Exhibit
10.9
 
 SECOND
AMENDED AND RESTATED PROMISSORY NOTE
 
 
 $30,000,000.00
 May 13,
2008
 
 Lakeland
Industries, Inc.
 Attn:
Christopher J. Ryan, Chief Executive Officer and
 Gary
Pokrassa, Chief Financial Officer
 701-07
Koehler Avenue
 Ronkonkoma,
New York  11779
 (Hereinafter
referred to as "Borrower")
 
 Wachovia
Bank, National Association
 12 East
49th
Street, 43rd Floor
 New York,
New York  10017
 (Hereinafter
referred to as “Bank")
 
 Borrower
promises to pay to the order of Bank, in lawful money of the United States of
America, at its office indicated above or wherever else Bank may specify, the
sum of Thirty Million and No/100 Dollars ($30,000,000.00) or such sum as may be
advanced and outstanding from time to time, with interest on the unpaid
principal balance at the rate and on the terms provided in this Promissory Note
(including all renewals, extensions or modifications hereof, this
"Note").
 
 AMENDMENT AND
RESTATEMENT.  This Note amends and restates that certain
Promissory Note dated July 7, 2005 by Borrower in favor of Bank in the original
principal amount of up to $25,000,000.00 (the “Original Note”), as amended by
that certain Amended and Restated Promissory Note dated September 1, 2005 by
Borrower in favor of Bank in the original principal amount of up to
$25,000,000.00 (collectively with the Original Note, the “Replaced Note), as
amended by a Modification To Note and Loan Agreement and Reaffirmation of
Guaranty (the “First Modification Agreement”) dated September 1,
2005,  as further modified by a Second Modification To Note and Loan
Agreement and Reaffirmation of Guaranty dated December 7, 2007 (the “Second
Modification Agreement”), and as further modified by a Third Modification To
Note and Loan Agreement and Reaffirmation of Guaranty of even date herewith
(“Third Modification Agreement” and collectively with the First Modification and
the Second Modification, the “Modification Agreements”).  Borrower
intends, and Bank, by its acceptance of this Note agrees, that the indebtedness
previously evidenced by the Replaced Note remains outstanding, but such
indebtedness shall henceforth be evidenced by this Note, and the terms and
conditions concerning Borrower's obligation to repay said indebtedness and
interest thereon shall be governed by the provisions of this
Note.  Neither the execution, delivery and acceptance of this Note nor
any of the terms and provisions set forth in this Note shall be deemed or
construed to effect a novation or to cause all or any part of the aforesaid
indebtedness, or the liability of any person with respect thereto or any
security therefor, to be, or to be deemed to have been, paid, satisfied or
discharged.  This Note is the Note, as referenced in the Loan
Agreement by and between Bank and Borrower dated July 7, 2005, as modified
by the Modification Agreements, and in all other Loan Documents, as that term is
defined in such Loan Agreement.
 
 LOAN
AGREEMENT.  This Note is subject to the provisions of that
certain Loan Agreement between Bank and Borrower dated July 7, 2005, as modified
from time to time (the “Loan Agreement”).
 
 LINE OF
CREDIT.Borrower may borrow, repay
and reborrow, and, upon the request of Borrower, Bank shall advance and
readvanceunder this
Notefrom time to time
until the maturity hereof (each an "Advance" and together the "Advances"), so
long as the total principal balance outstandingunder this
  
  Note at
any one time does not exceed the principal amount stated on the face of
thisNote,
subject to the limitations described in any loan agreement to which this Note is
subject.  Bank's obligation to make Advances under thisNote
shall terminate if Borrower is in Default. As of the date of each proposed
Advance, Borrower shall be deemed to represent that each representation made in
the Loan Documents is true as of such date.
 
 If
Borrower subscribes to Bank's cash management services and such services are
applicable to this line of credit, the terms of such service shall control the
manner in which funds are transferred between the applicable demand deposit
account and the line of credit for credit or debit to the line of
credit.
 
 USE OF
PROCEEDS.  Borrower shall use the proceeds of the loan(s)
evidenced by this Note for the commercial purposes of Borrower, as
follows:  for general corporate purposes including but not limited to
Borrower's working capital requirements.
 
