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Exhibit 10.18

INVENTORY PLEDGE AND SECURITY AGREEMENT

This Pledge and Security Agreement (the “Agreement”) is made as of May 13, 2008
by and among:

Wachovia Bank, National Association, duly organized and existing in accordance
with the laws of New York, with its registered office at 12 East 49th Street,
43rd Floor, New York, New York  10017, represented in accordance with its
corporate documents,(the “Bank”);

Qualytextil S/A, duly organized and existing in accordance with the laws of
Brazil, with its registered office in the City of Salvador, State of Bahia, at
Rua Luxemburgo, s/nº, Loteamento Granjas Rurais, Presidente Vargas, Quadra O,
Lotes 82 and 83, São Caetano, Brazil, enrolled with the Brazilian Taxpayers Roll
of the Ministry of Finance (CNPJ/MF) under no. 04.011.170/0001-22, herein duly
represented in accordance with its Charter Documents, together with its
successors and permitted assigns (the “Qualytextil”); and

As Intervening and Consenting Parties:

Lakeland do Brasil Empreendimentos e Participações Ltda., a company duly
organized and existing in accordance with the laws of Brazil, with its
registered office at Avenida Bernardino de Campos, nº 98, sala 09, 14º andar,
São Paulo – SP, Brazil, enrolled with the Brazilian Taxpayers Roll of the
Ministry of Finance (CNPJ/MF) under no. 09.484.003/0001-12, herein duly
represented in accordance with its Articles of Association, together with its
successors and permitted assigns (the “Lakeland Brazil”); and

Lakeland Industries, Inc, duly organized and existing in accordance with the
laws of Delaware, with its registered office at 701-07 Koehler Avenue,
Ronkonkoma, 11779, herein duly represented by its Chief Financial Officer, Mr.
Christopher J. Ryan and Gary Pokrassa (the “Lakeland”).

W I T N E S S E T H:

WHEREAS, pursuant to the Loan Agreement, dated July 7, 2005, as amended by the
Third Modification Agreement and Reaffirmation of Guaranty dated of even date
hereof entered into by and between Lakeland and the Bank (as amended,
supplemented, restated or otherwise modified and in effect from time to time the
“Credit Agreement”), the Bank has agreed to loan to Lakeland a $ 30,000,000
revolving line of credit to be used for the purchase by Lakeland Brazil of the
totality of shares of Qualytextil;

 
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WHEREAS, after the execution of a Share Purchase Agreement by and among
Lakeland, Lakeland Brazil, Qualytextil, and its shareholders, Lakeland Brazil
shall be the legal owner of 1,507,701 shares representing, in the aggregate,
100% of the capital stock of Qualytextil;

WHEREAS, it is a condition precedent of the Credit Agreement that Lakeland
causes to be created in favor of the Bank, a security interest over the
inventory of Qualytextil in all of its forms (as defined in Section 1.01.) to
secure Lakeland’s obligations arising from the Credit Agreement;

WHEREAS Qualytextil have agreed to pledge its inventory in all of its forms in
favor of the Bank;

NOW, THEREFORE, in consideration of the foregoing premises and mutual covenants
contained herein, the parties hereto agree as follows:

ARTICLE I - The Pledge

1.01.         Pledge; Grant of Security Interest. (a) In order to secure the
full and prompt payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of all the obligations under the Credit
Agreement, (and which Lakeland hereby acknowledges and recognizes for all legal
purposes), Qualytextil hereby unconditionally and irrevocably pledges to the
Bank all its inventory in all of its forms as described in Annex II, located at
the places specified therein (each, a “Location”) including, without limitation,
(i) all raw materials, work in process, finished goods and materials used or
consumed in the manufacture, production, preparation or shipping thereof, (ii)
goods in which Qualytextil has an interest in mass or a joint or other interest
or right of any kind (including, without limitation, goods in which Qualytextil
has an interest or right as consignee) and (iii) goods that are returned to or
repossessed or stopped in transit by Qualytextil, and all accessions thereto and
products thereof and documents therefore (any and all such property being the
"Inventory");

(b)           Furthermore, Qualytextil agrees with the creation of a security in
favor of the Bank, regarding other goods owned by Qualytextil, in substitution
for any good that belongs to the Inventory that had been sold during the term of
this Agreement, in whole or in part (the “Substitute Goods”), as security for
all present and future debts of Lakeland and all payments of any nature due to
the Bank. For this purpose, every six (6) months, Qualytextil undertakes to send
to the Bank a notice, substantially in the form of Annex III hereto (the “Notice
of Pledge”), specifying  the  products in  the Inventory which were sold during
this period and that were  substituted.

