Exhibit
10.15
 EQUIPMENT
PLEDGE AND SECURITY AGREEMENT
 
 
 This
Equipment Pledge and Security Agreement (the “Agreement”) is made
as of May 13, 2008 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, 20th
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 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 do Brazil”);
and
 
 LAKELAND INDUSTRIES, INC, duly
organized and existing in accordance with the laws of New York, 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 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 (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 do Brazilof the totality of
shares of Qualytextil (as amended, supplemented, restated or otherwise
modified and in effect from time to time, the “Credit
Agreement”);
  1
  WHEREAS
after the execution of a Share Purchase Agreement by and among Lakeland,
Lakeland do Brazil, Qualytextil, and its shareholders, Lakeland do 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 on the equipment described in
Annex I hereof (the “Equipment”) belonging to Qualytextil to secure Lakeland’s
obligations arising from the Credit Agreement;
 
 WHEREAS
Qualytextil, Lakeland do Brazil and Lakeland have agreed to pledge the Equipment
and all parts thereof 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), and all of
the obligations of Lakeland as stated in Section 2.01. below, Qualytextil hereby
unconditionally and irrevocably pledges to the Bank the Equipment described in
Annex I hereto, located at the places specified therein (each, a “Location”),
pursuant to articles 1,431 and following, especially articles 1,447 to 1,450 of
the Brazilian Civil Code and to other applicable legislation.
   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”), a summary of the terms and conditions of which follows
below.
 
  2
  (i)
              Total principal amount of the
      secured obligations: A sum not to exceed US$ 30,000,000.00 (thirty
      million United States dollars).
 
 (ii)
              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 II.
 
 (iii)
              Maturity date of
      interest: Monthly payments of interest only commencing June 2,
      2008, final payment of all accrued interest on July 7,
  2010
 
 (iv)
              Repayment of the principal
      amount:Final payment of
      principal on July 7, 2010
 
 (v)
              Penalty in an event of
      default:Interest rate plus
      3%
 
 
 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 it has 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)            Exception
made to consents and approvals set forth in this Agreement, no other consent,
approval, authorization or other order of any person is required for (i) the
legality, validity, perfection or enforcement of the security interest created
hereby; (ii) the execution and delivery of this Agreement by Qualytextil,
Lakeland do Brazil and Lakeland, or (iii) for the exercise by the Bank of the
remedies in respect of the Equipment pursuant to this Agreement, except (x)
consents, approvals, authorizations or other orders that shall be obtained as
set forth herein and (y) as may be required in connection with the disposition
of the Equipment by laws affecting the offering and sale of securities
generally;
 
 (c)            the
execution of this Agreement and the exercise by Qualytextil of its rights and
performance of its obligations hereunder do not and will not (i) violate any
applicable law, decrees, rules or regulations, (ii) violate any provisions of
Qualytextil’s By-Laws, and/or (iii) result in any breach of or default under any
contractual agreement to which Qualytextil is a party or by which Qualytextil or
its properties are bound;
  3
  (d)            the
obligations assumed by Qualytextil in this Agreement are legal and valid
obligations binding on Qualytextil in accordance with the terms hereof and
enforceable against Qualytextil;
 
 (e)            Qualytextil
owns all right, title and interest in, to the Equipment and the pledge created
herein shall be a first priority security, ranking at all times ahead of all
other creditors with respect to the Equipment;
 
 (f)            the
Equipment is free of other security interests, liens, encumbrances and/or option
rights of other third parties;
 
 (g)            the
Equipment shall, at all times during such period as this Agreement is and
continues to be in full force and effect, be and remain the sole and exclusive
property of Qualytextil and shall not be assigned, sold or in any other manner
transferred to any third parties.
 
 
 ARTICLE
IV – OBLIGATIONS OF QUALYTEXTIL
 
 4.01 At
all times during such period as this Pledge over the Equipment is and continues
to be in full force and effect Qualytextil undertakes:
 
 (a)           to
keep the Equipment at its own expense in good conditions of repair and in
perfect operating conditions, ensuring that the value thereof is not affected,
except to normal wear and tear, 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
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 Equipment, obtaining release and/or discharge
thereof;
  (c)           to
assume the liabilities for any and all damages caused by the Equipment to third
parties and/or to Qualytextil assets, holding the Bank harmless of the
liabilities for any and all damages caused by the Equipment to said third
parties or assets;
 
