**Exhibit 10.2**

 

**WARRANTTO PURCHASE COMMON STOCK**

 

NEITHER THE SECURITIES REPRESENTED BY THIS INSTRUMENT NOR THESECURITIES ISSUABLE UPON EXERCISE OF THIS INSTRUMENT HAS BEEN REGISTERED UNDERTHE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE ANDNONE OF SUCH SECURITIES MAY BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OFEXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCHACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROMREGISTRATION UNDER SUCH ACT OR SUCH LAWS. THE SECURITIES REPRESENTED BY THISINSTRUMENT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS INSTRUMENT MAY NOTBE SOLD OR OTHERWISE TRANSFERRED EXCEPT IN COMPLIANCE WITH SUCH ACT AND SUCHLAWS. ANY SALE OR OTHER TRANSFER NOT IN COMPLIANCE WITH SUCH ACT AND SUCH LAWSWILL BE VOID.

 

**WARRANT**

**topurchase**

**Up to1,683,952**

**Sharesof Common Stock**

 

**of TVICORPORATION**

 

Issue Date: November 20,2008

 

1.                                       Definitions.Unless the context otherwise requires, when used herein the following termsshall have the meanings indicated.

 

“Board of Directors”means the board of directors of the Company, including any duly authorizedcommittee thereof.

 

“Business Combination”means a merger, consolidation, statutory share exchange or similar transactionwith unaffiliated third parties or party that requires the approval of theCompany’s stockholders.

 

“business day” means anyday except Saturday, Sunday and any day on which banking institutions in theState of New York generally are authorized or required by law or othergovernmental actions to close.

 

“Charter” means thecharter of the Company, as amended or supplemented from time to time.

 

“Common Stock” means thecommon stock of the Company, par value $0.01 per share.

 

“Company” means TVICorporation, a Maryland corporation.

 

“Exchange Act” means theSecurities Exchange Act of 1934, as amended, or any successor statute, and the rules andregulations promulgated thereunder.

 

“Exercise Price” has themeaning set forth in Section 2.

 

“Expiration Time” has themeaning set forth in Section 3.

 

“Financing Agreement”means that certain Amended and Restated Financing and Security Agreement dated February 22,2008 (as amended by First Amendment to Amended and Restated Financing andSecurity Agreement dated July 3, 2008 and as amended, restated, modified,substituted, extended, and renewed from time to time) by and among the Company,Capa Manufacturing Corp, Safety Tech International, Inc., SignatureSpecial Event Services, Inc., and Branch Banking and Trust Company.

 

“Forbearance Agreement”means that certain Limited Forbearance Agreement, dated as of November 20,2008, as amended, restated, modified, substituted, extended and renewed fromtime to time, by and among the Company, Capa Manufacturing Corp, Safety TechInternational, Inc., Signature Special Event Services,

 

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Inc., and Branch Banking and Trust Company.

 

“Issue Date” means thedate of this Warrant.

 

“Market Price” means,with respect to shares of Common Stock, on any given day, the last reportedsale price regular way or, in case no such reported sale takes place on suchday, the average of the last closing bid and ask prices regular way, in eithercase on the principal national securities exchange on which shares of CommonStock are listed or admitted to trading, or if not listed or admitted totrading on any national securities exchange, the average of the closing bid andask prices as furnished by two members of the Financial Industry RegulatoryAuthority, Inc. selected from time to time by the Company for thatpurpose. “Market Price” shall be determined without reference to after hours orextended hours trading. If shares of Common Stock are not listed and traded ina manner that the quotations referred to above are available for the periodrequired hereunder, the Market Price per share of Common Stock shall be deemedto be the fair market value per share of such security as determined in goodfaith by the Board of Directors which determination shall be conclusiveevidence of such fair market value. For the purposes of determining the MarketPrice on the “trading day” preceding, on or following the occurrence of anevent, (i) that trading day shall be deemed to commence immediately afterthe regular scheduled closing time of trading on the New York Stock Exchangeor, if trading is closed at an earlier time, such earlier time and (ii) thattrading day shall end at the next regular scheduled closing time, or if tradingis closed at an earlier time, such earlier time (for the avoidance of doubt,and as an example, if the Market Price is to be determined as of the lasttrading day preceding a specified event and the closing time of trading on aparticular day is 4:00 p.m. and the specified event occurs at 5:00 p.m.on that day, the Market Price would be determined by reference to such 4:00 p.m.closing price).

 

“Obligations” has themeaning ascribed to it in the Financing Agreement.