 SECURITY.  Borrower has
granted Bank a security interest in the collateral described in the Loan
Documents, including, but not limited to, personal property collateral described
in that certain Security Agreement of even date herewith.
 
 INTEREST
RATE DEFINITIONS.
 
 LIBOR-Based
Rate.“LIBOR-Based Rate” means each of 1-month LIBOR plus the
Applicable Margin, as defined below, 3-month LIBOR plus the Applicable Margin,
as defined below, and 6-month LIBOR plus the Applicable Margin, as defined
below.
 
 LIBOR.  "LIBOR"
means, with respect to each Interest Period, the rate for U.S. dollar deposits
with a maturity equal to the number of months specified above, as reported on
Telerate page 3750 as of 11:00 a.m., London time, on the second London business
day before such Interest Period begins(or if not so reported,
then as determined by Bank from another recognized source or interbank
quotation).
 
 LIBOR Market Index-Based
Rate.  LIBOR Market Index Rate plus the Applicable Margin, as
defined below, as LIBOR Market Index Rate may change from day to
day.
 
 LIBOR Market Index
Rate.  "LIBOR Market Index Rate", for any day, means the rate
for 1 month U.S. dollar deposits as reported on Telerate page 3750 as of 11:00
a.m., London time, on such day, or if such day is not a London business day,
then the immediately preceding London business day (or if not so reported, then
as determined by Bank from another recognized source or interbank
quotation).
 
 Interest
Period.“Interest Period” means, in respect of each
LIBOR-Based Rate Advance, each period commencing on the last day of the
immediately preceding Interest Period and ending on the same day of the month
that interest in respect of such Advance is due 1 month, 3 months or 6 months
thereafter, as appropriate for the then applicable interest rate; provided (i)
the first Interest Period shall commence on the date of such Advance and end on
the first day thereafter that interest in respect of such Advance is due, (ii)
any Interest Period that ends in a month for which there is no day which
numerically corresponds to the last day of the immediately preceding Interest
Period shall end on the last day of the month and (iii) any Interest Period that
would otherwise extend past the maturity date of this Note shall end on the
maturity date of this Note.
 
 Applicable
Margin."Applicable Margin” shall mean the applicable
percentage as set forth in the table below, based on Borrower’s Funded Debt to
EBITDA Ratio, as that covenant is defined in the Loan Agreement.  The
Applicable Margin shall be determined and adjusted quarterlyon the date (each a
“Calculation Date”) 10 business days after the date on which Bank receives
Borrower’s periodic and annual financial statements, as required by the Loan
Agreement.The initial Applicable Margin shall be based on Pricing Level
1, as set forth in the table below, and shall remain at Pricing Level 1 until
the first Calculation Date occurring after the date hereof, and thereafter the
Pricing Level shall be determined by reference to Borrower’s Funded Debt to
EBITDA Ratio of
Borrower as of the last day of the most recently ended fiscal year or quarterly
period of Borrower preceding the applicable Calculation
Date.If Borrower
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2
  fails to
provide interim or annual financial statements beyond any applicable cure period
as required by the Loan Agreement for the most recently ended period preceding
the applicable Calculation Date, the Applicable Margin from such Calculation
Date shall be based on Pricing Level 4 or, at Bank=s
option, this Note shall bear interest at the Default Rate until such time as
that and all other Defaults are cured to Bank=s
satisfaction.  Each adjustment in the Applicable Margin shall apply to
all then outstanding principal under this Note, until the next adjustment of the
Applicable Margin.
 
 Pricing
      Levels
              Ratio
      of Funded Debt to EBITDA
              Applicable
      MarginPricing
      Level 1
              Less
      than 1.00:1.00
              0.60%Pricing
      Level 2
              Less
      than 2.00:1.00 but greater than 1.00:1.00
              0.70%Pricing
      Level 3
              Less
      than 2.50:1:00 but greater than 2:00:1.00
              0.80%Pricing
      Level 4
              Equal
      to or greater than 2.50:1.00
              1.00%
 
 INTEREST
RATE SELECTION AND ADJUSTMENT.
 