(c)           Notwithstanding the Notice of Pledge above stated, since the
moment of sale of any product in the Inventory as described in Annex II, the
Substitute Goods shall forthwith be subject to all of the clauses, terms and
conditions of this Pledge Agreement.

(d)           In case of Substitute Goods as stated in Section 1.01.(b) above,
each three (3) Notices of Pledge delivered by Qualytextil to the Bank , the
Parties shall promptly (i) execute an amendment to this Agreement (the
“Amendment”) in order to extend the lien created hereunder

 
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to such Substitute Goods, and (ii) provide the required filings and register the
pledge of such Substitute Goods in accordance with the provisions of Section
1.01. hereof or take such other actions as may otherwise be required by
applicable law to extend such lien;

(e)           The Inventory pledged hereunder, including the Substitute Goods to
be pledged shall remain in the possession of Qualytextil until the sale of any
of its products.

1.02.         Definitions: Interpretation. Capitalized terms used herein shall
have the same meanings ascribed to them in the Credit Agreement.

ARTICLE II – SECURED OBLIGATIONS

2.01.         The Debt: For the purposes of Section 1,424 of the Brazilian Civil
Code, this Agreement shall cover, fully and without restrictions, any and all
debts and monetary liabilities of Lakeland to the Bank in relation to the Credit
Agreement and irrespective of whether of such debts or liabilities: (i) are
present or future; (ii) are actual, prospective, contingent or otherwise; (iii)
are owed or incurred as principal, interest, fees, charges, taxes, duties or
other imposts, damages (whether for breach of contract or tort or incurred on
any other ground), losses, costs or expenses (including judicial costs and
attorney’s fees) or on any account; (v) are owed at stated maturity, upon
prepayment, following acceleration or otherwise; or (vi) comprise any
combination of the above (the “Secured Obligations”). The total estimated
principal amount of the Secured Obligations, the final maturity date and the
interest rates provided in the Credit Agreement for such Secured Obligations
are, on this date, those set forth in Annex I hereof.

ARTICLE III - REPRESENTATIONS AND WARRANTIES

3.01.        Representations and Warranties. Qualytextil represents and warrants
to the Bank as of the date hereof, as of the date of any Amendment and as of the
date of any other date that the following representations and warranties are
required to be made or are deemed to be made pursuant to this Agreement, to the
Credit Agreement or any other financing document, that:

(a)           Qualytextil is a corporation duly organized and validly existing
and in good standing under the laws of Brazil, and they have all requisite
corporate power, authority and legal right under the laws of such jurisdiction
to enter into and perform their obligations under this Agreement;

(b)           Other than the registration provided in Section 8.01. no consent,
approval, authorization or other action by, and no notice to or of, or
declaration or filing with, any governmental or other public body, or any other
person, is required for (i) the due authorization, execution, delivery, validly
enforceability of this Agreement and the performance by Qualytextil  of its
obligations hereunder or the consummation of the transactions contemplated
hereby; (ii) the creation, perfection or maintenance of the first priority lien
created hereby; and (iii) the

 
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exercise by the Bank of its rights under this Agreement or the remedies with
respect of the Inventory pledged herein;

(c)           Annex II hereto completely and accurately sets forth the number of
goods of the Inventory, as well as the corresponding value in Reais;

(d)           Qualytextil is the legal and record owner of, and has title to,
its Inventory in which it has granted to the Bank a first priority security
interest, free of any and all liens except for the lien created hereunder, and
be the owner of any Substitute Goods described in any of the Notices of Pledge
and that the Inventory is and any Substitute Goods will be free and unencumbered
of all and any charges both under the law and any agreements.