 

“Person” has the meaninggiven to it in Section 3(a)(9) of the Exchange Act and as used inSections 13(d)(3) and 14(d)(2) of the Exchange Act.

 

“SEC” means the U.S.Securities and Exchange Commission.

 

“Securities Act” meansthe Securities Act of 1933, as amended, or any successor statute, and the rules andregulations promulgated thereunder.

 

“Shares” has the meaningset forth in Section 2.

 

“Term Loan” has themeaning ascribed to it in the Financing Agreement.

 

“trading day” means (A) ifthe shares of Common Stock are not traded on any national or regionalsecurities exchange or association or over-the-counter market, a business dayor (B) if the shares of Common Stock are traded on any national orregional securities exchange or association or over-the-counter market, abusiness day on which such relevant exchange or quotation system is scheduledto be open for business and on which the shares of Common Stock (i) arenot suspended from trading on any national or regional securities exchange orassociation or over-the-counter market for any period or periods aggregatingone half hour or longer, and (ii) have traded at least once on thenational or regional securities exchange or association or over-the-countermarket that is the primary market for the trading of the shares of CommonStock.

 

“Vesting Date” has themeaning set forth in Section 13(A).

 

“Warrantholder” has themeaning set forth in Section 2.

 

“Warrant” means thisWarrant, issued pursuant to the Forbearance Agreement.

 

2.                                      Numberof Shares; Exercise Price. This certifies that, for value received, theBranch Banking and Trust Company, a North Carolina banking corporation, or itspermitted assigns (the “Warrantholder “) is entitled, upon the terms andsubject to the conditions hereinafter set forth, to acquire from the Company,in whole or in part, up to an aggregate of 1,683,952 fully paid andnonassessable shares of Common Stock, at a purchase price per share

 

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of Common Stock equal to $0.164 per share (the “Exercise Price”).  The number of shares of Common Stock that areissuable upon exercise of this Warrant (the “Shares”) and the Exercise Priceare subject to adjustment as provided herein, and all references to “CommonStock,” “Shares” and “Exercise Price” herein shall be deemed to include anysuch adjustment or series of adjustments.

 

3.                                      Exerciseof Warrant; Term. Subject to Section 2, the right to purchase theShares represented by this Warrant is exercisable, in whole or in part by theWarrantholder, at any time or from time to time after the first business dayimmediately following the Vesting Date, but in no event later than 5:00 p.m.,Eastern time on the tenth anniversary of the Vesting Date (the “Expiration Time”),by (A) the surrender of this Warrant and Notice of Exercise annexedhereto, duly completed and executed on behalf of the Warrantholder, at theprincipal executive office of the Company located at the address set forth in Section 20(or such other office or agency of the Company in the United States as it maydesignate by notice in writing to the Warrantholder at the address of theWarrantholder appearing on the books of the Company), and (B) payment ofthe Exercise Price for the Shares thereby purchased:

 

(i)                      with theconsent of the Company (except as otherwise provided in this subparagraph (i) below),by having the Company withhold, from the shares of Common Stock that wouldotherwise be delivered to the Warrantholder upon such exercise, shares ofCommon Stock issuable upon exercise of the Warrant equal in value to theaggregate Exercise Price as to which this Warrant is so exercised based on theMarket Price of the Common Stock on the trading day on which this Warrant isexercised and the Notice of Exercise is delivered to the Company pursuant tothis Section 3; *provided, however,*that such consent of the Company shall not be required if a registration statementunder the Securities Act registering for resale the shares of Common Stockissuable upon such exercise either (A) is not effective on the date ofsuch exercise or (B) if such registration statement is not effective onthe date of such exercise then, in addition to such failure to be effective,such registration statement has not been effective for at least twenty (20) ofthe thirty (30) business days immediately preceding the date of such exercise,or

 

(ii)                       bytendering in cash, by certified or cashier’s check payable to the order of theCompany, or by wire transfer of immediately available funds to an accountdesignated by the Company.

 

If the Warrantholder doesnot exercise this Warrant in its entirety, the Warrantholder will be entitledto receive from the Company within a reasonable time, and in any event notexceeding three business days, a new warrant in substantially identical formfor the purchase of that number of Shares equal to the difference between thenumber of Shares subject to this Warrant and the number of Shares as to whichthis Warrant is so exercised.

