on the business as now
conducted by the Company. There are no pending claims in writing by any
Governmental Authority or any other person in respect of Environmental Laws
affecting the Company or the business. The Company has not received any written
notice of any violations of any Environmental Laws or has received any written
warning notices, administrative complaints, judicial complaints or other formal
or informal notices from any person alleging that conditions of the business of
the Company are, or may be, in violation of any Environmental Laws. There is not
now, nor has there ever been, any treatment, storage, disposal, discharge or
other type of release of hazardous substances on property adjacent to or near
the real properties owned and/or leased by the Company or to the surface or
ground water flowing to the real properties owned and/or leased by the Company
which has resulted in contamination of such real properties.

Section 3.16.  Insurance.  Exhibit 3.16. contains all of the insurance policies
or programs relating to the properties and assets of the Company in effect as of
the date hereof. All of such insurance policies are and will be on the Closing
Date (i) in full force and effect; (ii) underwritten by financially sound and
reputable insurers, (iii) sufficient for all applicable requirements of law; and
(iv) secure coverage in amounts and against all risks that are normal and
customary for the operation of the businesses of the Company. All of such
insurance policies will remain in full force and effect in accordance with their
terms and will not terminate or lapse by reason of any of the transactions
contemplated hereby. The Company is not in default with respect to its
obligations under any of such Insurance Policies.

Section 3.17.  Powers of Attorney.  Exhibit 3.17 hereto contains copies of all
powers of attorney granted by the Company and in full force and effect. The
powers of attorney were validly granted by the Company and in good standing
under its by-laws, and all acts executed pursuant any of the powers of attorneys
were valid and effective.

Section 3.18.  Inventory. All the inventory of the Company are in good physical
condition and are fully usable, merchantable, saleable and fit for the purpose
for which it was manufactured or produced. The Company has no obligations,
contingent or otherwise, to repurchase or replace any product it has sold other
than in the ordinary course of business. The expected costs of such repurchases
and replacements are expected to be consistent in amount and scope with prior
experience.  There is no inventory on consignment. Except for inventory in
transit in the ordinary course, the inventory is located in the main address at
the Company or in any of its branches. From

 
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the date hereof until the Closing Date the Company and the Sellers undertake to
take all the measures so as to prevent the occurrence of any changes in the
inventory of the Company out of the ordinary course of business.

Section 3.19.  No Undisclosed Liabilities.  There are no liabilities of the
Company of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, and there is no existing condition,
situation or set of circumstances that could reasonably be expected to result in
such a liability, other than (i) liabilities provided for in the Financial
Statements; or (ii) disclosed in any Exhibit attached herein.

Section 3.20.  Certain Representations with respect to the U.S.
Regulations.  Neither the Company, nor any of its Affiliates, nor any of its
current or former shareholders (directly or indirectly), directors, officers,
employees, agents or other persons acting on behalf of the Company have ever
violated or committed any act or made any payment in violation of, or that
requires disclosure under, the United States Foreign Corrupt Practices Act,
including but not limited to have offered, promised or given, or authorized or
approved the payment, gift or promise of anything of value, directly or through
a third party, to any “government official” (broadly defined to include any
official, employee or agent of an entity owned or controlled by a government,
any official or employee of a public international organization, any candidate
for political office, and any political party or party official) for the purpose
of securing any improper business advantage for the Company or any of its
Affiliates in relation to the business, including to obtain or retain business
or agreements.

Section 3.21.  Representations Complete.  None of the representations or
warranties made by the Sellers and the Company herein or in any other related
document, have or will have at the Closing Date any untrue statement, or omits
or will omit as of date hereof and at the Closing Date to state any fact
necessary in order to make the statements contained herein or therein, in the
light of the circumstances under which made, not misleading.

B)    Nordeste Empreendedor represents and warrants to the Purchaser that each
of the following representations and warranties is, as of the date hereof, and
will be, on the Closing Date, true and correct and in full force and effect:

Section 3.22.  Existence and Power.  Nordeste Empreendedor is duly organized,
validly existing and in good standing under the laws of the Federative Republic
of Brazil.

Section 3.23.  Authorization, Required Filings and Consents.  (a) The execution,
delivery and performance by Nordeste Empreendedor of this Agreement and the
consummation of the transactions contemplated hereby are duly and validly
authorized by all necessary corporate action, and no other corporate proceedings
on the part of Nordeste Empreendedor are necessary to consummate the
transactions contemplated herein.

(b) No filing or registration with, or notification by Nordeste Empreendedor to,
and no permit, authorization, consent or approval of, any Governmental Authority
is necessary for the execution and delivery of this Agreement by Nordeste
Empreendedor, or the consummation by Nordeste Empreendedor of the transactions
contemplated by this Agreement.

 
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Section 3.24.  Noncontravention.  (a) The execution, delivery and performance of
this Agreement and any other agreement or document related hereto and the
consummation of the transactions contemplated hereby by Nordeste Empreendedor do
not and will not (i) violate the organizational documents or its article of
association, (ii) conflict with or violate any Law applicable to Nordeste
Empreendedor, nor (iii) require any consent or other action by any Person.