(e)           There are no options or other contractual arrangements for the
pledge of the Inventory, and there are no arrangements, preemptive rights or any
other rights or claims of any character relating to the purchase, repurchase,
transfer, with respect to the Inventory that restrict the transfer of or
otherwise relate to the Inventory, in either case that would affect the pledge
hereunder; and

ARTICLE IV – OBLIGATIONS OF QUALYTEXTIL

4.01.        At all times during such period as this pledge over the Inventory,
is and continues to be in full force and effect, Qualytextil undertakes:

(a)           to keep the Inventory at its own expense in good conditions of
repair and in perfect operating conditions, ensuring that the value thereof is
not affected, to perform any relevant maintenance therefore and to keep it free
of any liens, encumbrances or charges, as well as to defend it against all
claims and legal procedures brought by any person other than the Bank;

(b)           to maintain enough goods at its Inventory to accomplish with the
lien created herein.

(c)           to pay out of its own funds or for its own account any taxes,
charges, license fees, duties, contributions, assessments and/or any other
amounts due or to become due with regard to the Inventory, obtaining release
and/or discharge thereof;

(d)           to assume the liabilities for any and all damages caused by the
Inventory to third parties and/or to Qualytextil assets, holding the Bank
harmless of the liabilities for any and all damages caused by the Inventory to
said third parties or assets;

(e)            to keep the Inventory  at its own expense insured, in favor of
the Bank, against total risk, including, but not limited to damages caused by
fire, flood, earthquake, robbery, theft, embezzlement, vandalism and other
reasonable causes of damages, with reputable insurance companies and/or
underwriters in a manner, to an extent and on terms satisfactory to the Bank and
customary for such kind of assets in the Federative Republic of Brazil as well
as to produce to the Bank documentary evidence of compliance by Qualytextil with
the obligations contained
 
 
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herein within 30 (thirty) days from the date of execution of this Agreement and
annually, within 30 (thirty) days from every anniversary of the insurance
policy;
 
(f)             to appoint the Bank as loss payee under the insurance policy/ies
relating to the Inventory and to order the insurance company/ies to pay to the
Bank thereinafter any insurance proceeds and any premium reimbursement;

 
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(g)           to inform the Bank and the insurance company(ies) promptly of the
occurrence of any insurance event relating to the Inventory and, as the case may
be, to keep the Bank advised as to the progress of any claim invoked against
Qualytextil or any of its property. In the event of any loss, Qualytextil shall
not take any step for the purpose of entering into a compromise, settlement or
arrangement with any of its insurance companies or creditors without prior
written consent of the Bank;

(h)           to immediately inform the Bank when any of the insurance policies
related to the Inventory or provided in this Agreement is terminated, revoked or
nullified;

(i)            not to claim, ask or request, and not to file any lawsuit or
judicial proceeding against the Bank in order to compel it to take any measure
in relation to the Inventory or asking for any indemnification due to damages
occurred in the Inventory, independently of the cause and size of the damage;

(j)            not to  create or permit to exist any charge, pledge, mortgage,
hypothecation, lien or other encumbrance of any nature whatsoever having the
effect of creating a security interest over the Inventory or to allow the
Inventory to be used in violation of any law, regulation or insurance policy
applicable to the Inventory. Losses or damages caused to the Inventory shall not
exempt Qualytextil of any of the obligations assumed hereunder;

(k)           to allow the representatives of the Bank or a third person on
behalf of the Bank to inspect the Inventory and the premises where the Inventory
is installed at any reasonable time and on reasonable notice;

4.02.         Negative Covenants. During the term of this Agreement, Qualytextil
undertakes not to:

(a)           create any other encumbrances to the Inventory for so long as the
Inventory are subject to lien created hereunder without the prior written
consent of the Bank.

(b)           take or participate in any action or enter into any agreement
which results or may result in the loss of ownership and/or possession of all or
part of  the Inventory, including the Substitute Goods, for so long as the
Inventory are subject to the lien created hereunder, or any other transaction
which could have the same result as a encumbrance of any of the goods which are
part of the Inventory or which would, for any reason, be inconsistent with the
security interest of the Bank hereunder or defeat, impair, amend, restrict or
circumvent any right of the Bank hereunder, except that Qualytextil is hereby
authorized to sell, use or move the Inventory, with due regard to Section
4.01(b).