 

4.                                      Issuanceof Shares; Authorization; Listing. Certificates for Shares issued uponexercise of this Warrant will be issued in such name or names as theWarrantholder may designate, subject (with respect to transfers of thisWarrant) to the limitations on transfer provided in Section 8, and will bedelivered to such named Person or Persons within a reasonable time, not toexceed three business days after the date on which this Warrant has been dulyexercised in accordance with the terms of this Warrant. The Company herebyrepresents and warrants that any Shares issued upon the exercise of thisWarrant in accordance with the provisions of Section 3 will be duly andvalidly authorized and issued, fully paid and nonassessable and free from alltaxes, liens and charges (other than liens or charges created by theWarrantholder, income and franchise taxes incurred in connection with theexercise of this Warrant or taxes in respect of any transfer occurringcontemporaneously therewith). The Company agrees that the Shares so issued willbe deemed to have been issued to the Warrantholder as of the close of businesson the date on which this Warrant and payment of the Exercise Price aredelivered to the Company in accordance with the terms of this Warrant,notwithstanding that the stock transfer books of the Company may then be closedor certificates representing such Shares may not be actually delivered on suchdate. The Company will take all actions necessary to make available the Sharesissuable upon exercise of this Warrant at any time, including amending itsCharter to increase the number of authorized shares of Common Stock.  The Company will procure, at its soleexpense, the listing of the Shares issuable upon exercise of this Warrant atany time, subject to issuance or notice of issuance, on all principal stockexchanges, if any, on which the Common Stock is then listed or traded.

 

5.                                      NoFractional Shares or Scrip. No fractional Shares or scrip representingfractional Shares shall be issued upon any exercise of this Warrant. In lieu ofany fractional Share to which the Warrantholder would otherwise be entitled,the Warrantholder shall be entitled to receive a cash payment equal to theMarket Price of the Common Stock on the last trading day preceding the date ofexercise less the pro-rated Exercise Price for such

 

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fractional share.

 

6.                                      NoRights as Stockholders; Transfer Books. This Warrant does not entitle theWarrantholder to any voting rights or other rights as a stockholder of theCompany prior to the date of exercise hereof. The Company will at no time closeits transfer books against transfer of this Warrant in any manner whichinterferes with the timely exercise of this Warrant.

 

7.                                      Charges,Taxes and Expenses. Issuance of certificates for Shares to theWarrantholder upon the exercise of this Warrant shall be made without charge tothe Warrantholder for any issue or transfer tax or other incidental expense inrespect of the issuance of such certificates, all of which taxes and expensesshall be paid by the Company.

 

8.                                      Transfer/Assignment.

 

(A)                              Subjectto compliance with clauses (B) and (C) of this Section 8, thisWarrant and all rights hereunder are transferable, in whole or in part(provided that in the case of a partial transfer of this Warrant, the number ofShares subject to the partial transfer shall not be less than 420,988), uponthe books of the Company by the registered holder hereof in person or by dulyauthorized attorney, and a new warrant shall be made and delivered by theCompany, of the same tenor and date as this Warrant but registered in the nameof the transferee, upon surrender of this Warrant, duly endorsed, to theprincipal executive office of, or agency designated by, the Company set forthin Section 19. All expenses (other than stock transfer taxes) and othercharges payable in connection with the preparation, execution and delivery ofthe new warrants pursuant to this Section 8 shall be paid by the Company.

 

(B)                                Unlessthe Company has failed to pay Obligations (as that term is defined in theFinancing Agreement) in full upon the acceleration of the Obligations or uponthe maturity of the Obligations (in the case of which failure, this clause (B) doesnot apply), if the Warrantholder proposes to transfer this Warrant, in whole orin part, the Warrantholder shall promptly give written notice (the “TransferNotice”) to the Company of such transfer. The Transfer Notice shall describe in reasonable detail the proposedtransfer including, without limitation, the number of shares covered by theportion of the Warrant to be transferred, the nature of such transfer, theform, amount and timing of the consideration to be paid, and the name andaddress of each prospective purchaser or transferee.  For a period of ten (10) business daysfollowing receipt of the Transfer Notice, the Company shall have the right topurchase the Warrant, or the part thereof, subject to such notice on the sameterms and conditions as set forth therein. The Company’s purchase right shall be exercised by written notice signedby an officer of the Company (the “Company Notice”) and delivered to theWarrantholder within such ten (10) business day period.  The Company shall effect the purchase of theWarrant or part thereof to be transferred on the terms set forth in theTransfer Notice. If Company does not deliver the Company Notice within such ten(10) business day period or if the Company fails to effect the purchase asrequired, then the Warrantholder within such ten (10) business daythereafter shall effect the transfer strictly in the manner set forth in theTransfer Notice or, if it does not, the Transfer Notice shall be null and voidand no other transfer of the Warrant or part thereof shall be made unless therequirement of this clause (B) have been met with respect to such othertransfer.