(b) For the purposes of Section 3.04, on or prior to the Closing Date, Nordeste
Empreendedor (together with the members of the Board of Directors of the Company
holding one (1) preferred class A share of capital stock of the Company each)
agrees to sell, convey, assign, transfer and deliver to the Sellers and the
Sellers agree to purchase and acquire from Nordeste Empreendedor (and from the
members of the Board of Directors of the Company holding one (1) preferred class
A share of capital stock of the Company each) all of the 15,077 shares of class
A preferred stock jointly held by Nordeste Empreendedor and the members of the
Board of Directors of the Company, so that on the Closing Date the Seller be the
legal holder and registered owner of all the Shares, including such 15,077
preferred shares of class A stock, in the proportion set forth in Exhibit A
hereto.

ARTICLE 4
Representations and Warranties of the Purchaser

The Purchaser hereby represents and warrants to the Sellers and the Company that
each of the following representations and warranties is, as of the date hereof,
and will be, on the Closing Date, true and correct and in full force and effect:

Section 4.01.  Existence.  The Purchaser have been duly organized and is validly
existing and in good standing under the laws of its jurisdiction of
organization.

Section 4.02.  Authorization, Binding Effect.  The execution, delivery and
performance by Purchaser of this Agreement and the consummation of the
transactions contemplated hereby are within the powers of the Purchaser and have
been duly authorized by all necessary action on the part of the Purchaser. This
Agreement and Exhibits have been duly executed and delivered by the Purchaser
and, assuming the due authorization, execution and delivery by the Seller and
the Company, constitutes a legal, valid and binding obligation of the Purchaser
enforceable against it in accordance with its terms, except to the extent that
its enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors’ rights
generally.

Section 4.03.  Governmental Authorization.  The execution, delivery and
performance by the Purchaser of this Agreement and the consummation of the
transactions contemplated hereby require no action, approval, consent or
declaration by or in respect of, notice or filing with, any Governmental
Authority, agency or official.

Section 4.04.  No Conflict.  The execution and delivery of this Agreement by the
Purchaser do not, and the performance by the Purchaser of its obligations
hereunder and the consummation of the transactions contemplated herein will not,
(i) conflict with or violate any provision of its by-laws, (ii) conflict with or
violate any Law applicable thereto or by which any of its property or asset is
bound

 
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or affected or (iii) result in any breach of or constitute a default (or an
event which with the giving of notice or lapse of time or both could reasonably
be expected to become a default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or other encumbrance on any of their property or asset
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation.

Section 4.05.  Representations Complete.  None of the representations or
warranties made by the Purchaser herein contains at the date hereof or will
contain at the Closing Date any untrue statement of a material fact, or omits at
the date hereof or will omit at the Closing Date to state any material fact
necessary in order to make the statements contained herein, in the light of the
circumstances under which made, not misleading.

ARTICLE 5
Covenants of the Company, the Sellers

Section 5.01.  Conduct of Business.

(a) From the date hereof until the Closing Date, the Sellers shall cause the
Company to, and the Company shall conduct its business in the ordinary and usual
course of business. In addition to the above, the Sellers shall not take any
action that may lead the Company to cause or experience: (i) physical damage,
destruction, loss or abandonment of any asset or property of the Company; (ii)
acquisition, sale, assignment, transfer, lease, sublease, license or other
disposal of any asset or property of the Company; (iii) any change in the
management practices of the Company; (iv) any change in the accounting policies
and practices of the Company; (v) creation of any Liens on all or any portion of
any asset or property of the Company; (vi) any amendment, modification,
alteration, failure to renew or termination of any material contract; (vii)
waiver of any rights of the Company or any cancellation of any claims, debts or
accounts receivable owing to the Company, other than in the ordinary course of
business; (viii) redemption of capital stock or declaration or payment of any
dividends or distributions (whether in cash, securities or other property) to
the current holders of capital stock of the Company and no other forms of
transfer of funds from the Company to its shareholders; (ix) issuance of shares
of capital stock, notes, bonds or other securities, convertible or not into
shares of capital stock, or any option, warrant or other right to acquire the
same, or any other interest in the Company; (x) advance or capital contribution
to or investment by the Company; (xi) entering into any joint venture or similar
arrangement by the Company; (xii) entering into any form of financial agreement;
(xiii) revaluation of any tangible or intangible assets of the Company; (xiv)
litigation, which could have a material adverse effect on the Company or its
financial condition; (xv) any loss to the Company; or (xvi) any adverse change
in the Company’s financial condition, business, operations or prospects.

(b) If any of the events described above occurred or are reasonably expected to
occur, the Sellers  shall promptly give notice to the Purchaser and to the
extent possible, shall discuss with the Purchaser any action to be taken by the
Company as a result thereof.

 
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(c) Notwithstanding Section 5.01(a) above, prior to the Closing Date the Company
shall not, and the Sellers shall not cause the Company to, enter into, modify,
amend or terminate any contract having an aggregate value of more than
R$200,000.00, except as first approved in writing by the Purchaser.

