Exhibit
10.13
 QUOTA
PLEDGE AGREEMENT
 
 
 This
Quota Pledge Agreement (the “Agreement”) is made
as of May 13,2008 and among:
 
 (a)
              LAKELAND INDUSTRIES,
      INC., a Delaware corporation, with its registered office at 701-07
      Koehler Avenue, Ronkonkoma, New York  11779, herein
      represented by its duly authorized signatories (the “Borrower”);
 
 (b)
              CHRISTOPHER J. RYAN,American
      citizen, married, chief executive officer, with office at Koehler Avenue,
      701, zip code 11779, at Ronkonkoma, New York State (“Chris” and
      together with Borrower, the “Grantors”);
 
 (c)
              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, (the “Bank”),
      represented in accordance with its corporate
  documents;
 
 (d)
              QUALYTEXTIL S/A, a
      corporation (sociedade
      por ações), duly organized and existing in accordance with the laws
      of Brazil, with its head office in the City of Salvador, State of Bahia,
      at Rua Luxemburgo, s/n.o, Loteamento Granjas Rurais, Presidente Vargas,
      Quadra O, Lotes 82 and 83, São Caetano, enrolled with the Brazilian
      Taxpayers Roll of the Ministry of Finance (CNPJ/MF) under no.
      04.011.170/0001-22, herein represented in accordance with its Charter
      Documents (together with its successors and permitted assigns, “Qualytextil”);
      and
 
 (e)
              LAKELAND DO BRASIL
      EMPREENDIMENTOS E PARTICIPAÇÕES LTDA., a limited company (sociedade empresária
      limitada) duly organized and existing in accordance with the laws
      of Brazil,  with its head office in the City of São Paulo, State
      of São Paulo, at Av. Bernardino de Campos, 98, sala 09, 14o andar, CEP
      04004-040, 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, “Lakeland do
      Brasil”).
 
 
 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
Guarantee dated of even date hereof entered into by and between the
Borrower 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 Borrower a $ 30,000,000 revolving line of credit to be used for the
purchase by Borrower of the totality of shares of Qualytextil;
  1
  WHEREAS,
after the execution of a Share Purchase Agreement by and among Lakeland do
Brasil, Borrower, Qualytextil and its shareholders, Lakeland do Brasil shall be
the legal owner of 1,507,701 shares, being 1,492,624 shares of common stock and
15,077 shares of Class A preferred stock, without par value, representing, in
the aggregate, 100% of the Capital Stock of the Qualytextil;
 
 WHEREAS,
it is a condition precedent of the Credit Agreement that Borrower causes to be
created in favor of the Bank, a security interest over the totality of the
quotas of Lakeland do Brasil to secure Borrower’s obligations arising from the
Credit Agreement;
 
 WHEREAS
Grantors have agreed to pledge the totality of their quotas in all of its forms
in favor of the Bank;
 
 WHEREAS,
it is a condition precedent to the obligations of the Bank to grant the Loan
under the Credit Agreement that this Agreement shall have been executed and
delivered and shall be in full force and effect.
 
 
 NOW,
THEREFORE, in consideration of the foregoing premises and mutual covenants
contained herein, the parties hereto agree as follows:
 
 1.          
 Defined
Terms.
 
 (a)           Capitalized
terms used and not otherwise defined in this Agreement are used herein with the
same meanings ascribed to such terms in the Credit Agreement. All terms defined
in this Agreement shall have the defined meanings contained herein when used in
any certificate or other document made or delivered pursuant hereto unless
otherwise defined therein.
 
 “Obligations" means
all debts, liabilities and obligations of any kind (monetary or otherwise,
whether absolute or contingent, matured or unmatured) of the Borrower now
existing or hereafter arising under or in connection with the Credit Agreement,
and the principal of and premium, if any, and interest (including interest
accruing during the pendency of bankruptcy or insolvency proceeding) on the
loans made to the Borrower thereunder.
 