4.03.         Transfer of Inventory. (a) In the event of an act of God or force
majeure, Qualytextil may transfer the Inventory affected by such acts of God or
force majeure, even to another place with storing conditions reasonably
acceptable to the Bank, in order to preserve and maintain the Inventory (or any
part thereof) in good storage conditions. In this event, Qualytextil shall, as
soon as practicable, but no later than five (5) Business Days after any such
event, inform the Bank of the place to which the Inventory (or any part thereof)
has been transferred to (“New Location”), which place may then be inspected by
the Bank. If the Bank

 
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has reasonable grounds not to approve the New Location, the Bank may inform
Qualytextil of its objection and request Qualytextil to remove and/or transfer
the Inventory (or any part thereof) to another location reasonably acceptable to
the Bank, in which case Qualytextil shall remove the Inventory to another
location within the timeframes reasonably agreed upon between the parties, at
the expenses of Qualytextil.

(b)           In the event the Inventory are transferred to the New Location
pursuant to his Section 4.03 (a), Qualytextil agrees to, as soon as practicable,
but no later than ten (10) Business Days after any such transfer, execute and
deliver to the Bank an amendment to this Agreement to update the list of the
Inventory contained in Annex II with the new location for each Inventory.

(c)           Any amendments to this Agreements to be executed pursuant to this
Section 4.03 shall be registered with the competent real estate registry(ies)
and delivered to the Bank as provided and within the timeframes established
under Section 8.01.

ARTICLE V - RISK OF LOSS

5.01.        Qualytextil shall bear all risk of loss with respect to the
Inventory. The injury to or loss of the Inventory, either partial or total,
shall not release Qualytextil from payment or other performance hereof.

5.02.        Qualytextil shall bear the risk of loss to the extent of any
deficiency in the effective insurance coverage with respect to loss or damage to
the Inventory. Qualytextil hereby assigns to Bank the proceeds of all property
insurance covering the Inventory up to the amount of the Secured Obligations and
directs any insurer to make payments directly to Bank.  Qualytextil hereby
appoints Bank its attorney-in-fact, which appointment shall be irrevocable and
coupled with an interest for so long as Secured Obligations are unpaid, to file
proof of loss and/or any other forms required to collect from any insurer any
amount due from any damage or destruction of the Inventory, to agree to and bind
Qualytextil as to the amount of said recovery, to designate payee(s) of such
recovery, to grant releases to insurer, to grant subrogation rights to any
insurer, and to endorse any settlement check or draft. Qualytextil agrees not to
exercise any of the foregoing powers granted to Bank without Bank's prior
written consent.

ARTICLE VI - DEFAULT

6.01.         Default. (a) Upon the occurrence of an Event of Default (as
defined in the Credit Agreement) which is continuing, the Bank may, in its sole
discretion, irrespective of any prior or subsequent notice, sell, assign,
transfer or in any other way dispose of all or part of the Inventory pledged
hereunder (the “Sale”), at market price and upon market terms and conditions and
subject to applicable law, in or out of court, in a public or private
transaction, and shall apply the proceeds of such Sale thus received for the
payment of the Secured Obligations then due and unpaid, as well as for the
payment or reimbursement of all other costs and expenses incurred as a result of
the Sale.

 
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(b)           For the purposes hereof, it is hereby agreed and understood that
(i) in the event the amount obtained from the Sale, after the reimbursement to
the Bank of all costs and expenses incurred in connection with the Sale,
including Bank’s fees, attorney’s fees and court costs and expenses, exceeds the
amounts due under the Secured Obligations, the balance shall be promptly
returned to Qualytextil by the Bank, and (ii) in the event the amounts obtained
from the Sale are lower than the amounts due under the Secured Obligations,
Qualytextil shall remain liable for the payment of the outstanding balance.