Section 5.02.  Access to Information; Confidentiality.  From the date hereof
until the Closing Date, the Company, and the Sellers  will (i) from time to time
upon reasonable prior notice and during regular business hours, give the
Purchaser and its counsel, financial advisors, auditors and other authorized
representatives full access to the offices, properties, books and records
relating to the Company, (ii) furnish to the Purchaser and its counsel,
financial advisors, auditors and other authorized representatives such financial
and operating data and other information relating to the Company as such Persons
may reasonably request and (iii) instruct the employees, counsel and financial
advisors of the Sellers or the Company to cooperate with the Purchaser in its
investigation of the Company. No investigation by the Purchaser or its counsel,
financial advisors, auditors or any other person or other information received
by the Purchaser or its counsel, financial advisors, auditors or any other
person shall operate as a waiver or otherwise affect any representation,
warranty or agreement given or made by the Company or the Sellers hereunder.

Section 5.03.  Exclusive Dealing.  From the date hereof until the Closing Date,
the Company, the Sellers  shall cause their respective shareholders, officers,
directors, employees, agents, representatives, financial advisors, attorneys,
accountants and other agents to, as applicable, refrain from taking any action,
directly or indirectly, to encourage, initiate, solicit or engage in discussions
or negotiations with, or provide any information to, any Person, other than the
Purchaser and its respective Affiliates, concerning any direct or indirect sale
of the capital stock of the Company or any merger, sale or transfer of assets or
similar transaction involving the Company. The Company and the Sellers further
agrees that, in the event of a breach of or a default under this Section 5.03,
the remedies foreseen in Article 10 would be insufficient and that the aggrieved
Party shall be entitled to (i) specific performance to enjoin any breach, or the
continuation of any breach, of the provisions of this Section 5.03 and (ii) a
punitive penalty (multa punitiva não-compensatória) for each of the violating
party and for each violation individually the amount of R$500,000.00 (five
hundred thousand Reais).

Section 5.04.  Certain Employees.   The Sellers shall continue in their current
positions with the Company until December 31, 2011, and they shall cause Elton
to serve as a manager of the Company until December 31, 2011, pursuant to the
terms and conditions set forth in the Management Agreements to be executed on
the Closing Date, substantially in the form of Exhibit 5.04 hereto and upon
payment of a market salary.

ARTICLE 6
Covenants of the Company, the Sellers and the Purchaser

Section 6.01.  Best Efforts; Further Assurances.  Subject to the terms and
conditions of this Agreement, the Parties hereto will use their respective best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary or desirable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement, including but not

 
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limited to the Purchaser’s obligation of using its best efforts to obtain and
deliver to Wachovia Bank, National Association all the documents listed in
Exhibit 6.01, for the purposes of meeting the condition set forth in Section
7.02(k). The Parties agree to cause the Company to execute and deliver all such
documents, certificates, agreements and other writings and to take such other
actions as may be necessary or desirable in order to consummate or implement
expeditiously the transactions contemplated by this Agreement.

Section 6.02.  Confidentiality.  From and after the date hereof, the Parties
agree to hold, and to use their best efforts to cause their Affiliates and
respective officers, directors, employees, accountants, counsel, consultants,
advisors and agents to hold, in confidence, any and all information regarding
the terms and conditions of this Agreement, any financial, Tax-related or
commercial information of the Parties (“Confidential Information”).  The terms
and conditions of this Agreement may only be disclosed in the event that any of
the Parties is compelled to disclose such information by law, rule, regulation,
order or decree enacted by a Governmental Authority to which the Party is
subject or as a result of judicial or administrative process in connection with
any action, suit, proceeding or investigation.  In any event the terms and
conditions of this Agreement are disclosed, the Party concerned shall take all
such steps as may be reasonable in the circumstances to agree the contents of
such disclosure with the other Party before making such disclosure.

Section 6.03.  Certain Filings.  The Parties agree to cooperate with one another
(i) in determining whether any action by or in respect of, or filing with, any
governmental body, agency, official or authority is required, or any actions,
consents, approvals or waivers are required to be obtained from parties to any
material contracts, in connection with the consummation of the transactions
contemplated by this Agreement and (ii) in taking such actions or making any
such filings, furnishing information required in connection therewith and
seeking timely to obtain any such actions, consents, approvals or waivers.

Section 6.04.  Public Announcements.  The Parties agree to consult with each
other before issuing any press release or making any public statement with
respect to this Agreement or the transactions contemplated hereby and, except
for any press releases and public statements the making of which may be required
by applicable law or any listing agreement with any national securities
exchange, will not issue any such press release or make any such public
statement prior to such consultation.

ARTICLE 7
Conditions to Closing

Section 7.01.  Conditions to Obligations of the Purchaser and the Sellers.  The
obligations of the Purchaser and the Sellers to consummate the Closing are
subject to the satisfaction of the following conditions:

(a) There shall not be threatened, instituted or pending any action or
proceeding challenging this Agreement or the transactions contemplated hereby,
or seeking to prohibit, alter, prevent or materially delay the Closing by any
Person before any court, arbitrator or governmental body, agency or official.

 
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(b) No provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit the consummation of the Closing.

(c) All actions by or in respect of or filings with any governmental body,
agency, official or authority required to permit the consummation of the Closing
shall have been taken, made or obtained.