 “Lien” means any
security interest, mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or otherwise), charge against or
interest in property, or other priority or preferential arrangement of any kind
or nature whatsoever, to secure payment of a debt or performance of an
obligation.
 
 "Person" means any
natural person, corporation, limited liability company, partnership, joint
venture, association, trust or unincorporated organization, governmental
authority or any other legal entity, whether acting in an individual, fiduciary
or other capacity.
 
 “Pledged Quotas” shall
have the meaning ascribed to such term in Section 2(ii).
 
 “Secured Obligations”
shall have the meaning ascribed to such term in Section 2.
 
 "Secured Parties"
means the Bank and, in each case, its respective successors, transferees and
assigns.
 
 “Quotas” shall have
the meaning ascribed to such term in Section 2(i).
 
 
 2.      
     Pledge; Grant of Security
Interest.  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, which, for the purposes of Article 1,424 of
the Brazilian Civil Code, are described in Schedule A hereto
(and which Borrower hereby acknowledges and recognizes for all legal purposes),
and all of the obligations of Borrower owing to the Bank (collectively, the
“Secured
Obligations”), Grantors hereby pledge to the Secured Parties, pursuant to
the provisions of Articles 1,451 et seq. of the Brazilian Civil Code (Federal
Law no. 10,406/02) and Article 39 of Federal Law no. 6,404/76 (the Brazilian
Corporations Act, as amended), the following, whether now existing or hereafter
acquired:
  2
  (i)        
   the quotas held by the Grantors, as indicated in Schedule B hereto (as
amended from time to time), representing on the date hereof the percentage of
100% of the Capital Stock of Lakeland do Brasil (the “Quotas”);
 
 (ii)           all
additional quotas in the Capital Stock of Lakeland do Brasil which may from time
to time be subscribed, purchased or acquired by the Grantors in any manner
(including, but not limited to, any additional quotas acquired by consolidation,
merger, exchange of stock, stock split, or corporate reorganization or
otherwise), whether or not in addition to, in substitution of, as a conversion
of or in exchange for any quotas of Lakeland do Brasil held by the Grantors,
together with all options, warrants or rights of any nature whatsoever that may
be issued or granted by Lakeland do Brasil to Grantors in respect of their
interest in Lakeland do Brasil while this Agreement is in effect (“Additional Quotas”
and, together with the Quotas , the “Pledged Quotas”);
and
 
 (iii)           all
profits, income, cash, rights, distributions, interests on capital and all other
amounts received, receivable or otherwise distributed to it upon any collection,
exchange, sale or other disposition of any of the Pledged Quotas, and any
property into which any of the Pledged Quotas is converted (including any
deposits, securities or negotiable instruments).
 
 3.         
  Registration of the Pledge
of the Pledged Quotas.
 
 (a)           Grantors
shall, (i) establish a first priority security interest over the Pledged Quotas
by registering this Agreement, within 20 (twenty) days of the execution date
hereof (or of any Amendment, as the case may be), and any amendment to this
Agreement within 20 (twenty) days of the execution date thereof, with the
relevant Registry of Titles and Deeds (Cartório de Registro de Títulos e
Documentos) in Brazil, pursuant toArticle 130 of Federal
Law no. 6,015/73(Public Registry Act,
as amended), and (ii) promptly furnish to the Bank evidence of such registration
in form and substance reasonably satisfactory to the Bank. All expenses incurred
in connection with such registrationsshall be borne by the
Borrower.
 
 (b)           If
any Pledged Quotas are held in custody by a third party, immediately after the
execution of this Agreement, or any issuance, receipt or acquisition of any
Additional Quotas, Grantors shall furnish to the Bank a statement of the custody
account with the custodian of the Pledged Quotas evidencing the first priority
pledge created hereunder in form and substance reasonably satisfactory to the
Bank.
 