 

(C)                                Neitherthe securities represented by this Warrant nor the securities issuable uponexercise of this Warrant have been registered under the Securities Act and suchsecurities may be resold only if registered pursuant to the Securities Act orif an exemption from registration is available. Further, the securitiesissuable upon exercise of this Warrant may be issued and sold to the holderhereof only if the issuance thereof has been registered under the SecuritiesAct or an exemption from registration is available.

 

9.                                      Exchangeand Registry of Warrant. This Warrant is exchangeable, upon the surrenderhereof by the Warrantholder to the Company, for a new warrant or warrants oflike tenor and representing the right to purchase the same aggregate number ofShares. The Company shall maintain a registry showing the name and address ofthe Warrantholder as the registered holder of this Warrant. This Warrant may besurrendered for exchange or exercise in accordance with its terms, at theprincipal executive office of the Company, and the Company shall be entitled torely in all respects, prior to written notice to the contrary, upon suchregistry.

 

10.                                Loss,Theft, Destruction or Mutilation of Warrant. Upon receipt by the Company ofevidence 

 

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reasonably satisfactoryto it of the loss, theft, destruction or mutilation of this Warrant, and in thecase of any such loss, theft or destruction, upon receipt of a bond, indemnityor security reasonably satisfactory to the Company, or, in the case of any suchmutilation, upon surrender and cancellation of this Warrant, the Company shallmake and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant,a new Warrant of like tenor and representing the right to purchase the sameaggregate number of Shares as provided for in such lost, stolen, destroyed ormutilated Warrant.

 

11.                                Saturdays,Sundays, Holidays, etc. If the last or appointed day for the taking of anyaction or the expiration of any right required or granted herein shall not be abusiness day, then such action may be taken or such right may be exercised onthe next succeeding day that is a business day.

 

12.                                PublicInformation.   The Company covenantsthat it will use its commercially reasonable efforts to timely file all reportsand other documents required to be filed by it under the Securities Act and theExchange Act and the rules and regulations promulgated by the SECthereunder unless the Company is not required to file such reports.  The Company shall have no obligation tomaintain the listing of its Common Stock on any exchange or quotation system orto continue to remain subject to the reporting requirements of the ExchangeAct. The Company will use commercially reasonable efforts to take such furtheraction as any Warrantholder may reasonably request, in each case to the extentrequired from time to time to enable such holder to, if permitted by the termsof this Warrant, sell this Warrant without registration under the SecuritiesAct within the limitation of the exemptions provided by (A) Rule 144under the Securities Act, as such rule may be amended from time to time,or (B) any successor rule or regulation hereafter adopted by theSEC.  If the Company is not required tofile reports under the Exchange Act, the Company will deliver to theWarrantholder (a) within 120 days after each fiscal year end, annualfinancial statements and (b) within forty five (45) days after the closeof each fiscal quarter of the Company, quarterly financial statements, which financial statements shall be meetthe requirements for financial statements set forth in Section 6.1.1 (a) and(c) of the Financing Agreement (even though the Financing Agreement may nolonger be in effect).

 

13.                                Adjustmentsand Other Rights. The Exercise Price and the number of Shares issuable uponexercise of this Warrant shall be subject to adjustment from time to time asfollows:

 

(A)                              AdjustmentsRelated to the Term Loan.  The numberof Shares issuable upon exercise of this Warrant shall be reduced by (i) 420,988shares if the Term Loan balance is reduced by 50% of the balance on the IssueDate on or before July 31, 2009, (ii) 841,976 shares (including anyprior reduction under clause (i)) if the Term Loan balance is paid in full onor before October 31, 2009, or (iii) 100% if the Obligations are paidin full on or before April 30, 2010 (the “Vesting Date”); *provided, however*, that the Warrantholdershall not be entitled to the reductions under clause (i) or clause (ii) unlesson the date of determination (x) no Event of Default (as defined in theFinancing Agreement) exists and (y) the Warrantholder has positive Availability(as that term is defined in the Financing Agreement) after excluding from theBorrowing Base (as that term is defined in the Financing Agreement) accountsand inventory that were not of the type eligible for inclusion in EligibleReceivables and Eligible Inventory (as such terms are defined in the FinancingAgreement), respectively, on the Closing Date (as defined in the FinancingAgreement).

