Document:

Unassociated Document

    
      

    

    
      Exhibit
10.12

      UNCONDITIONAL
GUARANTY

      

      

      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")

      

      Qualytextil
S.A.

      Rua
Luxemburgo, s/n.o

      Loteamento
Granjas Rurais, Presidente Vargas, Quadra O, Lotes 82 and 83, São
Caetano

      CEP
40607-520, Salvador, Bahia

      Brazil

      (Hereinafter
referred to as “Guarantor”)

      

      Wachovia
Bank, National Association

      12 East
49th Street, 43rd
Floor

      New York,
New York 10017

      (Hereinafter
referred to as "Bank")

      

      To induce
Bank to make, extend or renew loans, advances, credit, or other financial
accommodations to or for the benefit of Borrower, which are and will be to the
direct interest and advantage of the Guarantor, and in consideration of loans,
advances, credit, or other financial accommodations made, extended or renewed to
or for the benefit of Borrower, which are and will be to the direct interest and
advantage of the Guarantor, Guarantor hereby absolutely, irrevocably and
unconditionally guarantees to Bank and its successors, assigns and affiliates
the timely payment and performance of all liabilities and obligations of
Borrower to Bank and its affiliates under
the Loan Agreement, dated July 7, 2005, as amended by the Third Modification Agreement and Reaffirmation of
Guarantee, dated of even date hereof, among the Borrower, the Bank and others,
and the Second Amended and Restated Promissory Note, dated of even date
hereof, attached hereto as Schedule A, as well
as, all obligations under any notes, loan agreements, security
agreements, letters of credit, instruments, accounts receivable, contracts,
drafts, leases, chattel paper, indemnities, acceptances, repurchase agreements,
overdrafts, and the Loan Documents, as defined below, and all obligations of
Borrower to Bank or any of its affiliates under any swap agreement (as defined
in 11 U.S.C. § 101, as in effect from time to time), however and whenever
incurred or evidenced, whether primary, secondary, direct, indirect, absolute,
contingent, due or to become due, now existing or hereafter contracted or
acquired, and all modifications, extensions and renewals thereof, (collectively,
the "Guaranteed Obligations").

      

      Guarantor
further covenants and agrees:

      

      GUARANTOR'S
LIABILITY.  This Guaranty is a continuing and unconditional
guaranty of payment and performance and not of collection. The parties to this
Guaranty are jointly and severally obligated together with all other parties
obligated for the Guaranteed Obligations. This Guaranty does not impose any
obligation on Bank to extend or continue to extend credit or otherwise deal with
Borrower at any subsequent time. Except to the extent the provisions of this
Guaranty give Bank additional rights, this Guaranty shall not be deemed to
supersede or replace any other guaranties given to Bank by Guarantor; and the
obligations guaranteed hereby shall be in addition to, and independent of, any agreement or transaction
between Borrower and Bank or any other person creating or reserving any lien,
encumbrance, or security for any obligation of Borrower or any other
obligations guaranteed by Guarantor pursuant to

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      any other
agreement of guaranty given to Bank and other guaranties of the Guaranteed
Obligations and any such other guaranties of
Guarantor are cumulative and may be exercised singly or concurrently.

      

      BENEFIT TO GUARANTOR. Guarantor hereby represents that it will greatly benefit
from the granting of the Third Modification of the $ 30,000,000 Revolving
Line
of Credit to Lakeland Industries, Inc., dated as of May 13, 2008,
especially in view of the fact that the resulting funds shall be utilized for
the purchase of Guarantor ́s shares by Lakeland do Brasil
Empreendimentos e Participações Ltda.

      

      