6.02.         Power of Attorney. (a) For the purposes of this Article VI,
Qualytextil hereby irrevocably and irreversibly, as a condition to the pledge
created hereunder, appoints the Bank as its attorney-in-fact, pursuant to
Article 684 and the sole paragraph of Article 686 of the Brazilian Civil Code,
to act solely, with broad powers to, upon the occurrence of an Event of Default
which is continuing carry out, in the name and on behalf of Qualytextil, any
acts necessary for the Sale, including the execution of any documents required
for the definitive transfer of the Inventory pledge hereby, the Bank being
authorized, at its sole discretion and irrespective of Qualytextil’s consent, to
delegate the powers granted herein to any third party.

(b)           For such purpose Qualytextil has executed and delivered to the
Bank on the date hereof an irrevocable power-of-attorney, substantially in the
form of Annex IV and shall maintain such irrevocable power-of-attorney in full
force and effect until the Secured Obligations have been paid in full to the
Bank to its satisfaction.

(c)           Any notice by to the Bank that at such time an Event of Default
has occurred or has ceased shall be conclusive against Qualytextil and any other
third parties.

ARTICLE VII -TERM

7.01.        Term. The pledge hereunder and the power of attorneys granted
herein will endure in their entirety and will remain in full force and effect
until the Secured Obligations have been irrevocably and indefeasibly paid in
full to the Bank has no further commitment to lend under the Credit Agreement.

ARTICLE VIII - MISCELLANEOUS

8.01.         Registration. (a) Qualytextil undertakes to, within fifteen (15)
days of the date of execution of this Agreement, register it or any amendments
hereto with the competent Real Estate Registry (Cartório de Registro de Imóveis)
of the city(ies) where the Inventory are located, provided that Qualytextil
shall pay any and all costs, expenses, fees and other charges payable in
connection thereto, necessary for the perfection of this Agreement or any
amendments thereto. Qualytextil shall provide the Bank with one original
counterpart of this Agreement or any amendment thereto duly registered with the
competent Real Estate Registry within five (5) Business Days after its
accomplishment.

(b)            For registration purposes only, the amount of this Agreement is
R$3,512,416.57.

 
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8.02.         Deposit of the Inventory – Qualytextil hereby irrevocably
undertakes to act as depository, in accordance with the provisions of the
Brazilian Civil Code, of the Inventory and of any Substitute Goods.

8.03.         Cumulative Remedies. The rights, powers and remedies of the
Parties under this Agreement are cumulative and shall be in addition to all
rights, powers and remedies available to the Parties pursuant to the Credit
Agreement and at law, in equity or by statute and may be exercised successively
or concurrently without impairing the rights of the Parties hereunder.

8.04.         Waivers and Amendments. This Agreement and its provisions shall
only be modified, amended, supplemented or waived with the express written
consent of Qualytextil and the Bank.

8.05.         Severability. If any provision of this Agreement shall be held to
be invalid, illegal or unenforceable under applicable law, such provision shall
be ineffective only to the extent of such invalidity, illegality or
unenforceability, and shall not affect any other provisions hereof or the
validity, legality or enforceability of such provision in any other
jurisdiction.  To the extent permitted by applicable law, the parties shall in
good faith negotiate and execute an Amendment to this Agreement to replace any
such severed provision with a new provision that (a) reflects their original
intent and (b) is valid and binding.  The first priority security interest
created thereby shall, to the extent permitted by applicable law, constitute a
continuing first priority Lien on and perfected first priority security interest
in the Inventory, in each case enforceable against Qualytextil in accordance
with its terms.

8.06.         Complete Agreement; Successors and Assigns. This Agreement is
intended by the parties as the final expression of their agreement regarding the
subject matter hereof and as a complete and exclusive statement of the terms and
conditions of such agreement.  This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.

8.07.         Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the further exercise of such right or remedy.
 
8.08.         Language. This Agreement is being executed in English and a sworn
translation of this Agreement shall be provided by Qualytextil for purposes of
registry, pursuant to Section 8.01. above.

8.09.         No Novation. It is the express intent of the parties hereto that
this Agreement is in no way intended to constitute a novation of any of the
terms of the Lon Agreement.