 

(B)                                StockSplits, Subdivisions, Reclassifications or Combinations. If, after theIssue Date, the Company shall (i) declare and pay a dividend or make adistribution on its Common Stock in shares of Common Stock, (ii) subdivideor reclassify the outstanding shares of Common Stock into a greater number ofshares, or (iii) combine or reclassify the outstanding shares of CommonStock into a smaller number of shares, the number of Shares issuable uponexercise of this Warrant at the time of the record date for such dividend ordistribution or the effective date of such subdivision, combination orreclassification shall be proportionately adjusted so that the Warrantholderafter such date shall be entitled to purchase the number of shares of CommonStock that such holder would have owned or been entitled to receive in respectof the shares of Common Stock subject to this Warrant after such date had thisWarrant been exercised immediately prior to such date. In such event, theExercise Price in effect at the time of the record date for such dividend ordistribution or the effective date of such subdivision, combination orreclassification shall be adjusted to the number obtained by dividing (x) theproduct of (1) the number of Shares issuable upon the exercise of thisWarrant before such adjustment and (2) the Exercise Price in effectimmediately prior to

 

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the record or effective date, as the case may be, forthe dividend, distribution, subdivision, combination or reclassification givingrise to this adjustment by (y) the new number of Shares issuable uponexercise of this Warrant determined pursuant to the immediately precedingsentence.

 

(C)                                Adjustmentsfor Certain Dilutive Issuances.

 

(i)                                    (X)                               Ifthe Company shall issue, after the Issue Date, any Additional Stock (as definedbelow) for a consideration per share less than the Exercise Price in effectimmediately prior to the issuance of such Additional Stock, the Exercise Pricein effect immediately prior to each such issuance shall forthwith (except asotherwise provided in this clause (i)) be adjusted to a price equal to theprice paid per share for such Additional Stock.

 

(Y)                                Inthe case of the issuance of Common Stock for cash, the consideration shall bedeemed to be the amount of cash paid therefore before deducting any reasonablediscounts, commissions or other expenses allowed, paid or incurred by theCompany for any underwriting or otherwise in connection with the issuance andsale thereof.  In the case of theissuance of the Common Stock for a consideration in whole or in part other thancash, the consideration other than cash shall be deemed to be the fair valuethereof as determined by the Board of Directors irrespective of any accountingtreatment.

 

(Z)                                Inthe case of the issuance (whether before, on or after the Issue Date) ofoptions to purchase or rights to subscribe for Common Stock, securities bytheir terms convertible into or exchangeable for Common Stock or options topurchase or rights to subscribe for such convertible or exchangeablesecurities, the following provisions shall apply for all purposes of thissubsection 13(C)(i):

 

(1)                                  Theshares of Common Stock deliverable upon exercise of such options to purchase orrights to subscribe for Common Stock shall be deemed to have been issued at thetime such options or rights were issued and for a consideration equal to theconsideration (determined in the manner provided in subsections 13(C)(i)(Y)),if any, received by the Company upon the issuance of such options or rightsplus the minimum exercise price provided in such options or rights for theCommon Stock covered thereby.

 

(2)                                   Theshares of Common Stock deliverable upon conversion of or in exchange for anysuch convertible or exchangeable securities or upon the exercise of options topurchase or rights to subscribe for such convertible or exchangeable securitiesand subsequent conversion or exchange thereof shall be deemed to have beenissued at the time such securities were issued or such options or rights wereissued and for a consideration equal to the consideration, if any, received bythe Company for any such securities and related options or rights (excludingany cash received on account of accrued interest or accrued dividends), plusthe minimum additional consideration, if any, to be received by the Companyupon the conversion or exchange of such securities or other exercise of anyrelated options or rights (the consideration in each case to be determined inthe manner provided in subsections 13(C)(i)(Y)).

 

(ii)                                      “AdditionalStock” shall mean any shares of Common Stock issued (or deemed to have been issuedpursuant to subsection 13(C)(i)(Z)) by the Company after the Issue Date otherthan shares of Common Stock issuable or issued to employees, directors, andconsultants of the Company directly or pursuant to a stock option plan,restricted stock plan or other equity incentive plan approved by Board ofDirectors of the Company.