      CONSENT TO
MODIFICATIONS. 
Guarantor consents
and agrees that Bank may
from time to time, in its sole discretion, without affecting, impairing,
lessening or releasing the obligations of Guarantor
hereunder:  (a) extend or modify the time, manner, place or
terms of payment or performance and/or otherwise change or modify the credit
terms of the Guaranteed Obligations; (b) increase, renew, or enter into a
novation of the Guaranteed Obligations; (c) waive or consent to the departure
from terms of the Guaranteed Obligations; (d) permit any change in the business
or other dealings and relations of Borrower or any other guarantor with Bank;
(e) proceed against, exchange, release, realize upon, or otherwise deal with in
any manner any collateral that is or may be held by Bank in connection with the
Guaranteed Obligations or any liabilities or obligations of Guarantor; and (f)
proceed against, settle, release, or compromise with Borrower, any insurance
carrier, or any other person or entity liable as to any part of the Guaranteed
Obligations, and/or subordinate the payment of any part of the Guaranteed
Obligations to the payment of any other obligations, which may at any time be
due or owing to Bank; all in such manner and upon such terms as Bank may deem
appropriate, and without notice to or further consent from
Guarantor.  No invalidity, irregularity, discharge or unenforceability
of, or action or omission by Bank relating to any part of the Guaranteed
Obligations or any security therefor shall affect or impair this
Guaranty.

      

      WAIVERS AND
ACKNOWLEDGMENTS. To
the extent it may lawfully do so, Guarantor waives and releases the following
rights, demands, and defenses Guarantor may have with respect to Bank
(and, with respect to swap obligations, its affiliates) and collection of the
Guaranteed Obligations:  (a) promptness and diligence in collection of
any of the Guaranteed Obligations from Borrower or any other person liable
thereon, including, without limitation, any right
of reimbursement, recourse, subrogation, indemnity, exoneration, as well as any
rights or remedies relating to any collateral security which Bank now has or
hereafter may acquire; (b) any law or statute that requires that Bank
(and, with respect to swap obligations, its affiliates) make demand upon, assert
claims against, or collect from Borrower or other persons or entities, foreclose
any security interest, sell collateral, exhaust any remedies, or take any other
action against Borrower or other persons or entities prior to making demand
upon, collecting from or taking action against Guarantor with respect to the
Guaranteed Obligations, including any such rights Guarantor might otherwise have
had under any other applicable law; (c) any law or statute that requires that
Borrower or any other person be joined in, notified of or made part of any
action against Guarantor; (d) that Bank or its affiliates preserve, insure or
perfect any security interest in collateral or sell or dispose of collateral in
a particular manner or at a particular time, provided that Bank’s obligation to
dispose of Collateral in a commercially reasonable manner is not waived hereby;
(e) notice of extensions, modifications, renewals, or novations of the
Guaranteed Obligations, of any new transactions or other relationships between
Bank, Borrower and/or any guarantor, and of changes in the financial condition
of, ownership of, or business structure of Borrower or any other guarantor; (f)
presentment, protest, notice of dishonor, notice of default, demand for payment,
notice of intention to accelerate maturity, notice of acceleration of maturity,
notice of sale, and all other notices of any kind whatsoever to which Guarantor
may be entitled; (g) the right to assert against Bank or its affiliates any
defense (legal or equitable), set-off, counterclaim, or claim that Guarantor may
have at any time against Borrower or any other party liable to Bank or its
affiliates; (h) all defenses relating to invalidity, insufficiency,
unenforceability, enforcement, release or impairment of Bank or its affiliates’
lien on any collateral, of the Loan Documents, or of any other guaranties held
by Bank; (i) any right to which Guarantor is or may become entitled to be
subrogated to Bank or its affiliates’ rights against Borrower or to seek
contribution, reimbursement, indemnification, payment or the like, or
participation in any claim, right or remedy of Bank or its
affiliates

      
        
           

        

        
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      against
Borrower or any security which Bank or its affiliates now has or hereafter
acquires, until such time as the Guaranteed Obligations have been fully
satisfied beyond the expiration of any applicable preference period; (j) any
claim or defense that acceleration of maturity of the Guaranteed Obligations is
stayed against Guarantor because of the stay of assertion or of acceleration of
claims against any other person or entity for any reason including the
bankruptcy or insolvency of that person or entity; and (k) the right to
marshalling of Borrower’s assets or the benefit of any exemption claimed by
Guarantor.  Guarantor acknowledges and represents that Guarantor has
relied upon Guarantor’s own due diligence in making an independent appraisal of
Borrower, Borrower's business affairs and financial condition, and any
collateral; Guarantor will continue to be responsible for making an independent
appraisal of such matters; and Guarantor has not relied upon Bank or its
affiliates for information regarding Borrower or any collateral.