 Interest Rate
Options.  Interest shall accrue on the unpaid principal balance
of each Advance from the date of such Advance at a rate per annum equal to
a LIBOR-Based Rate or the LIBOR Market Index-Based Rate, as selected by Borrower
in accordance herewith (each, an "Interest Rate").  Interest for each
Interest Period shall accrue each day during such Interest Period, commencing on
and including the first day to but excluding the last day.  There
shall be no more than one Interest Rate for an Advancein effect at any
time.
 
 Indemnification.  Borrower
shall indemnify Bank against Bank's loss or expense as a consequence of (a)
Borrower's failure to make any payment when due on a loan or Advance bearing
interest at a LIBOR-Based Rate, (b) any payment, prepayment or conversion of any
loan or Advance bearing interest at a LIBOR-Based Rate on a day other than the
last day of the Interest Period, or (c) any failure to make a borrowing or
conversion after giving notice thereof ("Indemnified Loss or
Expense").  The amount of such Indemnified Loss or Expense shall be
determined by Bank based upon the assumption that Bank funded 100% of that
portion of the loan in the London interbank market.
 
 Default Rate.  In
addition to all other rights contained in this Note, if a Default occurs, and as
long as a Default continues, (a) Borrower shall no longer have the option
to request a LIBOR-Based Rate or the LIBOR Market Index-Based Rate and
(b) all outstanding Obligations, other than Obligations under any swap
agreements (as defined in 11 U.S.C. § 101, as in effect from time to time)
between Borrower and Bank or its affiliates, shall bear interest at the Interest
Rate (as in effect on the date of Default) plus 3% ("Default
Rate").  The Default Rate shall also apply fromacceleration until the
Obligations or any judgment thereon is paid in full.
 
 Notice and Manner of Borrowing and
Rate Conversion.  Borrower shall give Bank irrevocable
telephonic notice of each proposed Advance or rate conversion not later
than 11:00 a.m. local time at the office of Bank first shown above (a) on the
same business day as each proposed Advance at or rate conversion to the
LIBOR Market Index-Based Rate and (b) at least 2 business days before each
proposed Advance at or rate conversion to a LIBOR-Based Rate.  Each
such notice shall specify (i) the date of such Advance or rate conversion, which
shall be a business day and, in the case of a conversion from a LIBOR-Based
Rate Advance, shall be the last day of an Interest Period, (ii) the amount of
each Advance or the amount to beconverted, (iii) the
Interest Rate selected by Borrower, and (iv) except for the LIBOR Market
Index-Based Rate, the Interest Period applicable thereto, which period must
correspond to one of the Interest Rate options.  Notices received
after 11:00 a.m. local time at the office of Bank first shown above shall be
deemed received on the next business day.
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3
  INTERESTANDFEE(S) COMPUTATION
(ACTUAL/360).  Interest and fees, if any, shall be computed on
the basis of a 360-day year for the actual number of days in the applicable
period ("Actual/360 Computation").  The Actual/360 Computation
determines the annual effective yield by taking the stated (nominal) rate for a
year's period and then dividing said rate by 360 to determine the daily periodic
rate to be applied for each day in the applicable period.  Application
of the Actual/360 Computation produces an annualized effective interest rate
exceeding the nominal rate.
 
 REPAYMENT
TERMS.  This Note shall be due and payable in consecutive
monthly payments of accrued interest only, commencing on June 2, 2008, and
continuing on the same day of each month thereafter until fully
paid.  In any event, all principal and accrued interest shall be due
and payable on July 7, 2010.  This Note may be prepaid at any time
without the payment of any prepayment fee, except (i) as set forth in the
paragraph above entitled “INDEMNIFICATION” and (ii) with respect to any fees,
expenses or other obligations under any swap agreements (as defined in 11 U.S.C.
§ 101, as in effect from time to time).
 