Section 7.02.  Conditions to Obligation of the Purchaser.  The obligation of the
Purchaser to consummate the Closing is subject to the satisfaction (or waiver by
Purchaser) of the following further conditions:

(a) (i) Each of the Sellers shall have performed in all material respects all of
its obligations hereunder required to be performed by it on or prior to the
Closing Date, (ii) the representations and warranties of the Sellers contained
in this Agreement and in any certificate or other writing delivered pursuant
hereto (A) that are qualified by materiality or material adverse effect shall be
true at and as of the Closing Date as if made at and as of such date, and (B)
that are not qualified by materiality or material adverse effect shall be true
in all material respects at and as of the Closing Date as if made at and as of
such time, (iii) the Purchaser shall have received a certificate signed by each
of the Sellers to the foregoing effect and such other information as the
Purchaser may reasonably request to determine the satisfaction of this
condition.

(b) There shall not be threatened, instituted or pending any action or
proceeding by any Person before any court or governmental authority or agency,
domestic or foreign, (i) seeking to restrain, prohibit or otherwise interfere
with the purchase and sale of the Shares or the ownership or operation by the
Company or the Purchaser of all or any material portion of the business or
assets of the Company or of the Purchaser or any of their respective Affiliates
or to compel the Company or the Purchaser or any of their respective Affiliates
to dispose of all or any material portion of the business or assets of the
Company or of the Purchaser or any of their respective Affiliates, (ii) seeking
to impose or confirm limitations on the ability of the Purchaser effectively to
exercise full rights of ownership of the Shares, including without limitation,
the right to vote all additional Shares on all matters properly presented to the
Company’s stockholders or (iii) seeking to require divestiture by the Purchaser
of any Shares.

(c) There shall not be any action taken, or any statute, rule, regulation,
injunction, order or decree proposed, enacted, enforced, promulgated, issued or
deemed applicable to the acquisition of the Shares, by any court, government or
governmental authority or agency, domestic or foreign, that, in the reasonable
judgment of the Purchaser could, directly or indirectly, result in any of the
consequences referred to in clauses 7.02(b)(i) through 7.02(b)(iii) above.

(d) The Purchaser shall have received evidence establishing that, at the time of
the Closing the representations and warranties contained in Section 3.04 shall
be true and correct in all respects.

(e) The Purchaser shall have received all documents it may reasonably request
relating to the existence of the Sellers and the authority of the Sellers to
execute, deliver and perform this Agreement, all in form and substance
satisfactory to the Purchaser.

 
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(f) All obligations, agreements, contracts, powers of attorney, plans, leases,
arrangements and commitments owed between any Affiliate, on the one hand, and
the Company, on the other hand, as of the Closing shall have been settled or
terminated.

(g) The Purchaser shall have received the following clearance certificates in
the name of the Seller and the Company: (i) Debt Clearance Certificate - CND
issued by the Instituto Nacional do Seguro Social (Brazilian Social Security
Institute - INSS); (ii) Federal Taxes Clearance Certificate issued by the
Secretaria da Receita Federal (Brazilian Federal Revenue Office); (iii)
Clearance Certificate - CRS issued by the Fundo de Garantia por Tempo de Serviço
(Brazilian Unemployment Compensation Fund - FGTS).

(h) The Purchaser shall have received (a) a written resignation from each one of
the members of the Board of Directors of the Company, and (b) a written release
from each member of the Board of Directors of the Company, releasing the Company
from any and all obligations or liabilities that may be owed by the Company to
such member in its capacity of member of Board of Directors and individual
shareholder of the Company.

(i) The Purchaser shall have received evidence that the Company has obtained all
the consents and approvals listed in Exhibit 3.08(b).

(j) The Purchaser shall have been satisfied, in its sole discretion, with the
results of its legal, accounting, labor, tax and business due diligence review
of the Company, including, without limitation, the operation, business, assets,
working capital, liabilities and prospects of the Company and any Affiliates
thereof.

(k) Wachovia Bank, National Association shall have disbursed the loan
contemplated by the $30,000,000 Second Amended and Restated Promissory Note and
the Third Modification to Note and Loan Agreement and Reaffirmation of Guaranty,
among Lakeland, National Association Bank and others.

ARTICLE 8
Closing

Section 8.01.  Closing.  Subject to the terms and conditions set forth herein,
and the satisfactory completion (or waiver) of each of the conditions precedents
contemplated in Article 7 above, the closing of the deal contemplated by this
contract ("Closing") shall take place at the offices of Mattos Filho, Veiga
Filho, Marrey Jr. e Quiroga, at Alameda Joaquim Eugênio de Lima, 447, in the
City of São Paulo, State of São Paulo, on May 9th, 2008 (“Closing Date”).

Section 8.02.  Closing Transactions.  On the Closing Date, the following actions
shall be taken by the Parties, all of which considered to have taken place
simultaneously ("Closing Transactions"):

 
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(i) The Purchaser shall pay to the Sellers the Purchase Price less the Retained
Amount, in Reais, by wire transfer, in immediately available funds, to the
Sellers’ bank account in Brazil, designated in Exhibit 2.03, and cause the
Company to pay all the Outstanding Debts with due regard for item 2.07.

