Document:

Unassociated Document

     

    Exhibit
10.1

    
       

      AMENDMENT
NO. 3 TO STOCK PURCHASE AGREEMENT

       

       

      Amendment No. 3 (“Amendment No. 3”)
dated January 11, 2010 to Stock Purchase Agreement dated October 6, 2009 and
amended November 10, 2009  on December 9, 2009 (the “Amended SPA”)
among CS China Acquisition Corp. (“Purchaser”), Asia
Gaming & Resort, Ltd. (“Company”) and Spring
Fortune Investment Ltd (“Shareholder”).

       

      WHEREAS, the parties hereto, who
constitute all of the parties to the Amended SPA, desire to amend the Amended
SPA as set forth herein;

       

      IT IS AGREED:

       

      1.  Section
1.12 of the Amended SPA is hereby amended to read as follows:

       

      “1.12                      Sale
Restriction.

       

      
        	
                 
      

              	
                (a)  During
      the one-year period beginning on the Closing Date, no public market sales
      of shares of Purchaser Stock issued pursuant to Section 1.2 shall be made
      in excess of that number of shares equal to the difference between (i) 47%
      of the number of shares of Purchaser Stock outstanding immediately after
      the Closing and (ii) the total number of shares of Purchaser Stock
      outstanding immediately after the Closing held by all holders of Purchaser
      Stock other than the Shareholder, provided that no such sales shall be
      made to the extent that such sales would reduce the total number of shares
      of Purchaser Stock that are subject to sale restrictions at the time of
      such sale below 53% of the total number of shares of Purchaser Stock then
      outstanding.

              

      

      

      
        	
                 
      

              	
                (b)  During
      the period ending on the later of one year after the Closing Date or three
      months after the date of their issuance, no public market sales of shares
      of Purchaser Stock issued pursuant to Section 1.7 shall be made in excess
      of 10% of the number of shares issued on each such
    issuance.

              

      

      

      
        	
                 
      

              	
                (c)  Of
      the shares of Purchaser Stock sold pursuant to Sections 1.12(a) and
      1.12(b), one-third must be sold at a price equal to or greater than $9.50
      per share, an additional one-third of such shares must be sold at a price
      equal to or greater than $8.50 per share and all such shares must be sold
      at a price equal to or greater than $7.50 per
  share.

              

      

      

      
        	
                 
      

              	
                (d)  The
      proceeds of sales made pursuant to Sections 1.12(a) and 1.12(b), up to an
      amount equal to amounts expended from the Trust Fund (as defined in
      Section 3.25) for redemptions and purchases by Purchaser, shall be loaned
      by the Shareholder to the Company, without interest, until such time as
      the working capital of the Company is at least  One Hundred
      Million Dollars ($100,000,000).

              

      

      

      
        	
                 
      

              	
                (e)  No
      private sales of shares of Purchaser Stock that may be sold pursuant to
      Sections 1.12(a) and 1.12(b) may be made unless the purchaser acknowledges
      and agrees in writing to the provisions of this Section
    1.12.

              

      

      

      
        	
                 
      

              	
                (f)  No
      public market or private sales of shares of Purchaser Stock issued to the
      Shareholder in excess of the amounts that may be sold pursuant to Sections
      1.12(a) and 1.12(b) may be made during the periods in which the provisions
      of such Sections are in effect without the prior written consent of at
      least five of the seven members of the Purchaser’s board of
      Directors.

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                (g)  Notwithstanding
      the other provisions of this Section 1.12, the Shareholder may transfer
      shares of Purchaser Stock issued pursuant to this Agreement to employees
      of the Company and its Subsidiaries (as defined in Section 2.2(a)) who are
      parties to Employment Agreements (as defined in Section 5.20), to other
      Persons who are listed on Schedule 1.12
      and to the counter-party to the Advisor Agreement (as defined in Section
      2.17), provided that such employees, other Persons and counter-party
      acknowledge and agree to the restriction stated in Sections 1.12(a) and
      1.12(b) by delivery to Purchaser of a written document to such effect and
      provided, further, that all such transfers are made in a manner that would
      not cause the issuance of the shares of Purchaser Stock pursuant to this
      Agreement to be in violation of the Securities
  Act.

              

      

      

      
        	
                 
      

              	
                (h)  All
      shares of Purchaser Stock issued pursuant to this Agreement that are not
      subject to the restrictions set forth in Sections 1.12(a) and (b) may be
      sold or otherwise transferred by the Shareholder except as may be
      restricted by the Securities Act and other United States securities laws,
      provided that all such sales and transfers are made in a manner that would
      not cause the issuance of the shares of Purchaser Stock pursuant to this
      Agreement to be in violation of the Securities
  Act.”

              

      

      

      
        	
                 
      

              	
                (i)  Certificates
      representing shares of Purchaser Stock issued pursuant to this Agreement
      shall bear a prominent legend to the effect of the provisions of this
      Section 1.12.”

              

      

       

      2.  Capitalized
terms used herein that are defined in the Amended SPA shall have the meanings
ascribed to them in the Amended SPA.

       

      3.  As
amended hereby, the Amended SPA shall remain in full force and
effect.

       

      IN WITNESS WHEREOF, the parties hereto
have caused this Amendment No. 3 to be executed as of the date first above
written.

       

       

      
        
          	 	CS
      CHINA ACQUISITION CORP.	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/
      Chien Lee 	 
	 	 	Chien
      Lee 	 
	 	 	Chairman
      of the Board 	 
	 	 	 	 

        

      

       

      
        
          
            	 	ASIA
      GAMING & RESORT, LTD.	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/
      Leong Siak Hung 	 
	 	 	Leong
      Siak Hung 	 
	 	 	Chief
      Executive Officer 	 
	 	 	 	 

          

        

        
           

          
            
              
                	 	SPRING
      FORTUNE INVESTMENTS LTD	 
	 	 	 	 
	
                         

                      	
                        By:
      

                      	/s/
      Leong Siak Hung 	 
	 	 	Leong
      Siak Hung 	 
	 	 	Director 	 
	 	 	 	 

              

            

             

            
              
                 

              

              
                2Exhibit
10.1

    

    EXECUTION
VERSION      

    
      
        
          	 
      
	 
      
	
                  LOAN
      AND SECURITY AGREEMENT

                
	 
      

        

      

    

     

     LAKELAND
INDUSTRIES, INC.

     

    and

     

    TD
BANK, N.A.

     

    Dated as
of January 14, 2010

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    TABLE OF
CONTENTS

    

    
      
        	 
      	 
      	
                Page

              
	 
      	 
      	 
      
	
                SECTION
      1 DEFINITIONS AND INTERPRETATION

              	
                1

              
	
                1.1

              	
                Terms
      Defined.

              	
                1

              
	
                1.2

              	
                Accounting
      Principles

              	
                14

              
	
                1.3

              	
                Construction

              	
                14

              
	 
      	 
      	 
      
	
                SECTION
      II THE LOANS

              	
                14

              
	
                2.1

              	
                Revolving
      Credit - Description:

              	
                14

              
	
                2.2

              	
                Letters
      of Credit:

              	
                15

              
	
                2.3

              	
                Advances
      and Payments:

              	
                17

              
	
                2.4

              	
                Interest:

              	
                18

              
	
                2.5

              	
                Additional
      Interest Provisions:

              	
                19

              
	
                2.6

              	
                Fees
      and Charges:

              	
                20

              
	
                2.7

              	
                Prepayments:

              	
                20

              
	
                2.8

              	
                Use
      of Proceeds

              	
                20

              
	
                2.9

              	
                Capital
      Adequacy

              	
                21

              
	
                2.10

              	
                Funding
      Indemnity

              	
                21

              
	
                2.11

              	
                Inability
      to Determine Interest Rate

              	
                21

              
	
                2.12

              	
                Illegality

              	
                21

              
	
                2.13

              	
                Requirements
      of Law:

              	
                22

              
	 
      	 
      	 
      
	
                SECTION
      III COLLATERAL

              	
                22

              
	
                3.1

              	
                Collateral

              	
                22

              
	
                3.2

              	
                Lien
      Documents

              	
                23

              
	
                3.3

              	
                Other
      Actions:

              	
                24

              
	
                3.4

              	
                Searches,
      Certificates:

              	
                24

              
	
                3.5

              	
                Landlord's
      and Warehouseman's Waivers

              	
                24

              
	
                3.6

              	
                Filing
      Security Agreement

              	
                24

              
	
                3.7

              	
                Power
      of Attorney

              	
                25

              
	 
      	 
      	 
      
	
                SECTION
      IV CLOSING AND CONDITIONS PRECEDENT TO ADVANCES

              	
                25

              
	
                4.1

              	
                Resolutions,
      Opinions, and Other Documents

              	
                25

              
	
                4.2

              	
                Absence
      of Certain Events

              	
                26

              
	
                4.3

              	
                Warranties
      and Representations at Closing

              	
                26

              
	
                4.4

              	
                Compliance
      with this Agreement

              	
                26

              
	
                4.5

              	
                Officers'
      Certificate

              	
                26

              
	
                4.6

              	
                Closing

              	
                26

              
	
                4.7

              	
                Waiver
      of Rights

              	
                26

              
	
                4.8

              	
                Conditions
      for Future Advances

              	
                26

              
	 
      	 
      	 
      
	
                SECTION
      V REPRESENTATIONS AND WARRANTIES

              	
                27

              
	
                5.1

              	
                Organization
      and Validity:

              	
                27

              
	
                5.2

              	
                Places
      of Business

              	
                28

              
	
                5.3

              	
                Pending
      Litigation

              	
                28

              

      

    

     

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

     

    
      
        	
                5.4

              	
                Title
      to Properties

              	
                28

              
	
                5.5

              	
                Governmental
      Consent

              	
                28

              
	
                5.6

              	
                Taxes

              	
                28

              
	
                5.7

              	
                Financial
      Statements

              	
                28

              
	
                5.8

              	
                Full
      Disclosure

              	
                28

              
	
                5.9

              	
                Subsidiaries

              	
                29

              
	
                5.10

              	
                Investments,
      Guarantees, Contracts, etc.:

              	
                29

              
	
                5.11

              	
                Government
      Regulations, etc.:

              	
                29

              
	
                5.12

              	
                Business
      Interruptions

              	
                30

              
	
                5.13

              	
                Names
      and Intellectual Property:

              	
                30

              
	
                5.14

              	
                Other
      Associations

              	
                30

              
	
                5.15

              	
                Environmental
      Matters

              	
                30

              
	
                5.16

              	
                Regulation
      O

              	
                31

              
	
                5.17

              	
                Capital
      Stock

              	
                31

              
	
                5.18

              	
                Solvency

              	
                32

              
	
                5.19

              	
                Perfection
      and Priority

              	
                32

              
	
                5.20

              	
                Commercial
      Tort Claims

              	
                32

              
	
                5.21

              	
                Letter
      of Credit Rights

              	
                32

              
	
                5.22

              	
                Deposit
      Accounts

              	
                32

              
	
                5.23

              	
                Anti-Terrorism
      Laws:

              	
                32

              
	 
      	 
      	 
      
	
                SECTION
      VI AFFIRMATIVE COVENANTS

              	
                33

              
	
                6.1

              	
                Payment
      of Taxes and Claims

              	
                33

              
	
                6.2

              	
                Maintenance
      of Properties and Corporate Existence:

              	
                33

              
	
                6.3

              	
                Business
      Conducted

              	
                34

              
	
                6.4

              	
                Litigation

              	
                34

              
	
                6.5

              	
                Issue
      Taxes

              	
                34

              
	
                6.6

              	
                Bank
      Accounts

              	
                34

              
	
                6.7

              	
                Employee
      Benefit Plans

              	
                35

              
	
                6.8

              	
                Financial
      Covenant

              	
                35

              
	
                6.9

              	
                Financial
      and Business Information

              	
                35

              
	
                6.10

              	
                Officers'
      Certificates

              	
                37

              
	
                6.11

              	
                Audits
      and Inspection

              	
                37

              
	
                6.12

              	
                Information
      to Participant

              	
                37

              
	
                6.13

              	
                Material
      Adverse Developments

              	
                37

              
	
                6.14

              	
                Places
      of Business

              	
                38

              
	
                6.15

              	
                Commercial
      Tort Claims

              	
                38

              
	
                6.16

              	
                Letter
      of Credit Rights

              	
                38

              
	
                6.17

              	
                Additional
      Subsidiaries

              	
                38

              
	
                6.18

              	
                Non-Material
      Non-Domestic Subsidiaries

              	
                38

              
	 
      	 
      	 
      
	
                SECTION
      VII NEGATIVE COVENANTS:

              	
                39

              
	
                7.1

              	
                Merger,
      Consolidation, Dissolution or Liquidation:

              	
                39

              
	
                7.2

              	
                Acquisitions

              	
                39

              
	
                7.3

              	
                Liens
      and Encumbrances

              	
                39

              
	
                7.4

              	
                Transactions
      With Affiliates or Subsidiaries:

              	
                39

              

      

    

     

    
      
         

      

      
        ii

        
          

        

      

      
         

      

    

     

    
      
        	
                7.5

              	
                Guarantees

              	
                40

              
	
                7.6

              	
                Restricted
      Payments, Bonuses and Other Indebtedness

              	
                40

              
	
                7.7

              	
                Loans
      and Investments

              	
                40

              
	
                7.8

              	
                Use
      of Lenders' Name

              	
                40

              
	
                7.9

              	
                Miscellaneous
      Covenants:

              	
                40

              
	
                7.10

              	
                Jurisdiction
      of Organization

              	
                40

              
	 
      	 
      	 
      
	
                SECTION
      VIII DEFAULT

              	
                40

              
	
                8.1

              	
                Events
      of Default

              	
                40

              
	
                8.2

              	
                Cure

              	
                43

              
	
                8.3

              	
                Rights
      and Remedies on Default:

              	
                43

              
	
                8.4

              	
                Nature
      of Remedies

              	
                44

              
	
                8.5

              	
                Set-Off:

              	
                44

              
	 
      	 
      	 
      
	
                SECTION
      IX MISCELLANEOUS

              	
                44

              
	
                9.1

              	
                Governing
      Law

              	
                44

              
	
                9.2

              	
                Integrated
      Agreement

              	
                45

              
	
                9.3

              	
                Waiver

              	
                45

              
	
                9.4

              	
                Indemnity:

              	
                45

              
	
                9.5

              	
                Time

              	
                45

              
	
                9.6

              	
                Expenses
      of Lender

              	
                46

              
	
                9.7

              	
                Brokerage

              	
                46

              
	
                9.8

              	
                Notices:

              	
                46

              
	
                9.9

              	
                Headings

              	
                47

              
	
                9.10

              	
                Survival

              	
                47

              
	
                9.11

              	
                Successors
      and Assigns

              	
                47

              
	
                9.12

              	
                Duplicate
      Originals

              	
                47

              
	
                9.13

              	
                Modification

              	
                47

              
	
                9.14

              	
                Signatories

              	
                47

              
	
                9.15

              	
                Third
      Parties

              	
                47

              
	
                9.16

              	
                Discharge
      of Taxes, Borrower's Obligations, Etc.

              	
                47

              
	
                9.17

              	
                Withholding
      and Other Tax Liabilities

              	
                48

              
	
                9.18

              	
                Consent
      to Jurisdiction

              	
                48

              
	
                9.19

              	
                Additional
      Documentation

              	
                48

              
	
                9.20

              	
                Advertisement:

              	
                48

              
	
                9.21

              	
                Waiver
      of Jury Trial

              	
                49

              
	
                9.22

              	
                Consequential
      Damages

              	
                49

              

      

    

     

    
      
         

      

      
        iii

        
          

        

      

      
         

      

    

     

    LOAN AND SECURITY
AGREEMENT

     

    This Loan and Security Agreement
("Agreement") is dated this 14th day of
January, 2010, by and between Lakeland
Industries, Inc., a Delaware corporation ("Borrower") and TD Bank,
N.A., a national
banking association ("Lender").

     

    BACKGROUND

     

    A.           Borrower
desires to establish financing arrangements with Lender and Lender is willing to
make loans and extensions of credit to Borrower under the terms and provisions
hereinafter set forth.

     

    B.           The
parties desire to define the terms and conditions of their relationship in
writing.

     

    NOW, THEREFORE, the parties hereto,
intending to be legally bound, hereby agree as follows:

    

    SECTION
I

    DEFINITIONS
AND INTERPRETATION

     

    1.1          Terms
Defined:  As used in this Agreement, the following terms have
the following respective meanings:

     

    Account - All of the
"accounts" (as that term is defined in the UCC) of Borrower, whether now
existing or hereafter arising.

     

    Account Debtor - Any
Person obligated on any Account owing to Borrower.

     

    Adjusted LIBOR Rate -
For the LIBOR Interest Period for each Adjusted LIBOR Rate Loan comprising part
of the same borrowing (including conversions, extensions and renewals), a per
annum interest rate determined pursuant to the following formula:

     

    
      
        
          
            	
                    Adjusted
      LIBOR Rate

                  	
                    =

                  	
                    London Interbank Offered
    Rate

                  
	 
      	 
      	
                    1 –
      LIBOR Reserve
Percentage

                  

          

        

      

    

    

    Adjusted LIBOR Rate
Loan – LIBOR Rate Loans accruing interest at a rate determined by the
Adjusted LIBOR Rate.

    

    Advance(s) - Any
monies advanced or credit extended to Borrower by Lender under the Revolving
Credit, including without limitation, cash advances and the issuance of Letters
of Credit.

     

    Advance
Request  - Section 2.3b)(ii)

     

    Affiliate - With
respect to any Person, (a) any Person which, directly or indirectly through one
or more intermediaries controls, or is controlled by, or is under common control
with, such Person, or (b) any Person who is a director or officer (i) of such
Person, (ii) of any Subsidiary of such Person, or (iii) any person described in
clause (a) above.  For purposes of this definition, control of a
Person shall mean the power, direct or indirect, (x) to vote 5% or more of the
Capital Stock having ordinary voting power for the election of directors (or
comparable equivalent) of such Person, or (y) to direct or cause the direction
of the management and policies of such Person whether by contract or
otherwise.  Control may be by ownership, contract, or
otherwise.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    Aggregate
Outstandings - The aggregate principal amount of unpaid cash Advances
plus the Letter of Credit Amount.

     

    Anti-Terrorism Laws -
Any statute, treaty, law (including common law), ordinance, regulation, rule,
order, opinion, release, injunction, writ, decree or award of any Governmental
Authority relating to terrorism or money laundering, including Executive Order
No. 13224 and the USA Patriot Act.

     

    Applicable Rate -
With respect to (a) each LIBOR Rate Loan, the percentage set forth below under
the leading “LIBOR Margin” opposite the Applicable Ratio, (b) the L/C Fees
payable pursuant to Section 2.6(c) of this Agreement, the percentage set forth
below under the heading “L/C Commission” opposite the Applicable Ratio and (c)
with respect to the Unused Fee payable pursuant to Section 2.6(b) of this
Agreement, the percentage set forth below under the heading “Unused Rate”
opposite the Applicable Ratio:

     

    
      
        
          	
                  Applicable Ratio

                	 	
                  LIBOR Margin

                	 	 	
                  L/C Commission

                	 	 	
                  Unused Rate

                	 
	
                  Greater
      than 3.00:1.00

                	 	 	1.75	%	 	 	1.75	%	 	 	.35	%
	
                  Less
      than or equal to 3.00:1.00, but greater than 2.00:1.00

                	 	 	1.60	%	 	 	1.60	%	 	 	.30	%
	
                  Less
      than or equal to 2.00:1.00

                	 	 	1.45	%	 	 	1.45	%	 	 	.25	%

        

      

    

     

    Notwithstanding
the foregoing, during the period commencing on the Closing Date and ending on
the date of reset of the Applicable Rate in accordance with this paragraph, the
Applicable Rate with respect to (a) each LIBOR Rate Loan shall be 1.75%, (b) the
L/C Commission shall be 1.75% and (c) the Unused Fee shall be
..35%.  The Applicable Rate will be set or reset with respect to each
LIBOR Rate Loan, the L/C Fees and the Unused Fee on the date which is five (5)
Business Days following the date of receipt by the Lender of the financial
statements referred to in Section 6.9(a)(i) or Section 6.9(a)(ii), as the case
may be, together with the certificate required by Section 6.10; provided,
however, (a) the Applicable Rate will first be reset based on the financial
statements for the fiscal year ending on January 31, 2010, and (b) if any such
financial statement and certificate are not received by the Lender within the
time period required pursuant to Section 6.9(a)(i), Section 6.9(a)(ii), and
Section 6.10, as the case may be, the Applicable Rate will be set or reset based
on an Applicable Ratio of greater than 3.00:1.00 from the date such financial
statements and certificate were due until the date which is five (5) Business
Days following the receipt by the Lender of such financial statements and
certificate, and provided, further, that the Lender shall not in any way deemed
to have waived any Default, including without limitation, an Event of Default
resulting from the failure of Borrower to comply with Section 6.8, Section 6.9
or Section 6.10 of this Agreement, or any rights or remedies hereunder or under
any other Loan Document in connection with the foregoing
proviso.  During the occurrence and continuance of a Default or an
Event of Default, no downward adjustment, and only upward adjustments shall be
made to the Applicable Rate.