 AUTOMATIC DEBIT OF CHECKING ACCOUNT
FOR LOAN PAYMENT.  Borrower authorizes Bank to debit demand
deposit account number 2000018590584 or any other account with Bank(routing number
031201467) designated in writing by Borrower, beginning June 2, 2008 for any
payments due under this Note.  Borrower further certifies that
Borrower holds legitimate ownership of this account and preauthorizes this
periodic debit as part of its right under said ownership.
 
 AVAILABILITY FEE.Borrower shall pay to Bank quarterly an availability fee equal to 0.10%
per annum on the difference between (i) (a) the face amount of the Replaced Note
prior to the date hereof, and (b) the face amount of this Note commencing with
the date hereof, and (ii) the outstanding principal balance of the Replaced Note
or this Note, as the case may be, for each day during the preceding calendar
quarter or portion thereof, commencing on June 1, 2008and
continuing on the same day of each quarter thereafter, with a final payment due
and payable on the date that all principal and accrued interest is paid in
full.
 
 APPLICATION OF
PAYMENTS.  Monies received by Bank from any source for
application toward payment of the Obligations shall be applied to accrued
interest and then to principal.  If a Default occurs, monies may be
applied to the Obligations in any manner or order deemed appropriate by
Bank.
 
 If any
payment received by Bank under this Note or other Loan Documents is rescinded,
avoided or for any reason returned by Bank because of any adverse claim or
threatened action, the returned payment shall remain payable as an obligation of
all persons liable under this Note or other Loan Documents as though such
payment had not been made.
 
 DEFINITIONS.  Loan
Documents.  The term "Loan Documents", as used in this Note and
the other Loan Documents, refers to all documents executed in connection with or
related to the loan evidenced by this Note and any prior notes which evidence
all or any portion of the loan evidenced by this Note, and any letters of credit
issued pursuant to any loan agreement to which this Note is subject, any
applications for such letters of credit and any other documents executed in
connection therewith or related thereto,and may include,
without limitation, a commitment letter that survives closing, a loan agreement,
this Note, guaranty agreements, security agreements, security instruments,
financing statements, mortgage instruments, any renewals or modifications,
whenever any of the foregoing are executed, but does not include swap agreements
(as defined in 11 U.S.C. § 101, as in effect from time to
time).  Obligations.  The
term "Obligations", as used in this Note and the other Loan Documents, refers to
any and all indebtedness and other obligations under this Note, all other
obligations under any other Loan Document(s), and all obligations under any swap
agreements (as defined in 11 U.S.C. § 101, as in effect from time to
time) between Borrower and Bank, or its affiliates, whenever
executed.  Certain
Other Terms.  All terms that are used but not otherwise defined
in any of the Loan Documents shall have the definitions provided in the Uniform
Commercial Code.
 
 LATE CHARGE.  If any
payments are not timely made, Borrower shall also pay to Bank a late charge
equal to 5% of each payment past due for 10 or more days.  This late
charge shall not apply to payments
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4
  due at
maturity or by acceleration hereof, unless such late payment is in an amount not
greater than the highest periodic payment due hereunder.
 
 Acceptance
by Bank of any late payment without an accompanying late charge shall not be
deemed a waiver of Bank's right to collect such late charge or to collect a late
charge for any subsequent late payment received.
 
 ATTORNEYS' FEES AND OTHER COLLECTION
COSTS.  Borrower shall pay all of Bank's reasonable expenses
incurred to enforce or collect any of the Obligations including, without
limitation, reasonable arbitration, paralegals', attorneys' and experts' fees
and expenses, whether incurred without the commencement of a suit, in any trial,
arbitration, or administrative proceeding, or in any appellate or bankruptcy
proceeding.
 
 USURY.  If at any
time the effective interest rate under this Note would, but for this paragraph,
exceed the maximum lawful rate, the effective interest rate under this Note
shall be the maximum lawful rate, and any amount received by Bank in excess of
such rate shall be applied to principal and then to fees and expenses, or, if no
such amounts are owing, returned to Borrower.
 