(ii) The Parties shall hold a shareholders' meeting in the form contained in
Exhibit 8.02(ii) hereto in order to accept the resignation of actual members of
Board of Director of the Company and elect the new members of the Board of
Directors, to be appointed by the Purchaser.

(iii) The Purchaser shall deposit the Retained Amount with the Escrow Agent upon
execution and delivery of the Escrow Agreements, substantially in the form of
Schedule 2.04 hereto.

(iv) The Sellers and the Purchaser shall execute in the share transfer book
(livro de transferência de ações nominativas) of the Company deeds of transfer
of 1,492,624 shares of common stock and 15,077 shares of preferred stock,
representing, in the aggregate, 100% of the Company’s voting and total capital
stock, free and clear of any Liens, together with all documents reasonably
required to transfer assign and deliver title to such Shares to the Purchaser.

(v) The Company and Miguel, Marcia, Elder and Elton shall execute and deliver
the Management Agreements contemplated by Section 5.04.

(vi) The Company and Wachovia Bank, National Association  shall execute and
deliver certain collateral agreements on terms and conditions to be mutually
agreed by the Purchaser and Wachovia Bank, National Association , pursuant to
which the Company shall grant a first priority security interest in and to all
of its assets to secure the payment of all amounts required to be paid under the
Third Modification to Note and Loan Agreement and Reaffirmation of Guaranty,
among Lakeland, Wachovia Bank, National Association and others.

(vii) Each Party shall confirm that all the representations and warranties given
by them are true and correct as of the Closing Date; and that there has not been
any breach of the representations and warranties given by each Party nor of any
covenant pursuant to this Agreement.

ARTICLE 9
Post-Closing Obligations

Section 9.01.  Employees of Prestserv.  Within six (6) months from the Closing
Date, the Parties shall negotiate in good faith the terms pursuant to which the
Company shall absorb the employees of Prestserv associated with the activities
of production and manufacture of personnel equipment of the Company. The Parties
shall agree on terms that are less burdensome to the Company.

Section 9.02.  Non Compete and Non-Solicitation.  (a) Each of the Sellers agrees
that for a period of seven (7) years from the Closing Date (or 7 (seven) years
from the termination of the relevant Management Agreements, whichever occurs
later), it shall not, directly or indirectly (i) provide consulting or other
services to, serve as a director or other advisor to, maintain any employee
relationship with, or make any loan, extend credit to, or have any ownership
interest in, any Person that competes with the Business or operates a business
similar to the Business within the territory of

 
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Brazil, (ii) solicit any Person not to conduct business with the Company, the
Purchaser or their respective Affiliates or to conduct its business with any
Person that operates a business similar to the Business within the territory of
Brazil or otherwise interfere with such customer relationship.

(b) None of the Sellers shall directly or indirectly, and the Sellers shall
cause any of their respective Affiliates or Persons in which they have or may
have an equity interest, not to directly or indirectly, at any time prior to the
7th (seventh) anniversary of the Closing Date, solicit (x) any Person who is
offered employment by the Company or their respective Affiliates, not to accept
such offer of employment or (y) any Person who is employed by the Company or
their Affiliates, to leave the employment in the Company or their Affiliates and
to work for, or to form a new entity with any Person.

(c) Each of the Sellers hereby acknowledges and agrees that the provisions of
this Section 9.02 are reasonable and necessary for the Company, the Sellers, the
Purchaser and their respective Affiliates’ protection and that if any portion
thereof shall be held contrary to Law or invalid or unenforceable in any respect
in any jurisdiction, or as to one or more periods of time, areas of business
activities, or any part thereof, the remaining provisions shall not be affected
but shall remain in full force and effect and that any such invalid or
unenforceable provision shall be deemed, without further action on the part of
any Person, modified and limited to the extent necessary to render the same
valid and enforceable in such jurisdiction. Each of the Parties further agrees
that, in the event of a breach of or a default under this Section 9.02, the
remedies foreseen in Article 10 would be insufficient and that the aggrieved
Party shall be entitled to (i) specific performance to enjoin any breach, or the
continuation of any breach, of the provisions of this Section 9.02 and (ii) a
punitive penalty (multa punitiva não-compensatória) for each of the violating
party and for each violation individually considered in the amount of
R$500,000.00 (five hundred thousand Reais), being such penalty exclusively due
by the defaulting Seller.

Section 9.03.  Access to Books and Records.  On and after the Closing Date, the
Sellers will afford promptly to the Company, the Purchaser, Lakeland and their
respective agents reasonable access to its books of account, financial and other
records (including, without limitation, accountant’s work papers), information,
employees and auditors to the extent necessary or useful for the Company, the
Purchaser or Lakeland in connection with any audit, investigation, dispute or
litigation or any other reasonable business purpose relating to the Company.

Section 9.04.  Non-disparagement. From the date hereof until the termination
hereof, Sellers will not, and will not permit any of their respective
Affiliates, to knowingly make any statement, written or oral, which disparages
or is derogatory to the Company in any communications with any Person.