 (c)           Grantors
shall immediately (but in any event not later than 7 (seven) business days)
after the execution of this Agreement or, whenever applicable, after any
issuance, receipt or acquisition of any Additional Quotas, file an amendment to
the articles of association of Lakeland do Brasil with the Commercial Registry
of the State of São Paulo (Junta Comercial do Estado de São
Paulo) in order to evidence the creation of the Lien contemplated
hereunder, which articles of association, as amended, must include the following
language:
 
 "The
totality of quotas of the capital stock of the quotaholders is pledged to the
Secured Parties under the Loan Agreement dated as of July 7, 2005, as amended by
the Third Modification Agreement and Reaffirmation
of Guarantee dated as of May [•], 2008, entered into by and between the
Lakeland Industries, Inc. and Wachovia Bank, National Association (the "Credit Agreement"),
as provided in the quota pledge agreement, entered into on May [•], 2008, by and
among the quotaholders, the Wachovia Bank, National Association, the Company and
Qualytextil S.A. (the "Quota Pledge
Agreement") in order to secure all of the obligations of the Lakeland
Industries, Inc. under the Credit Agreement and the obligations under the Quota
Pledge Agreement. The pledge created under the Quota Pledge Agreement shall be
extended to any new quotas issued or distributed by the Company to the
quotaholders, as well as shares issued thereby in case of modification of the
corporate form of the Company, being thus fully agreed and understood that the
total amount of pledged quotas pursuant to the Quota Pledge Agreement shall
always correspond to 100% of the interest of the quotaholders held in the
capital stock of the Company."
 
 (d)           Grantors
shall deliver to Bank evidence of the filing of the amendment to the articles of
association of Lakeland do Brasil and, as soon as the registration of the
amendment of the articles of association of the Lakeland do Brasil is obtained,
evidence of such registration.
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  (e)           Grantors
hereby undertake to maintain the notation of the lien created hereby or in
connection with any Pledged Quotas in full force and effect in the articles of
association of Lakeland do Brasil until the Secured Obligations are paid in
full.
 
 4.      
     Representations and
Warranties. Grantors represent and warrant to each Secured Party as of
the date hereof, as of the date of any Amendment and as of the date of any
Disbursement or 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)           Lakeland
do Brasil 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)           No
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 the
Borrower, by the Grantors, or (iii) for the exercise by the Secured Parties of
the remedies in respect of the Pledged Quotas 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 Pledged Quotas by laws affecting the offering and sale of
securities generally;
 
 (c)           the
security interest created hereby will, upon completion of the filings and
registrations required by Section 3 hereof,
constitute a legal, valid, perfected and enforceable first priority security
interest in the Pledged Quotas, securing the payment of the Obligations,
enforceable in accordance with the terms hereof against Grantors and all
creditors of Grantors, in each case; provided, however, that any
security interest to be created hereby on any Pledged Quota which has not been
issued to, or received or acquired by, Grantors on or before the date hereof
shall be deemed to have been created, perfected and to be in full force only (i)
after such Pledged Quotas is issued to, or received or acquired by, Grantors,
and (ii) on the date when the lien of the Secured Parties thereon, has been
registered as provided in Section 3 hereof, or
as may be in the future required by applicable law;
 
  (e)           (i)
Schedule B
hereto completely and accurately sets forth the number of Quotas of Lakeland do
Brasil owned by the Grantors. Grantors are the legal and record owners of,
and has title to, its quotas of the capital stock of Lakeland do Brasil (as such
quotas set forth on Schedule B hereto),
free of any and all Liens except for the Lien created hereunder. The Pledged
Quotas have been duly authorized and validly issued in compliance with
applicable securities laws and are fully paid and nonassessable. There are no
outstanding warrants, options, subscriptions, reserved quotas or other
contractual arrangements for the purchase of the Pledged Quotas, and there are
no outstanding arrangements, preemptive rights, redemption rights or any other
rights or claims of any character relating to the issuance, purchase,
repurchase, redemption, transfer, voting or preemptive rights with respect to
the Pledged Quotas that restrict the transfer of, require the issuance of, or
otherwise relate to the Capital Stock of the Borrower, in either case that would
affect the pledge hereunder; and
 
 (f)           Grantors
have all the requisite power and authority to execute, deliver and perform this
Agreement and to pledge the Pledged Quotas.
 