      

      To the extent it may lawfully do so, Guarantor hereby
agrees to waive, and do hereby absolutely and irrevocably waive and relinquish
the benefit and advantage of, and do hereby covenant not to assert, any
appraisement, valuation, stay, extension, redemption, or similar laws, now or at
any time hereafter in force, which might delay, prevent, or otherwise impede the
performance or enforcement of this Guaranty, the Guaranteed Obligations, or any
other present or future agreement or instrument relating directly or indirectly
thereto. 

      

      Guarantor warrants and agrees that the waivers set forth
in this Guaranty are made with full knowledge of their significance and
consequences, and that under the circumstances, the waivers are reasonable and
not contrary to public policy or law.  If any of said waivers are
determined to be contrary to any applicable law or public policy, such waivers
shall be effective to the maximum extent permitted by Law.  Should any
one or more provisions of this Guaranty be determined to be illegal or
unenforceable, all other provisions hereof shall nevertheless remain
effective.

      

      SPECIAL BRAZILIAN WAIVER.  Without prejudice to the provisions of
Section “Miscellaneous” hereof regarding applicable law, and in addition to the
waivers set forth in Section “Waivers, Acknowledgements”, the Guarantor, being
jointly and severally liable with Borrower, hereby waives any benefits arising
from articles 364, 827, 828, 829, 830, 834, 835, 837 and 839 of the Brazilian
Civil Code and article 595 of the Brazilian Civil Procedure Code, and
acknowledges the Bank's rights (or the rights of any assignee of Bank) to demand
payment by the Guarantor of its claims, regardless of prior execution of
Borrower's properties or claims of any existing contingent guarantee, as well as
acknowledging Bank's right (or the rights of any assignee of Bank) to grant a
moratorium to Borrower, should Bank (or any assignee) deem such moratorium
convenient in its sole discretion. Guarantor shall, however, remain fully liable
for its obligations hereunder.

      

      FINANCIAL
CONDITION.  Guarantor warrants, represents and covenants to
Bank and its affiliates that on and after the date hereof:  (a) the
fair saleable value of Guarantor's assets exceeds its liabilities, Guarantor is
meeting its current liabilities as they mature, and Guarantor is and shall
remain solvent; (b) all financial statements of Guarantor furnished to Bank are
correct and accurately reflect the financial condition of Guarantor as of the
respective dates thereof; (c) since the date of such financial statements, there
has not occurred a material adverse change in the financial condition of
Guarantor; (d) except for those listed in Schedule B hereto, there are not now
pending any court or administrative proceedings or undischarged judgments
against Guarantor, no federal or state tax liens have been filed or to the best
of Guarantor’s knowledge, threatened against Guarantor, and Guarantor is not in
default or claimed default under any agreement; and (e) at such reasonable times
as Bank requests, Guarantor will furnish Bank and its affiliates with such other
financial information as Bank and its affiliates may reasonably
request.

      

      INTEREST AND APPLICATION OF
PAYMENTS.  Regardless of any other provision of this Guaranty
or other Loan Documents, if for any reason the effective interest on any of the
Guaranteed Obligations should exceed the maximum lawful interest, the effective
interest shall be deemed reduced to and shall be such maximum lawful interest,
and any sums of interest which have been collected in excess of such maximum
lawful interest shall be applied as a credit against the unpaid principal
balance of the

      
        
           

        

        
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      Guaranteed
Obligations.  Monies received from any source by Bank or its
affiliates for application toward payment of the Guaranteed Obligations may be
applied to such Guaranteed Obligations in any manner or order deemed appropriate
by Bank and its affiliates.

      

      DEFAULT.  If any of
the following events occur, a default ("Default") under this Guaranty shall
exist:  (a) failure of timely payment or performance of the Guaranteed
Obligations or a default under any Loan Document; (b) a breach of any agreement
or representation contained or referred to in the Guaranty, or any of the Loan
Documents, or contained in any other contract or agreement of Guarantor with
Bank or its affiliates, whether now existing or hereafter arising; (c) the death
of, appointment of a guardian for, dissolution of, termination of existence of,
loss of good standing status by, appointment of a receiver for, assignment for
the benefit of creditors of, or the commencement of any insolvency or bankruptcy
proceeding by or against Guarantor or any general partner of or the holder(s) of
the majority ownership interests of Guarantor; and/or (d) Bank determines in
good faith, in its sole discretion, that the prospects for payment or
performance of the Guaranteed Obligations are impaired or a material adverse
change has occurred in the business or prospects of Borrower or Guarantor,
financial or otherwise.