8.10.         Intervening and Consenting Parties. The Intervening and Consenting
Parties hereby expressly consents to and agrees with all of the terms and
conditions of this Agreement and undertakes to faithfully observe and fulfill
any and all of its obligations arising hereunder.

8.11          Notices. All notices and other communications provided for
hereunder shall be provided in accordance with the Credit Agreement.

 
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8.12.        Clearance Certificates. Qualytextil hereby delivers to the Bank the
following clearance certificates which copies are attached hereto as Annex V I:

 
(i)
Clearance Certificate (Certidão Positiva com Efeitos de Negativa de Débitos
relativos às Contribuições Previdenciárias e às de Terceiros) issued by the
Federal Revenue Service (Secretaria da Receita Federal); and

 
(ii)
Clearance Certificate (Certidão Conjunta Positiva com Efeitos de Negativa de
Débitos relativos aos Tributos Federais e à Dívida Ativa da União), joinly
issued by the Office of the Attorney-General of the National Treasury
(Procuradoria da Fazenda Nacional) and the Federal Revenue Service (Secretaria
da Receita Federal).

8.13.         Governing Law; Jurisdiction.  This Agreement shall be governed by
and construed and interpreted in accordance with the laws of Brazil.  The
parties irrevocably submit to the jurisdiction of the courts sitting in the City
of São Paulo, State of São Paulo, Brazil, any action or proceeding to resolve
any dispute or controversy related to or arising from this Agreement and the
parties irrevocably agree that all claims in respect of such action or
proceeding may be heard and determined in such courts, with the express waiver
of the jurisdiction of any other court, however privileged it may be.

[SIGNATURE PAGE TO FOLLOW]
 
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
in the presence of the undersigned witnesses.

WACHOVIA BANK

By:
/s/ Roger Grossman
By:
 
Name:
Roger Grossman
Name:
 
Title:
Vice President
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

LAKELAND INDUSTRIES, INC.

 
By:
/s/ Gary A. Pokrassa
   
Name:
Gary Pokrassa
   
Title:
CFO
 

LAKELAND DO BRASIL EMPREENDIMENTOS E PARTICIPAÇÕES LTDA.

By:
 /s/ Jose Tavares Lucena
By:
 
Name:
 Jose Tavares Lucena
Name:
 
Title:
 Administrator
Title:
         

 
WITNESSES:
                         
Name:
   
Name:
 
ID:
   
ID:
 

 
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ANNEX I

CONDITIONS AND CHARACTERISTICS OF THE SECURED OBLIGATIONS

1)             TOTAL PRINCIPAL AMOUNT OF THE SECURED OBLIGATIONS

A sum not to exceed US$ 30,000,000.00 (thirty million United States dollars)

2)             INTEREST RATE OVER THE AMOUNT EFFECTIVELY DISBURSED:

Based on either LIBOR or LIBOR Market Index Rate, plus the Applicable Margin
(equal to the percentage set forth in the table based on Borrower’s Funded Debt
to EBITDA Ratio), more particularly described in the Second Amended and Restated
Promissory Note attached hereto as Annex I(a)

3)             MATURITY DATE OF INTEREST:

Monthly payments of interest only commencing June 2, 2008, final payment of all
accrued interest on July 7, 2010

4)              REPAYMENT OF THE PRINCIPAL AMOUNT:

Final payment of principal on July 7, 2010

5)             PENALTY IN AN EVENT OF DEFAULT:

Interest rate plus 3%

 
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ANNEX I.(a)

SECOND AMENDED AND RESTATED PROMISSORY NOTE

 
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ANNEX II

DESCRIPTION AND LOCATION OF THE INVENTORY AS OF APRIL 30, 2008

Quantity
Quality
Description
Location

 
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ANNEX III

NOTICE OF PLEDGE

Pursuant to the Inventory Pledge and Security Agreement, dated as of May 13,
2008 by and among (i) WACHOVIA BANK (the “Bank”); and QUALYTEXTIL S/A (the
“Qualytextil”), and as Intervening and Consenting Parties; LAKELAND DO BRASIL
EMPREENDIMENTOS E PARTICIPAÇÕES LTDA., and LAKELAND INDUSTRIES, INC; we hereby
give in pledge and transfer to the Bank, under the terms and conditions of the
above referred Inventory Pledge and Security Agreement and for the purposes
specified therein, the following Substitute Goods:

Quantity
Quality
Description
Location

May 13, 2008

QUALYTEXTIL S/A

By: /s/ Miguel G. Bastos
Name: Miguel G. Bastos
Title: CFO

Accepted by:  /s/ Roger Grossman

WACHOVIA BANK

 
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ANNEX IV

POWER OF ATTORNEY

QUALYTEXTIL S/A, A company duly organized and existing in accordance with the
laws of Brazil, with its registered office in the City of Salvador, State of
Bahia, at Rua Luxemburgo, s/nº, Loteamento Granjas Rurais, Presidente Vargas,
Quadra O, Lotes 82 and 83, São Caetano, Brazil, enrolled with the Brazilian
Taxpayers Roll of the Ministry of Finance (CNPJ/MF) under no.
04.011.170/0001-22, herein duly represented in accordance with its Charter
Documents, together with its successors and permitted assigns (the
“Qualytextil”) hereby irrevocably and irreversibly appoints WACHOVIA BANK, duly
organized and existing in accordance with the laws of New York, with its
registered office at 12 East 49th Street, 20th Floor, New York, New York  10017,
represented in accordance with its corporate documents (the “Bank”), as its
attorney-in-fact to act in its name and place, with the following powers:

(a)
upon the occurrence of an Event of Default which is continuing (as defined in
the Credit Agreement), to sell, assign, transfer or in any other way dispose of
all or part of the Inventory pledged to the Bank pursuant to the Inventory
Pledge and Security Agreement entered into between the Bank and Qualytextil on
May 13, 2008 (as from time to time amended, the “Inventory Pledge and Security
Agreement”), at market prices and upon market terms and conditions and subject
to applicable law irrespective of any prior or subsequent notice to Qualytextil
with respect thereto, in accordance with the provisions set forth in the
Inventory Pledge and Security Agreement and in Article 1,433, Item IV, and
Article 1,435, Item V, of the Brazilian Civil Code, and apply the proceeds thus
received for the payment of the Secured Obligations the due and unpaid as well
for the payment or reimbursement of all other costs and expenses incurred as a
result of such sale, being vested with all necessary powers incidental thereto,
including, without limitation, the power and authority to execute transfer
documents, including discharge documentation with respect to the Inventory, to
purchase foreign currency and make all remittances abroad, to sign any necessary
foreign exchange contract with financial institutions in Brazil that may be
required to such remittances and to represent the Grantor before the Central
Bank of Brazil, financial institutions, private and public law legal entities
and any Brazilian governmental authority when necessary to accomplish the
purpose of the Inventory Pledge and Security Agreement; and

(b)
upon the occurrence of an Event of Default which is continuing, to take any
action and to execute and deliver any instrument consistent with the terms of
the as deemed

 
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necessary or advisable to accomplish the purpose of the Inventory Pledge and
Security Agreement.

Any notice by the Bank that at such time an Event of Default has occurred and is
continuing shall be conclusive against Qualytextil and all other third parties.
Capitalized terms used, but not defined herein, shall have the meaning ascribed
to them in the Credit Agreement and/or in the Inventory Pledge and Security
Agreement. The powers granted herein are in addition to the powers granted by
the Bank in the Inventory Pledge and Security Agreement and not to cancel or
revoke any of such powers. This power of attorney is irrevocable and is granted
as a condition to the Inventory Pledge and Security Agreement and as a means to
comply with the obligations set forth therein, in accordance with the Article
684 and the sole paragraph of Article 686 of the Brazilian Civil Code, and shall
be valid and effective until The Bank has receives full payment of the
obligations secured by the Inventory Pledge and Security Agreement to its
satisfaction. The Bank may delegate the power granted through this power of
attorney.

Qualytextil has caused its duly authorizes representatives to execute this power
of attorney on May 13, 2008.

QUALYTEXTIL S/A

 
By: /s/ Miguel G. Bastos
Name: Miguel G. Bastos
Title: CFO

 
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ANNEX V

CLEARANCE CERTIFICATES
 
 
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