 
 5.       
    Covenants. Grantors
(as the case may be) covenant and agree that:
 
 (a)           Grantors
shall not (i) create, incur or permit to exist any Lien or option in favor of,
or any claim of any Person with respect to any of the Pledged Quotas, or any
interest therein, except for the security interest created hereby, or (ii) sell,
assign, transfer, exchange, or otherwise dispose of the Pledged
Quotas;
 
 (b)           Grantors
shall, upon request of the Bank, and as provided in the Credit Agreement, enter
into Amendments to this Agreement in form and substance reasonably satisfactory
to the Bank in order to include any other Person as a Secured Party
hereunder, and shall register such
Amendment in accordance with Section 3
hereof;
  4
  (c)           Grantors
shall pay, before any fine, penalty, interest or cost attaches thereto, all
taxes, assessments and other charges or levies now or hereafter assessed or
levied against the Pledged Quotas pledged by the Grantors hereunder, and shall
pay, or cause to be paid, all claims which, if unpaid, would reasonably be
expected to become a Lien thereon, except for taxes, assessments and other
charges, levies or claims that are subject to a good faith contest;
 
 (d)           Grantors  shall,
upon receipt of a notification of the Bank stating that an Event of Default has
occurred and is continuing, comply (notwithstanding any notice or other
communication to the contrary from any other Person) with all reasonable written
instructions received by it from the Bank in connection with this
Agreement;
 
 (e)           Grantors
shall, promptly upon request, provide the Bank all information and evidence it
may reasonably request concerning the Pledged Quotas to enable the Secured
Parties (directly or through any of their respective successors or assigns) to
enforce the provisions of this Agreement;
 
 (f)           Grantors
shall not enter into any agreement that could reasonably be expected to restrict
or inhibit the Secured Parties’ rights or ability to sell or otherwise dispose
of the Pledged Quotas or any part thereof after the occurrence of an Event of
Default.
 
 
 6.          
 Further
Assurance. Grantors shall execute such further documents and instruments
as may be required from time to time to enable the Secured Parties to protect
the rights created hereby in connection with the Pledged Quotas or any part
thereof or the exercise by the Bank of any of the rights, powers, authorities
and discretions vested in it by this Agreement. In addition, Grantors will
defend the right, title and interest of the Secured Parties in and to the
Pledged Quotas against the claims and demands of all Persons
whomsoever.
 
 
 7.       
    Voting Rights after an Event
of Default. After the occurrence and during the continuation of an Event
of Default, Borrower shall not exercise any voting, consent and other rights in
respect of the Pledged Quotas unless in accordance with the written instructions
of the Bank. Nothing contained in this Agreement shall be interpreted to require
Borrower to transfer voting, consent or subscription rights to the Secured
Parties.
 
 
 8.        
   Remedies.
 
 (a)           Without
prejudice to the foregoing provisions, upon (i) the occurrence and during the
continuation of an Event of Default and (ii) delivery of a notification to the
Grantors and the Borrower (notwithstanding any notice or other communication to
the contrary from any other Person), the Bank (directly or through the Bank, or
any of their respective agents, successors or assigns) is hereby irrevocably
authorized and entitled to dispose of, collect, receive, appropriate and/or
realize upon the Pledged Quotas (or any part thereof) and may forthwith sell,
assign, give an option or options to purchase or otherwise dispose of and
deliver the Pledged Quotas or any part thereof at market price, and upon market
terms and conditions, subject to Brazilian applicable law, irrespective of any
prior or subsequent notice to Lakeland do Brasil or the Grantors, in accordance
with the provisions set forth in Articles 1,433 Item IV of the Brazilian Civil
Code. Any notice by the Bank that an Event of Default has occurred and is
continuing or has ceased or has been waived shall be conclusive as against
Lakeland do Brasil, Grantors and all other third parties (notwithstanding any
notice or other communication to the contrary from any other
Person).
 