      

      If a
Default occurs, and the Guarantor fails to cure such default to Bank’s
satisfaction within thirty (30) days of the receipt of written notice from Bank
demanding such default to be cured, the Guaranteed Obligations shall be due
immediately and payable without notice, other than Guaranteed Obligations under
any swap agreements (as defined in 11 U.S.C. § 101, as in effect from time to
time) with Bank or its affiliates, which shall be due in accordance with and
governed by the provisions of said swap agreements, and, Bank and its affiliates
may exercise any rights and remedies as provided in this Guaranty and other Loan
Documents, or as provided at law or equity.  Guarantor shall pay
interest on the Guaranteed Obligations from such Default at the highest rate of
interest charged on any of the Guaranteed Obligations.

      

      ATTORNEYS’ FEES AND OTHER COSTS OF
COLLECTION.  Guarantor shall pay all of Bank's and its
affiliates’ reasonable expenses incurred to enforce or collect any of the
Guaranteed Obligations, including, without limitation, reasonable arbitration,
paralegals', attorneys' and experts' fees and expenses, whether incurred without
the commencement of a suit, in any suit, arbitration, or administrative
proceeding, or in any appellate, or bankruptcy proceeding.

      

      SUBORDINATION OF OTHER
DEBTS.  Guarantor agrees:  (a) to subordinate the
obligations now or hereafter owed by Borrower to Guarantor ("Subordinated Debt")
to any and all obligations of Borrower to Bank or its affiliates now or
hereafter existing while this Guaranty is in effect, provided however that
Guarantor may receive regularly scheduled principal and interest payments on the
Subordinated Debt so long as (i) all sums due and payable by Borrower to Bank
and its affiliates have been paid in full on or prior to such date, and (ii) no
event or condition which constitutes or which with notice or the lapse or time
would constitute an event of default with respect to the Guaranteed Obligations
shall be continuing on or as of the payment date; (b) Guarantor will either
place a legend indicating such subordination on every note, ledger page or other
document evidencing any part of the Subordinated Debt or deliver such documents
to Bank; and (c) except as permitted by this paragraph, Guarantor will not
request or accept payment of or any security for any part of the Subordinated
Debt, and any proceeds of the Subordinated Debt paid to Guarantor, through error
or otherwise, shall immediately be forwarded to Bank by Guarantor, properly
endorsed to the order of Bank, to apply to the Guaranteed
Obligations.

      

      TERM AND TERMINATION. This Guaranty shall remain in full force and effect
until all of the Guaranteed Obligations have been discharged in
full.

      

      MISCELLANEOUS.  Assignment.  This
Guaranty and 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 Guaranty and
other Loan Documents are freely assignable, in whole or in part, by
Bank.  Any assignment shall not release Guarantor from the Guaranteed
Obligations until the obligations and liabilities
of Guarantor hereunder shall have been satisfied by full and
final

      
        
           

        