     

    Applicable Ratio –
The Ratio of Consolidated Funded Debt to Consolidated EBITDA as determined from
time to time.

     

    Asset Coverage Ratio
– The ratio of (a) the sum of Eligible Accounts plus Eligible
Inventory to (b) Aggregate Outstandings.

     

    Asset Sale - The
sale, transfer, lease, license or other disposition, by Borrower or by any
Subsidiary of Borrower to any Person other than Borrower of any Property now
owned or hereafter acquired, of any nature whatsoever in any transaction or
series of related transactions other than the sale of Inventory in the ordinary
course of business. An Asset Sale  includes, without limitation, the
sale of a division.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    Authorized Officer -
Any officer (or comparable equivalent) of Borrower authorized by specific
resolution of Borrower to request Advances or execute Compliance Certificates as
set forth in the authorization certificate delivered to Lender substantially in
the form of Exhibit
A attached hereto.

     

    Bank Affiliate -With
respect  to Lender, any Person which, directly or indirectly, is in
control of, is controlled by, or is under common control with
Lender.  For purposes of this definition, control of a Person shall
mean the power, direct or indirect, (x) to vote 25% or more of any class of
Capital Stock having  ordinary voting power for the election of
directors of such Person or other Persons performing similar functions for any
such Person, or (y) to direct or cause the direction of the management and
policies of such Person whether by ownership of Capital Stock, contract or
otherwise.

     

    Bankruptcy Code –
Title 11 of the United States Code entitled “Bankruptcy”, as now or hereinafter
in effect, or any successor statute.

     

    Base Rate – For any
day, a rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%)
equal to the greater of (a) the rate published from time to time in The Wall Street
Journal as the “U.S. Prime Rate” or, in the event The Wall Street
Journal ceases to be published, goes on strike, is otherwise not
published or ceases publication of “Prime Rates”, the base, reference or other
rate then designated by Lender, in its sole discretion, for general commercial
loan reference and (b) the Federal Funds Effective Rate in effect on such day
plus one-half
of one percent (0.50%)   If for any reason the Lender shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable to ascertain the Federal Funds Effective Rate, for any reason,
including the inability or failure of the Lender to obtain sufficient quotations
in accordance with the terms thereof, the Base Rate shall be determined without
regard to clause (b) of the first sentence of this definition, as appropriate,
until the circumstances giving rise to such inability no longer
exist.  Any change in the Base Rate due to a change in the Prime Rate
or the Federal Funds Effective Rate shall be effective on the effective date of
such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.  The Base Rate is not necessarily the lowest or best
rate of interest offered by Lender to any borrower or class of
borrowers.

     

    Base Rate Loans –
That portion of the Loans accruing interest based on a rate determined by
reference to the Base Rate.

     

    Blocked Person
-  Section 5.23.

     

    Business Day - (i) A
day other than Saturday or Sunday when Lender is open for business in New York,
New York; or (ii)
with respect to any LIBOR Rate Loan, any day other than a Saturday, Sunday or
federal holiday (or a day on which commercial banks in New York are required or
permitted to close) on which Lender is open and conducting its customary banking
transactions.

     

    Capitalized Lease
Obligations - Any Indebtedness represented by obligations under a lease
that is required to be capitalized for financial reporting purposes in
accordance with GAAP, consistently applied.

     

    Capital Expenditures
- For any period, the aggregate of all expenditures (including that portion of
Capitalized Lease Obligations attributable to that period) made in respect of
the purchase, construction or other acquisition of fixed or capital assets by
the Borrower and its Subsidiaries, determined in accordance with
GAAP.

     

    Capital Stock - Any
and all shares, interests, participations or other equivalents (however
designated) of capital stock of a corporation, any and all other ownership
interests in a Person (other than a corporation) and any and all warrants or
options to purchase any of the foregoing.

    
      
         

      

      
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    Cash Management Agreement
- That certain cash management agreement, to be executed and delivered on
the Closing Date by the Borrower pursuant to Section 4.1 hereof as the same may
hereafter be amended, restated, supplemented or otherwise modified from time to
time.

     

    Change of Control -
With respect to Borrower, (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) of Capital
Stock of Borrower representing more than 20% of the aggregate ordinary voting
power represented by the issued and outstanding Capital Stock of Borrower or (b)
the acquisition of direct or indirect control of Borrower by any Person or
group.

     

    Change of Management
– The failure of both Christopher J. Ryan and Gary Pokrassa to be officers of
the Borrower and to be involved in the day-to day management of the
Borrower.

     

    Closing - Section
4.6.

     

    Closing Date -
Section 4.6.

     

    Collateral - All of
the Property and interests in Property described in Section 3.1 of this
Agreement and all other Property (including, without limitation, pledges of
ownership interests in Material Non-Domestic Subsidiaries, in accordance with
the Pledge Agreement(s), and interests in Property that now or hereafter secure
payment of the Obligations and satisfaction by Borrower of all covenants and
undertakings contained in this Agreement and the other Loan
Documents.

     

    Compliance
Certificate - Section 6.10.

     

    Consolidated Amortization
Expense - For any period, the aggregate amortization expenses of Borrower
and its Subsidiaries, as determined on a consolidated basis in accordance with
GAAP.

     

    Consolidated Depreciation
Expense - For any period, the aggregate amount
of depreciation expenses of Borrower and its Subsidiaries, as determined on a
consolidated basis in accordance with GAAP.

     

    Consolidated EBITDA -
For any period, Consolidated Net Income (or deficit) plus (a) Consolidated
Interest Expense, plus (b) Consolidated
Depreciation Expense, plus (c) Consolidated
Amortization Expense, plus (d) Consolidated Tax Expense, plus (e) consolidated
one-time extraordinary expenses relating to the termination of the Existing
Indebtedness and expenses associated with the termination of Borrower’s
$18,000,000 fixed interest rate swap related to the Existing Indebtedness, plus (f) non-cash
expenses for equity compensation related to restricted stock plans and stock
options for employees and board members plus (g)
non-recurring severance expenses incurred during August, 2009 provided that such
amount is not in excess of $185,000 minus (h)
consolidated extraordinary gains of Borrower and its Subsidiaries, all as
determined on a rolling four quarter basis, in accordance with
GAAP.

     

    Consolidated Fixed Charge
Coverage Ratio - For any period, the ratio of (i) Consolidated
EBITDA minus Restricted
Payments minus
Unfunded Capital Expenditures minus Consolidated
Tax Expenses paid in cash during the immediately preceding twelve month period
to (ii) consolidated scheduled principal payments of Borrower and its
Subsidiaries on account of long term Indebtedness for the next succeeding twelve
month period excluding the aggregate principal amount of all Loans at such time
plus
Consolidated Interest Expense, all as determined in accordance with
GAAP.

    
      
         

      

      
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    Consolidated Funded
Debt - For any period, the sum of all Indebtedness of Borrower and its
Subsidiaries for borrowed money, on a consolidated basis, including the current
portion thereof and including Capitalized Lease Obligations, determined in
accordance with GAAP.

     

    Consolidated Interest
Expense - For any period (without duplication), the aggregate amount of
interest expense required to be paid or accrued during such period on all
Indebtedness of Borrower and its Subsidiaries outstanding during all or any part
of such period, as determined on a consolidated basis in accordance with
GAAP.

     

    Consolidated Leverage
Ratio - At any time, the ratio of (i) Consolidated Funded Debt to (ii)
Consolidated EBITDA.

     

    Consolidated Net
Income - For any period, net income after taxes of Borrower and its
Subsidiaries as such would appear on Borrower's statement of income, prepared on
a consolidated basis in accordance with GAAP.

     

    Consolidated Tax
Expense - For any period, the aggregate amount of income tax expenses of
Borrower and its Subsidiaries, as determined on a consolidated basis in
accordance with GAAP.

     

    Control - The
possession, directly or indirectly, of the power to direct or cause the
directors of the management and policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.

     

    Daily LIBOR Rate -
For each Daily LIBOR Rate Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate equal to the
London Interbank Offered Rate determined for a LIBOR Interest Period of thirty
days, as determined on the date of a request for an Advance of a Daily LIBOR
Rate Loan as such Daily LIBOR Rate may change from time to time.

     

    Daily LIBOR Rate Loans
– LIBOR Rate Loans accruing interest at a rate determined by the Daily
LIBOR Rate.

     

    Default - Any event,
act, condition or occurrence which with notice, or lapse of time or both, would
constitute an Event of Default hereunder.

     

    Designated Accounts –
Accounts owing to the Borrower or any Guarantor from Daniel Safety Products,
Worldwide Medical, Malt Industries, Five Star, Stauffer Glove, Saf-T-Glove,
Safety Products or Sunrise Industries, for which Borrower provides extended
payment terms.

     

    Disqualified Stock -
Any Capital Stock which by its terms (or by the terms of any security into which
it is convertible or for which it is exchangeable) or upon the happening of any
event (i) matures or is mandatorily redeemable for any reason, (ii) is
convertible or exchangeable for Indebtedness or Capital Stock that meets the
requirements of clauses (i) and (ii), or (iii) is redeemable at the option of
the holder thereof, in whole or in part, in each case on or prior to the
Revolving Credit Maturity Date.

     

    Dollar, Dollars and U.S.
Dollars and the Symbol $ - Lawful money of the United States of
America.

     

    Domestic Subsidiary -
Any Subsidiary of the Borrower or any Guarantor organized under the laws of any
state of the United States of America.

    
      
         

      

      
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    Dupont 
- E.I. Dupont De Nemours and Company, a Delaware corporation.

     

    Dupont Agreement –
The Trademark Licensing Agreement, dated as of January 1, 2008, between the
Borrower and Dupont, as amended, and, at any time after the Effective Date, the
amendment to such Trademark Licensing Agreement or a new agreement entered into
with Dupont in accordance with Section 6.19 below.

     

    Effective Date – That
date when the Borrower shall have entered into an amendment to the Dupont
Agreement or a new agreement with Dupont in accordance with Section 6.19
below.

     

    Eligible Accounts -
All Accounts of Borrower and each Guarantor meeting all of the
following specifications: (i) the Account is lawfully and exclusively owned by
Borrower and such Guarantor, as the case may be and subject to no Lien
(other than Permitted Liens, if applicable, and Liens granted under this
Agreement) and Borrower and such Guarantor has the right of
assignment thereof and the power to grant a security interest therein; (ii) the
Account is valid and enforceable representing the undisputed indebtedness of an
Account Debtor not more than 30 days past the due, with respect to the
Designated Accounts, or 90 days past the original invoice date, with respect to
any other Account, and the Account does not represent a rebilling; (iii) not
more than 25% of the aggregate balance of all Accounts owing from an Account
Debtor obligated on the Account are outstanding more than 90 days past their
original invoice dates; (iv) the amount of the Account, when aggregated with all
other Accounts of such Account Debtor, is less than 10% of the face value of all
Accounts of Borrower and the Guarantors then outstanding; (v)
the Account is not subject to any defense, set-off, or counterclaim, deduction,
discount, credit, chargeback, freight claim, allowance or adjustment of any
kind; (vi)  such sale was an absolute sale and not on consignment or on
approval or on a sale-or-return basis nor subject to any other repurchase or
return agreement, and such goods have been shipped to the Account Debtor or its
designee; (vii) no notice of the bankruptcy, receivership, reorganization,
liquidation, dissolution, or insolvency of the Account Debtor has been received
by Lender or Borrower or such Guarantor; (viii) the Account is an Account for
which Lender believes that the validity, enforceability or collection of the
Account is not invalid or otherwise impaired; (ix) the Account Debtor is not a
Subsidiary or Affiliate of Borrower or such Guarantor; (x) the Account is not an
Account of an Account Debtor having its principal place of business or executive
office outside the United States, unless the payment of such Account is
guaranteed by an irrevocable letter of credit satisfactory to Lender or by
credit insurance, satisfactory to Lender; and (xi) the Account meets such other
reasonable specifications and requirements which may from time to time be
established by Lender.   Notwithstanding
anything to the contrary herein, for purposes of determining the aggregate
amount of Eligible Accounts, the value ascribed to those Designated Accounts
which are otherwise deemed Eligible Accounts shall not exceed five percent (5%)
of aggregate Eligible Accounts.

     

    Eligible Inventory -
Any and all Inventory of Borrower and each Guarantor located at Borrower's
places of business shown on Schedule 5.2 attached
hereto and made part hereof (and for which location Lender has received a
landlord, warehouse or mortgagee waiver as determined by, and in form and
substance satisfactory to, Lender), which (i) is not subject to any Lien (other
than Liens granted under this Agreement and Permitted Liens, if applicable);
(ii) is not slow moving, damaged, obsolete or unmerchantable; (iii) is not
Inventory held on consignment; (iv) is not Inventory in-transit unless such
Inventory (A) is in transit to one of Borrower's and such Guarantor’s places of business shown
on Schedule
5.2, (B) is owned by Borrower or such Guarantor, as the case may be, (C)
is insured to the full value thereof, and (D) is subject to negotiable bills of
lading endorsed to, or non-negotiable bills of lading issued in the name of
Lender; and (v) meets such other reasonable specifications and requirements
which may from time to time be established by Lender.  Notwithstanding
anything to the contrary herein, Inventory in-transit to the Borrower from
locations outside of the United States of America shall be deemed Eligible
Inventory as long as the Borrower has taken title to such Inventory and has
provided satisfactory evidence thereto to the Lender, such Inventory has been
insured to the full value thereof on terms and conditions reasonably
satisfactory to the Lender and the Lender has been named loss payee with respect
to such insurance.

    
      
         

      

      
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    Environmental Laws -
Any and all Federal, foreign, state, local or municipal laws, rules, orders,
regulations, statutes, ordinances, codes, decrees and any and all common law
requirements, rules and bases of liability regulating, relating to or imposing
liability or standards of conduct concerning pollution, protection of the
environment, or the impact of pollutants, contaminants or toxic or hazardous
substances on human health or the environment, as now or may at any time
hereafter be in effect from time to time.

     

    ERISA - The Employee
Retirement Income Security Act of 1974, as the same may be in effect, from time
to time.

     

    Event of Default -
Section 8.1.

     

    Executive Order No.
13224 - The Executive Order No. 13224 on Terrorist Financing, effective
September 24, 2001, as the same may be in effect from time to time.

     

    Expenses - Section
9.6.

     

    Existing Indebtedness
- The credit facility made available to the Borrower by Wachovia Bank, N.A.
pursuant to a credit agreement and other loan documents, between the Borrower
and Wachovia Bank, N.A.

    

    Federal Funds Effective
Rate - For any day, the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal fund brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for the day of such
transactions received by Lender from three Federal fund brokers of recognized
standing selected by Lender.

     

    First-Tier Subsidiary
- with respect to any Person, a Subsidiary of such Person that is directly owned
by such Person.

     

    GAAP - Generally
accepted accounting principles as in effect in the United States of America on
the Closing Date applied in a manner consistent with the most recent audited
financial statements of Borrower furnished to Lender and described in Section
5.7 herein.

     

    Government Acts -
Section 2.2(f).

     

    Governmental
Authority - Any federal, state or local government or political
subdivision, or any agency, authority, bureau, central bank, commission,
department or instrumentality of either, or any court, tribunal, grand jury, or
arbitration.

     

    Guarantor  -
Individually, Laidlaw, Adams & Peck, Inc., a Delaware corporation and each
other Domestic Subsidiary which, from time to time hereafter, is required to
execute a Surety and Guaranty Agreement in accordance with Section 6.17 hereof,
provided such Domestic Subsidiary’s status as a Guarantor shall be effective as
of the date of such execution.

     

    Hazardous Substances
- Any substances defined or designated as hazardous or toxic waste, hazardous or
toxic material, hazardous or toxic substance or similar term, under any
Environmental Law.

    
      
         

      

      
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    Hedging Agreements -
Any Interest Hedging Instrument or any other interest rate protection agreement,
foreign currency exchange agreement, commodity purchase or option agreement, or
any other interest rate hedging device or swap agreement (as defined in 11
U.S.C. § 101 et. seq.).

     

    Indebtedness - Of any
Person at any date, without duplication, (i) all indebtedness of such Person for
borrowed money  (including with respect to Borrower, the Obligations)
or for the deferred purchase price of property or services (other than current
trade liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), (ii) any other indebtedness of such Person
which is evidenced by a note, bond, debenture or similar instrument, (iii) all
Capitalized Lease Obligations of such Person, (iv) the face amount of all
letters of credit issued for the account of such Person and all drafts drawn
thereunder, (v) all obligations of other Persons which such Person has
guaranteed, (vi) Disqualified Stock, (vii) all net obligations of such Person
under Hedging Agreements, and (viii) all liabilities secured by any Lien on any
property owned by such Person even though such Person has not assumed or
otherwise become liable for the payment thereof.

     

    Interest Hedging
Instrument - Any documentation evidencing any interest rate swap,
interest "cap" or "collar" or any other interest rate hedging device or swap
agreement (as defined in 11 U.S.C. § 101 et. seq.) between
Borrower and Lender (or any Affiliate of Lender).

     

    Inventory - All of
the "inventory" (as that term is defined in the UCC) of Borrower, whether now
existing or hereafter acquired or created.

     

    IRS - Internal
Revenue Service.

     

    L/C Commitment - The
sum of Five Million and 00/100 Dollars ($5,000,000.00).

     

    L/C Fees - Section
2.6(c).

     

    Letters of Credit -
Standby letters of credit issued to or to be issued by Lender for the account of
Borrower pursuant to Section 2.2 herein.

     

    Letter of Credit
Amount - The sum of (i) the aggregate undrawn amount of all Letters of
Credit outstanding at any time plus (ii) the
aggregate amount of all drawings under Letters of Credit for which Lender has
not been reimbursed at such time.

     

    Letter of Credit
Documents - Any Letter of Credit, any amendment thereto, any documents
delivered in connection therewith, any application therefor, or any other
documents (all in form and substance satisfactory to Lender), governing or
providing for (i) the rights and obligations on the parties concerned or at
risk, or (ii) any collateral security for such obligations.

     

    LIBOR Interest Period
- As to LIBOR Rate Loans, a period of one month, two months, three months or six
months, as selected by Borrower pursuant to the terms of this Agreement
(including continuations and conversions thereof); provided however, (i) if any
LIBOR Interest Period would end on a day for which there is no numerically
corresponding day in the calendar month, such LIBOR Interest Period shall end on
the last Business Day of the relevant calendar month and (ii) no LIBOR Interest
Period shall extend beyond the Revolving Credit Maturity Date.

     

    LIBOR Rate Loans -
That portion(s) of the Loans accruing interest based on a rate determined by
reference to the Adjusted LIBOR Rate or the Daily LIBOR Rate.