 (b)           In
accordance with Articles 684 and 1,433 Item IV of the Brazilian Civil Code and
as a means to comply with the obligations set forth herein, Grantors hereby
irrevocably appoint the Bank as their attorney-in-fact, and for such purpose
Grantors have executed and delivered to the Bank on the date hereof a
power-of-attorney in form and substance satisfactory to the Bank. Grantors agree
to deliver an equivalent power-of-attorney to any successor Bank and otherwise
as necessary to ensure that the Bank has powers to carry out the acts and rights
specified herein.
  5
  10.           Application of
Proceeds. Any monies received by any of the Secured Parties through the
exercise of remedies pursuant to Section 8(a) hereof
shall be applied in accordance with the terms of the Credit Agreement. After
payment in full of the Secured Obligations, any such monies so received in
excess of the Obligations shall be returned promptly to Borrower.
 
 
 11.           Amendments, etc. with
Respect to the Secured Obligations. Grantors shall remain obligated
hereunder, and the Pledged Quotas shall remain subject to the first priority
security interests granted hereby, at all times until termination of this
Agreement pursuant to Section 15, without
limitation and without any reservation of rights against Lakeland do Brasil and
the Grantors, and without notice to or further assent by the Lakeland do Brasil
or the Grantors, notwithstanding:
 
 (a)           any
change in the time, manner, place, amount or currency of payment of the
Obligations under any Financing Document;
 
 (b)           any
action (or failure to take any action) by the Secured Parties under or in
respect of the Credit Agreement in the exercise of any remedy, power or
privilege contained therein or at law, equity or otherwise, or waiver of any
remedy, power, privilege or extension of the time for performance of any
obligation under the Credit Agreement; and
 
 (c)           the
sale, exchange, waiver, surrender or release of any guaranty, right to setoff or
other collateral security at any time held by the Bank in its name or for the
benefit of the Bank for the payment of the Obligations.
 
 
 12.           Dividends and Events of
Default. For the purposes of Article 1,457 of the Brazilian Civil Code,
so long as no Event of Default has occurred and is continuing all dividends
payable in respect of the Pledged Quotas shall be paid to the
Grantors.
 
 
 13.           Certain Waivers by
Grantors. No Secured Party shall have any obligation to protect, secure,
perfect or insure any Lien at any time held as security for the Secured
Obligations or any property subject thereto except as required by applicable law
with respect to any Pledged Quotas.
 
 
 14.           Pursuit of Rights and
Remedies against Lakeland do Brasil and the Grantors. When pursuing its
rights and remedies hereunder against Lakeland do Brasil and the Grantors,
Secured Parties (directly or through the Bank, or any of their respective
agents, successors or assigns) may, but shall be under no obligation (except as
required by applicable law) to, pursue such rights and remedies as it may have
against any third party or against any collateral security for or guaranty of
the Secured Obligations or any right of offset with respect thereto, and any
failure by the Secured Parties (directly or through the Bank, or any of their
respective agents, successors or assigns) to pursue such other rights or
remedies or to collect any payments from such third party or to realize upon any
such collateral security or guaranty or to exercise any such right to setoff, or
any release of such third party or of any such collateral security or guaranty
or right of offset, shall not relieve Lakeland do Brasil or the Grantors of any
liability hereunder, and shall not impair or affect the rights and remedies,
whether express, implied or available as a matter of applicable law, of the
Bank.
 
 
 15.           Termination and
Release. Upon payment in full of the Secured Obligations, this Agreement
shall be terminated and the first priority security interests created hereby
shall be released, at the Grantors expense.  No release of this
Agreement, or of the Lien created and evidenced hereby, shall be valid unless
executed by the Bank.  Upon Grantors request and at the Grantors
expense, the Bank shall promptly execute and deliver to Grantors all documents
reasonably necessary to evidence such termination and release in accordance with
this Section
15.
  6
  16.           Cumulative Remedies.
The rights, powers and remedies of the Secured Parties under this Agreement are
cumulative and shall be in addition to all rights, powers and remedies available
to the Secured 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 Secured Parties hereunder.
 