        
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      payment and performance. Guarantor agrees, at the
request of Bank, to confirm in writing to the assignee or transferee its consent
to any such assignment, transfer or other disposition by Bank and to provide to
such assignee or transferee such documentation as Bank may reasonably require in
connection therewith. Guarantor may not assign or transfer its rights or
obligations under this Guaranty.  Organization;
Powers.  Guarantor (i) is (a) an adult individual and is sui juris, or (b) a
corporation, general partnership, limited partnership, limited liability company
or other legal entity (as indicated below), duly organized, validly existing and
in good standing under the laws of its state of organization, and is authorized
to do business in each other jurisdiction wherein its ownership of property or
conduct of business legally requires such organization, (ii) has the power and
authority to own its properties and assets and to carry on its business as now
being conducted and as now contemplated; and (iii) has the power and authority
to execute, deliver and perform, and by all necessary action has authorized the
execution, delivery and performance of, all of its obligations under this
Guaranty and any other Loan Document to which it is a party.  Applicable Law; Conflict Between
Documents.  This Guaranty shall be governed by and interpreted
in accordance with federal law and, except as preempted by federal law, 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
Guaranty should conflict with the terms of any commitment letter that survives
closing, the terms of this Guaranty shall control.  Guarantor's
Accounts.  Except as prohibited by law, Guarantor grants Bank
and its affiliates a security interest in all of Guarantor's deposit accounts
and investment properties maintained with Bank and its
affiliates.  Jurisdiction.  Guarantor
irrevocably agrees to non-exclusive personal jurisdiction in the state named in
Bank's address on the first page hereof. Guarantor hereby agrees to the jurisdiction of such
courts and agree that they will not invoke the doctrine of forum non conveniens
or other similar defenses. Guarantor does hereby irrevocably appoint
Borrower as its attorney-in-fact for the
purpose of receiving any notice required hereunder and service of process in any
action, suit, or proceeding in connection with this Guaranty and the Guaranteed
Obligations.  Severability.  If
any provision of this Guaranty or of the other Loan Documents shall be
prohibited or invalid 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 Guaranty or
other Loan Documents.  Payments.  All
payments shall be mailed to Commercial Loan Services, P. O. Box 740502, Atlanta,
GA 30374-0502. Notices.  Any
notices to Guarantor shall be sufficiently given if in writing and mailed or
delivered to Guarantor at Borrower’s
address informed above, 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 (as
process agent for Guarantor) changes address at any time prior to the
date the Guaranteed Obligations are paid in full, Guarantor agrees to promptly
give written notice of said change of address to Bank 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.  Binding
Contract.  Guarantor by execution of and Bank by acceptance of
this Guaranty agree that each party is bound to all terms and provisions of this
Guaranty.  Amendments, Waivers and
Remedies.  No waivers, amendments or modifications of this
Guaranty and other Loan Documents shall be valid unless in writing and signed by
an officer of Bank.  No waiver by Bank or its affiliates 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 or its affiliates in exercising any right, power, or privilege granted
pursuant to this Guaranty and other Loan Documents shall operate as a waiver
thereof, nor shall a single or partial exercise thereof preclude any other or
further exercise or the exercise of any other right, power or
privilege.  All remedies available to Bank or its affiliates with
respect to this Guaranty and other Loan Documents and remedies available at law
or in equity shall be cumulative and may be pursued concurrently or
successively.  Partnerships.  If
Guarantor is a partnership, the obligations, liabilities and agreements on the
part of Guarantor shall remain in full force and effect and fully applicable
notwithstanding any changes in the individuals comprising the
partnership.  The term "Guarantor" includes any altered or successive
partnerships, and predecessor partnership(s) and the partners shall not be
released from any obligations or liabilities hereunder.  Loan Documents.  The
term "Loan

      
        
           

        

        
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      Documents"
refers to all documents executed in connection with or related to the Guaranteed
Obligations and may include, without limitation, commitment letters that survive
closing, loan agreements, other guaranty agreements, security agreements,
instruments, financing statements, mortgages, deeds of trust, deeds to secure
debt, letters of credit and any amendments or supplements (excluding swap
agreements as defined in 11 U.S.C. § 101, as in effect from time to
time).   Currency Indemnity.  All amounts to be paid hereunder shall be
paid in the lawful currency of the United
States of America ("Dollars"), in
immediately available funds.  Guarantor acknowledges that the
specification of Dollars in the Guaranteed Obligations is of the essence and
that Dollars shall be the currency of account in any and all
events.  The obligations of Guarantor hereunder shall not be
discharged by an amount paid in another currency, whether pursuant to a judgment
or otherwise, to the extent that the amount so paid on prompt conversion to
Dollars and transfer to Commercial Loan
Services (as provided in “Payments” above)
under normal banking procedures does not yield the amount of Dollars owing to
Bank.  If Bank receives an amount in respect of Guarantor’s liability
under this Guarantee or if such liability is converted into a claim, proof,
judgment or order in a currency other than Dollars, Guarantor will indemnify
Bank as an independent obligation against any loss arising out of or as a result
of such receipt or conversion.  If the amount received by Bank, when
converted into Dollars (at the market rate at which Bank is able on the relevant
date to purchase Dollars with that other currency) is less than the amount owed
in Dollars Guarantor will, forthwith on demand, pay to Bank an amount in Dollars
equal to the deficit.  In addition, Guarantor waives any right it may
have in any jurisdiction to pay any amount due or to become due hereunder in a
currency other than Dollars. 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.  Final
Agreement.  This Agreement and the other Loan Documents
represent the final agreement between the parties and may not be contradicted by
evidence of prior, contemporaneous or subsequent agreements of the
parties.  There are no unwritten agreements between the
parties.