 

(D)                                OtherDistributions.  In the event theCompany shall declare a distribution payable to holders of Common Stock in anyof its assets or debt securities or any rights or warrants to purchase debtsecurities, assets, or other securities of the Company, the Exercise Priceshall be adjusted as follows: the Exercise Price immediately before suchdistribution shall be multiplied by a fraction, the numerator of which shall be(1) the current Market Price per share of Common Stock on the record dateof the other distribution (“Other Distribution Record Date”) minus (2) thefair market value on the Other Distribution Record Date of the assets,securities, rights or warrants applicable to one share of Common Stock; the 

 

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denominator of which shall be the current Market Priceper share of Common Stock on the Other Distribution Record Date.  The Board of Directors of the Company shallmake a reasonable determination of the fair market value.  This subsection (D) does not apply toany transactions referred to in subsection (B) of this Section 13.

 

(E)                                  Noticeof Business Combinations. If the Company shall to propose to enter intoa Business Combination, at the same time the Company gives any notice toshareholders of, and in any event least ten (10) days before, the closingof the proposed Business Combination, the Company shall provide theWarrantholder with written notice thereof. This notice shall set forth:  (i) thename and address of the proposed parties in the transaction; (ii) theproposed structure of the Business Combination; (iii) the proposed kindand amount of stock, securities or the property receivable and the terms andconditions of payment in connection with the Business Combination; (iv) thenumber of outstanding shares of capital stock of the Company at such time, and (v) suchfacts with respect to the Business Combination as shall be reasonably necessaryto indicate the kind and amount of stock, securities or the property receivableas a result of such Business Combination if the Warrantholder were to exerciseits rights under this Warrant.

 

(F)                                  Roundingof Calculations; Minimum Adjustments. All calculations under this Section 13shall be made to the nearest one-tenth (1/10th) of a cent or to thenearest one-hundredth (1/100th) of a share, as the case may be. Anyprovision of this Section 13 to the contrary notwithstanding, noadjustment in the Exercise Price or the number of Shares into which thisWarrant is exercisable shall be made if the amount of such adjustment would beless than $0.01 or one-tenth (1/10th) of a share of Common Stock, but anysuch amount shall be carried forward and an adjustment with respect theretoshall be made at the time of and together with any subsequent adjustment which,together with such amount and any other amount or amounts so carried forward,shall aggregate $0.01 or one-tenth (1/10th) of a share of Common Stock, ormore.

 

(G)                                 Timingof Issuance of Additional Common Stock Upon Certain Adjustments. In anycase in which the provisions of this Section 13 shall require that anadjustment shall become effective immediately after a record date for an event,the Company may defer until the occurrence of such event (i) issuing tothe Warrantholder of this Warrant exercised after such record date and beforethe occurrence of such event the additional shares of Common Stock issuableupon such exercise by reason of the adjustment required by such event over andabove the shares of Common Stock issuable upon such exercise before givingeffect to such adjustment and (ii) paying to such Warrantholder any amountof cash in lieu of a fractional share of Common Stock;*provided*,*however*, that the Company upon request shall deliver to suchWarrantholder a due bill or other appropriate instrument evidencing suchWarrantholder’s right to receive such additional shares, and such cash, uponthe occurrence of the event requiring such adjustment.

 

(H)                                StatementRegarding Adjustments. Whenever the Exercise Price or the number of Sharesinto which this Warrant is exercisable shall be adjusted as provided in this Section 13,the Company shall forthwith file at the principal executive office of theCompany a statement showing in reasonable detail the facts requiring suchadjustment and the Exercise Price that shall be in effect and the number ofShares into which this Warrant shall be exercisable after such adjustment, andthe Company shall also cause a copy of such statement to be sent by mail, firstclass postage prepaid, to each Warrantholder at the address appearing in theCompany’s records.

 

(I)                                     Noticeof Adjustment Event. In the event that the Company shall propose to takeany action of the type described in this Section 13 (but only if theaction of the type described in this Section 13 would result in anadjustment in the Exercise Price or the number of Shares into which thisWarrant is exercisable or a change in the type of securities or property to bedelivered upon exercise of this Warrant), the Company shall give notice to theWarrantholder, in the manner set forth in Section 13(I), which noticeshall specify the record date, if any, with respect to any such action and theapproximate date on which such action is to take place. Such notice shall alsoset forth the facts with respect thereto as shall be reasonably necessary toindicate the effect on the Exercise Price and the number, kind or class ofshares or other securities or property that shall be deliverable upon exerciseof this Warrant. In the case of any action that would require the fixing of arecord date, such notice shall be given at least 10 days prior to the date sofixed, and in case of all other action, such notice shall be given at least 15days prior to the taking of such

 

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proposed action. Failureto give such notice, or any defect therein, shall not affect the legality orvalidity of any such action.