 (d)           to
keep the Equipment 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
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;
  4
  (e)           to
appoint the Bank loss payee under the insurance policy/ies relating to the
Equipment and to order the insurance company/ies to pay to the Bank thereinafter
any insurance proceeds and any premium reimbursement;
 
 (f)           to
inform the Bank and the insurance company(ies) promptly of the occurrence of any
insurance event relating to the Equipment 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;
 
 (g)           to
immediately inform the Bank when any of the insurance policies related to the
Equipment or provided in this Pledge is terminated, revoked or
nullified;
 
 (h)           to
maintain the Equipment in its premises located at the address indicated in Annex
I hereto and not to remove it therefrom without the prior written consent of the
Bank;
 
 (i)           to
allow the representatives of the Bank or a third person on behalf of the Bank to
inspect the Equipment and the premises where the Equipment 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) sell,
rent or lease the Equipment or, save as the pledge over the Equipment created
herein, 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 Equipment or to allow the
Equipment to be used in violation of any law, regulation or insurance policy
applicable to the Equipment. Losses or damages caused to the Equipment shall not
exempt Qualytextil of any of the obligations assumed hereunder;
  (b) alter
or reform the Equipment without the prior written consent of the Bank
(disregarding alterations and reforms in the ordinary course of
business);
  (c)
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
Equipment or asking for any indemnification due to damages occurred in the
Equipment, independently of the cause and size of the damage; and
  (d) 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 the Equipment for so long
as the Equipment is subject to the lien created hereunder, or any other
transaction which could have the same result as a sale, transfer, encumbrance or
other disposal of the Equipment 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.
  5
  4.03.         Transfer of
Equipment. (a) In the event of an act of God or force majeure,
Qualytextil may transfer the Equipment 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 Equipment 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 Equipment has been transferred to (“New Location”), which
place may then be inspected by the Bank. If the Bank 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 Equipment to another
location reasonably acceptable to the Bank, in which case Qualytextil shall
remove the Equipment to another location within the timeframes reasonably agreed
upon between the parties, at the expenses of Qualytextil.
  (b) In
the event the Equipment is transferred to the New Location pursuant to this
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 Annex I with the new location for
the Equipment.
  (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(a).
  ARTICLE
V - RISK OF LOSS
 
 5.01.     Qualytextilshall bear all risk of
loss with respect to the Equipment. The injury to or loss of the Equipment,
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 Equipment. Upon the
occurrence of an Event of Default, Qualytextil hereby assigns to Bank the
proceeds of all property insurance covering the Equipment 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 Equipment, 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 the Equipment pledged
  6
  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.
 
 (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 Equipment 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 III
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 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          The
Pledge hereunder and the power-of-attorney granted herein will endure their
entirety and remain in full force and effect until the Secured Obligations have
been irrevocably and indefeasibly paid in full to the Bank and 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
Equipment are located, provided that Qualytextil shall pay any and all costs,
expenses, fees and other charges
  7
  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$599,555.00.
 
 8.02.         Deposit
of the Equipment - Qualytextil hereby irrevocably undertakes to act as
depository, in accordance with the provisions of the Brazilian Civil Code, of
the Equipment.
 
 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
Equipment, 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
  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.
  9
  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 Pledge
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.
 
 8.12.        
Clearance Certificates. Qualytextil hereby delivers to the Bank the following
clearance certificates which copies are attached hereto as Annex
IV:
 
 (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]
  10
  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 ConceicaoName:
      Miguel G. Bastos
              
              Name:
      Elder Marcos Vieira da ConceicaoTitle:
      CFO
              
              Title:
      CEO
 
 LAKELAND
INDUSTRIES, INC.
 
 By:
      /s/ Gary A. PokrassaName:
      Gary A. PokrassaTitle:   CFO
 
 LAKELAND
DO BRASIL EMPREENDIMENTOS E PARTICIPAÇÕES LTDA.
 