    
      
         

      

      
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    LIBOR Reserve
Percentage - For any day, that percentage (expressed as a decimal) which
is in effect from time to time under Regulation D, as such regulation may be
amended from time to time or any successor regulation, as the maximum reserve
requirement (including, without limitation, any basic, supplemental, emergency,
special, or marginal reserves) applicable with respect to Eurocurrency
liabilities as that term is defined in Regulation D (or against any other
category of liabilities that includes deposits by reference to which the
interest rate of LIBOR Rate Loans is determined), whether or not Lender has any
Eurocurrency liabilities subject to such reserve requirement at that
time.  LIBOR Rate Loans shall be deemed to constitute Eurocurrency
liabilities and as such shall be deemed subject to reserve requirements without
benefits of credits for proration, exceptions or offsets that may be available
from time to time to Lender.  The Adjusted LIBOR Rate shall be
adjusted automatically on and as of the effective date of any change in the
LIBOR Reserve Percentage.

     

    Lien - Any interest
of any kind or nature in property securing an obligation owed to, or a claim of
any kind or nature in property by, a Person other than the owner of the
Property, whether such interest is based on the common law, statute, regulation
or contract, and including, but not limited to, a security interest or lien
arising from a mortgage, encumbrance, pledge, conditional sale or trust receipt,
a lease, consignment or bailment for security purposes, a trust, or an
assignment.  For the purposes of this Agreement, Borrower shall be
deemed to be the owner of any Property which it has acquired or holds subject to
a conditional sale agreement or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person for security
purposes.

     

    Loans - Collectively,
the unpaid balance of cash Advances under the Revolving Credit which may be Base
Rate Loans or LIBOR Rate Loans and any unreimbursed draws under any Letter of
Credit.

     

    Loan Documents -
Collectively, this Agreement, the Note, the Surety and Guaranty Agreement, the
Letter of Credit Documents, the Security Documents, the Perfection Certificate,
the Cash Management Agreement and all agreements, instruments and documents
executed and/or delivered in connection therewith, all as may be supplemented,
restated, superseded, amended or replaced from time to time.

     

    London Banking Days -
Any day on which commercial banks are open for general business (including
dealings in foreign exchange and foreign currency deposits)  in
London, England.

     

    London Interbank Offered
Rate - With respect to any LIBOR Rate Loan, the rate of interest per
annum in  Dollars (rounded upwards, if necessary, at Lender’s option,
to the next 100th of one
percent) equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), for
the applicable LIBOR Interest Period as published by Bloomberg (or such other
commercially available source providing quotations of BBA LIBOR as designated by
Lender from time to time) at approximately 11:00 A.M. (London time) two (2)
London Banking Days prior to the first day of such LIBOR Interest Period for a
term comparable to such LIBOR Interest Period; provided however, if more than
one BBA LIBOR Rate is specified, the applicable rate shall be the arithmetic
mean of all such rates.  If, for any reason, such rate is not
available, the term London Interbank Offered Rate shall mean, with respect to
any LIBOR Rate Loan for the LIBOR Interest Period applicable thereto, the rate
of interest per annum (rounded upwards, at Lender’s option, to the next 100th of one
percent) determined by Lender to be the average rate of interest per annum at
which deposits in Dollars are offered for such LIBOR Interest Period to major
banks in London, England at approximately 11:00 A.M. (London time) two
(2) London Banking Days prior to the first day of such LIBOR Interest
Period for a term comparable to such LIBOR Interest Period.

     

    Material Adverse
Effect - A material adverse effect with respect to (a) the business,
assets, properties, financial condition, stockholders' equity, contingent
liabilities, prospects, material agreements or results of operations of
Borrower, or (b) Borrower's ability to pay the Obligations in accordance with
the terms hereof, or (c) the validity or enforceability of this Agreement or any
of the other Loan Documents or the rights and remedies of Lender hereunder or
thereunder.

    
      
         

      

      
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    Material Non-Domestic
Subsidiary - Any Non-Domestic Subsidiary that has at least $350,000 in
assets or has revenues consisting of at least $350,000, each as reflected on the
most recent financial statements delivered pursuant to Section 6.9(a) or (b)
hereof.

     

    Maximum Revolving Credit
Amount - The sum of Twenty Three Million Five Hundred Thousand and
00/100Dollars ($23,500,000.00).

     

    Non-Material Non-Domestic
Subsidiary - Any Non-Domestic Subsidiary which is not a Material
Non-Domestic Subsidiary.

     

    Non-Domestic
Subsidiary - Any Subsidiary of the Borrower or any Guarantor which is not
a Domestic Subsidiary.

     

    Note - The Revolving
Credit Note.

     

    Notice of
Conversion/Extension - A written notice of conversion of an Adjusted
LIBOR Rate Loan to a Base Rate Loan or a Daily LIBOR Rate Loan, or of a Base
Rate Loan to an Adjusted LIBOR Rate Loan or a Daily LIBOR Rate Loan, or of a
Daily LIBOR Rate Loan to an Adjusted LIBOR Rate Loan or a Base Rate Loan or
extension of an Adjusted LIBOR Rate Loan, in each case substantially in the form
of Exhibit C
attached hereto.

     

    Obligations - All
existing and future debts, liabilities and obligations of every kind or nature
at any time owing by Borrower and any of its Subsidiaries to Lender or any other
subsidiary of Lender or Bank Affiliate, whether under this Agreement, or any
other existing or future instrument, document or agreement, between Borrower or
any Subsidiary of the Borrower and Lender or any other subsidiary of Lender or
Bank Affiliate, whether joint or several, related or unrelated, primary or
secondary, matured or contingent, due or to become due (including debts,
liabilities and obligations obtained by assignment), and whether principal,
interest, fees, indemnification obligations hereunder or Expenses (specifically
including interest accruing after the commencement of any bankruptcy, insolvency
or similar proceeding with respect to Borrower or any of its Subsidiaries,
whether or not a claim for such post-commencement interest is allowed),
including, without limitation, debts, liabilities and obligations in respect of
the Revolving Credit, Reimbursement Obligations and any extensions,
modifications, substitutions, increases and renewals thereof; any amount payable
by Borrower or any of its Subsidiaries pursuant to a Hedging Agreement; the
payment of all amounts advanced by Lender or any other subsidiary of Lender or
Bank Affiliate to preserve, protect and enforce rights hereunder and in the
Collateral; and all Expenses incurred by Lender or any other subsidiary of
Lender or Bank Affiliate.  Without limiting the generality of the
foregoing, Obligations shall include any other debts, liabilities or obligations
owing to Lender or any other subsidiary of Lender or Bank Affiliate in
connection with any lockbox, cash management, or other services (including
electronic funds transfers or automated clearing house transactions) provided by
Lender or any other subsidiary of Lender or Bank Affiliate to Borrower or any of
Borrower’s Subsidiaries, as well as any other loan, advances or extension of
credit, under any existing or future loan agreement, promissory note, or other
instrument, document or agreement between Borrower or any Subsidiary of Borrower
and Lender or any other subsidiary of Lender or Bank Affiliate.

     

    Overadvance - Section
2.1(a).

     

    PBGC - The Pension
Benefit Guaranty Corporation.

    
      
         

      

      
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    Perfection
Certificate - The Perfection Certificate provided by Borrower to Lender
on or prior to the Closing Date in form and substance satisfactory to
Lender.

     

    Permitted Acquisition
- Any acquisition (whether by merger or otherwise) by the Borrower or any
Guarantor of more than 50% of the outstanding capital stock, membership
interests, partnership interests or other similar ownership interests of a
Person which is engaged in a line of business similar to the business (or
reasonable extensions thereof) of the Borrower or such Guarantor or the purchase
of all or substantially all of the assets owned by such Person or the purchase
of a division, business unit or product line of a Person; provided (a) the
Lender shall have received, within ten (10) Business Days of the
closing of such Permitted Acquisition, (i) with respect to a Person which
constitutes a Domestic Subsidiary, a duly executed Guaranty and Surety Agreement
and Security Agreement by such Domestic Subsidiary and the other documents
required to be delivered pursuant to Section 6.17 hereof, pursuant to which such
Subsidiary becomes a “Guarantor” hereunder, and (ii) with respect to a Person
which constitutes a Material Non-Domestic Subsidiary, to the extent not
previously received, a duly executed Pledge Agreement by the parent of such
Material Non-Domestic Subsidiary, and the other documents required to be
delivered pursuant to Section 6.17 hereof; (b) the Lender shall have received
evidence reasonably satisfactory to it that the shares or other interests in the
Person, or the assets of the Person, which is the subject of the Permitted
Acquisition are, or will be promptly following the closing of such Permitted
Acquisition, free and clear of all Liens, except Permitted Liens, including,
without limitation, with respect to the acquisition of shares or other equity
interests, free of any restrictions on transfer other than restrictions
applicable to the sale of securities under federal and state securities laws and
regulations generally; (c) the Lender shall have received within thirty (30)
Business Days prior to closing of such Permitted Acquisition, the documentation
governing the proposed acquisition, including, without limitation, the purchase
agreement with respect thereto, together with such other additional
documentation or information with respect to the proposed acquisition as the
Administrative Agent may reasonably require; (d) no Default or Event of Default
shall have occurred and be continuing immediately prior to or would occur after
giving effect to the acquisition on a pro forma basis and the
Lender shall have received five-year pro-forma post-acquisition projections and
pro forma financial statements showing that no Default or Event of Default shall
have occurred after giving effect to such acquisition; (e) the acquisition has
either (i) been approved by the Board of Directors or other governing body of
the Person which is the subject of the acquisition or (ii) been recommended for
approval by the Board of Directors or other governing body of such Person to the
shareholders or other members of such Person and subsequently approved by the
shareholders or such members if shareholder or such member approval is required
under applicable law or the by-laws, certificate of incorporation or other
governing instruments of such Person; and (f) the Borrower shall have received
the prior written consent of the Lender if the Permitted Acquisition Purchase
Price to be paid in connection with such Permitted Acquisition is in excess of
$8,000,000 or if the aggregate Acquisition Purchase Price of all Permitted
Acquisitions after consummation of such Permitted Acquisition would be in excess
of $8,000,000.  

     

    Permitted Acquisition
Purchase Price - With respect to any Permitted Acquisition, collectively,
without duplication, (a) all cash paid by the Borrower or any Guarantor in
connection with such Permitted Acquisition, including transaction costs, fees
and other expenses incurred by the Borrower or such Guarantor in connection with
such Permitted Acquisition, (b) all Indebtedness created, and all Indebtedness
assumed, by the Borrower or any Guarantor in connection with such Permitted
Acquisition, including, without limitation, the maximum amount of any purchase
price to be paid pursuant to any “earn out” provision contained in the
applicable purchase agreements related to such Permitted Acquisition, (c) the
value of all capital stock issued by the Borrower or any Guarantor in connection
with such Permitted Acquisition, and (d) the deferred portion of the purchase
price or any other costs paid by the Borrower or any Guarantor in connection
with such Permitted Acquisition, including, but not limited to, consulting
agreements and non-compete agreements.  For purposes of this
definition, if any “earn out” provision in any purchase agreement for any
Permitted Acquisition does not provide for a maximum payment, the amount to be
calculated pursuant to subsection (b) of this definition with respect to the
maximum amount of any purchase price to be paid pursuant to any “earn out”
provision, shall be determined by the Lender, on a reasonable basis, on the
basis of the projections provided to the Lender.

    
      
         

      

      
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    Permitted
Indebtedness - (a) Indebtedness to Lender in connection with the
Revolving Credit, and Letters of Credit or otherwise pursuant to the Loan
Documents; (b) Indebtedness under Hedging Agreements, provided such Hedging
Agreements are entered into in the ordinary course of business and not for
speculative purposes; (c) trade payables incurred in the ordinary course of
Borrower's business; (d) purchase money Indebtedness (including Capitalized
Lease Obligations) hereafter incurred by Borrower to finance the purchase of
fixed assets; provided that, (i) such Indebtedness incurred in any fiscal year
shall not exceed $250,000, (ii) such Indebtedness shall not exceed the purchase
price of the assets funded and (iii) no such Indebtedness may be refinanced for
a principal amount in excess of the principal amount outstanding at the time of
such refinancing; (e) Indebtedness existing on the Closing Date that is
identified and described on Schedule 1.1(a)
attached hereto and made part hereof, (f) Subordinated Debt and (g) secured
Indebtedness of Qualytextil, S.A. not to exceed $5,000,000, in the
aggregate.

     

    Permitted Investments
- (a) investments and advances existing on the Closing Date that are disclosed
on Schedule
5.10(a), (b) (i) obligations issued or guaranteed by the United States of
America or any agency thereof, (ii) commercial paper with maturities of not more
than 180 days and a published rating of not less than A-1 or P-1 (or the
equivalent rating) by a nationally recognized investment rating agency, (iii)
certificates of time deposit and bankers’ acceptances having maturities of not
more than 180 days and repurchase agreements backed by United States government
securities of a commercial bank if (A) such bank has a combined capital and
surplus of at least $500,000,000, or (B) its debt obligations, or those of a
holding company of which it is a Subsidiary, are rated not less than A (or the
equivalent rating) by a nationally recognized investment rating agency, (iv)
U.S. money market funds that invest solely in obligations issued or guaranteed
by the United States of America or an agency thereof; (c) additional loans and
advances to, and equity investments in, the Non-Domestic Subsidiaries, made
after July 31, 2009, not to exceed $7,500,000, in the aggregate, during the term
of the Loans, subject to compliance with Section 6.17 hereof; (d) Permitted
Acquisitions; (e) investments by any Material Non-Domestic Subsidiary which is a
First-Tier Subsidiary to any other Material Non-Domestic Subsidiary, not to
exceed $3,500,000 during the term of this Agreement; and (f) investment-grade
investments by any Material Non-Domestic Subsidiary made in the ordinary course
of its business and in accordance with the Borrower’s guidelines and
procedures.

     

    Permitted Liens -
(a)  Liens securing taxes, assessments or governmental charges or
levies not delinquent; (b) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance, social security and other like laws; (c) Liens on fixed assets
security purchase money Indebtedness permitted under Section 7.6; provided that,
(i) such Lien attached to such assets concurrently, or within 20 days of the
acquisition thereof, and only to the assets so acquired, and (ii) a description
of the asset acquired is furnished to Lender; (d) Liens existing on the Closing
Date and shown on Schedule 1.1(b)
attached hereto and made part hereof; (e) Liens by Qualytextil, S.A. to secure
Indebtedness described in clause (g)” of the definition of “Permitted
Indebtedness”; (f) Liens in favor of Lender securing the Obligations and other
Liens in favor of Lender; (g) Liens or taxes, assessments or other governmental
charges or levies not yet delinquent or which are being contested in good faith
by appropriate proceedings; provided, however, that adequate reserves with
respect thereto are maintained on the books of the Borrower or any Subsidiary of
the Borrower in accordance with Generally Accepted Accounting Principles; and
(h) Liens on real property of any Non-Domestic Subsidiary acquired in connection
with a Permitted Acquisition provided that such Liens (i) do not secure
Indebtedness in excess of $2,000,000, in the aggregate, during the term of this
Agreement, (ii) do not extend to any assets and property of any Non-Domestic
Subsidiary other than real property.

    
      
         

      

      
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    Person - An
individual, partnership, corporation, trust, limited liability company, limited
liability partnership, unincorporated association or organization, joint venture
or any other entity.

     

    Pledge
Agreements  - Those certain pledge agreements or other
documents, each to be executed and delivered on the Closing Date by the Borrower
and the Guarantor pursuant to Section 4.1 hereof and, thereafter, by Borrower or
any Guarantor who is the direct holder of capital stock of any Material
Non-Domestic Subsidiary of Borrower or any Guarantor who is required to execute
the same pursuant to Section 6.17 hereof, as each of the same may hereafter be
amended, restated, supplemented or otherwise modified from time to
time.

     

    Property - Any
interest of Borrower in any kind of property or asset, whether real, personal or
mixed, or tangible or intangible.

     

    Regulation D -
Regulation D of the Board of Governors of the Federal Reserve System comprising
Part 204 of Title 12, Code of Federal Regulations, as amended, and any successor
thereto.

     

    Reimbursement
Obligations - Section 2.2(c).

     

    Requirement of Law -
Collectively, all international, foreign, federal, state and local laws,
statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.

     

    Restricted Payment -
(a) Cash dividends or other cash distributions on any now or hereafter
outstanding Capital Stock of Borrower; (b) the redemption, repurchase,
defeasance or acquisition of such Capital Stock or of warrants, rights or other
options to purchase such Capital Stock; and (c) Any loans or advances (other
than salaries), to any shareholder(s), partner(s) or member(s) of
Borrower.

     

    Revolving Credit -
Section 2.1(a).

     

    Revolving Credit Closing
Fee - Section 2.6(a).

     

    Revolving Credit Maturity
Date -  January 14, 2011.

     

    Revolving Credit Note
- Section 2.1(b).

     

    Security Agreement -
That certain security agreement to be executed by each Guarantor in favor of
Lender, in form and substance satisfactory to Lender, on or prior to the Closing
Date and thereafter by each Domestic Subsidiary required to deliver a Security
Agreement pursuant to Section 6.17 hereof, as same may hereafter be amended,
restated, supplemented or otherwise modified from time to time.

     

    Security Documents -
The Pledge Agreements and the Security Agreement, each to be delivered to the
Lender on the Closing Date, and each other collateral security document
thereafter delivered to the Lender.

     

    Subordinated Debt -
Indebtedness of Borrower subject to payment terms and subordination provisions
set forth in a written subordination agreement or intercreditor agreement
acceptable to Lender in its sole discretion.

    
      
         

      

      
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    Subsidiary - With
respect to any Person at any time, (i) any corporation more than fifty percent
(50%) of whose voting stock is legally and beneficially owned by such Person or
owned by a corporation more than fifty percent (50%) of whose voting stock is
legally and beneficially owned by such Person; (ii) any trust of which a
majority of the beneficial interest is at such time owned directly or
indirectly, beneficially or of record, by such Person or one or more
Subsidiaries of such Person; and (iii) any partnership, joint venture, limited
liability company or other entity of which ownership interests having ordinary
voting power to elect a majority of the board of directors or other Persons
performing similar functions are at such time owned directly or indirectly,
beneficially or of record, by, or which is otherwise controlled directly,
indirectly or through one or more intermediaries by, such Person or one or more
Subsidiaries of such Person.

     

    Surety and Guaranty
Agreement - That certain surety and guaranty agreement to be executed by
each Guarantor in favor of Lender, in form and substance satisfactory to Lender,
on or prior to the Closing Date and thereafter by each Domestic Subsidiary
required to deliver a Surety and Guaranty Agreement pursuant to Section 6.17
hereof, as same may hereafter be amended, restated, supplemented or otherwise
modified from time to time.

     

    UCC - The Uniform
Commercial Code as adopted in the State of New York, as in effect from time to
time.

     

    Unfunded Capital
Expenditures - Capital Expenditures that are not financed through
interest bearing Indebtedness.

     

    Other Capitalized
Terms - Any other capitalized terms used without further definition
herein shall have the respective meaning set forth in the UCC.

     

    1.2           Accounting
Principles:  Where
the character or amount of any asset or liability or item of income or expense
is required to be determined or any consolidation or other accounting
computation is required to be made for the purposes of this Agreement, this
shall be done in accordance with GAAP as in effect on the Closing Date, to the
extent applicable, except as otherwise expressly provided in this
Agreement.  If there are any changes in GAAP after the Closing Date
that would affect the computation of the financial covenants in Section 6.8,
such changes shall only be followed, with respect to such financial covenants,
from and after the date this Agreement shall have been amended to take into
account any such changes.

     

    1.3           Construction:  No
doctrine of construction of ambiguities in agreements or instruments against the
interests of the party controlling the drafting shall apply to any Loan
Documents.