 

(J)                                      ProceedingsPrior to Any Action Requiring Adjustment. As a condition precedent to thetaking of any action that would require an adjustment pursuant to this Section 13,the Company shall take any action that may be necessary, including obtainingregulatory, securities exchange or stockholder approvals or exemptions, inorder that the Company may thereafter validly and legally issue as fully paidand nonassessable all shares of Common Stock that the Warrantholder is entitledto receive upon exercise of this Warrant pursuant to this Section 13.

 

(K)                                  AdjustmentRules. Any adjustments pursuant to this Section 13 shall be madesuccessively whenever an event referred to herein shall occur. If an adjustmentin Exercise Price made hereunder would reduce the Exercise Price to an amountbelow par value of the Common Stock, then such adjustment in Exercise Pricemade hereunder shall reduce the Exercise Price to the par value of the CommonStock.

 

14.                                 NoAvoidance. The Company will not, by amendment of its Charter or through anyreorganization, transfer of all or substantially all of the assets,consolidation, merger, dissolution, issue or sale of securities or any othervoluntary action, avoid or seek to avoid the observance or performance of anyof the terms to be observed or performed hereunder by the Company; provided,for the sake of clarity, a Business Combination for which the Company hascomplied with the requirements of Section 13(E) (BusinessCombinations) does not violate this Section.

 

15.                                 GoverningLaw.**This Warrant will be governed by andconstrued in accordance with the laws of the State of Maryland. To the extentpermitted by applicable law, each of the Company and the Warrantholder herebyunconditionally waives trial by jury in any legal action or proceeding relatingto this Warrant or the transactions contemplated hereby or thereby.**

 

16.                                 BindingEffect. This Warrant shall be binding upon any successors or assigns of theCompany.

 

17.                                 Amendments.This Warrant may be amended and the observance of any term of this Warrant maybe waived only with the written consent of the Company and the Warrantholder.

 

18.                                 ProhibitedActions. The Company agrees that it will not take any action that wouldentitle the Warrantholder to an adjustment of the Exercise Price if the totalnumber of shares of Common Stock issuable after such action upon exercise ofthis Warrant, together with all shares of Common Stock then outstanding and allshares of Common Stock then issuable upon the exercise of all outstandingoptions, warrants, conversion and other rights, would exceed the total numberof shares of Common Stock then authorized by its Charter.

 

19.                                 Notices.Any notice, request, instruction or other document to be given hereunder by anyparty to the other will be in writing and will be deemed to have been dulygiven (a) on the date of delivery if delivered personally, or byfacsimile, upon confirmation of receipt, or (b) on the second business dayfollowing the date of dispatch if delivered by a recognized next day courierservice. All notices hereunder shall be delivered as set forth below, orpursuant to such other instructions as may be designated in writing by theparty to receive such notice:

 
| (A)    | if to the Company: |
|--------|--------------------|
|   |               |
|   |               | TVI Corporation |
|   |               | 7100 Holladay-Tyler Road |
|   |               | Glenn Dale, MD 20769 |
|   |               | Attention: Chief Executive Officer |
|   |               | Facsimile: (301) 352-8818 |

 

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|   |                     | With copy to:                                                                                                                                                                                                                                                                |
|--------|--------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                     |                                                                                                                                                                                                                                                                         |
|   |                     | Duane Morris LLP                                                                                                                                                                                                                                                             |
|   |                     | 30 South 17th Street                                                                                                                                                                                                                                                         |
|   |                     | Philadelphia, Pennsylvania 19010                                                                                                                                                                                                                                             |
|   |                     | Richard A. Silfen, Esq.                                                                                                                                                                                                                                                 |
|   |                     | Facsimile: (215) 689-4385                                                                                                                                                                                                                                                    |
|   |                     |                                                                                                                                                                                                                                                                         |
| (B)    | if to the Warrantholder: |
|   |                     |                                                                                                                                                                                                                                                                         |
|   |                     | Branch Banking and Trust Company                                                                                                                                                                                                                                             |
|   |                     | 8200 Greensboro Drive, Suite 800                                                                                                                                                                                                                                        |
|   |                     | McLean, Virginia 22102                                                                                                                                                                                                                                                       |
|   |                     | Attention:                                         Derek T.  Whitwer |
|   |                     |                                                                                                                                                                                                                                                                         |
|   |                     | With copy to:                                                                                                                                                                                                                                                                |
|   |                     |                                                                                                                                                                                                                                                                         |
|   |                     | Miles & Stockbridge P.C.                                                                                                                                                                                                                                            |
|   |                     | 10 Light Street                                                                                                                                                                                                                                                              |
|   |                     | Baltimore, MD 21202                                                                                                                                                                                                                                                          |
|   |                     | Attn:                    Frederick W. Runge, Jr.                                                                                                                         |