ARTICLE 10
Indemnification

Section 10.01.  Indemnification.  Subject to Sections 10.02 and 10.03 below,
each Party hereby agrees to indemnify and hold the other Party, the Company and
its shareholders, officers, directors and employees, and their respective
Affiliates and successors (“Indemnified Parties”), harmless from any and all
liability, loss, damage, fine, penalty, partially or totally non-existing assets
or receivables,

 
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claims, awards, judgments, costs and expenses (including reasonable fees and
expenses of attorneys) (“Losses”) incurred or suffered by any of the Indemnified
Parties in connection with, relating to or as a result of (i) any misdisclosure,
inaccuracy, untruthfulness, violation or breach of any representations and
warranties given in this Agreement; and/or (ii) any breach  of any covenant or
agreement contained in this Agreement. Additionally, the Sellers hereby agree to
indemnify and hold the Indemnified Parties, harmless from any and all Losses
incurred or suffered by any of the Indemnified Parties in connection with,
relating to or as a result of any and all debts and liabilities of any kind
(tax, labour, civil, environmental etc.), including but not limited to those
related to judicial or administrative procedures, resulting from any act or
omission, fact, event or circumstance related to the Company or its business
that occurred on or prior to the Closing Date, which have not been recorded in
the Financial Statements, whether or not known by the Sellers and whether or not
included in the Exhibits hereto attached, or which, if recorded in the Financial
Statements, are not adequately provisioned in the Company’s accounting records.

Section 10.02.  Survival of Indemnity Obligation.  The obligation to indemnify
pursuant to this Article 10 shall remain in full force and effect for the
survival periods of the indemnification obligations according to the applicable
law.

Section 10.03.  Indemnification Procedures.  (a) In the event that any action,
suit, proceeding, demand, assessment or other notice of claim (“Claim”) is at
any time instituted against or made upon any Indemnified Party for which
indemnification may be due from the Sellers pursuant to Section 10.01 above,
such Indemnified Party shall notify the Sellers of the assertion of any claim,
or the commencement of any suit, action or proceeding in respect of which
indemnity may be sought under this Agreement. The Sellers shall have the right,
at its election, to take over the defense of such claim by giving written notice
to the Indemnified Party at least 5 (five)  Business Days prior to the time when
an answer or other responsive pleading or notice with respect thereto is
required. If the Sellers make such election, they may conduct the defense of
such claim through counsel reasonably acceptable to the Indemnified Party, shall
be solely responsible for the expenses of such defense and shall be bound by the
results of its defense or settlement of the claim; provided, that if the
Indemnified Party shall have concluded that there may be legal defenses
available to it which are different from or in conflict with those available to
the Seller, the Indemnified Party shall have the right to select separate
counsel (reasonably acceptable to the Sellers) to assume such legal defenses or
to otherwise participate in the defense of such action at the expense of the
Sellers. The Sellers shall not settle any such claim without prior notice to and
consultation with the Indemnified Party, and no such settlement which might have
an adverse effect on the Indemnified Party may be agreed to without the written
consent of the Indemnified Party. So long as the Sellers are diligently
contesting any such claim in good faith, the Indemnified Party may pay or settle
such claim only at its own expense; provided, that the Seller shall not be
obligated to indemnify the Indemnified Party in connection with any such payment
or settlement unless the Seller shall have consented thereto, such consent not
to be unreasonably withheld. If the Sellers do not make an election to take over
defense or settlement of a claim, or having made such election does not, in the
reasonable opinion of the Indemnified Party, proceed diligently to defend such
claim, then the Indemnified Party may (after written notice to the Seller
Party), at the expense of the Sellers, take over the defense of and proceed to
handle such claim in its discretion and the Sellers shall be bound by any
defense or settlement that the Indemnified Party may make in good faith.

 
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(b) The Party responsible for the conduct of the defense of a lawsuit or
arbitration proceeding shall provide the other Party with copies of the main
court or arbitration filings (peças processuais) as well as quarterly reports
regarding the conduct of the defense, which shall include, among others, the
status and the analysis of the probability of success of such defense.

Section 10.04.  Cooperation.  The Parties agree to cooperate in defending such
claims and the Sellers, the Company and the Indemnified Party shall provide any
information necessary to the other party and such access to its books, records
and properties as any Seller or Indemnified Party shall reasonably request with
respect to any matter for which indemnification is sought thereunder; and the
parties hereto agree to cooperate with each other in order to ensure the
adequate defense thereof. Any information obtained under these provisions shall
be deemed confidential and its use in relation to any third party or any claim
shall be used upon and in accordance with a prior written agreement between the
Indemnified Party and the Seller.

Section 10.05.  Due Date.  (a) With regard to third party claims for which
indemnification is payable hereunder such indemnification (and not expenses and
similar costs, which become due as and when incurred) shall become due by the
Seller upon the earlier to occur of: (i) the entry of a judgment against the
Indemnified Party and the expiration of any applicable appeal period, or if
earlier, five Business Days  after the date that the judgment creditor has the
right to execute the judgment; (ii) the entry of an unappealable judgment or
final appellate decision against the Indemnified Party; or (iii) a settlement of
the claim in accordance with the preceding paragraphs.  Notwithstanding the
foregoing, the reimbursement of expenses, fees and similar costs of the
Indemnified Party shall be due on a current basis by the Sellers if such
expenses are a liability of the Sellers. With regard to other claims for which
indemnification is payable hereunder, such indemnification shall be due promptly
by the Sellers upon demand by the Indemnified Party.