 DEFAULT.  If any of
the following occurs, a default ("Default") under this Note shall
exist:  Nonpayment.  The
failure of timely payment of the Obligations or Default with respect to any
financial covenant set forth in the Loan Agreement.  Nonperformance.  The
failure of timely performance of the Obligations or Default under this Note or
any other Loan Documents for more than thirty (30) days after Borrower has
actual or constructive notice of such failure of timely performance or Default;
provided that such thirty (30) day period shall not apply with respect to the
failure of timely payment of the Obligations or Default with respect to any
financial covenant as set forth above.  False Warranty.  A
warranty or representation made or deemed made in the Loan Documents or
furnished Bank in connection with the loan evidenced by this Note proves
materially false, or if of a continuing nature, becomes materially
false.  Cross
Default.  At Bank's option, any default in payment in excess of
$100,000.00 or performance of any obligation under any other loans, contracts or
agreements of Borrower, any Subsidiary or Affiliate of Borrower, any general
partner of or the holder(s) of the majority ownership interests of Borrower with
Bank or its affiliates ("Affiliate" shall have the meaning as defined in 11
U.S.C. § 101, as in effect from time to time, except that the term "Borrower"
shall be substituted for the term "Debtor" therein; "Subsidiary" shall mean any
business in which Borrower holds, directly or indirectly, a controlling
interest).  Cessation;
Bankruptcy.  The death of, appointment of a guardian for,
dissolution of, termination of existence of, appointment of a receiver for,
assignment for the benefit of creditors of, or commencement of any bankruptcy or
insolvency proceeding by or against Borrower, its Subsidiaries or Affiliates, if
any, or any general partner of or the holder(s) of the majority ownership
interests of Borrower, or any party to the Loan Documents.Material Capital
Structure or Business Alteration.  Except as set forth in the
Loan Agreement with respect to Permitted Acquisitions, as that term is defined
therein, without prior written consent of Bank, which consent shall not be
unreasonably withheld, (i) a material alteration in the kind or type of
Borrower's business or that of Borrower's Subsidiaries or Affiliates, if any;
(ii) the sale of substantially all of the business or assets of Borrower, any of
Borrower's Subsidiaries or Affiliates or any guarantor, or a material portion
(10% or more) of such business or assets if such a sale is outside the ordinary
course of business of Borrower, or any of Borrower's Subsidiaries or Affiliates
or any guarantor, or more than 50% of the outstanding stock or voting power of
or in any such entity in a single transaction or a series of transactions; (iii)
the acquisition of substantially all of the business or assets or more than 50%
of the outstanding stock or voting power of any other entity; or (iv) should any
Borrower or any of Borrower's Subsidiaries or Affiliates or any guarantor enter
into any merger or consolidation.Material Adverse
Change.Bank determines in good faith, in its sole discretion,
that the prospects for payment or performance of the Obligations are impaired or
there has occurred a material adverse change in the business or prospects of
Borrower, financial or otherwise.
 
 REMEDIES UPON
DEFAULT.  If a Default occurs under this Note or any Loan
Documents, Bank may at any time thereafter, take the following actions: 
Bank
Lien.  Foreclose its security interest or lien against
Borrower's accounts without notice.  Acceleration Upon
Default.  Accelerate the maturity of this Note and, at Bank’s
option, any or all other Obligations, other than Obligations under any swap
agreements (as
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5
  defined
in 11 U.S.C. § 101, as in effect from time to time) between Borrower and Bank,
or its affiliates, which shall be due in accordance with and governed by the
provisions of said swap agreements; whereupon this Note and the accelerated
Obligations shall be immediately due and payable; provided, however, if the
Default is based upon a bankruptcy or insolvency proceeding commenced by or
against Borrower or any guarantor or endorser of this Note, all Obligations
(other than Obligations under any swap agreement as referenced above) shall
automatically and immediately be due and payable.  Cumulative.  Exercise
any rights and remedies as provided under the Note and other Loan Documents, or
as provided by law or equity.
 
 FINANCIAL AND OTHER
INFORMATION.  Borrower shall deliver to Bank such information
as Bank may reasonably request from time to time, including without limitation,
financial statements and information pertaining to Borrower's financial
condition.  Such information shall be true, complete, and
accurate.
 