    

    SECTION
II

    THE
LOANS

     

    2.1           Revolving Credit -
Description:

     

    (a)           Subject
to the terms and conditions of this Agreement, Lender hereby establishes for the
benefit of Borrower a revolving credit facility (collectively, the "Revolving
Credit") which shall include cash Advances extended by Lender to or for the
benefit of Borrower as well as Letters of Credit issued for the account of
Borrower from time to time hereunder.  The aggregate principal amount
of unpaid cash Advances, plus the Letter of Credit Amount, shall not at any time
exceed the Maximum Revolving Credit Amount.  Subject to such
limitation, the outstanding balance of Advances under the Revolving Credit may
fluctuate from time to time, to be reduced by repayments made by Borrower, to be
increased by future Advances which may be made by Lender, to or for the benefit
of Borrower, and, subject to the provisions of Section 8 below, shall be due and
payable on the Revolving Credit Maturity Date.  If Aggregate
Outstandings at any time exceeds the Maximum Revolving Credit Amount (such
excess referred to as "Overadvance"), Borrower shall immediately repay the
Overadvance in full.

    
      
         

      

      
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    (b)           At
Closing, Borrower shall execute and deliver a promissory note to Lender for the
Maximum Revolving Credit Amount ("Revolving Credit Note").  The
Revolving Credit Note shall evidence Borrower's unconditional obligation to
repay Lender for all Advances made under the Revolving Credit, with interest as
herein provided.  Each Advance under the Revolving Credit shall be
deemed evidenced by the Revolving Credit Note, which is deemed incorporated
herein by reference and made part hereof.  The Revolving Credit Note
shall be in form and substance satisfactory to Lender.

     

    (c)           The
term of the Revolving Credit shall expire on the Revolving Credit Maturity
Date.  On such date, unless having been sooner accelerated by Lender
pursuant to the terms hereof, and without impairing any rights under Section
3.1, all sums owing under the Revolving Credit shall be due and payable in full,
and as of and after such date Borrower shall not request and Lender shall not
make any further Advances under the Revolving Credit.

     

    2.2           Letters of
Credit:

     

    (a)           As
a part of the Revolving Credit and subject to its terms and conditions, Lender
shall make available to Borrower Letters of Credit which shall not exceed, in
the aggregate at any one time outstanding, the L/C Commitment. Notwithstanding
the foregoing, all Letters of Credit shall be in form and substance reasonably
satisfactory to Lender.  No Letter of Credit shall be issued with an
expiry date later than (i) three hundred sixty five (365) days from the date of
issuance for a stand-by letter of credit, or (ii) ten (10) Business Days prior
to the Revolving Credit Maturity Date.  Borrower shall execute and
deliver to Issuer all Letter of Credit Documents required by Lender for
such purposes.  Each
Letter of Credit shall comply with the Letter of Credit Documents.

     

    (b)           Each
Letter of Credit issued from time to time under the Revolving Credit which
remains undrawn (and the amounts of draws on Letters of Credit prior to payment
as hereinafter set forth) shall reduce, dollar for dollar, the amount
available to be borrowed by Borrower under the Revolving Credit.

     

    (c)           In
the event of any request for drawing under any Letter of Credit by the
beneficiary thereof, Lender shall promptly notify Borrower and Borrower shall
immediately reimburse Lender on the day when such drawing is honored, by either
a cash payment by Borrower or, so long as no Event of Default has occurred and
is continuing, in the absence of such payment by Borrower, and at Lender's
option, by Lender automatically making or having been deemed to have made
(without further request or approval of Borrower) a cash Advance under the
Revolving Credit on such date to reimburse Lender.  Borrower's
reimbursement obligation for draws under Letters of Credit along with the
obligation to pay L/C Fees shall herein be referred to collectively as
Borrower's "Reimbursement Obligations."  All of Borrower's
Reimbursement Obligations hereunder with respect to Letters of Credit shall
apply unconditionally and absolutely to Letters of Credit issued hereunder on
behalf of Borrower.

     

    (d)           The
obligation of Borrower to reimburse Lender for drawings made (or for cash
Advances made to cover drawings made) under the Letters of Credit shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances including, without limitation,
the following circumstances:

     

    (i)           any
lack of validity or enforceability of any Letter of Credit;

    
      
         

      

      
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    (ii)           the
existence of any claim, setoff, defense or other right that Borrower or any
other Person may have at any time against a beneficiary or any transferee of any
Letter of Credit (or any persons or entities for whom any such beneficiary or
transferee may be acting), Lender or any other Person, whether in connection
with this Agreement, the transactions contemplated herein or any unrelated
transaction;

     

    (iii)           any
draft, demand, certificate or any other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect;

     

    (iv)           payment
by Lender under any Letter of Credit against presentation of a demand, draft or
certificate or other document that does not comply with the terms of such Letter
of Credit unless Lender shall have acted with willful misconduct or gross
negligence in issuing such payment;

     

    (v)           any
other circumstances or happening whatsoever that is similar to any of the
foregoing; or

     

    (vi)           the
fact that a Default or Event of Default shall have occurred and be
continuing.

     

    (e)           If
by reason of (i) any change after the Closing Date in any Requirement of Law, or
any change in the interpretation or application thereof by any Governmental
Authority of any Requirement of Law or (ii) compliance by Lender with any
direction, reasonable request or requirement (whether or not having the force of
law) of any governmental or monetary authority including, without limitation,
Regulation D:

     

    (i)           Lender
shall be subject to any tax or other levy or charge of any nature or to any
variation thereof (except for changes in the rate of any tax on the net income
of Lender or its applicable lending office) or to any penalty with respect to
the maintenance or fulfillment of its obligations under this Section 2.2,
whether directly or by such being imposed on or suffered by Lender;

     

    (ii)           any
reserve, deposit or similar requirement is or shall be applicable, imposed or
modified in respect of any Letter of Credit issued by Lender; or

     

    (iii)           there
shall be imposed on Lender any other condition regarding this Section 2.2 or any
Letter of Credit; and the result of the foregoing is to directly or indirectly
increase the cost to Lender of issuing, creating, making or maintaining any
Letter of Credit or to reduce the amount receivable in respect thereof by
Lender, then and in any such case, Lender shall, after the additional cost is
incurred or the amount received is reduced, notify Borrower and Borrower shall
pay on demand such amounts as may be necessary to compensate Lender for such
additional cost or reduced receipt, together with interest on such amount from
the date demanded until payment in full thereof at a rate per annum equal at all
times to the applicable interest rate under the Revolving Credit.  A
certificate signed by an officer of Lender as to the amount of such increased
cost or reduced receipt showing in reasonable detail the basis for the
calculation thereof, submitted to Borrower by Lender shall, except for manifest
error and absent written notice from Borrower to Lender within ten (10) days
from submission, be final, conclusive and binding for all
purposes.

    
      
         

      

      
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    (f)           In
addition to amounts payable as elsewhere provided in this Section 2.2, without
duplication, Borrower hereby agrees to protect, indemnify, pay and save Lender
harmless from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable attorneys' fees) which
Lender may incur or be subject to as a consequence, direct or indirect, of (A)
the issuance of the Letters of Credit or (b) the failure of Lender to honor a
drawing under any Letter of Credit as a result of any such act or omission,
whether rightful or wrongful, of any present or future de jure or de facto government
or Governmental Authority (all such acts or omissions herein called "Government
Acts") in each case except for claims, demands, liabilities, damages, losses,
costs, charges and expenses arising solely from acts or conduct of Lender
constituting gross negligence or willful misconduct.

     

    (g)           As
between Borrower and Lender, Borrower assumes all risks of the acts and
omissions of or misuse of the Letters of Credit issued by Lender by the
respective beneficiaries of such Letters of Credit.  In furtherance
and not in limitation of the foregoing, Lender shall not be responsible: (A) for
the form, validity, sufficiency, accuracy, genuineness or legal effects of any
document submitted by any party in connection with the application for and
issuance if such Letters of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or forged; (B) for
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, that may prove to
be invalid or ineffective for any reason; (C) for failure of the beneficiary of
any such Letter of Credit to comply fully with conditions required in order to
draw upon such Letter of Credit; (D) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they are in cipher, unless any of the
foregoing are caused by Lender's gross negligence or willful misconduct; (E) for
errors in interpretation of technical terms; (F) for any loss or delay in the
transmission of any document or required in order to make a drawing under such
Letter of Credit or of the proceeds thereof, unless caused by Lender's gross
negligence or willful misconduct; (G) for the misapplication by the beneficiary
of any such Letter of Credit of the proceeds of any drawing under such Letter of
Credit; and (H) for any consequences arising from causes beyond the control of
Issuer, including, without limitation, any Government Acts.  None of
the above shall affect, impair or prevent the vesting of any of Lender's rights
or powers hereunder

     

    (h)           In
furtherance and extension and not in limitation of the specific provisions
hereinabove set forth, any action taken or omitted by Lender in connection with
the Letters of Credit issued by it or the related certificates, if taken or
omitted in good faith, shall not create any liability on the part of Lender to
Borrower.

     

    2.3           Advances and
Payments:

     

    (a)           Except
to the extent otherwise set forth in this Agreement (or in the case of an
Interest Hedging Instrument under the applicable agreements), all payments of
principal and of interest on the Revolving Credit, Reimbursement Obligations and
all Expenses, fees, indemnification obligations and all other charges and any
other Obligations of Borrower, shall be made to Lender at its banking office, at
PO Box 5600, Lewiston, ME 04243-5600, or such other office as Lender may
designate in writing, in United States Dollars, in immediately available
funds.  Borrower hereby authorizes Lender to charge checking account
number 4245875913 maintained at Lender and further agrees that Lender shall have
the unconditional right and discretion (and Borrower hereby authorizes Lender)
to charge any of Borrower's operating and/or deposit account(s), in any
event  for all of Borrower's Obligations as they become due from time
to time under this Agreement including, without limitation, interest, principal,
fees, indemnification obligations and reimbursement of
Expenses.  Alternatively, Lender may in its discretion (and Borrower
hereby authorizes Lender to) make a cash Advance under the Revolving Credit in a
sum sufficient to pay all interest accrued and payable on the Obligations and to
pay all costs, fees and Expenses owing hereunder.  Borrower
acknowledges that Borrower’s failure to maintain sufficient funds in any
checking, operating or deposit account for payment of any of the Obligations, or
Lender’s failure to charge any such account shall not relieve Borrower of any
payment obligation under this Agreement or any other Loan
Document.  Any payments received prior to 2:00 p.m. Eastern time on
any Business Day shall be deemed received on such Business Day.  Any
payments (including any payment in full of the Obligations), received after 2:00
p.m. Eastern time on any Business Day shall be deemed received on the
immediately following Business Day.

    
      
         

      

      
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    (b)           Cash
Advances which may be made by Lender from time to time under the Revolving
Credit shall be made available by crediting such proceeds to Borrower's
operating account with Lender.

     

    (i)           All
cash Advances requested by Borrower under the Revolving Credit that are (a)
LIBOR Rate Loans must be in the minimum amount of Five Hundred Thousand Dollars
($500,000) and integral multiples of One Hundred Thousand Dollars ($100,000) in
excess thereof and (b) Base Rate Loans must be in the minimum amount of One
Hundred Thousand Dollars ($100,000) and integrated multiples of Ten Thousand
Dollars ($10,000) in excess thereof.

     

    (ii)           All
cash Advances requested by Borrower under the Revolving Credit are to be in
writing pursuant to a written request ("Advance Request") executed by an
Authorized Officer in the form of Exhibit B
attached hereto.  Requests for Base Rate Loans and Daily LIBOR Rate
Loans must be requested by 10:00 A.M., Eastern time, on the date such Advance is
to be made.  Requests for Adjusted LIBOR Rate Loans must be requested
three (3) Business Days in advance and must specify the amount of such Adjusted
LIBOR Rate Loan and the LIBOR Interest Period.  If no LIBOR Interest
Period is specified, the LIBOR Interest Period for an Adjusted LIBOR Rate Loan
shall be deemed to be a one month period.

     

    Upon
receiving a request for an Advance in accordance with subparagraph (ii) above,
and subject to the conditions set forth in this Agreement, Lender shall make the
requested Advance available to Borrower as soon as is reasonably practicable
thereafter on the day the requested Advance is to be made.

    

    (c)           Notwithstanding
anything to the contrary herein, and subject to the terms of the Cash Management
Agreement, all cash Advances requested by the Borrower constituting Daily LIBOR
Rate Loans shall be made available by crediting such proceeds to Designated
Account.  In addition, the Lender will sweep all collected balances
from the Cash Collateral Account at the end of each Business Day to pay down or
payoff any outstanding Loans constituting Daily LIBOR Rate Loans and any
remaining collected balances after such pay down or payoff shall be swept into
the Designated Account.  As used in the this paragraph, the terms
“Designated Account” and “Cash Collateral Account” shall have the meanings
ascribed to them in the Cash Management Agreement.

    

    2.4           Interest:

     

    (a)           The
unpaid principal balance of cash Advances under the Revolving Credit shall bear
interest, subject to the terms hereof at a per annum rate equal to, at
Borrower's option, (i) the Adjusted LIBOR Rate plus the Applicable
Rate, (ii) the Base Rate or (iii) the Daily LIBOR Rate plus the Applicable
Rate.

     

    (b)           Changes
in the interest rate applicable to Base Rate Loans and Daily LIBOR Rate Loans
shall become effective on the same day there is a change in the Base Rate and
the Daily LIBOR Rate, respectively.

    
      
         

      

      
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    (c)           Interest
on Base Rate Loans and Daily LIBOR Rate Loans shall be payable monthly, in
arrears, on the first day of each month, beginning on the first day of the first
full calendar month after the Closing Date, and on the Revolving Credit Maturity
Date.  Interest on Adjusted LIBOR Rate Loans shall be payable on the
last day of the applicable LIBOR Interest Period or, in the case of a LIBOR
Interest Period which is six months, at the end of the three month period, and
on the last day of such LIBOR Interest Period.

     

    (d)           Borrower
may elect from time to time to convert Base Rate Loans and Daily LIBOR Rate
Loans to LIBOR Rate Loans, by delivering a Notice of Conversion/Extension to
Lender at least three (3) Business Days prior to the proposed date of
conversion.  In addition, Borrower may elect from time to time to
convert all or any portion of a (i) LIBOR Rate Loan to a Base Rate Loan or Daily
LIBOR Rate Loans, (ii) Base Rate Loans to Daily LIBOR Rate Loans or (iii) Daily
LIBOR Rate Loans to Base Rate Loans by giving Lender irrevocable written notice
thereof by 12:00 noon one (1) Business Day prior to the proposed date of
conversion.  Adjusted LIBOR Rate Loans may only be converted to Base
Rate Loans or Daily LIBOR Rate Loans on the last day of the applicable LIBOR
Interest Period.  If the date upon which an Adjusted LIBOR Rate Loan
is to be converted to a Base Rate Loan or a Daily LIBOR Rate Loan is not a
Business Day, then such conversion shall be made on the next succeeding Business
Day and during the period from such last day of a LIBOR Interest Period to such
succeeding Business Day such Loan shall bear interest as if it were a Base Rate
Loan.  All or any part of outstanding Base Rate Loans and Daily LIBOR
Rate Loans may be converted as provided herein; provided that no Loan may be
converted into a LIBOR Rate Loan when any Event of Default has occurred and is
continuing.

     

    (e)           Borrower
may continue any Adjusted LIBOR Rate Loans upon the expiration of a LIBOR
Interest Period with respect thereto by delivering a Notice of
Conversion/Extension to Agent at least three (3) Business Days prior to the
proposed date of extension; provided that no Adjusted LIBOR Rate Loan may be
continued as such when any Event of Default has occurred and is continuing, in
which case such Loan shall be automatically converted to a Base Rate Loan at the
end of the applicable LIBOR Interest Period with respect thereto.  If
Borrower shall fail to give timely notice of an election to continue an Adjusted
LIBOR Rate Loan, or the continuation of an Adjusted LIBOR Rate Loans is not
permitted hereunder, each such Adjusted LIBOR Rate Loan shall be automatically
converted to a Base Rate Loan at the end of the applicable LIBOR Interest Period
with respect thereto.

     

    (f)           Borrower
may not have more than six (6) LIBOR Rate Loans outstanding at any
time.

     

    2.5           Additional Interest
Provisions:

     

    (a)           Interest
on the Loans shall be calculated on the basis of a year of three hundred sixty
(360) days but charged for the actual number of days elapsed.

     

    (b)           After
the occurrence and during the continuance of an Event of Default hereunder, the
per annum effective rate of interest on all outstanding principal under the
Loans, shall be increased by four hundred (400) basis points.  All
such increases may be applied retroactively to the date of the occurrence of the
Event of Default.  Borrower agrees that the default rate payable to
Lender is a reasonable estimate of Lender's damages and is not a
penalty.

     

    (c)           All
contractual rates of interest chargeable on outstanding principal under the
Loans shall continue to accrue and be paid even after Default, an Event of
Default, maturity, acceleration, judgment, bankruptcy, insolvency proceedings of
any kind or the happening of any event or occurrence similar or
dissimilar.

    
      
         

      

      
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    (d)           In
no contingency or event whatsoever shall the aggregate of all amounts deemed
interest hereunder and charged or collected pursuant to the terms of this
Agreement exceed the highest rate permissible under any law which a court of
competent jurisdiction shall, in a final determination, deem applicable
hereto.  In the event that such court determines Lender has charged or
received interest hereunder in excess of the highest applicable rate, Lender
shall apply, in its sole discretion, and set off such excess interest received
by Lender against other Obligations due or to become due and such rate shall
automatically be reduced to the maximum rate permitted by such law.

     

    (e)           Borrower
shall not request and Lender shall not make or continue, or convert any Loan to
a LIBOR Rate Loan while an Event of Default exists.

     

    2.6           Fees and
Charges:

     

    (a)           At
Closing, Lender shall have fully earned and Borrower shall unconditionally pay
to Lender, a non-refundable fee with respect to the Revolving Credit ("Revolving
Credit Closing Fee") of Forty One Thousand Six Hundred Sixty Six Thousand and
67/100 Dollars ($41,667.67), less amounts previously paid thereon.

     

    (b)           Borrower
shall pay to Lender a commitment fee on the average daily unused portion of the
Revolving Credit from the date of this Agreement until the Revolving Credit
Commitment Termination Date at a rate per annum equal to the Applicable Rate,
based on a year of 360 days, payable quarterly in arrears on the last day of
March, June, September, and December of each year commencing March 31, 2010, on
the Revolving Credit Maturity Date and on each date the Revolving Credit is
permanently reduced in whole or in part.

     

    (c)           Borrower
shall pay to Lender a fee in an amount equal to the Applicable Rate per annum of
the face amount of each Letter of Credit issued by Lender.  Such fee
shall be payable quarterly in arrears on the first day of each calendar quarter
and at the expiration or termination of the Letter of Credit.  In
addition, Borrower shall pay to Lender, upon billing therefor, all of Lender's
charges for issuance, amendment, extension and cancellation of the Letter of
Credit.  All such fees and charges are referred to herein collectively
as the "L/C Fees."

     

    (d)           Borrower
shall unconditionally pay to Lender a late charge equal to six percent (6%) of
any and all payments of principal or interest on the Loans that are not paid
within fifteen (15) days of the due date.  Such late charge shall be
due and payable regardless of whether Lender has accelerated the
Obligations.  Borrower agrees that any late fee payable to Lender is a
reasonable estimate of Lender's damages and is not a penalty.

     

    (e)           Borrower
shall unconditionally pay to Lender a Twenty Five Dollar ($25.00) fee for any
check or payment item returned by Lender for insufficient funds or any other
reason.  Borrower agrees that such fee is a reasonable estimate of
Lender’s damages and is not a penalty.

     

    2.7           Prepayments: Borrower
may prepay the Revolving Credit  in whole or in part at any time or
from time to time, without penalty or premium except as provided in Section
2.10.  Any prepayment shall be accompanied by all accrued and unpaid
interest.