 

20.                                EntireAgreement. This Warrant and the Forbearance Agreement (including alldocuments incorporated therein), contain the entire agreement between theparties with respect to the subject matter hereof and supersede all prior andcontemporaneous arrangements or undertakings with respect thereto.

 

The Company’s signatureis on the following page.  The rest ofthis page is intentionally left blank.

 

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COMPANY’S SIGNATURE PAGETOWARRANT TO PURCHASE COMMON STOCK

 

IN WITNESS WHEREOF, theCompany has caused this Warrant to be duly executed by a duly authorizedofficer.

 

Dated:  November 20, 2008

 

 
| TVI CORPORATION                                                           |                           |
|---------------------------------------------------------------------------|--------------------------------|
|                                                                      |                           |
|                                                                      |                           |
| By:                                                                       |   /s/ Harley Hughes  |   |
| Name: Harley Hughes                                                  |                           |
| Title: President and Chief Executive Officer                         |                           |
|                                                                      |                           |
| **Attest:**                                                               |                           |   |
|                                                                      |                           |   |
|                                                                      |                           |   |
| By:                                                                       |   /s/ Sherri Voelkel |   |
| Name: Sherri Voelkel                                                 |                           |
| Title: Senior Vice President, Chief Financial  Officer and Secretary |                           |
|                                                                           |                                |  |  |

 

**[SignaturePage to Warrant]**

 

----

 

**[Form ofNotice of Exercise]**

 

Date:              

 

TO: TVI Corporation (the “Company”)

 

RE: Election to Purchase Common Stock

 

The undersigned, pursuantto the provisions set forth in the attached Warrant, hereby subscribes for andpurchases the number of shares of the Common Stock set forth below covered bysuch Warrant, or for all of the shares issuable on the date hereof uponexercise of such Warrant if this Notice of Exercise does not specify the numberof shares of Common Stock for which the undersigned so subscribes andpurchases. The undersigned, in accordance with Section 3 of the Warrant,hereby agrees to pay the aggregate Exercise Price for such shares of CommonStock in the manner set forth below.  Tothe extent that the Exercise Price A new warrant evidencing the remainingshares of Common Stock covered by such Warrant, but not yet subscribed for andpurchased, if any, should be issued in the name set forth below.

 

Number of Shares of Common Stock:

 

Method of Payment of Exercise Price:

 

*(Checkthe appropriate box below to indicate method of payment of Exercise Price.  If no box is checked, then such Warrant shallbe deemed to have been exercised pursuant to Section 3(ii) of SuchWarrant; **provided, however,** thatno exercise of such Warrant shall be effective unless and until the Company hasreceived payment in full, in the manner prescribed by Section 3(ii) ofsuch Warrant, of the aggregate Exercise Price payable with respect to thenumber of shares of Common Stock subscribed for and purchased by this Notice ofExercise.)*

 

o                                   Cashlessexercise pursuant to Section 3(i) of such Warrant; or

 

*Note:**                  If the undersignindicates “cashless exercise” pursuant to Section 3(i) of suchWarrant, then the Warrant **shall not beeffective** unless and until consent of the Company to such method ofpayment is indicated by execution of this Notice of Exercise on behalf of theCompany in the space provided below, unless such consent of the Company is notrequired by Section 3(i) of such Warrant.*

 

o                                   Cashexercise pursuant to Section 3(ii) of such Warrant.

 

*[Signaturepage follows]*

 

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The undersigned herebyrepresents that the undersigned is an “accredited investor” as defined inRegulation D under the Securities Act of 1933, as amended.

 
| Holder: |   |   |
|---------|--------|--------|
| By:     |   |   |
| Name:   |   |   |
| Title:  |   |   |

 

 

[Consent by the Company to “Cashless Exercise” of such Warrant pursuantto Section 3(i) of such Warrant (to the Extent Required by Section 3(i) ofsuch Warrant):

TVI CORPORATION

 
| By:    |   |   |
|--------|--------|--------|
| Name:  |   |   |
| Title: |   | ]      |

 

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