(b) Any amounts to be indemnified by a Party to another Party shall be duly
adjusted by the CDI from the date any of the Losses are effectively incurred,
suffered or paid by the Indemnified Party until the date the respective
indemnification is paid by the Sellers. All payments to be made by the Sellers
pursuant to this Article 10 that are not paid after due date or a valid demand
for payment is made (whichever is earlier) shall continue to be adjusted by the
CDI from the date any such amount is due until the date of the respective
payment. Additionally, the Seller shall pay a punitive penalty (multa punitiva
não-compensatória) of 2% (two per cent) over the outstanding amount duly
adjusted by CDI, as described above.

Section 10.06.  Guarantee (”Fiança”). To secure the payment of all amounts
required to be paid by the Sellers under this Agreement, with interest at the
rates set forth herein, and the full performance by the Sellers of all of the
other terms, covenants and obligations set forth herein, the Sellers, with the
consent of their spouses, hereby irrevocably and irreversibly, jointly and
severally, guarantee the Sellers’ obligation to pay any indemnity under this
Article 10, waiving all benefits under Articles 827, 834, 835, 836, 837,837, 838
and 839 of the Brazilian Civil Code.

 
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ARTICLE 11
Termination

Section 11.01.  Right to Terminate.  This Agreement may be terminated at any
time prior to the Closing without liability or penalty to any of the Parties:

(i) by the mutual written consent of the Parties;

(ii) by either Party in the event that any Governmental Authority shall have
issued an order, decree or ruling or taken any other action restraining or
otherwise prohibiting the transactions contemplated by this Agreement and such
order, decree, ruling or other action shall have become final and unappealable;
and

(iii) by either Party in the event that the Closing does not occur until 9th May
2008, so as long as the terminating Party is not in breach of any of its
representations, warranties, covenants or agreements hereunder before the
termination.

Section 11.02.  Effects of Termination.  In the event of termination of this
Agreement as provided in Section 11.01, this Agreement shall immediately become
void and there shall be no liability on the part of any Party to this Agreement,
except that:

(i) the obligations under Sections 6.02, 12.01 and 13.06 will survive; and

(ii) nothing in this Article 11 shall relieve either Party from liability for
any breach, failure to perform or comply with this Agreement which has given the
right to the other Party to exercise the right of termination pursuant to
Section 11.1 of this Agreement.

Section 11.03.  Remedies.  (a) At any time prior to the Closing, either Party
may:

(i) extend the time for the performance of any of the obligations or other acts
of the other Party;

(ii) waive any inaccuracies in the representations and warranties contained in
this Agreement or in any document delivered pursuant to this Agreement; or

(iii) waive compliance with any of the agreements or conditions contained in
this Agreement.

(b) This Agreement may only be terminated prior to Closing and in accordance
with Section 11.01 of this Agreement.  After the Closing has taken place, the
indemnification rights provided for in Article 10 of this Agreement shall be the
sole and ultimate remedy available to the Parties with respect to any breach of
the representations and warranties of the Parties in this Agreement, and/or any
breach of any covenant or other term in this Agreement.

ARTICLE 12
Dispute Resolution

 
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Section 12.01.  Arbitration.  (a) Any dispute arising between the Parties in
connection with this Agreement, its interpretation, validity, performance,
enforceability, breach or termination, shall be settled in an amicable way by
the Parties by direct negotiations held in good faith for a term not exceeding
30 (thirty) calendar days.

(b) If, upon expiration of the 30-day period, the Parties have not reached an
amicable settlement, the dispute must be submitted to the decision of an
arbitration panel and shall be finally settled under the rules of Arbitration of
the Chamber of Commerce Brasil-Canadá (“CCBC”) by 3 (three) arbitrators
appointed in accordance with the said rules. Language of the proceeding shall be
English. Place of arbitration and the issuance of the award shall be the City of
São Paulo, State of São Paulo, Brazil. The claims and disputes taken before the
arbitration proceeds shall be solved according to Brazilian law, which will also
be applicable to solve any controversy regarding this arbitration Article.
Notwithstanding the arbitration provisions above, the Parties hereto shall have
the right to go to court in the County of São Paulo in order to (i) obtain
injunctive relief or (ii) to enforce the submission of the other Party to the
arbitration proceeding.

ARTICLE 13
Miscellaneous

Section 13.01.  Binding Effect. This Agreement will be binding and inure to the
benefit of the Parties, their respective legal successors and permitted
assignees.

Section 13.02.  Assignability.  The rights and obligations set forth in this
Agreement must not be assigned, except for (i) the right of the Purchaser to act
through any Affiliate incorporated in Brazil or elsewhere; or (ii) with the
written consent of the other Parties.

Section 13.03.  Severability. In case any term or provision set forth in this
Agreement is considered invalid, illegal or not applicable, due to any legal
provision or final court decision, all the other conditions and provisions
hereto will remain in full force and effect. In case any term or provision is
considered invalid, illegal or inapplicable, the Parties will negotiate, in good
faith, the amendment of this Agreement, so as to effect the original intent of
the Parties hereto as closely as possible.