     

    2.8           Use of
Proceeds:  The
extensions of credit under and proceeds of the Revolving Credit shall be used
for to refinance the Existing Indebtedness and for general corporate purposes,
including working capital, Capital Expenditures and Permitted
Acquisitions.

    
      
         

      

      
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    2.9           Capital
Adequacy:  If
any present or future law, governmental rule, regulation, policy, guideline,
directive or similar requirement (whether or not having the force of law)
imposes, modifies, or deems applicable any capital adequacy, capital maintenance
or similar requirement which affects the manner in which Lender allocates
capital resources to its commitments (including any commitments hereunder), and
as a result thereof, in the opinion of Lender, the rate of return on Lender's
capital with regard to the Loans is reduced to a level below that which Lender
could have achieved but for such circumstances, then in such case and upon
notice from Lender to Borrower, from time to time, Borrower shall pay Lender
such additional amount or amounts as shall compensate Lender for such reduction
in Lender's rate of return.  Such notice shall contain the statement
of Lender with regard to any such amount or amounts which shall, in the absence
of manifest error, be binding upon Borrower.  In determining such
amount, Lender may use any reasonable method of averaging and attribution that
it deems applicable.

     

    2.10         Funding
Indemnity:  Borrower
shall indemnify Lender, and hold Lender harmless from any loss, damages,
liability, or expense which Lender may sustain or incur as a consequence of the
making of a prepayment of Loans on a day which is not the last day of a LIBOR
Interest Period with respect thereto.  With respect to such Loans,
such indemnification shall equal the excess, if any, of (i) the amount of
interest which would have accrued on the amount so prepaid for the period from
the date of such prepayment at the applicable rate of interest for such Loans
provided for herein over (ii) the amount of interest (as reasonably
determined by Lender) which would have accrued to Lender on such amount by
placing such amount on deposit for a comparable period with leading banks in the
London interbank Eurodollar market. This covenant shall survive the termination
of this Agreement, and the payment of the Obligations.

     

    2.11        Inability to Determine
Interest Rate:  Notwithstanding
any other provision of this Agreement, if Lender shall reasonably determine
(which determination shall be conclusive and binding absent manifest error)
that, (i) by reason of circumstances affecting the relevant market, reasonable
and adequate means do not exist for ascertaining the Adjusted LIBOR Rate or the
Daily LIBOR Rate for a LIBOR Interest Period, or (ii) the Adjusted LIBOR Rate or
the Daily LIBOR Rate, as applicable,does not adequately and fairly reflect the
cost to Lender of funding LIBOR Rate Loans that Borrower has requested be
outstanding as LIBOR Rate Loans during a LIBOR Interest Period, Lender shall
forthwith give telephone notice of such determination, confirmed in writing, to
Borrower at least two (2) Business Days prior to the first day of such LIBOR
Interest Period. Unless Borrower shall have notified Lender upon receipt of such
telephone notice that it wishes to rescind or modify its request regarding such
LIBOR Rate Loans, any Loans that were requested to be made as LIBOR Rate Loan
shall be made as Base Rate Loans and any Loans that were requested to be
converted into or continued as Adjusted LIBOR Rate Loans shall remain as or be
converted into Base Rate Loans. Until any such notice has been withdrawn by
Lender, no further Loans shall be made as, continued as, or converted into,
LIBOR Rate Loans for the LIBOR Interest Periods so affected.

     

    2.12        Illegality:  Notwithstanding
any other provision of this Agreement, if the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof to Lender by
the relevant Governmental Authority shall make it unlawful for Lender to make or
maintain LIBOR Rate Loans as contemplated by this Agreement, or to obtain in the
interbank Eurodollar market, the funds with which to make such Loans, (a) Lender
shall promptly notify Borrower thereof, (b) the commitment of Lender hereunder
to make LIBOR Rate Loans or continue LIBOR Rate Loans as such shall forthwith be
suspended until Lender shall give notice that the condition or situation which
gave rise to the suspension shall no longer exist, and (c) Lender's Loans then
outstanding as LIBOR Rate Loans, if any, shall be converted on the last day of
the LIBOR Interest Period for such Loans, or within such earlier period as
required by law, to Base Rate Loans.  Borrower hereby agrees promptly
to pay Lender, upon its demand, any additional amounts necessary to compensate
Lender for actual and direct costs (but not including anticipated profits)
reasonably incurred by Lender in connection with any repayment in accordance
with this Section 2.12, including but not limited to, any interest or fees
payable by Lender to lenders of funds obtained by it in order to make or
maintain its LIBOR Rate Loans hereunder. A certificate as to any additional
amounts payable pursuant to this Section 2.12 submitted by Lender, to Borrower
shall be presumptive evidence of such amounts owing.  Lender agrees to
use reasonable efforts to avoid or to minimize any amounts which may otherwise
be payable pursuant to this Section 2.12, provided however, that such efforts
shall not cause the imposition on Lender of any additional costs or legal or
regulatory burdens deemed by Lender in its reasonable discretion to be
material.

    
      
         

      

      
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    2.13    
    Requirements of
Law:

     

    (a)           If
the adoption of or any change in any Requirement of Law or in the interpretation
or application thereof or compliance by Lender with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:

     

    (i)           shall
subject Lender to any tax of any kind whatsoever with respect to any LIBOR Rate
Loan made by it, or change the basis of taxation of payments to Lender in
respect thereof (except for changes in the rate of tax on the overall net income
of Lender);

     

    (ii)           shall
impose, modify, or hold applicable, any reserve, special deposit, compulsory
loan, or similar requirement against assets held by, deposits or other
liabilities in, or for the account of, advances, loans, or other extension of
credit (including participations therein) by, or any other acquisition of funds
by, any office of Lender which is not otherwise included in the determination of
the LIBOR Rate hereunder; or

     

    (iii)           shall
impose on such Lender any other condition;

     

    and the
result of any of the foregoing is to materially increase the cost to Lender of
making or maintaining LIBOR Rate Loans, or to reduce any amount receivable
hereunder, or under the Note, then, in any such case, Borrower shall promptly
pay Lender, upon its demand, any additional amounts necessary to compensate
Lender for such additional costs or reduced amount receivable which Lender
reasonably deems to be material as determined by Lender, with respect to its
LIBOR Rate Loans.  A certificate as to any additional amounts payable
pursuant to this Section 2.13 submitted by Lender to Borrower shall be
presumptive evidence of such amounts owing.  Lender agrees to use
reasonable efforts to avoid, or to minimize, any amounts which might otherwise
be payable pursuant to this Section 2.13; provided however, that such efforts
shall not cause the imposition on Lender of any additional costs or legal
regulatory burdens deemed by Lender in good faith to be material.

     

    (b)           The
agreements in this Section 2.13 shall survive the termination of this Agreement
and payment of the Obligations.

     

    2.14         Extension of Revolving
Credit Maturity Date:  The Borrower shall have the option to
extend the Revolving Credit Maturity Date for two years to January 14, 2013;
provided that
no Default or Event of Default exists at the time of such extension, there has
been no Material Adverse Effect and the Borrower has entered into an amendment
to the Dupont Agreement or a new licensing agreement with Dupont in accordance
with Section 6.19 below.  The Borrower may exercise the option granted
pursuant to this Section 2.14 by delivery to the Bank (i) written notice of its
intention to extend the Revolving Credit Maturity Date at any time following the
Effective Date but on or before March 15, 2010, (ii) an amendment to this
Agreement, in form and substance reasonably satisfactory to the Bank, providing
for, among other things the payment of an additional upfront fee of $83,333.33,
and (iii) such other documents and agreements reasonably satisfactory to the
Bank.

    
      
         

      

      
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    SECTION
III

     

    COLLATERAL

     

    3.1           Collateral:  As
security for the payment of the Obligations, and satisfaction by Borrower of all
covenants and undertakings contained in this Agreement and the other Loan
Documents, Borrower hereby assigns and grants to Lender, a continuing Lien on
and security interest in, upon and to all assets of Borrower, including but not
limited to the following Property of the Borrower, all whether now owned or
hereafter acquired, created or arising and wherever located:

     

    (1)           Accounts - All
Accounts;

     

    (2)           Chattel Paper - All
Chattel Paper;

     

    (3)           Documents - All
Documents;

     

    (4)           Instruments - All
Instruments;

     

    (5)           Inventory - All
Inventory;

     

    (6)           General Intangibles -
All General Intangibles;

     

    (7)           Equipment - All
Equipment;

     

    (8)           Fixtures - All
Fixtures;

     

    (9)           Deposit Accounts -
All Deposit Accounts (including any Permitted Investments that constitute
Deposit Accounts);

     

    (10)           Goods - All
Goods;

     

    (11)           Letter of Credit
Rights – All Letter of Credit Rights;

     

    (12)           Supporting
Obligations – All Supporting Obligations;

     

    (13)           Investment Property -
All Investment Property (including any Permitted Investments that constitute
Investment Property);

     

    (14)           Commercial Tort
Claims – All Commercial Tort Claims identified and described on Schedule 5.20 (as
amended or supplemented from time to time);

     

    (15)           Property in Lender's
Possession - All Property of Borrower, now or hereafter in Lender's
possession; and

     

    (16)           Proceeds - The
Proceeds (including, without limitation, insurance proceeds), whether cash or
non-cash, of all of the foregoing property described in clauses (i) through
(xv).

     

    3.2           Lien
Documents:  At
Closing and thereafter as Lender deems necessary, Borrower shall execute and/or
deliver to Lender, or have executed and delivered (all in form and substance
satisfactory to Lender and its counsel):

     

    (a)           Financing
statements pursuant to the UCC, which Lender may file in the jurisdiction where
Borrower is organized and in any other jurisdiction that Lender deems
appropriate; and

     

    (b)           Any
other agreements, documents, instruments and writings, including, without
limitation, intellectual property security agreements, required by Lender to
evidence, perfect or protect the Liens and security interests in the Collateral
or as Lender may reasonably request from time to time.

    
      
         

      

      
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    3.3           Other
Actions:

     

    (a)           In
addition to the foregoing,  Borrower shall do anything further that
may be reasonably required by Lender to secure Lender and effectuate the
intentions and objects of this Agreement, including, without limitation, the
execution and delivery of security agreements, contracts and any other documents
required hereunder and the delivery of motor titles with Lender’s lien noted
thereon.  At Lender's reasonable request, Borrower shall also
immediately deliver (with execution by Borrower of all necessary documents or
forms to reflect, implement or enforce the Liens described herein), or cause to
be delivered to Lender all items for which Lender must receive possession to
obtain a perfected security interest, including without limitation, all notes,
stock powers, letters of credit, certificates and documents of title, Chattel
Paper, Warehouse Receipts, Instruments, and any other similar instruments
constituting Collateral.

     

    (b)           Lender
is hereby authorized to file financing statements and amendments to financing
statements without Borrower's signature, in accordance with the
UCC.  Borrower hereby authorizes Lender to file all such financing
statements and amendments to financing statements describing the Collateral in
any filing office as Lender, in its sole discretion may determine, including
financing statements listing "All Assets" in the collateral description
therein.  Borrower agrees to comply with the requests of Lender in
order for Lender to have and maintain a valid and perfected first security
interest in the Collateral including, without limitation, executing and causing
any other Person to execute such documents as Lender may require to obtain
Control (as defined in the UCC) over all Deposit Accounts, Letter of Credit
Rights and Investment Property.

     

    3.4           Searches,
Certificates:

     

    (a)           Lender
shall, prior to or at Closing, and thereafter as Lender may determine from time
to time, at Borrower's expense, obtain the following searches (the results of
which are to be consistent with the warranties made by Borrower in this
Agreement):

     

    (i)           UCC
searches with the Secretary of State and local filing office of each state where
Borrower is organized, maintains its executive office, a place of business, or
assets; and

     

    (ii)           Judgment, state
and federal tax lien and corporate tax lien searches, in all applicable filing
offices of each state searched under subparagraph (i) above.

     

    (b)           Borrower
shall, prior to or at Closing and at its expense, obtain and deliver to Lender
good standing certificates showing Borrower to be in good standing in its state
of organization and in each other state in which it is doing and presently
intends to do business for which qualification is required.

     

    3.5           Landlord's and
Warehouseman's Waivers:  Borrower
will cause each owner of any premises occupied by Borrower or to be occupied by
Borrower and each warehouseman of any warehouse, where, in either event
Collateral is held, to execute and deliver to Lender, upon Lender’s request, an
instrument, in form and substance satisfactory to Lender, under which such
owner(s) or warehouseman subordinates its/his/their interests in and waives
its/his/their right to distrain on or foreclose against the Collateral and
agrees to allow Lender to remain on such premises to dispose of or deal with any
Collateral located thereon.

     

    3.6           Filing Security
Agreement:  A
carbon, photographic or other reproduction or other copy of this Agreement or of
a financing statement is sufficient as and may be filed in lieu of a financing
statement.

    
      
         

      

      
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    3.7           Power of
Attorney:  Each
of the officers of Lender is hereby irrevocably made, constituted and appointed
the true and lawful attorney for Borrower (without requiring any of them to act
as such) with full power of substitution to do the
following:  (a)  endorse the name of Borrower upon any and
all checks, drafts, money orders and other instruments for the payment of monies
that are payable to Borrower and constitute collections on Borrower's Accounts
or proceeds of other Collateral; (b) execute and/or file in the name of Borrower
any financing statements, schedules, assignments, instruments, documents and
statements that Borrower is obligated to give Lender hereunder or is necessary
to perfect (or continue or evidence the perfection of such security interest or
Lien) Lender's security interest or Lien in the Collateral; and (c) do such
other and further acts and deeds in the name of Borrower that Lender may
reasonably deem necessary or desirable to enforce any Account or other
Collateral.

     

    SECTION
IV

     

    CLOSING
AND CONDITIONS PRECEDENT TO ADVANCES

     

    Closing under this Agreement is subject
to the following conditions precedent (all instruments, documents and agreements
to be in form and substance satisfactory to Lender and Lender's
counsel):

     

    4.1           Resolutions, Opinions, and
Other Documents:  Borrower
shall have delivered, or caused to be delivered to Lender the
following:

     

    (a)           this
Agreement, the Note and each of the other Loan Documents all properly executed
by the Borrower and Guarantor, as the case may be;

     

    (b)           financing
statements and each of the documents to be executed and/or delivered by Borrower
or any Guarantor pursuant to this Agreement;

     

    (c)           certified
copies of (i) resolutions of Borrower's and Guarantor’s board of directors' or
managing members (as applicable) authorizing the execution, delivery and
performance of this Agreement, the Notes to be issued hereunder and each of the
other Loan Documents required to be delivered by any Section hereof and (ii)
Borrower's and Guarantor’s articles or certificate of incorporation and by-laws
or certificate of formation and operating agreement, as applicable;

     

    (d)           an
incumbency certificate for Borrower identifying all Authorized Officers, with
specimen signatures and an incumbency certificate for Guarantor identifying all
individuals authorized to execute the Loan Documents to which the Guarantor is a
party with specimen signatures;

     

    (e)           (i)
a written opinion of Borrower's and Guarantor’s independent counsel addressed to
Lender and opinions of such other counsel as Lender deems reasonably necessary
and (ii) such opinions of foreign counsel as the Lender shall require with
respect to the Pledge Agreements with respect to Material Non-Domestic
Subsidiaries to be delivered on the Closing Date.

     

    (f)           such
financial statements, reports, certifications and other operational information
as Lender may reasonably require, satisfactory in all respects to
Lender;

     

    (g)           certification
by the president of Borrower that there has not occurred any material adverse
change in the operations and condition (financial or otherwise) of Borrower and
its Subsidiaries since January 31, 2009;

    
      
         

      

      
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    (h)           payment
by Borrower of all fees including, without limitation, Revolving Credit Closing
Fee, and Expenses associated with the Loans;

     

    (i)           Searches
and certificates required under Section 3.4;

     

    (j)           Insurance
certificates and policies as required under Section 6.2;

     

    (k)           Instruments
and agreements required under Section 3.5;

     

    (l)           simultaneously
with the first Advance, evidence that the Existing Indebtedness has been paid in
full, that the agreements giving rise to the Existing Indebtedness have been
terminated and that Liens granted in connection therewith have been released;
and

     

    (m)           a
copy of the Dupont Agreement in existence on the Closing Date and any amendments
thereto;

     

    (n)           copies
of the executed employment agreements for each of Christopher J. Ryan and Gary
Pokrassa; and

     

    (o)           such
other documents reasonably required by Lender.

     

    4.2           Absence of Certain
Events:  At
the Closing Date, no Default or Event of Default hereunder shall have occurred
and be continuing.

     

    4.3           Warranties and
Representations at Closing:  The
warranties and representations contained in Section 5 as well as any other
Section of this Agreement shall be true and correct in all respects on the
Closing Date with the same effect as though made on and as of that
date.  Neither Borrower nor any Subsidiary of the Borrower shall have
taken any action or permitted any condition to exist which would have been
prohibited by any Section hereof.

     

    4.4           Compliance with this
Agreement:  Borrower
shall have performed and complied with all agreements, covenants and conditions
contained herein including, without limitation, the provisions of Sections 6 and
7 hereof, which are required to be performed or complied with by Borrower before
or at the Closing Date.

     

    4.5           Officers'
Certificate:  Lender
shall have received a certificate dated the Closing Date and signed by the chief
financial officer of Borrower certifying that all of the conditions specified in
this Section have been fulfilled.

     

    4.6           Closing:  Subject
to the conditions of this Section, the Loans shall be made available on such
date (the "Closing Date") and at such time as may be mutually agreeable to the
parties contemporaneously with the execution hereof ("Closing") at Melville, New
York.

     

    4.7           Waiver of
Rights:  By
completing the Closing hereunder, or by making Advances hereunder, Lender does
not thereby waive a breach of any warranty or representation made by Borrower
hereunder or under any agreement, document, or instrument delivered to Lender or
otherwise referred to herein, and any claims and rights of Lender resulting from
any breach or misrepresentation by Borrower are specifically reserved by
Lender.

     

    4.8           Conditions for Future
Advances:  The
making of Advances under the Revolving Credit in any form following the Closing
Date is subject to the following conditions precedent (all instruments,
documents and agreements to be in form and substance satisfactory to Lender and
its counsel) following the Closing Date:

     

    (a)           This
Agreement and each of the other Loan Documents shall be
effective;

    
      
         

      

      
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    (b)           No
event or condition shall have occurred or become known to Borrower, or would
result from the making of any requested Advance, which could have a Material
Adverse Effect;

     

    (c)           No
Default or Event of Default then exists or after giving effect to the making of
the Advance would exist;

     

    (d)           Each
Advance is within and complies with the terms and conditions of this Agreement
including, without limitation, the notice provisions contained in Section 2.3
hereof;

     

    (e)           No
Lien (other than a Permitted Lien) has been imposed on Borrower;
and

     

    (f)           Each
representation and warranty set forth in Section 5 and any other Loan Document
in effect at such time (as amended or modified from time to time) is then true
and correct in all material respects as if made on and as of such date except to
the extent such representations and warranties are made only as of a specific
earlier date.

     

    SECTION
V

     

    REPRESENTATIONS
AND WARRANTIES

     

    To induce Lender to complete the
Closing and make the initial Advances under the Revolving Credit and Loans to
Borrower, Borrower warrants and represents to Lender that:

     

    5.1          Organization and
Validity:

     

    (a)           Borrower
and each of its Subsidiaries (i) is a corporation, limited liability company,
partnership or other legal entity (as indicated on Schedule 5.1 hereto) duly
organized or formed, validly existing and in good standing under the laws of the
jurisdiction of its formation, (ii) has the appropriate power and authority to
operate its business and to own its Property and (iii) is duly qualified, is
validly existing and in good standing and has lawful power and authority to
engage in the business it conducts in each state where the nature and extent of
its business requires qualification, except where the failure to so qualify does
not and could not have a Material Adverse Effect.  A list of all
states and other jurisdictions where Borrower and each Guarantor is qualified to do
business is shown on Schedule 5.1
attached hereto and made part hereof.

