Exhibit 10.1


 


ACKNOWLEDGEMENT
AND AGREEMENT


 


January 30,
2009


 


TVI
Corporation


Capa
Manufacturing Corp.


Safety
Tech International, Inc.


Signature
Special Event Services, Inc.


c/o
TVI Corporation


7100
Holladay-Tyler Road


Glenn
Dale, MD 20769


Attention:  Chief Financial Officer


 


	
  Re:

  	
  Limited Forbearance
  Agreement dated November 20, 2008 (as amended, restated, modified,
  substituted, extended, and renewed from time to time, the “Forbearance
  Agreement”) among
  TVI Corporation, Capa Manufacturing Corp., Safety Tech
  International, Inc., and Signature Special Event Services, Inc.
  (formerly named “TVI Holdings One, Inc.”) (collectively, as the “Borrowers”),
  and Branch Banking and Trust Company (as the “Lender”)

  



 


Ladies
and Gentlemen:


 


Please
refer to the Forbearance Agreement for the meaning of capitalized terms not
otherwise defined in this Acknowledgement and Agreement.


 


The Forbearance Agreement
provides that the Forbearance Period expires on January 30, 2009, with
further provision for extension until April 30, 2009, subject to certain
conditions, including, without limitation, the condition that the Second Budget
be in form and substance satisfactory to the Lender in the exercise of its
reasonable discretion.  The Borrowers submitted
the Second Budget, which is generally satisfactory to the Lender, but which
projects that the Borrowing Base Deficiency will exceed the Borrowing Base
Deficiency Cap during the extended Forbearance Period.


 


The
Lender is, nonetheless, willing to agree that the Second Budget is satisfactory
to the Lender on the condition that by signing below the Borrowers acknowledge
and agree as follows:


 


(a)           The provisions of the Forbearance Agreement continue in
full force and effect and are hereby ratified and confirmed.  Without implying any limitation on the
foregoing,  the Borrowers acknowledge and
agree that, notwithstanding the fact that the Second Budget projects that
the Borrowing Base Deficiency will exceed the Borrowing Base Deficiency Cap,
the Lender (i) has no obligation to make any advances during the extended
Forbearance Period unless all conditions for lending, including, without
limitation,  those with respect to the
Borrowing Base Deficiency Cap and Negative Variance Cap, have been met, (ii) does
not consent to any excess Borrowing Base Deficiency Cap or excess Negative
Variance Cap, and (iii) does not waive any Forbearance Default that may
result therefrom.


 

















 


(b)           Without
implying any limitation on the foregoing, the Borrowers reissue as of their
execution and delivery of this
Acknowledgement and Agreement the acknowledgements representations,
warranties and agreements of Section 7 of the Forbearance Agreement, the
waivers, releases and other provisions of Section 8 of the Forbearance
Agreement, and the WAIVER OF JURY TRIAL
contained in Section 10 of the Forbearance Agreement.


 


(c)           The
Borrowers shall execute and deliver to the Lender on or before February 6,
2009, the deed of trust, motor vehicle security interest filing documents, and
assignments of intellectual property previously identified to the Borrowers and
such other documents reasonably related thereto.


 


(d)           The
Borrowers shall on or before February 6, 2009 (i) engage Buccino and
Associates, Inc. for the second phase of their consultancy consistent with
prior discussions between the Borrowers and the Lender and (ii) provide to
the Lender a timeline for the engagement of an investment banker, all of the
foregoing in scope, form and substance satisfactory to the Lender in the
exercise of its reasonable discretion.


 


This
Acknowledgement and Agreement shall be effective upon acceptance by the
Borrowers in the places indicated below and shall evidence the concurrence of
the Lender and the Borrowers that the conditions for the extension of the
Forbearance Period until April 30, 2009 have been met.  By entering into this Acknowledgement and
Agreement the Lender is not,
however, consenting to or waiving any Forbearance Default, whenever
arising.


 


This
Acknowledgement and Agreement may be executed in any number of duplicate
originals or counterparts, each of such duplicate originals or counterparts
shall be deemed to be an original and all taken together shall constitute but
one and the same agreement.  Each party
to this Acknowledgement and Agreement agrees that the respective signatures of
the parties may be delivered by fax, PDF, or other electronic means acceptable
to the Lender and that the parties may rely on a signature so delivered as an
original.  Any party who chooses to
deliver its signature in such manner agrees to provide promptly to the other
parties a copy of this Acknowledgement and Agreement with its inked signature,
but the party’s failure to deliver a copy of this Agreement with its inked
signature shall not affect the validity, enforceability and binding effect of
this Agreement.


 


Signatures
begin on the following page.


 


2

















 


LENDER’S
SIGNATURE PAGE TO ACKNOWLEDGEMENT AND AGREEMENT


 


(Page 1
of 2 Signature Pages)


 


	
   

  	
  Branch
  Banking and Trust Company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Derek T. Whitwer

  	
   (Seal)

  
	
   

  	
   

  	
  Derek
  T. Whitwer

  	
   

  
	
   

  	
   

  	
  Senior
  Vice President

  	
   

  



 


3

















 


BORROWERS’ SIGNATURE PAGE TO ACKNOWLEDGEMENT AND AGREEMENT


 


(Page 2 of 2 Signature Pages)


 


	
   

  	
  TVI
  CORPORATION

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Harley A. Hughes

  	
   (Seal)

  
	
   

  	
   

  	
  Harley A. Hughes

  	
   

  
	
   

  	
   

  	
  President and Chief
  Executive Officer

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CAPA
  MANUFACTURING CORP.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Harley A. Hughes

  	
   (Seal)

  
	
   

  	
   

  	
  Harley A. Hughes

  	
   

  
	
   

  	
   

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SAFETY
  TECH INTERNATIONAL, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Harley A. Hughes

  	
   (Seal)

  
	
   

  	
   

  	
  Harley A. Hughes

  	
   

  
	
   

  	
   

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SIGNATURE
  SPECIAL EVENT SERVICES, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Harley A. Hughes

  	
   (Seal)

  
	
   

  	
   

  	
  Harley A. Hughes

  	
   

  
	
   

  	
   

  	
  President

  	
   

  



 


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