Section 13.04.  Waiver; Amendment.  (a) No failure of delay in exercising any
right, power or privilege hereunder will be considered as a waiver thereof, nor
will any single or partial exercise thereof prevent the future exercise thereof
or the exercise of any other right, power or privilege. The rights and legal
measures set forth herein will be cumulated and will not prevent any other
rights or legal measures set forth in the law or in this Agreement.

(b) Any provision of this Agreement may only be amended or waived if through
written form and signed by all the Parties hereto.

Section 13.05.  Notices.  All notices and communications required or allowed
pursuant to this Agreement, will be made in written form, in English, and will
be sent by registered mail, by fax (receipt confirmed) or e-mail (receipt
confirmed), to the following addresses:

 
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If to the Purchaser:

Lakeland Industries Inc.
701 Koehler Avenue, suite 7
Ronkonkoma, NY 11779, USA
Fax: 631-981-9751
At.: Garry Pokrassa and Christopher J. Ryan
e-mail: GAPokrassa@lakeland.com and CJRyan@lakeland.com

if to the Sellers:

Miguel Antonio dos Guimarães Bastos
Condominio Encontro das Águas, Quadra I, Lote 39
42700-000 – Lauro de Freitas - BA
Fax: 55 71 3390-3013
E-mail: mgb@qualytextil.com.br

Elder Marcos Vieira da Conceição
Rua Clarival do Prado Valladares, 371, Condomínio Monte Trianon
Bairro Caminho das Arvores, CEP 41820-700
Salvador, BA
Fax: 55 71 3390-3013
E-mail: marcos.vieira@qualytextil.com.br

Márcia Cristina Vieira da Conceição Antunes
Alameda Cabo Frio, Quadra 34, Lote 10
Bairro Praias do Flamengo, CEP 41603-115
Salvador, BA
Fax: 55 71 3390-3013
E-mail: marciaantunes@qualytextil.com.br

if to the Company:

Qualytextil S.A.
Rua do Luxemburgo, 260
41.230-130  Salvador BA
Fax: (55 71) 3390-3001
At. Miguel Antonio dos Guimarães Bastos
e-mail: mgb@qualytextil.com.br
with copy to the Purchaser.

The Parties are entitled to amend, by means of written communication, pursuant
to this Section 13.05, the addresses above.

 
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Section 13.06.  Expenses.  All costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby will be paid by the
Party incurring such cost or expense.

Section 13.07.  Counterparts.  This Agreement may be signed in any number of
counterparts, each of which will be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

Section 13.08.  Entire Agreement. This Agreement (including the Exhibits
attached hereto) constitute the entire agreement between the Parties with
respect to the subject matter of this Agreement and supersede all prior
agreements, understandings and offers, both oral and written, between the
Parties with respect to the subject matter of this Agreement.

Section 13.09.  Language. This Agreement is being executed in the English
language. The version in the Portuguese language, a copy of which is attached
hereto as Exhibit 13.09, is only for reference of the Parties. In the event of
any discrepancy between the English and Portuguese versions of this Agreement,
the English version of the Agreement shall prevail.

Section 13.10.  Applicable Law.  This Agreement is governed and interpreted in
accordance with the laws of the Federative Republic of Brazil.

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed by their respective authorized officers, as of the day and year first
above written, in the presence of the two witnesses named below.

São Paulo, May 2, 2008.
                   
LAKELAND DO BRASIL EMPREENDIMENTOS E PART. LTDA.
         
By:
/s/ Jose Tavares Lucena
     
Name:
Jose Tavares Lucena
     
Title:
Administrator
                         
LAKELAND INDUSTRIES, INC.
         
By:
/s/ Gary A. Pokrassa
     
Name:
Gary A. Pokrassa
     
Title:
CFO
                         
MIGUEL ANTONIO DOS GUIMARÃES BASTOS
         
By:
/s/ Miguel Antonio Dos Guimaraes Bastos

 
 
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ELDER MARCOS VIEIRA DA CONCEIÇÃO
         
By:
/s/ Elder Marcos Vieira Da Conceicao
                             
MÁRCIA CRISTINA VIEIRA DA CONCEIÇÃO ANTUNES
By:
/s/ Marcia Cristina Vieira Da Conceicao Antunes
                   
NORDESTE EMPREENDEDOR FUNDO MÚTUO DE INV. EM EMP. EM.
         
By:
       
Name:
       
Title:
                 
By:
       
Name:
       
Title:
                           
QUALYTEXTIL S.A.
                             
By:
/s/ Miguel G. Bastos
 
By:
/s/ Elder Marcos Vieira da Conceicao
Name:
Miguel G. Bastos
 
Name:
Elder Marcos Vieira da Conceicao
Title:
CFO
 
Title:
CEO
                                                                     
CONCEIÇÃO MARIA PASSOS DE QUEIROZ
         
By:
/s/ Conceicao Maria Passos De Queiroz
                   
ELTON DE CARVALHO ANTUNES
         
By:
/s/ Elton De Carvalho Antunes

 
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WITNESSES:
               
1.
 
2.
Name:
 
Name:
ID:
 
ID:

 
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