      

      FINANCIAL AND OTHER
INFORMATION.  Guarantor shall deliver to Bank such information
as Bank may reasonably request from time to time, including without limitation,
financial statements and information pertaining to Guarantor's financial
condition.  Such information shall be true, complete, and
accurate.

      

      NEGATIVE COVENANTS. 
To the extent it may lawfully do so,
Guarantor agrees that from the date hereof and until final payment in
full of the Guaranteed Obligations, unless Bank shall otherwise consent in
writing, Guarantor will not:   Change in Fiscal
Year.  Change its fiscal year.  Change of
Control.  Make or suffer a change of ownership that effectively
changes control of Guarantor from current ownership.  Encumbrances.  Create,
assume, or permit to exist any mortgage, security deed, deed of trust, pledge,
lien, charge or other encumbrance on any of its assets, whether now owned or
hereafter acquired, other than: (i) security interests required by the Loan
Documents; (ii) liens for taxes contested in good faith; or (iii) Permitted
Liens, as set forth in Schedule C attached hereto Guarantees.  Guarantee
or otherwise become responsible for obligations of any other person or persons,
except to obligations of Prestserv Serviços Ltda., an affiliate of the
Guarantor, other than the endorsement of checks and drafts for collection in the
ordinary course of business.  Investments.  Purchase
any stock, securities, or evidence of indebtedness of any other person or entity
except investments in direct or indirect obligations of the United States
Government, other highly liquid investments graded AAA or the equivalent within
the United States of America (and with exception for certain investments held in
China and Mexico), and certificates of deposit of United States commercial banks
having a tier 1 capital ratio of not less than 6% and then in an amount not
exceeding 10% of the issuing bank’s unimpaired capital and surplus, or
other

      
        
           

        

        
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      specific
investment options, to be determined. Default on Other Contracts or
Obligations.  Default on any material contract with or
obligation when due to a third party or default in the performance of any
obligation to a third party incurred for money borrowed.  Government
Intervention.  Permit the assertion or making of any seizure,
vesting or intervention by or under authority of any governmental entity, as a
result of which the management of Guarantor or any guarantor is displaced of its
authority in the conduct of its respective business or such business is
curtailed or materially impaired.  Judgment
Entered.  Permit the entry of any monetary judgment or the
assessment against, the filing of any tax lien against, or the issuance of any
writ of garnishment or attachment against any property of or debts due Borrower
in an amount in excess of $100,000.00 which is not discharged or execution is
not stayed within 45 days of entry.  Prepayment of Other
Debt.  Retire any long-term debt entered into prior to the date
of this Agreement at a date in advance of its legal obligation to do
so.  Retire or
Repurchase Capital Stock.  Retire or otherwise acquire any of
its capital stock in excess of $1,000,000.00 or pay annual cash dividends in
excess of $1,000,000.00 annually.

      

      TAX
RETURNS.  Guarantor shall deliver to Bank, within 30 days of
filing, complete copies of federal and state tax returns, as applicable,
together with all schedules thereto, each of which shall be signed and certified
by Guarantor to be true and complete copies of such returns.  In the
event an extension is filed, Guarantor shall deliver a copy of the extension
within 30 days of filing.

      

      WAIVER OF JURY
TRIAL.  TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF GUARANTOR BY 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 GUARANTY, THE LOAN DOCUMENTS OR
ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION WITH THIS GUARANTY, 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 THIS GUARANTY. 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
GUARANTY.

      

      [SIGNATURE PAGE TO
FOLLOW]

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      

      IN WITNESS WHEREOF, Guarantor,
on the day and year first written above, has caused this Unconditional Guaranty
to be duly executed by its duly authorized signatories.

      

      

      Qualytextil
S.A.