 
 By: /s/ Jose Tavares
Lucena
 Name:
Jose Tavares Lucena
 Title:
Administrator
 
 
 WITNESSES:_________________________________
              
              _________________________________Name:
              
              Name:ID:
              
              ID:
  11
  ANNEX
I
 
 DESCRIPTION
AND LOCATION OF THE EQUIPMENT
 
 
 Invoice No
1255
 
 Description
              Quantity
              Unitary
      Amount (R$)
              Total
      Amount (R$)
              LocationCleaning
      Beny Machine with 01 head (Máquina de Limpeza de 01 cabeça
      Beny)
              01
              4.460,00
              4.460,00
              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)Cleaning Beny Machine with 01 head (Máquina de Limpeza de 01
      cabeça Beny)
              06
              4.460,00
              26.760,00
              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)Passante
      Machine with Refilador Nissin (Máquina de Passante com Refilador
      Nissin)
              01
              5.050,00
              5.050,00
              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)12 Needles Machine Siruba (Máquina 12 Agulhas
      Siruba)
              02
              5.361,00
              10.722,00
              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)Bud Machine Special Series SS
      373 (Máquina Botão Série Special SS 373)
              01
              4.350,00
              4.350,00
              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)Caseadeira
      Machine Special Series (Máquina Caseadeira Série
      Special)
              01
              9.561,00
              9.561,00
              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)Electronic
      Machine Travetti Star Series 1201 (Máquina Travetti Eletrônica Série Star
      1201)
              01
              12.000,00
              12.000,00
              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)
  12
  Left
      Arm Machine Special Series 2605 (Máquina Braço Esquerda Série Special
      2605)
              01
              5.350,00
              5.350,00
              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)Filigrana
      Machine Star Series 5x4 Velcro
      (Máquina Filigrana Servi Star 5x4 Velero)
              01
              14.861,00
              14.861,00
              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)Cut
      Machine – Machine 30 (Máquina Cortar Máquina 30)
              01
              8.000,00
              8.000,00
              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)Triple
      Transp.
      Machine 2 Needles SS 20606 (Máquina Transp. Triplo 2 agulhas SS
      20606)
              01
              5.050,00
              5.050,00
              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)Pneumatic
      Machine Pocket Crease (Máquina Vincar Bolso Pneumática)
              01
              9.000,00
              9.000,00
              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)Bore
      Tissue Machine 02 Columns (Máquina Furar Tecido 02
Colunas)
              01
              1.401,00
              1.401,00
              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)Column
      Machine 02 Needles SS 8820 (Máquina Coluna 02 Agulhas SS
    8820)
              01
              4.261,00
              4.261,00
              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)Sloping
      Machine – North Metal 02 Knives (Máquina Viés–Metal Norte 02
      Facas)
              01
              2.040,00
              2.040,00
              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)
  13
  Superior
      Trasp. Interloq. Machine Siruba (Máquina Interlock. Transp.
      Superior Siruba)
              01
              5.017,00
              5.017,00
              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)
 
 
 Invoice No
1257
 
 Description
              Quantity
              Unitary
      Amount (R$)
              Total
      Amount (R$)
              LocationArm
      Machine 30[x]
      Global (Máquina de Braço 3[x] Global)
              01
              7.060,00
              7.060,00
              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)Electronic
      Straight Machine Star Series (Máquina Reta Eletrônico Sun
      Star)
              01
              4.253,00
              4.253,00
              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)Sheath
      Machine Special Series (Máquina de Bainha Sun Special)
              01
              10.184,00
              10.184,00
              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)Straight
      Machine Special Series  SS 618B (Máquina Reta Sun Special SS
      618B)
              22
              1.553,00
              34.166,00
              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)Waistband
      Machine Special Series SS 6908 (Máquina de Cós Sun Special SS
      6908)
              01
              5.684,00
              5.684,00
              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)Electronic
      Straight Machine Big [x]
      (Máquina Reta Eletrônica [xx]
      Grande)
              02
              4.153,00
              8.306,00
              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)
  14
  Straight
      Conventional Machine Big [x]
      (Máquina Reta Convencional [xx] Lança Grande)
              07
              1.553,00
              10.871,00
              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)Interlock
      Machine Special Series SS 7705 (Máquina Interlock Sun Special SS
      7705)
              04
              1.803,00
              7.212,00
              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)Electronic
      Backstitch Machine Star Series [x]
      (Máquina Pesponto Eletrônico Sun Star [xx])
              05
              8.541,00
              42.705,00
              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)[x]
      Machine Special Series SS 7703 (Máquina Overlock Sun Special SS
      7703)
              04
              1.783,00
              7.132,00
              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)Arm
      Machine 3[x]
      2[x]
      Nissin (Máquina de Braço 30[x]
      2[x]T Nissin)
              05
              8.303,00
              41.515,00
              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)Electronic
      [x]
      Machine 20[x]
      1800 (Máquina [xx]
      Eletrônico 20[xx]
      1800)
              03
              9.303,00
              27.909,00
              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)Conventional
      Backstitch Machine Big [x]SS 875 (Máquina Pesponto Conv.
      [xx] Lança
      Grande SS 875)
              10
              3.953,00
              39.530,00
              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)Máquina
      [xx] com [xx] 4 Lts. S. Special (Máquina Ferro com [xx] 4 Lts. S.
      Special)
              03
              1.803,00
              5.409,00
              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)
  15
  Waistband
      Machine Siruba H008 (Máquina Cós Siruba H008)
              01
              4.103,00
              4.103,00
              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)Straight
      Bitter Back Machine Siruba (Máquina Reta com Refilador
    Siruba)
              01
              2.000,00
              2.000,00
              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)
 