     

    (b)           The
making and performance of this Agreement and the other Loan Documents will not
violate any Requirement of Law, or the charter, minutes or bylaw provisions of
Borrower or any Guarantor, or violate or result in a default (immediately or
with the passage of time) under any contract, agreement or instrument to which
Borrower or any Guarantor is a party, or by which
Borrower or any Guarantor is
bound.  Neither Borrower nor any Guarantor is in violation of any term
of any agreement or instrument to which it is a party or by which it may be
bound which violation has or could have a Material Adverse Effect, or of the
Borrower’s or such Guarantor’s charter, minutes or bylaw
provisions,.

     

    (c)           Borrower
and has all requisite power and authority to enter into and perform this
Agreement and to incur the obligations herein provided for, and has taken all
proper and necessary action to authorize the execution, delivery and performance
of this Agreement, and the other Loan Documents as applicable.

     

    
      
         

      

      
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     (d)           This
Agreement, the Notes to be issued hereunder, and all of the other Loan
Documents, when delivered, will be valid and binding upon Borrower and each
Guarantor, as the case may be, and enforceable in accordance with their
respective terms except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
the enforcement of creditors' rights generally and by general equitable
principles.

     

    5.2           Places of
Business:  The only places of business of Borrower, and the
places where Borrower keeps and intends to keep its Property, are at the
addresses shown on Schedule 5.2 attached
hereto and made part hereof.

     

    5.3           Pending
Litigation:  There
are no judgments or judicial or administrative orders or proceedings pending, or
to the knowledge of Borrower, threatened, against Borrower or any of its
Subsidiaries in any court or before any Governmental Authority except as shown
on Schedule 5.3
attached hereto and made part hereof.  To the knowledge of Borrower,
there are no investigations (civil or criminal) pending or threatened against
Borrower or any of its Subsidiaries in any court or before any Governmental
Authority.  Neither Borrower nor any of its Subsidiaries is in default
with respect to any order of any Governmental Authority.  To the
knowledge of Borrower, no shareholder or executive officer
of  Borrower has been indicted in connection with or convicted of
engaging in any criminal conduct, or is currently subject to any lawsuit or
proceeding or under investigation in connection with any anti-racketeering or
other conduct or activity which may result in the forfeiture of any property to
any Governmental Authority.

     

    5.4           Title to
Properties:  Borrower and each of its Subsidiaries has good and
marketable title in fee simple (or its equivalent under applicable law) to all
the Property it respectively purports to own, free from Liens and free from the
claims of any other Person, except for Permitted Liens.

     

    5.5           Governmental
Consent:  Neither the nature of Borrower or any Guarantor nor
its respective business or Property, nor any relationship between Borrower or
such Guarantor and any other Person, nor any circumstance affecting Borrower or
a Guarantor in connection with the issuance or delivery of this Agreement, the
Notes or any other Loan Documents, as applicable, is such as to require a
consent, approval or authorization of, or filing, registration or qualification
with, any Governmental Authority on the part of Borrower or such
Guarantor.

     

    5.6           Taxes:  All
tax returns required to be filed by Borrower or any of its Subsidiaries in any
jurisdiction have been filed, and all taxes, assessments, fees and other
governmental charges upon Borrower, or upon any of its Property, income or
franchises, which are shown to be due and payable on such returns have been
paid, except for those taxes being contested in good faith with due diligence by
appropriate proceedings for which appropriate reserves have been maintained
under GAAP and as to which no Lien has been entered.  Neither Borrower
nor any of its Subsidiaries is aware of any proposed additional tax assessment
or tax to be assessed against or applicable to Borrower or such
Subsidiary.

     

    5.7           Financial
Statements:  The annual audited consolidated (if applicable)
balance sheets of Borrower for interim periods within the fiscal year enduing
January 31, 2010, and the related statements of profit and loss, stockholder's
equity and cash flow as of such date accompanied by reports thereon from
Borrower's independent certified public accountants (complete copies of which
have been delivered to Lender), and the interim consolidated (if applicable)
balance sheet of Borrower as of January 31, 2009, and the related statements of
profit and loss, stockholder's equity and cash flow as of such date have been
prepared in accordance with GAAP and present fairly the financial position of
Borrower as of such dates and the results of its operations for such
periods.  The fiscal year for Borrower currently ends on January
31st.
Borrower's federal tax identification number and state organizational
identification number for UCC purposes are as shown on Schedule 5.7 attached
hereto and made part hereof.

     

    5.8           Full
Disclosure:  The financial statements referred to in Section
5.7 of this Agreement do not, nor  does any other written statement of
Borrower to Lender in connection with the negotiation of the Loans, contain any
untrue statement of a material fact.  Such statements do
not  omit a material fact, the omission of which  would make
the statements contained therein  misleading.  There is no
fact known to Borrower which has not been disclosed in writing to Lender which
has or could have a Material Adverse Effect.

    
      
         

      

      
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    5.9         Subsidiaries:  Attached
hereto as Schedule
5.9 is a list of all of the Borrower’s Subsidiaries or
Affiliates.

     

    5.10       Investments, Guarantees,
Contracts, etc.:

     

    (a)           Neither
Borrower nor any of its Subsidiaries owns or hold equity or long term debt
investments in, or have any outstanding advances to, any other Person, except as
shown on  Schedule 5.10(a),
attached hereto and made part hereof.

     

    (b)           Neither
Borrower nor any of its Subsidiaries has entered into any leases for real or
personal Property (whether as landlord or tenant or lessor or lessee), except as
shown on Schedule
5.10(b), attached hereto and made part hereof.

     

    (c)           Neither
Borrower nor any of its Subsidiaries is a party to any contract or agreement, or
subject to any charter or other corporate restriction, which has or could have a
Material Adverse Effect.

     

    (d)           Except
as otherwise specifically provided in this Agreement, neither Borrower nor any
of its Subsidiaries has agreed or consented to cause or permit any of its
respective Property whether now owned or hereafter acquired to be subject in the
future (upon the happening of a contingency or otherwise), to a Lien not
permitted by this Agreement.

     

    5.11       Government Regulations,
etc.:

     

    (a)           The
use of the proceeds of and Borrower's issuance of the Notes will not directly or
indirectly violate or result in a violation of Section 7 of the Securities
Exchange Act of 1934, as amended, or any regulations issued pursuant thereto,
including, without limitation, Regulations U, T and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R.,
Chapter II.  Borrower does not own or intend to carry or purchase
any "margin stock" within the meaning of said Regulation U.

     

    (b)           Borrower
and each of its Subsidiaries has obtained all licenses, permits, franchises or
other governmental authorizations necessary for the ownership of its respective
Property and for the conduct of its business.

     

    (c)           As
of the date hereof, no employee benefit plan ("Pension Plan"), as defined in
Section 3(2) of ERISA, maintained by Borrower or under which Borrower could have
any liability under ERISA (i) has failed to meet the minimum funding standards
established in Section 302 of ERISA, (ii) has failed to comply in a
material respect with all applicable requirements of ERISA and of the Internal
Revenue Code, including all applicable rulings and regulations thereunder, (iii)
has engaged in or been involved in a prohibited transaction under
Section 406 of ERISA or Section 4975 of the Internal Revenue Code
which would subject Borrower to any material liability, or (iv) has been
terminated if such termination would subject Borrower to any material
liability.  Borrower has not assumed, or received notice of a claim
asserted against Borrower for, withdrawal liability (as defined in
Section 4207 of ERISA) with respect to any multi employer pension plan and
is not a member of any Controlled Group (as defined in
ERISA).  Borrower has timely made all contributions when due with
respect to any multi employer pension plan in which it participates and no event
has occurred triggering a claim against Borrower for withdrawal liability with
respect to any multi employer pension plan in which Borrower
participates.  All Employee Benefit Plans and multi employer pension
plans in which Borrower participates are shown on Schedule 5.11(c)
attached hereto and made part hereof.

    
      
         

      

      
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    (d)           Neither
Borrower nor any of its Subsidiaries is in violation of or receipt
of  written notice that it is in violation of any Requirement of Law
(including, without limitation, Environmental Laws), a violation of which causes
or could cause a Material Adverse Effect.

     

    (e)           Borrower
and each of its Subsidiaries is current with all reports and documents required
to be filed with any state or federal securities commission or similar agency
and is in full compliance in all material respects with all applicable rules and
regulations of such commissions.

     

    5.12       Business
Interruptions:  Within five (5) years prior to the date hereof,
none of the business, Property or operations of Borrower or any of its
Subsidiaries have been materially and adversely affected in any way by any
casualty, strike, lockout, combination of workers, order of the United States of
America, or any state or local government, or any political subdivision or
agency thereof, directed against Borrower or any of its
Subsidiaries.  There are no pending or, to Borrower's knowledge,
threatened labor disputes, strikes, lockouts or similar occurrences or
grievances affecting Borrower or any of its Subsidiaries.  No
collective bargaining agreements of Borrower or any of its Subsidiaries is
scheduled to expire prior to the Revolving Credit Maturity
Date.  Borrower will provide to the Lender, promptly following
execution thereof, copies of employment contracts hereinafter entered into with
Christopher Ryan or Gary Pokrassa and all material amendments, supplements and
modifications thereto.

     

    5.13       Names and Intellectual
Property:

     

    (a)           Within
five (5) years prior to the Closing Date, neither Borrower nor any of its
Subsidiaries has conducted business under or used any other name (whether
corporate or assumed) except for the names shown on Schedule 5.13(a)
attached hereto and made part hereof.  Borrower is the sole owner of
all names listed on such Schedule 5.13(a) and
any and all business done and all invoices issued in such trade names are
Borrower's sales, business and invoices.  Each trade name of Borrower
represents a division or trading style of Borrower and not a separate Subsidiary
or Affiliate or independent entity.

     

    (b)           All
trademarks, service marks, patents or copyrights which Borrower uses, plans to
use or has a right to use are shown on Schedule 5.13(b) attached
hereto and made part hereof and Borrower is the sole owner of such Property
except to the extent any other Person has claims or rights in such Property, as
such claims and rights are shown on Schedule
5.13(b).  Borrower is not in violation of any rights of any
other Person with respect to such Property.

     

    (c)           Except
as shown on Schedule
5.13(c) attached hereto and made part hereof, (i) Borrower does not
require any copyrights, patents, trademarks or other intellectual property, or
any license(s) to use any patents, trademarks or other intellectual property in
order to provide services to its customers in the ordinary course of business;
and (ii) Lender will not require any copyrights, patents, trademarks or other
intellectual property or any licenses to use the same in order to provide such
services after the occurrence of an Event of Default.

     

    (d)           Borrower
shall promptly notify the Lender of any termination (prior to the end of its
stated term), material amendment, material supplement or other material
modification to the Dupont Agreement or the occurrence of a default in any
material respect by the Borrower under the Dupont Agreement or, to the
Borrower’s knowledge, by any other party to the Dupont Agreement.

     

    5.14         Other
Associations:  Neither Borrower nor any of its Subsidiaries is
engaged and has no interest in any joint venture or partnership with any other
Person except as shown on Schedule 5.14,
attached hereto and made part hereof.

     

    5.15         Environmental
Matters:  Except as shown on Schedule 5.15,
attached hereto and made part hereof:

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

     

    (a)           To
the best of Borrower's knowledge after due inquiry, no Property presently owned,
leased or operated by Borrower or any of its Subsidiaries contains, or has
previously contained, any Hazardous Substances in amounts or concentrations
which (i) constitute or constituted a violation of, or (ii) could give rise to
liability under, any Environmental Law.

     

    (b)           To
the best of Borrower's knowledge after due inquiry, Borrower and each of its
Subsidiaries is in compliance, and, for the duration of all applicable statutes
of limitations periods, has been in compliance with all applicable Environmental
Laws, and there is no contamination at, under or about any properties presently
owned, leased, or operated by Borrower or any of its Subsidiaries or violation
of any Environmental Law with respect to such properties which could reasonably
be expected to interfere with any of their continued operations or reasonably be
expected to impair the fair saleable value thereof.

     

    (c)           Neither
Borrower nor any of its Subsidiaries has received any notice of violation,
alleged violation, non-compliance, liability or potential liability regarding
environmental matters or compliance assessment with Environmental Laws and
Borrower has no knowledge that any such notice will be received or is being
threatened.

     

    (d)           Hazardous
Substances have not been transported or disposed of in a manner or to a location
which are reasonably likely to give rise to liability of Borrower or any of its
Subsidiaries under any Environmental Law.

     

    (e)           No
judicial proceeding or governmental or administrative action is pending, or to
the knowledge of Borrower, threatened under any Environmental Law to which
Borrower or any of its Subsidiaries is, or to Borrower's knowledge will be,
named as a party, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative or
judicial requirements outstanding, the implementation of which is reasonably
likely to have a Material Adverse Effect on any natural resources or on
Borrower's business, financial condition, Property or prospects under any
Environmental Law.

     

    5.16         Regulation
O:  No director, executive officer or principal shareholder of
Borrower is a director, executive officer or principal shareholder of
Lender.  For the purposes hereof the terms "director" "executive
officer" and "principal shareholder" (when used with reference to Lender), have
the respective meanings assigned thereto in Regulation O issued by the Board of
Governors of the Federal Reserve System.

     

    5.17         Capital
Stock:  The authorized and outstanding Capital Stock of
Borrower is as shown on Schedule 5.17
attached hereto and made part hereof.  All of the Capital Stock of
Borrower has been duly and validly authorized and issued and is fully paid and
non-assessable and has been sold and delivered to the holders thereof in
compliance with, or under valid exemption from, all Federal and state laws and
the rules and regulations of all Governmental Authorities governing the sale and
delivery of securities.  Except for the rights and obligations shown
on Schedule
5.17, there are no subscriptions, warrants, options, calls, commitments,
rights or agreements by which Borrower or any of the shareholders of Borrower is
bound relating to the issuance, transfer, voting or redemption of shares of its
Capital Stock or any pre-emptive rights held by any Person with respect to the
shares of Capital Stock of Borrower.  Except as shown on Schedule 5.17,
Borrower has not issued any securities convertible into or exchangeable for
shares of its Capital Stock or any options, warrants or other rights to acquire
such shares or securities convertible into or exchangeable for such
shares.

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

     

    5.18          Solvency:  After
giving effect to the transactions contemplated under this Agreement, Borrower
and each Guarantor is solvent, is able to pay its debts as they become due, and
has capital sufficient to carry on its business and all businesses in which it
is about to engage, and now owns Property having a value both at fair valuation
and at present fair salable value greater than the amount required to pay
Borrower's and such Guarantor’s debts.  Neither Borrower nor any
Guarantor will be rendered insolvent by the execution and delivery of this
Agreement or any of the other Loan Documents executed in connection with this
Agreement or by the transactions contemplated hereunder or
thereunder.

     

    5.19          Perfection and
Priority:  This Agreement and the other Loan Documents are
effective to create in favor of Lender legal, valid and enforceable Liens in all
right, title and interest of Borrower in the Collateral, and when financing
statements have been filed in the offices of the jurisdictions shown on Schedule 5.19,
attached hereto and made part hereof under Borrower's name, Borrower will have
granted to Lender, and Lender will have perfected first priority Liens in the
Collateral, superior in right to any and all other Liens, existing or
future.

     

    5.20          Commercial Tort
Claims:  As of the Closing Date, Borrower is not a party to any
Commercial Tort Claims, except as shown on Schedule 5.20
attached hereto and made part hereof.

     

    5.21          Letter of Credit
Rights:  As of the Closing Date, Borrower has no Letter of
Credit Rights, except as shown on Schedule 5.21,
attached hereto and made part hereof.

     

    5.22          Deposit
Accounts:  All Deposit Accounts of Borrower are shown on Schedule 5.22,
attached hereto and made part hereof.

     

    5.23          Anti-Terrorism
Laws:

     

    (a)          General.  Neither
Borrower nor any Affiliate of Borrower is in violation of any Anti-Terrorism Law
or engages in or conspires to engage in any transaction that evades or avoids,
or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in any Anti-Terrorism Law.

     

    (b)          Executive Order No.
13224.   Neither Borrower nor any Affiliate of Borrower,
or to Borrower’s knowledge, any of its respective agents acting or benefiting in
any capacity in connection with the Loans, Letters of Credit or other
transactions hereunder, is any of the following (each a “Blocked
Person”):

     

    (i)           a
Person that is listed in the annex to, or is otherwise subject to the provisions
of, the Executive Order No. 13224;

     

    (ii)          a
Person owned or controlled by, or acting for or on behalf of, any Person that is
listed in the annex to, or is otherwise subject to the provisions of, the
Executive Order No. 13224;

     

    (iii)         a
Person with which Lender is prohibited from dealing or otherwise engaging in any
transaction by any Anti-Terrorism Law;

     

    (iv)         a
Person that commits, threatens or conspires to commit or supports “terrorism” as
defined in the Executive Order No. 13224;

     

    (v)          a
Person that is named as a “specially designated national” on the most current
list published by the U.S. Treasury Department Office of Foreign Asset Control
at its official website or any replacement website or other replacement official
publication of such list; or

     

    (vi)         a
Person who is affiliated with a Person listed above.

     

    (vii)        a
Person that commits, threatens or conspires to commit or supports “terrorism” as
defined in the Executive Order No. 13224;

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

     

    (viii)       a
Person that is named as a “specially designated national” on the most current
list published by the U.S. Treasury Department Office of Foreign Asset Control
at its official website or any replacement website or other replacement official
publication of such list; or

     

    (ix)          a
Person who is affiliated with a Person listed above.

     

    SECTION
VI

     

    AFFIRMATIVE
COVENANTS

     

    Borrower
covenants that until all of the Obligations are paid and satisfied in full and
the revolving Credit has been terminated,:

     

    6.1         Payment of Taxes and
Claims:  Borrower and its Subsidiaries shall pay, before they
become delinquent, all taxes, assessments and governmental charges, or levies
imposed upon it, or upon Borrower or such Subsidiary’s Property, and all claims
or demands of materialmen, mechanics, carriers, warehousemen, landlords and
other Persons, entitled to the benefit of statutory or common law Liens which,
in any case, if unpaid, would result in the imposition of a Lien upon its
Property; provided however, that neither Borrower nor such Subsidiary shall be
required to pay any such tax, assessment, charge, levy, claim or demand if the
amount, applicability or validity thereof, shall at the time, be contested in
good faith and by appropriate proceedings by Borrower or such Subsidiary, and
if  Borrower or such Subsidiary shall have set aside on its books
adequate reserves in respect thereof, if so required in accordance with GAAP;
which deferment of payment is permissible so long as no Lien other than a
Permitted Lien has been entered and Borrower or such Subsidiary’s title to, and
its right to use, its Property are not materially adversely affected
thereby.

     

    6.2         Maintenance of Properties
and Corporate Existence:

     

    (a)           Property –Borrower
and each of its Subsidiaries shall maintain its respective Property in good
condition (normal wear and tear excepted) make all necessary renewals,
replacements, additions, betterments and improvements thereto and will pay and
discharge when due the cost of repairs and maintenance to its Property, and will
pay all rentals when due for all real estate leased by Borrower or such
Subsidiary.