 WAIVERS AND
AMENDMENTS.  No waivers, amendments or modifications of this
Note and other Loan Documents shall be valid unless in writing and signed by an
officer of Bank.  No waiver by Bank of any Default shall operate as a
waiver of any other Default or the same Default on a future
occasion.  Neither the failure nor any delay on the part of Bank in
exercising any right, power, or remedy under this Note and other Loan Documents
shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or remedy.
 
 Except to
the extent otherwise provided by the Loan Documents or prohibited by law, each
Borrower and each other person liable under this Note waives presentment,
protest, notice of dishonor, demand for payment, notice of intention to
accelerate maturity, notice of acceleration of maturity, and notice of
sale.  Further, each agrees that Bank may (i) extend, modify or renew
this Note or make a novation of the loan evidenced by this Note, and/or (ii)
grant releases, compromises or indulgences with respect to any collateral
securing this Note, or with respect to any Borrower or other person liable under
this Note or any other Loan Documents, all without notice to or consent of each
Borrower and other such person, and without affecting the liability of each
Borrower and other such person; provided, Bank may not extend, modify or renew
this Note or make a novation of the loan evidenced by this Note without the
consent of the Borrower, or if there is more than one Borrower, without the
consent of at least one Borrower; and further provided, if there is more than
one Borrower, Bank may not enter into a modification of this Note which
increases the burdens of a Borrower without the consent of that
Borrower.
 