 
 Invoice No
1258
 
 Description
              Quantity
              Unitary
      Amount (R$)
              Total
      Amount (R$)
              LocationCut
      Machine 6 inches Km (Máquina de corte Km 6 polegadas)
              01
              6.281,45
              6.281,45
              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)Cut
      Machine 8 inches Km (Máquina de corte Km 8 polegadas)
              01
              6.325,46
              6.325,46
              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)Backstitch
      Machine [x]
      SS 624OB (Máquina [x] DISL55624OB)
              09
              3.953,00
              35.577,00
              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)Closing
      Arm Machine Special Series (Máquina de Fechamento Braço S.
      Special)
              02
              8.000,00
              16.000,00
              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)
  16
  Closing
      Machine Special Series 2[x]
      (Máquina de Fechamento S. Special 20 [x]
              01
              6.500,00
              6.500,00
              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)Straight
      Machine Special Series 6150M (Reta Sun Special 6150M)
              01
              1.100,00
              1.100,00
              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)Straight
      Machine with big [x]
      Special Series 6150B (Reta com Lança Grande S. Special
      6150[x])
              20
              1.553,00
              31.060,00
              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)
 
 
 Invoice No
1259
 
 Description
              Quantity
              Unitary
      Amount (R$)
              Total
      Amount (R$)
              LocationCleaning
      Machine 01 Head (Máquina de Limpeza 1 cabeça)
              03
              4.460,00
              13.380,00
              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)Straight
      Electronic Machine Big [x]
      Siruba (Máquina Reta Eletro Lança Grande Siruba)
              01
              4.153,00
              4.153,00
              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)Interlock
      Machine [x]
      10 mm [x]
      (Máquina Interlock [x] 10 MM Pesada)
              04
              1.803,00
              7.212,00
              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)
  17
  Overlock
      Machine [x]
      Medium (Máquina Overlock INDL. Média)
              02
              1.783,00
              3.560,00
              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)Arm Machine 3[x] 2[x]Nissin (Máquina Braço Nissin 3
      [x] 2 [x])
              04
              8.303,00
              33.212,00
              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)Conventional Backstitch Machine [x]
      (Máquina Pesponto DISL Convencional Lança Grande)
              05
              3.593,00
              19.765,00
              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)[x]
      Machine Special Series 4 Litters Feno ([x] Serie Special 4 LTS
      Ferro)
              03
              1.803,00
              5.409,00
              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)Straight
      Machine [x]
      (Máquina Reto [x] 2 [x])
              13
              1.553,00
              20.189,00
              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)Straight
      Bitter Back Machine Siruba (Máquina Reta com refilador
    Siruba)
              02
              2.000,00
              4.000,00
              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)
  18
  ANNEX
II
 
 SECOND
AMENDED AND RESTATED PROMISSORY NOTE
  19
  ANNEX
III
 
  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 Equipment pledged to the Bank pursuant to
      the Equipment Pledge and Security Agreement entered into between the Bank
      and Qualytextil on May 13, 2008 (as from time to time amended, the “Equipment 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 Equipment 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
      Equipment, 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
      Equipment 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 necessary or advisable to accomplish the purpose of the
      Equipment 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 Equipment Pledge and Security
Agreement. The powers granted herein are in
  20
  addition
to the powers granted by the Bank in the Equipment 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 Equipment 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 Equipment 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
              
              By:
      /s/ Elder Marcos
      Vieira da ConceicaoName:
      Miguel G. Bastos
              
              Name:
      Elder Marcos Vieira da ConceicaoTitle:
      CFO
              
              Title:
      CEO
  21
  ANNEX
IV
 
  CLEARANCE
CERTIFICATES




22