      

      
        

        
          	
                  By:

                	
                  /s/
      Miguel G. Bastos

                	 
      	
                  By:

                	
                  /s/
      Elder Marcos
      Vieira da Conceicao

                
	 
      	 
      	 
      	 
      	 
      
	
                  Name:

                	
                  Miguel G. Bastos

                	 
      	
                  Name:

                	
                  Elder
      Marcos Vieira da Conceicao

                
	 
      	 
      	 
      	 
      	 
      
	
                  Title:

                	
                  Administrator

                	 
      	
                  Title:

                	
                  Officer

                

        

         

      

      

      Witnesses:

      

      
        	
                1.

              	 
      	 
      
	
                Name:

              	 
      	 
      
	
                ID:

              	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                2.

              	 
      	 
      
	
                Name:

              	 
      	 
      
	
                ID:

              	 
      	 
      

      

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      SCHEDULE
A

      

      to
the UNCONDITIONAL GUARANTY AGREEMENT

      

      SECOND
AMENDED AND RESTATED PROMISSORY NOTE

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      SCHEDULE
B

      

      to
the UNCONDITIONAL GUARANTY AGREEMENT

      

      

      1)
Administrative procedure n. 12689.000553/2004-91

      Date:
25/05/2004

      Object:
seek authorization to a Trading company import goods on Qualytextil's
behalf

      

      2)
Administrative procedure n. 19647.005986/2004-79

      Date:
29/06/2004

      Object:
Rectify import/export documents

      

      3) Law
suit n. 1944969-5/2008

      13th
court of Salvador/BA

      Plaintiff:
Qualytextil S/A

      Defendant:
Datasoft Consultoria em Tecnologia da Informatica Ltda and Datasul
S.A.

      Object:
seek a court order to allow Qualytextil not pay its debts with defendants due to
defendants default in the agreement between parties

      Amount
related: R$150,000.00

      

      4) Tax
deficiency notice 108595.0002/07-4

      Date:
27/06/2007

      Object:
payment of ICMS (state VAT)

      Amount
related: R$ 1.163.865.84 + R$ 8,598.50

      

      5) Writ
of mandamus 2006.33.00.017223-0

      Date:
06/11/2006

      Object:
aims the exclusion of ICMS (state VAT) from PIS and COFINS assessable
basis

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      SCHEDULE
C

      

      to
the UNCONDITIONAL GUARANTY AGREEMENT

      

      PERMITTED
LIENS

      

      LIST
OF CURRENT ACCOUNTS OVERDRAFT

      

      

      
        	
                1)

              	
                Bank: Banco Bradesco
      S.A.

              

      

      Agreement N.
1.917.168

      Purpose: credit facility to
the cash flow of Qualytextil S.A. in the maximum amount of R$
100,000.00

      Guaranty: endorsement (aval)

      Guarantor: Miguel Antonio dos
Guimarães Bastos

      

      
        	
                2)

              	
                Bank: Banco Itaú
      S.A.

              

      

      Agreement N.: N/A

      Purpose: credit facility to
the cash flow of Qualytextil S.A. in the maximum amount of R$
700,000.00

      Guaranty: account receivables
of Qualytextil S.A. (not specified in the Agreement) and promissory
note.

      Guarantors: Miguel Antonio dos
Guimarães Bastos and Elder Marcos Vieira da Conceição.

      

      
        	
                3)

              	
                Bank: Banco do Nordeste
      do Brasil S.A.

              

      

      Agreement N.:
187.2007.2141.812

      Purpose: credit facility to
the cash flow of Qualytextil S.A. in the maximum amount of R$
700,000.00

      Guaranty: unconditional
guaranty (fiança)

      Guarantors (fiadores): Miguel Antonio dos
Guimarães Bastos, Elder Marcos Vieira da Conceição, Conceição Maria Passos de
Queiroz, Marcia Cristina Vieira da Conceição and Elton de Carvalho
Antunes.

    

     

     

    11Unassociated Document

    
      

    

    
      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 to Article 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 registrations shall 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.

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      (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 responsible to Lakeland do 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 3
hereof.

      

      [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/A

              	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                By:
      /s/ Miguel G.
      Bastos

              	 
      	
                By:
      /s/ Elder Marcos
      Vieira da Conceicao

              
	
                Name:
      Miguel G. Bastos

              	 
      	
                Name:
      Elder Marcos Vieira da Conceicao

              
	
                Title:
      CFO

              	 
      	
                Title:
      CEO

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                WITNESSES:

              	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	______________________________	 
      	______________________________
	
                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%

              

      

      
 

    

    12

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