 MISCELLANEOUS
PROVISIONS.  Assignment.  This Note and the other
Loan Documents shall inure to the benefit of and be binding upon the parties and
their respective heirs, legal representatives, successors and
assigns.  Bank's interests in and rights under this Note and the other
Loan Documents are freely assignable, in whole or in part, by
Bank.  In addition, nothing in this Note or any of the other Loan
Documents shall prohibit Bank from pledging or assigning this Note or any of the
other Loan Documents or any interest therein to any Federal Reserve
Bank.  Borrower shall not assign its rights and interest hereunder
without the prior written consent of Bank, and any attempt by Borrower to assign
without Bank's prior written consent is null and void.  Any assignment
shall not release Borrower from the Obligations.  Applicable Law; Conflict Between
Documents.  This Note and, unless otherwise provided in any
other Loan Document, the other Loan Documents shall be governed by and construed
under the laws of the state named in Bank's address on the first page hereof
without regard to that state's conflict of laws principles.  If the
terms of this Note should conflict with the terms of any loan agreement or any
commitment letter that survives closing, the terms of this Note shall
control.  Borrower's
Accounts.  Except as prohibited by law, Borrower grants Bank a
security interest in all of Borrower's accounts with Bank and any of its
affiliates. Swap
Agreements.  All swap agreements (as defined in 11 U.S.C. §
101, as in effect from time to time), if any, between Borrower and Bank or its
affiliates are independent agreements governed by the written provisions of said
swap agreements, which will remain in full force and effect, unaffected by any
repayment, prepayment, acceleration, reduction, increase or change in the terms
of this Note, except as otherwise expressly provided in said written swap
agreements, and any payoff statement from Bank relating to this Note shall not
apply to said swap agreements unless expressly referred to in such payoff
statement.  Jurisdiction.  Borrower
irrevocably agrees to non-exclusive personal jurisdiction in the state named in
Bank's address on the first page hereof.  Severability.  If
any provision of this Note or of the other Loan Documents shall be prohibited or
invalid
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6
  under
applicable law, such provision shall be ineffective but only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Note or other such
document.  Notices.  Any
notices to Borrower shall be sufficiently given, if in writing and mailed or
delivered to the Borrower's address shown above or such other address as
provided hereunder, and to Bank, if in writing and mailed or delivered to
Wachovia Bank, National Association, Mail Code VA7628, P. O. Box 13327, Roanoke,
VA  24040 or Wachovia Bank, National Association, Mail Code VA7628, 10
South Jefferson Street, Roanoke, VA  24011 or such other address as
Bank may specify in writing from time to time.  Notices to Bank must
include the mail code.  In the event that Borrower changes Borrower's
address at any time prior to the date the Obligations are paid in full, Borrower
agrees to promptly give written notice of said change of address by registered
or certified mail, return receipt requested, all charges
prepaid.  Plural;
Captions.  All references in the Loan Documents to Borrower,
guarantor, person, document or other nouns of reference mean both the singular
and plural form, as the case may be, and the term "person" shall mean any
individual, person or entity.  The captions contained in the Loan
Documents are inserted for convenience only and shall not affect the meaning or
interpretation of the Loan Documents.  Advances.  Bank may,
in its sole discretion, make other advances which shall be deemed to be
advances under this Note, even though the stated principal amount of this
Note may be exceeded as a result thereof.  Posting of
Payments.  All payments received during normal banking hours
after 2:00 p.m. local time at the office of Bank first shown above shall be
deemed received at the opening of the next banking day.  Joint and Several
Obligations. If there is more than one Borrower, each is jointly and
severally obligated.  Fees and
Taxes.  Borrower shall promptly pay all documentary, intangible
recordation and/or similar taxes on this transaction whether assessed at closing
or arising from time to time.  LIMITATION ON LIABILITY; WAIVER OF
PUNITIVE DAMAGES.EACH OF THE PARTIES HERETO, INCLUDING BANK BY
ACCEPTANCE HEREOF, AGREES THAT IN ANY JUDICIAL, MEDIATION OR ARBITRATION
PROCEEDING OR ANY CLAIM OR CONTROVERSY BETWEEN OR AMONG THEM THAT MAY ARISE OUT
OF OR BE IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY
OTHER AGREEMENT OR DOCUMENT BETWEEN OR AMONG THEM OR THE OBLIGATIONS EVIDENCED
HEREBY OR RELATED HERETO, IN NO EVENT SHALL ANY PARTY HAVE A REMEDY OF, OR BE
LIABLE TO THE OTHER FOR, (1) INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR (2)
PUNITIVE OR EXEMPLARY DAMAGES.   EACH OF THE PARTIES HEREBY
EXPRESSLY WAIVES ANY RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY MAY
HAVE OR WHICH MAY ARISE IN THE FUTURE IN CONNECTION WITH ANY SUCH PROCEEDING,
CLAIM OR CONTROVERSY, WHETHER THE SAME IS RESOLVED BY ARBITRATION, MEDIATION,
JUDICIALLY OR OTHERWISE.  Patriot Act
Notice.To help fight the funding of terrorism and money
laundering activities, Federal law requires all financial institutions to
obtain, verify, and record information that identifies each person who opens an
account.  For purposes of this section, account shall be understood to
include loan accounts.  FINAL
AGREEMENT.This Note and the other
Loan Documents represent the final agreement between the parties and may not be
contradicted by evidence of prior, contemporaneous or subsequent oral agreements
of the parties.  There are no unwritten oral agreements between the
parties.
 
 WAIVER OF JURY
TRIAL.  TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OFBORROWERBY EXECUTION HEREOF AND
BANK BY ACCEPTANCE HEREOF, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHT EACH MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE, THE LOAN DOCUMENTS OR ANY
AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION WITH THISNOTE, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
ANY PARTY WITH RESPECT HERETO.  THIS PROVISION IS A MATERIAL
INDUCEMENT TO BANK TO ACCEPT THISNOTE.  EACH OF THE PARTIES AGREES
THAT THE TERMS HEREOF SHALL SUPERSEDE AND REPLACE ANY PRIOR AGREEMENT RELATED TO
ARBITRATION OF DISPUTES BETWEEN THE PARTIES CONTAINED IN ANY LOAN DOCUMENT OR
ANY OTHER DOCUMENT OR AGREEMENT HERETOFORE EXECUTED IN CONNECTION WITH, RELATED
TO OR BEING REPLACED, SUPPLEMENTED, EXTENDED OR MODIFIED BY, THIS
NOTE.
 
 IN WITNESS WHEREOF, Borrower,
on the day and year first above written, has caused this Note to be executed
under seal.
  Page
7
  Lakeland
      Industries, Inc.By:
              /s/ Gary A.
      PokrassaGary A. Pokrassa,
      Chief Financial Officer


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