 
 17.           Waivers and
Amendments. This Agreement and its provisions shall only be modified,
amended, supplemented or waived with the express written consent of Grantors and
the Bank.
 
 
 18.           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 Pledged Quotas, in each case enforceable against
Grantors in accordance with its terms.
 
 
 19.           Authority of the
Bank. Lakeland do Brasil and the Grantors acknowledge that any action
taken by or not taken by the Bank hereunder shall be conclusively presumed to
have been taken or not taken by the Bank as attorney-in-fact and representative
of the Bank with full and valid authority to so act or refrain from acting in
accordance with the Credit Agreement, and Lakeland do Brasil and Grantors shall
be under no obligation and shall have no right to make any inquiry respecting
such authority.
 
 
 20.           No Impairment of Other
Security Interests. The security provided for in this Agreement shall be
in addition to and shall be independent of every other security that the Secured
Parties (collectively or individually) may at any time hold for any of the
Obligations.
 
 
 21.           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.
 
 
 22.           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.
 
 
 23.           No Duty on Bank’s
Part. The powers conferred on the Bank hereunder are solely to protect
the Secured Parties’ interests in the Pledged Quotas and shall not impose any
duty upon the Bank to exercise any such powers. None of the Bank, its officers,
directors, employees or agents shall be responsibletoLakelanddo Brasil
or to Grantors for any act or failure to act hereunder, except to the
extent caused by their willful misconduct or gross negligence.
 
 24.           Notices. All notices
and other communications provided for hereunder shall be provided in accordance
with the Credit Agreement.
  7
  25.           Specific Performance.
For the purposes hereof, the Bank, as representative of the Bank, may seek the
specific performance of the Secured Obligations, as provided in the Brazilian
Civil Procedure Code.
 
 
 26.           Language. This
Agreement is being executed in English and a sworn translation of this Agreement
shall be provided by Lakeland do Brasil for purposes of registry, pursuant to
Section 3hereof.
 
 [SIGNATURE
PAGE TO FOLLOW]
  8
  IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed in
the presence of the undersigned witnesses.
 
 LAKELAND
DO BRASIL EMPREENDIMENTOS E PARTICIPAÇÕES LTDA.
 
 
 By: /s/
Jose Tavares Lucena
 Name:
Jose Tavares Lucena
 Title:
Administrator
 
 
 CHRISTOPHER
J. RYAN
 By: /s/ Gary A.
Pokrassa
 Name:
Gary A. Pokrassa
 Title:  Attorney
in Fact
 
 LAKELAND
INDUSTRIES, INC.
 
 
 By: /s/ Gary A.
Pokrassa
 Name:
Gary A. Pokrassa
 Title:  CFO
 
 
 
 WACHOVIA
BANK
 
 
 By:
      /s/ Roger
      Grossman
              
              By:
      ______________________________Name:
      Roger Grossman
              
              Name:Title:
      Vice President
              
              Title:QUALYTEXTIL
      S/ABy:
      /s/ Miguel G.
      Bastos
              
              By:
      /s/ Elder Marcos
      Vieira da ConceicaoName:
      Miguel G. Bastos
              
              Name:
      Elder Marcos Vieira da ConceicaoTitle:
      CFO
              
              Title:
      CEOWITNESSES:______________________________
              
              ______________________________Name:
              
              Name:ID:
              
              ID:
  9
 
 SCHEDULE
A
 
 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 Schedule A.1
 
 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%.
  10
  SCHEDULE
A.1
 
 SECOND
AMENDED AND RESTATED PROMISSORY NOTE
  11
 
 SCHEDULE
B
 
 DESCRIPTION
OF PLEDGED QUOTAS
 
 
 Name
              Number
      of Quotas
              %
      of Total Capital Stock
                (subject
      to rounding  adjustments)Lakeland
      do Brasil Empreendimentos e Participações Ltda.
              99
              99%Christopher
      J. Ryan
              1
              1%


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