     

    (b)           Property Insurance, Public
and Products Liability Insurance – Borrower and its Subsidiaries shall
maintain insurance (i) on all insurable tangible Property against fire, flood,
casualty and such other hazards (including, without limitation, extended
coverage, workmen's compensation, boiler and machinery, with inflation coverage
by endorsement) and (ii) against public liability, product liability and
business interruption, in each case in such amounts, with such deductibles and
with such insurers as are customarily used by companies operating in the same
industry as Borrower or such Subsidiary.  At or prior to Closing,
Borrower shall furnish Lender with duplicate original policies of insurance or
such other evidence of insurance for Borrower and each Guarantor as Lender may
require, and any certificates of insurance shall be issued on Acord
Form-27.  In the event Borrower fails to procure or cause to be
procured any such insurance or to timely pay or cause to be paid the premium(s)
on any such insurance, Lender may do so for Borrower, but Borrower shall
continue to be liable for the same. The policies of all such casualty insurance
shall contain standard Lender's Loss Payable Clauses (and, with respect to
liability and interruption insurance, additional insured clauses) issued in
favor of Lender under which all losses thereunder shall be paid to Lender as
Lender's interest may appear.  Such policies shall expressly provide
that the requisite insurance cannot be altered or canceled without thirty (30)
days prior written notice to Lender and shall insure Lender notwithstanding the
act or neglect of Borrower.  Borrower hereby appoints Lender as
Borrower's attorney-in-fact, exercisable at Lender's option to endorse any
check  which may be payable to Borrower in order to collect the
proceeds of such insurance and any amount or amounts collected by Lender
pursuant to the provisions of this Section may be applied by Lender, in its sole
discretion, to any Obligations or to repair, reconstruct or replace the loss of
or damage to Collateral as Lender in its discretion may from time to time
determine.  Borrower further covenants that all insurance premiums
owing under current policies of Borrower and each Guarantor have been
paid.  Borrower shall notify Lender, immediately, upon receipt of a
notice of termination, cancellation, or non-renewal from its insurance company
of any such policy of Borrower or a Guarantor.

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

     

    (c)           Financial Records
–Borrower and each of its Subsidiaries shall keep current and accurate books of
records and accounts in which full and correct entries will be made of all of
its business transactions, and will reflect in its financial statements adequate
accruals and appropriations to reserves, all in accordance with
GAAP.  Neither Borrower nor any of its Subsidiaries shall change its
fiscal year end date without the prior written consent of Lender.

     

    (d)           Corporate Existence and
Rights – Borrower and each of its Subsidiaries shall do (or cause to be
done) all things necessary to preserve and keep in full force and effect its
existence, good standing, rights and franchises.  Borrower and each of
its Subsidiaries shall obtain and maintain any and all licenses, permits,
franchises or other governmental authorizations necessary to the ownership of
its Property or to the conduct of its businesses.

     

    (e)           Compliance with Laws
– Borrower and each of its Subsidiaries shall be in compliance with any and all
Requirements of Law to which it is subject, whether federal, state or local,
(including, without limitation, Environmental Laws).   Borrower
and each of its Subsidiaries shall timely satisfy all assessments, fines, costs
and penalties imposed (after exhaustion of all appeals, provided a stay has been
put in effect during such appeal) by any Governmental Authority against Borrower
or such Subsidiary or any Property of Borrower or such Subsidiary.

     

    6.3         Business
Conducted:  Borrower and each of its Subsidiaries shall
continue in the business presently operated by it using its best efforts to
maintain its customers and goodwill.  Neither Borrower nor any of its
Subsidiaries shall engage, directly or indirectly, in any material respect in
any line of business substantially different from the businesses conducted by
Borrower or such Subsidiary immediately prior to the Closing Date.

     

    6.4         Litigation:  Borrower
shall give prompt notice to Lender of any litigation claiming in excess of Two
Hundred Fifty Thousand Dollars ($250,000) from Borrower or any of its
Subsidiaries, individually or in the aggregate, which is not fully covered by
insurance (but subject to any deductibles) 
or which may otherwise have a Material Adverse
Effect.  Borrower shall further deliver to the Lender a schedule of
all litigation describing any claim in excess of $50,000, individually,
involving the Borrower or any its Subsidiary, simultaneously with the financial
statements to be delivered to the Lender in accordance with Section 6.9(a)(i)
and 6.9(a)(ii) hereof.

     

    6.5         Issue
Taxes:  Borrower shall pay all taxes (other than taxes based
upon or measured by any Lender's income or revenues or any personal property
tax), if any, in connection with the issuance of the Note and the recording of
any lien documents.  The obligations of Borrower hereunder shall
survive the payment of Borrower's Obligations hereunder and the termination of
this Agreement.

     

    6.6         Bank
Accounts:  Borrower shall maintain its major depository and
disbursement account(s), and cash management relationship, with
Lender.

    
      
         

      

      
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    6.7         Employee Benefit
Plans:  Borrower shall (a) fund all of its Pension Plan(s) in a
manner that will satisfy the minimum funding standards of Section 302 of ERISA,
(b) furnish Lender, promptly upon Lender's request, with copies of all
reports or other statements filed with the United States Department of Labor,
the PBGC or the IRS with respect to all Pension Plan(s), or which Borrower, or
any member of a Controlled Group, may receive from the United States Department
of Labor, the IRS or the PBGC, with respect to all such Pension Plan(s), and (c)
promptly advise Lender of the occurrence of any reportable event (as defined in
Section 4043 of ERISA, other than a reportable event for which the
thirty (30) day notice requirement has been waived by the PBGC) or
prohibited transaction (under Section 406 of ERISA or Section 4975 of
the Internal Revenue Code) with respect to any such Pension Plan(s) and the
action which Borrower proposes to take with respect thereto.  Borrower
will make all contributions when due with respect to any multi employer pension
plan in which it participates and will promptly advise Lender upon (x) its
receipt of notice of the assertion against Borrower of a claim for withdrawal
liability, (y) the occurrence of any event which, to the best of Borrower's
knowledge, would trigger the assertion of a claim for withdrawal liability
against Borrower, and (z) upon the occurrence of any event which, to the best of
Borrower's knowledge, would place Borrower in a Controlled Group as a result of
which any member (including Borrower) thereof may be subject to a claim for
withdrawal liability, whether liquidated or contingent.

     

    6.8         Financial
Covenant:  Borrower shall maintain and comply with the
following financial covenants:

     

    (a)         Consolidated Fixed Charge
Coverage Ratio - Borrower shall maintain a Consolidated Fixed Charge
Coverage Ratio of not less than 1.20 to 1.0, measured quarterly as of each
quarter end.

     

    (b)         Consolidated
Leverage Ratio - Borrower
shall maintain a Consolidated Leverage Ratio of not more the ratio set forth
below opposite the applicable period, measured quarterly as of each fiscal
quarter end:

     

    
      
        
          
            
              
                
                  
                    
                      	
                              Period

                            	 	
                              Maximum Ratio

                            
	
                              October
      31, 2009

                            	 	
                              4.50
      to 1.00

                            
	
                              January
      31, 2010 and thereafter

                            	 	
                              4.00
      to
1.00

                            

                    

                  

                

              

            

          

        

      

    

    

     

    (c)         Consolidated EBITDA.
Borrower shall maintain a Consolidated EBITDA of not less than the amount set
forth below opposite the applicable period, measured quarterly as of each fiscal
quarter end:

     

    
      
        
          
            
              	
                      Period

                    	 	
                      Minimum Amount

                    	 
	
                      October
      31, 2009

                    	 	$	3,750,000	 
	
                      January
      31, 2010

                    	 	$	4,000,000	 
	
                      April
      30, 2010

                    	 	$	4,250,000	 
	
                      July
      31, 2010 and thereafter

                    	 	$	4,500,000	 

            

          

        

      

    

     

    (d)         Asset Coverage
Ratio.  At all times when the Consolidated Leverage Ratio is
greater than or equal to 2.00 to 1.00, Borrower shall maintain an Asset Coverage
Ratio of not less than 1.25 to 1.00, measured monthly at the end of each
calendar month.

     

    6.9         Financial and Business
Information:  Borrower
shall deliver or cause to be delivered to Lender the following:

     

    (a)         Financial Statements and
Collateral Reports: such data, reports, statements and information,
financial or otherwise, as Lender may reasonably request, including, without
limitation:

    
      
         

      

      
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    (i)           As
soon as available, and in any event, within forty five (45) days after the end
of the first, second and third fiscal quarter of each fiscal year of Borrower,
the consolidated and consolidating income statements and balance sheet of
Borrower and its Subsidiaries and the consolidated cash flow statement of the
Borrower and its Subsidiaries, each for such quarter and for the expired portion
of the fiscal year ending with the end of such quarter, setting forth in
comparative form the corresponding figures for the corresponding periods of the
previous fiscal year, all in reasonable detail and certified by Borrower's chief
financial officer to have been prepared from the books and records of
Borrower;

     

    (ii)           as
soon as available, and in any event, within one hundred twenty (120) days
after the end of each fiscal year of Borrower, (A) the consolidated income and
cash flow statements of Borrower and its Subsidiaries for such fiscal year, and
the consolidated balance sheet of Borrower and its Subsidiaries as at the end of
such fiscal year, setting forth in each case in comparative form the
corresponding figures as at the end of and for the previous fiscal year, all in
reasonable detail, including all supporting schedules, and audited by an
independent public accounting firm acceptable to Lender, and unqualifiedly
certified to have been prepared in accordance with GAAP, and such independent
public accountants shall also unqualifiedly certify that in making the
examinations necessary to their certification mentioned above they have reviewed
the terms of this Agreement and the accounts and conditions of Borrower during
the accounting period covered by the certificate and that such review did not
disclose the existence of any condition or event which constitutes a Default or
an Event of Default (or if such conditions or events existed, describing them)
together with copies of any management letters provided by such accountants to
management of Borrower and (B) the management-prepared consolidating income
statements of the Borrower and its Subsidiaries and the consolidating balance
sheet of Borrower and its Subsidiaries, each for such fiscal year setting forth
in each case in comparative form the corresponding figures as at the end of and
for the previous fiscal year, all in reasonable detail, including all supporting
schedules, prepared in accordance with GAAP which support the financial
statements delivered pursuant to clause (A) above, accompanied by a certificate
to that effect executed by the Chief Financial Officer of the
Borrower;

     

    (iii)           within
thirty (30) days of the end of each calendar month, (x) Borrower's accounts
receivable aging report, accounts payable aging report, inventory reports and
such other reports as Lender reasonably deems necessary, certified by Borrower's
chief financial officer as true and correct, all in form and substance
reasonably satisfactory to Lender and (y) a certificate from the chief financial
officer, chief executive officer or president of Borrower with a description of
eligible domestic accounts receivable and eligible domestic inventory in order
to establish that Borrower is in compliance with the requirements of Section
6.8(d) hereof, if then applicable, to support compliance therewith;

     

    (b)           Notice of Event of
Default - promptly upon becoming aware of the existence of any condition
or event which constitutes a Default or an Event of Default under this
Agreement, a written notice specifying the nature and period of existence
thereof and what action Borrower or its Subsidiary is taking (and proposes to
take) with respect thereto;

     

    (c)           Notice of Claimed
Default - promptly upon receipt by Borrower or any of its Subsidiaries,
notice of default, oral or written, given to Borrower or such Subsidiary by any
creditor for Indebtedness for borrowed money, otherwise holding long term
Indebtedness of Borrower or such Subsidiary in excess of Two Hundred Fifty
Thousand Dollars ($250,000); and

     

    (d)           Securities and Other
Reports - if Borrower shall be required to file reports with the
Securities and Exchange Commission pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934, as amended, promptly upon its becoming
available, one copy of each financial statement, report, notice or proxy
statement sent by Borrower to stockholders generally, and, a copy of each
regular or periodic report, and any registration statement, or prospectus in
respect thereof, filed by Borrower with any securities exchange or with federal
or state securities and exchange commissions or any successor
agency.

    
      
         

      

      
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    (e)           Additional Reports -
Borrower and each of its Subsidiaries shall, if requested by Lender, promptly
furnish Lender with copies of all reports filed with any federal, state or local
Governmental Authority.

     

    6.10       Officers'
Certificates:  Along with the set of financial statements
delivered to Lender at the end of each fiscal quarter pursuant to Section
6.9(a)(i) hereof and the annual financial statements delivered pursuant to
Section 6.9(a)(ii) hereof, Borrower shall deliver to Lender a certificate
("Compliance Certificate") (in the form of Exhibit D, attached
hereto and made part hereof) from the chief financial officer, chief executive
officer or president of Borrower (and as to certificates accompanying the annual
financial statements of Borrower, also certified by Borrower's independent
certified public accountant) setting forth:

     

    (a)           Event of Default -
that the signer has reviewed the relevant terms of this Agreement, and has made
(or caused to be made under his/her supervision) a review of the transactions
and conditions of Borrower from the beginning of the accounting period covered
by the financial statements being delivered therewith to the date of the
certificate, and that such review has not disclosed the existence during such
period of any condition or event which constitutes a Default or an Event of
Default or, if any such condition or event exists, specifying the nature and
period of existence thereof and what action Borrower has taken or proposes to
take with respect thereto.

     

    (b)           Covenant Compliance -
the information (including detailed calculations) required in order to establish
that Borrower is in compliance with the requirements of Section 6.8 of this
Agreement, as of the end of the period covered by the financial statements
delivered.

     

    6.11         Audits and
Inspection:  Borrower shall permit any of Lender's officers or
other representatives to visit and inspect upon reasonable notice during
business hours any of the locations of Borrower and each Guarantor (provided
that, while an Event of Default exists, Lender may make such visits and
inspections at any time without prior notice), to examine and audit all of
Borrower's and each Guarantor’s Collateral, books of account, records, reports
and other papers, to make copies and extracts therefrom and to discuss its
affairs, finances and accounts with its officers, employees and independent
certified public accountants, provided that any such examinations, audits and
inspections conducted by Lender during the occurrence and continuance of an
Event of Default, shall be at Borrower's expense, at the standard rates charged
by Lender for such activities, plus Lender's reasonable out-of-pocket expenses
(all of which amounts shall be Expenses).

     

    6.12         Information to
Participant:  Lender may divulge to any participant, assignee
or co-lender or prospective participant, assignee or co-lender it may obtain in
the Revolving Credit or any portion thereof, all information, and furnish to
such Person copies of any reports, financial statements, certificates, and
documents obtained under any provision of this Agreement, or related agreements
and documents.

     

    6.13         Material Adverse
Developments:  Borrower agrees that immediately upon becoming
aware of any development or other information outside the ordinary course of
business and excluding matters of a general economic, financial or political
nature which would reasonably be expected to have a Material Adverse Effect it
shall give to Lender telephonic notice specifying the nature of such development
or information and such anticipated effect.  In addition, such verbal
communication shall be confirmed by written notice thereof to Lender on the same
day such verbal communication is made or the next Business Day
thereafter.

    
      
         

      

      
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    6.14           Places of
Business:  Borrower shall give thirty (30) days prior written
notice to Lender of any changes in the location of any of its or any of its
Subsidiaries’ respective places of business, of the places where records
concerning Borrower’s and each Guarantor’s Accounts or where Borrower’s and each
Guarantor’s Inventory are kept, or the establishment of any new, or the
discontinuance of any existing place of business.

     

    6.15           Commercial Tort
Claims:  Borrower will immediately notify Lender in writing in
the event that Borrower becomes a party to or obtains any rights with respect to
any Commercial Tort Claim.  Such notification shall include
information sufficient to describe such Commercial Tort Claim, including, but
not limited to, the parties to the claim, the court in which the claim was
commenced, the docket number assigned to such claim, if any, and a detailed
explanation of the events that gave rise to the claim.  Borrower shall
execute and deliver to Lender all documents and/or agreements necessary to grant
Lender a security interest in such Commercial Tort Claim to secure the
Obligations.  Borrower authorizes Lender to file (without Borrower's
signature) initial financing statements or amendments, as Lender deems necessary
to perfect its security interest in the Commercial Tort Claim.

     

    6.16           Letter of Credit
Rights:  Borrower shall provide Lender with written notice of
any Letters of Credit for which Borrower is the beneficiary.  Borrower
shall execute and deliver (or cause to be executed or delivered) to Lender, all
documents and agreements as Lender may require in order to obtain and perfect
its security interest in such Letter of Credit Rights.

     

    6.17           Additional
Subsidiaries:  Borrower shall give the Lender prompt written
notice of the creation, establishment or acquisition, in any manner, of any
Subsidiary not existing as a Subsidiary on the Closing Date.  Subject
to the last sentence of this Section 6.17, Borrower or a Guarantor, as
appropriate, (a) shall cause each Subsidiary of such Person which is a Domestic
Subsidiary to execute a Surety and Guaranty Agreement and a Security Agreement,
(b) shall execute a Foreign Pledge Agreement with respect to 65% of the Capital
Stock of each First-Tier Subsidiary of such Person which is or becomes a
Material Non-Domestic Subsidiary, (c) shall deliver an opinion of counsel,
simultaneously with the delivery of (i) the Guaranty and Surety Agreement and
Security Agreement executed pursuant to clause (a)(i) above, with respect to
such new Domestic Subsidiary, and the delivery of any Pledge Agreement executed
pursuant to clause (a)(ii) above, that such Pledge Agreement is valid and
enforceable in the jurisdiction of formation of such Material Non-Domestic
Subsidiary, provided that if such opinion, in connection with the delivery of
any Pledge Agreement executed pursuant to clause (a)(ii) above, cannot be
provided, the Borrower or Guarantor and such Material Non-Domestic Subsidiary,
as appropriate, shall execute any additional documents that may be required in
order to perfect the lien granted by such Pledge Agreement in such jurisdiction
and to enable such counsel to deliver an acceptable opinion with respect thereto
and (d) with respect to the pledge of Capital Stock of any Material Non-Domestic
Subsidiary that is certificated, deliver such certificates and powers with
respect to such interests duly endorsed in blank, and, in the event of
uncertificated interests UCC-1 financing statements identifying such interest
and executed by the holder of such interest or such other documentation as
reasonably requested by the Lender in order to grant and perfect a security
interest in such ownership interest; all within ten (10) Business Days after the
creation, establishment or acquisition of such Subsidiary and in connection
therewith shall deliver or cause to be delivered such proof of corporate action,
incumbency of officers and other documents as are consistent with those
delivered as to each Domestic Subsidiary pursuant to Section 4.1 hereof on the
Closing Date, or as the Lender may request, each in form and substance
satisfactory to the Lender.  In no event shall Borrower or any
Guarantor be required to pledge any of the assets of a Non-Domestic Subsidiary
of Borrower or such Guarantor if such Non-Domestic Subsidiary is a controlled
foreign corporation, as defined in Section 957(a) of the Code, including, but
not limited to the stock of any Non-Domestic Subsidiary of the Borrower held
directly or indirectly by any such Subsidiary.

     

    6.18           Non-Material Non-Domestic
Subsidiaries:  In the event that the assets or revenues of the
Non-Material Non-Domestic Subsidiaries, taken as a whole, as determined in
accordance with GAAP shall, at any time, exceed $700,000, then, at such time one
or more Non-Material Non-Domestic Subsidiaries, as selected by the Borrower,
shall be deemed Material Non-Domestic Subsidiary so that the Non-Material
Non-Domestic Subsidiaries, taken as a whole, shall no longer have assets or
revenues in excess of $700,000, in the aggregate.  In the event that
any Non-Material Non-Domestic Subsidiary shall be deemed a Material Non-Domestic
Subsidiary, such Subsidiary’s parent shall comply with the relevant provisions
of Section 6.17 hereof.

    
      
         

      

      
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    6.19         Dupont
Agreement:  The Borrower shall enter into an amendment to the
Dupont Agreement in existence as of the Closing Date or a new licensing
agreement with Dupont, on or before March 15, 2010, on terms and conditions
reasonably satisfactory to the Bank.  The Borrower shall provide one
or more drafts of such agreement for the Bank’s review and comment prior to the
Borrower’s execution thereof.

     

    SECTION
VII

     

    NEGATIVE
COVENANTS:

     

    Borrower covenants that until all of
the Obligations are paid and satisfied in full and the Revolving Credit has been
terminated, that:

     

    7.1         Merger, Consolidation,
Dissolution or Liquidation:

     

    (a)           Neither
Borrower nor any of its Subsidiaries shall engage in any Asset Sale other than
equipment that is replaced by other equipment of comparable or superior quality
and value within ninety (90) days of such Asset Sale.

     

    (b)           Neither
Borrower nor any of its Subsidiaries shall merge or consolidate with any other
Person or engage in a division, conversion, dissolution or liquidation, provided
that (a) any Domestic Subsidiary may merge with and  into the Borrower
or another Domestic Subsidiary, (b) any Non-Domestic Subsidiary may merge with
and into another Non-Domestic Subsidiary, provided, that no Non-Domestic
Subsidiary with respect to which the Lender has received a pledge of stock or
other ownership interest shall merge with and into another Non-Domestic
Subsidiary if 65% of the shares or other ownership interests of the surviving
Subsidiary cannot be pledged to the Lender.

     

    7.2         Acquisitions:  Neither
Borrower nor any of its Subsidiaries shall acquire all or a material portion of
the Capital Stock or assets of any Person in any transaction or in any series of
related transactions or enter into any sale and leaseback transaction, except
for Permitted Acquisitions.

     

    7.3         Liens and
Encumbrances:  Neither Borrower nor of its Subsidiaries shall:
(i) execute a negative pledge agreement with any Person covering any of its
Property, or (ii) cause or permit or agree or consent to cause or permit in the
future (upon the happening of a contingency or otherwise), its Property
(including, without limitation, the Collateral), whether now owned or hereafter
acquired, to be subject to a Lien or be subject to any claim except for
Permitted Liens.

     

    7.4         Transactions With Affiliates
or Subsidiaries:

     

    (a)           Neither
Borrower nor any of its Subsidiaries shall enter into any transaction with any
Subsidiary or other Affiliate of Borrower or such Subsidiary, including, without
limitation, the purchase, sale, or exchange of Property, or the loaning or
giving of funds to such Affiliate or any Subsidiary unless:  (i) such
Subsidiary or Affiliate is engaged in a business substantially related to the
business conducted by Borrower or such Subsidiary, and the transaction is in the
ordinary course of and pursuant to the reasonable requirements of Borrower's or
such Subsidiary’s business and upon terms substantially the same and no less
favorable to Borrower or such Subsidiary as it would obtain in a comparable
arm's length transactions with any Person not an Affiliate or a Subsidiary, and
so long as such transaction is not prohibited hereunder; or (ii) such
transaction is intended for incidental administrative purposes.

    
      
         

      

      
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    (b)           Neither
Borrower nor any of its Subsidiaries shall create or acquire any Subsidiary,
except in compliance with Section 6.17 hereof.

     

    7.5          Guarantees:  Excepting
(a) the endorsement in the ordinary course of business of negotiable instruments
for deposit or collection, (b) in connection with trade payables in the ordinary
course of business and (c) guaranties by the Borrower or any of its Subsidiaries
for any Permitted Indebtedness of the Borrower or such Subsidiary not to exceed
$500,000 in the aggregate during the term of this Agreement, neither Borrower
nor any of its Subsidiaries shall become or be liable, directly or indirectly,
primary or secondary, matured or contingent, in any manner, whether as
guarantor, surety, accommodation maker, or otherwise, for the existing or future
Indebtedness of any kind of any Person.

     

    7.6          Restricted Payments, Bonuses
and Other Indebtedness:  Neither Borrower nor any of its
Subsidiaries shall:  (a) declare or pay or make any forms of
Restricted Payment to holders of Borrower's or such Subsidiary’s Capital Stock,
except that the Borrower may repurchase up to $1,000,000 of its Capital Stock
during the term of this Agreement; (b) declare or pay any bonus compensation to
its officers if an Event of Default exists or would result from the payment
thereof; (c) hereafter incur or become liable for any Indebtedness other than
Permitted Indebtedness; (d) make any prepayments on any existing or future
Indebtedness (other than the Obligations); or (e) make any payments on
Subordinated Debt in violation of the subordination provisions
thereof.

     

    7.7          Loans and
Investments:  Neither Borrower nor any of its Subsidiaries
shall make or have outstanding loans, advances, extensions of credit or capital
contributions to, or investments in, any Person other than Permitted
Investments.

     

    7.8          Use of Lenders'
Name:  Borrower shall not use Lender's name in connection with
any of its business operations.  Nothing herein contained is intended
to permit or authorize Borrower to make any contract on behalf of
Lender.

     

    7.9          Miscellaneous
Covenants:

     

    (a)           Neither
Borrower nor any of its Subsidiaries shall become or be a party to any contract
or agreement which at the time of becoming a party to such contract or agreement
materially impairs Borrower's or such Subsidiary’s ability to perform under this
Agreement or any Loan Document, as the case may be, or under any other
instrument, agreement or document to which Borrower or such Subsidiary is a
party or by which it is or may be bound.

     

    (b)           Neither
Borrower nor any of its Subsidiaries shall carry or purchase any "margin stock"
within the meaning of Regulations U, T or X of the Board of Governors of the
Federal Reserve System, 12 C.F.R., Chapter II.

     

    7.10         Jurisdiction of
Organization:  Neither the Borrower nor any of its Subsidiaries
shall change its jurisdiction of organization.

     

    SECTION
VIII

     

    DEFAULT

     

    8.1           Events of
Default:  Each of the following events shall constitute an
event of default ("Event of Default"):

    
      
         

      

      
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    (a)           Payments - if
Borrower fails to make any payment of principal or interest, including any
Overadvance, under the Obligations on the date such payment is due and payable;
or

     

    (b)           Other Charges - if
Borrower fails to pay any other charges, fees, Expenses or other monetary
obligations owing to Lender arising out of or incurred in connection with this
Agreement on the date such payment is due and payable; or

     

    (c)           Particular Covenant
Defaults - if Borrower fails to perform, comply with or observe any
covenant or undertaking contained in this Agreement and (other than with respect
to the covenants contained in Sections 6.2(b), 6.8, 6.9, 6.10 and 6.11 and
Section 7 for which no cure period shall exist), such failure continues for
fifteen (15) days after the occurrence thereof; or

     

    (d)           Financial Information
- if any statement, report, financial statement, or certificate made or
delivered by Borrower or any of its officers, employees or agents, to Lender is
not true and correct, in all material respects, when made; or

     

    (e)           Uninsured Loss - if
there shall occur any uninsured damage to or loss, theft, or destruction in
excess of Seven Hundred Fifty Thousand Dollars ($750,000) in the aggregate with
respect to any portion of any Property of Borrower or any of its Subsidiaries;
or

     

    (f)           Warranties or
Representations - if any warranty, representation or other statement by
or on behalf of Borrower or any of its Subsidiaries contained in or pursuant to
this Agreement, the other Loan Documents or in any document, agreement or
instrument furnished in compliance with, relating to, or in reference to this
Agreement, is false, erroneous, or misleading in any material respect when made;
or

     

    (g)           Agreements with
Others - (i) if Borrower or any of its Subsidiaries shall default beyond
any grace period in the payment of principal or interest of any Indebtedness of
Borrower or such Subsidiary in excess of Two Hundred Fifty Thousand Dollars
($250,000) in the aggregate; or (ii) if Borrower or any of its Subsidiaries
otherwise defaults under the terms of any such Indebtedness if the effect of
such default is to enable the holder of such Indebtedness to accelerate the
payment of Borrower's or such Subsidiary’s obligations, which are the subject
thereof, prior to the maturity date or prior to the regularly scheduled date of
payment;

     

    (h)           Other Agreements with
Lender - if Borrower or any of its Subsidiaries breaches or violates the
terms of, or if a default (and expiration of any applicable cure period), or an
Event of Default, occurs under, any Interest Hedging Instrument or any other
existing or future agreement (related or unrelated) (including, without
limitation, the other Loan Documents) between Borrower or such Subsidiary and
Lender; or

     

    (i)           Judgments - if any
final judgment for the payment of money in excess of Two Hundred Fifty Thousand
Dollars ($250,000) in the aggregate against the Borrower or any of its
Subsidiaries (i) which is not fully and unconditionally covered by insurance or
(ii) for which Borrower or such Subsidiary has not established a cash or cash
equivalent reserve in the full amount of such judgment, shall be rendered by a
court of record against Borrower or such Subsidiary and such judgment shall
continue unsatisfied and in effect for a period of thirty (30) consecutive days
without being vacated, discharged, satisfied or bonded pending appeal;
or

     

    (j)           Assignment for Benefit of
Creditors, etc. - if Borrower or any of its Subsidiaries makes or
proposes in writing, an assignment for the benefit of creditors generally,
offers a composition or extension to creditors, or makes or sends notice of an
intended bulk sale of any business or assets now or hereafter owned or conducted
by Borrower or such Subsidiary; or

    
      
         

      

      
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    (k)          Bankruptcy, Dissolution,
etc. - upon the commencement of any action for the dissolution or
liquidation of Borrower or any of its Subsidiaries, or the commencement of any
proceeding to avoid any transaction entered into by Borrower or any of its
Subsidiaries, or the commencement of any case or proceeding for reorganization
or liquidation of Borrower's or any of its Subsidiaries’ debts under the
Bankruptcy Code or any other state or federal law, now or hereafter enacted for
the relief of debtors, whether instituted by or against Borrower or such
Subsidiary; provided however, that
Borrower or such Subsidiary shall have thirty (30) days to obtain the dismissal
or discharge of involuntary proceedings filed against it, it being understood
that during such thirty (30) day period, Lender shall not be obligated to make
Advances hereunder and Lender may seek adequate protection in any bankruptcy
proceeding; or

     

    (l)           Receiver - upon the
appointment of a receiver, liquidator, custodian, trustee or similar official or
fiduciary for Borrower or any of its Subsidiaries or for Borrower's or any of
its Subsidiaries’ Property; or

     

    (m)         Execution Process,
etc. - the issuance of any execution or distraint process against any
Property of Borrower or any of its Subsidiaries; or

     

    (n)          Termination of
Business - if Borrower or any of its Subsidiaries ceases any material
portion of its business operations as presently conducted; or

     

    (o)          Pension Benefits,
etc. - if Borrower or a Guarantor fails to comply with ERISA so that
proceedings are commenced to appoint a trustee under ERISA to administer
Borrower's employee plans or the PBGC institutes proceedings to appoint a
trustee to administer such plan(s), or a Lien is entered to secure any
deficiency or claim or a "reportable event" as defined under ERISA occurs;
or

     

    (p)          Investigations - any
indication or evidence received by Lender that reasonably leads it to believe
Borrower or a Subsidiary of the Borrower may have directly or indirectly been
engaged in any type of activity which, would be reasonably likely to result in
the forfeiture of any material property of Borrower or such Subsidiary to any
governmental entity, federal, state or local; or

     

    (q)          Change of Control -
if there shall occur a Change of Control; or

     

    (r)           Surety and Guaranty
Agreement- if any breach or default occurs under the Surety and Guaranty
Agreement, or if the Surety and Guaranty Agreement, or any obligation to perform
thereunder is terminated; or

     

    (s)           Liens - if any Lien
in favor of Lender shall cease to be valid, enforceable and perfected and prior
to all other Liens other than Permitted Liens or if Borrower, any Guarantor or
any Governmental Authority shall assert any of the foregoing; or

     

    (t)           Material Adverse
Effect – if there is any change in Borrower's or any of its Subsidiaries’
financial condition which, in Lender's reasonable opinion, has or would be
reasonably likely to have a Material Adverse Effect,

     

    (u)          Change of Management
– if there shall occur a Change of Management; or

     

    (v)          Other Loan Documents
- if any other Person (other than Lender) party to a Loan Document, breaches or
violates any term, provision or condition of such Loan
Document.

    
      
         

      

      
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    8.2         Cure:  Nothing
contained in this Agreement or the Loan Documents shall be deemed to compel
Lender to accept a cure of any Event of Default hereunder.

     

    8.3         Rights and Remedies on
Default:

     

    (a)          In
addition to all other rights, options and remedies granted or available to
Lender under this Agreement or the Loan Documents (each of which is also then
exercisable by Lender), or otherwise available at law or in equity, upon or at
any time after the occurrence and during the continuance of a Default or an
Event of Default, Lender may, in its discretion, withhold or cease making
Advances under the Revolving Credit.

     

    (b)          In
addition to all other rights, options and remedies granted or available to
Lender under this Agreement or the Loan Documents (each of which is also then
exercisable by Lender), or otherwise available at law or in equity, upon or at
any time after the occurrence and during the continuance of an Event of Default
Lender may, in its discretion, terminate the Revolving Credit and declare the
Obligations (other than any Obligations arising under an Interest Hedging
Instrument), immediately due and payable, all without demand, notice,
presentment or protest or further action of any kind (it also being understood
that the occurrence of any of the events or conditions set forth in Sections
8.1(j),(k) or (l) shall automatically cause an acceleration of the Obligations
(other than any Obligations arising under an Interest Hedging
Instrument)).

     

    (c)          In
addition to all other rights, options and remedies granted or available to
Lender, under this Agreement or the Loan Documents (each of which is also then
exercisable by Lender), upon or at any time after the occurrence and during the
continuance of an Event of Default, Borrower shall be obligated to deliver and
pledge to Lender, cash collateral in the amount of all outstanding Letters of
Credit.

     

    (d)          In
addition to all other rights, options and remedies granted or available to
Lender under this Agreement or the Loan Documents (each of which is also then
exercisable by Lender), or otherwise available at law or in equity, upon or at
any time after the acceleration of the Obligations following the occurrence of
an Event of Default (other than the rights with respect to clause (iv) below
which Lender may exercise at any time after an Event of Default and regardless
of whether there is an acceleration), Lender may, in its discretion, exercise
all rights under the UCC and any other applicable law or in equity, and under
all Loan Documents permitted to be exercised after the occurrence of an Event of
Default, including the following rights and remedies (which list is given by way
of example and is not intended to be an exhaustive list of all such rights and
remedies):

     

    (i)           The
right to take possession of, send notices regarding and collect directly the
Collateral, with or without judicial process (including without limitation the
right to notify the United States postal authorities to redirect mail addressed
to Borrower to an address designated by Lender); or

     

    (ii)          By
its own means or with judicial assistance, enter Borrower's premises and take
possession of the Collateral, or render it unusable, or dispose of the
Collateral on such premises in compliance with subsection (e) below, without any
liability for rent, storage, utilities or other sums, and Borrower shall not
resist or interfere with such action; or

     

    (iii)         Require
Borrower at Borrower's expense to assemble all or any part of the Collateral
(other than real estate or fixtures) and make it available to Lender at any
place designated by Lender; or

     

    (iv)         The
right to modify the terms and conditions upon which Lender may be willing to
consider making Advances under the Revolving Credit or to take reserves against
the Revolving Credit; or

    
      
         

      

      
        43

        
          

        

      

      
         

      

    

     

    (v)           The
right to enjoin any violation of Section 7.1, it being agreed that Lender’s
remedies at law are inadequate.

     

    (e)           Borrower
hereby agrees that a notice received by it at least seven (7) days before the
time of any intended public sale or of the time after which any private sale or
other disposition of the Collateral is to be made, shall be deemed to be
reasonable notice of such sale or other disposition.  If permitted by
applicable law, any perishable inventory or Collateral which threatens to
speedily decline in value or which is sold on a recognized market may be sold
immediately by Lender without prior notice to Borrower.  Borrower
covenants and agrees not to interfere with or impose any obstacle to Lender's
exercise of its rights and remedies with respect to the Collateral, after the
occurrence of an Event of Default hereunder.  Lender shall have no
obligation to clean up or prepare the Collateral for sale.  If Lender
sells any of the Collateral upon credit, Borrower will only be credited with
payments actually made by the purchaser thereof, that are received by
Lender.  Lender may, in connection with any sale of the Collateral
specifically disclaim any warranties of title or the like.

     

    8.4         Nature of
Remedies:  All rights and remedies granted Lender hereunder and
under the Loan Documents, or otherwise available at law or in equity, shall be
deemed concurrent and cumulative, and not alternative remedies, and Lender may
proceed with any number of remedies at the same time until all Obligations are
satisfied in full.  The exercise of any one right or remedy shall not
be deemed a waiver or release of any other right or remedy, and Lender, upon or
at any time after the occurrence of an Event of Default, may proceed against
Borrower, at any time, under any agreement, with any available remedy and in any
order.

     

    8.5         Set-Off:  In
addition to all other rights, options and remedies granted or available to
Lender  under this Agreement or the Loan Documents (each of which is
also then exercisable by Lender), upon or at any time after the occurrence and
during the continuance of an Event of Default, Lender (and any participant)
shall have and be deemed to have, without notice to Borrower, the immediate
right of set-off against any bank account of Borrower with Lender, or of
Borrower with any other subsidiary of Lender or Bank Affiliate or any
participant and may apply the funds or amount thus set-off against any of
Borrower's Obligations hereunder.

     

    If any
bank account of Borrower with Lender, any other subsidiary of Lender or Bank
Affiliate or any participant is attached or otherwise liened or levied upon by
any third party, Lender (and such participant) shall have and be deemed to have,
without notice to Borrower, the immediate right of set-off and may apply the
funds or amount thus set-off against any of Borrower's Obligations
hereunder.

     

    SECTION
IX

     

    MISCELLANEOUS

    

    9.1           Governing
Law:  THIS AGREEMENT, AND ALL
MATERS ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND ALL RELATED AGREEMENTS
AND DOCUMENTS, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK.   THE PROVISIONS OF
THIS AGREEMENT AND ALL OTHER AGREEMENTS AND DOCUMENTS REFERRED TO HEREIN ARE TO
BE DEEMED SEVERABLE, AND THE INVALIDITY OR UNENFORCEABILITY OF ANY PROVISION
SHALL NOT AFFECT OR IMPAIR THE REMAINING PROVISIONS WHICH SHALL CONTINUE IN FULL
FORCE AND EFFECT.

    
      
         

      

      
        44

        
          

        

      

      
         

      

    

     

    9.2         Integrated
Agreement:  The Note, the other Loan Documents, all related
agreements, and this Agreement shall be construed as integrated and
complementary of each other, and as augmenting and not restricting Lender's
rights and remedies.  If, after applying the foregoing, an
inconsistency still exists, the provisions of this Agreement shall constitute an
amendment thereto and shall control.

     

    9.3         Waiver:  No
omission or delay by Lender in exercising any right or power under this
Agreement or any related agreements and documents will impair such right or
power or be construed to be a waiver of any Default, or Event of Default or an
acquiescence therein, and any single or partial exercise of any such right or
power will not preclude other or further exercise thereof or the exercise of any
other right, and as to Borrower no waiver will be valid unless in writing and
signed by Lender and then only to the extent specified.

     

    9.4         Indemnity:

     

    (a)           Borrower
releases and shall indemnify, defend and hold harmless Lender and its respective
officers, employees and agents, of and from any claims, demands, liabilities,
obligations, judgments, injuries, losses, damages and costs and expenses
(including, without limitation, reasonable legal fees) resulting from (i) acts
or conduct of Borrower under, pursuant or related to this Agreement and the
other Loan Documents, (ii) Borrower's breach or violation of any representation,
warranty, covenant or undertaking contained in this Agreement or the other Loan
Documents, (iii) Borrower's failure to comply with any Requirement of Law
(including without limitation Environmental Laws, etc.), and (iv) any claim by
any other creditor of Borrower against Lender arising out of any transaction
whether hereunder or in any way related to  the Loan Documents and all
costs, expenses, fines, penalties or other damages resulting therefrom, unless
resulting solely from acts or conduct of Lender constituting willful misconduct
or gross negligence.

     

    (b)           Promptly
after receipt by an indemnified party under subsection (a) above of notice of
the commencement of any action by a third party, such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying party under
such subsection, notify the indemnifying party in writing of the commencement
thereof.  The omission so to notify the indemnifying party shall
relieve the indemnifying party from any liability which it may have to any
indemnified party under such subsection only if the indemnifying party is unable
to defend such actions as a result of such failure to so notify.  In
case any such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnified party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses, in
each case subsequently incurred by such indemnified party, in connection with
the defense thereof other than reasonable costs of investigation.

     

    9.5         Time:  Whenever
Borrower shall be required to make any payment, or perform any act, on a day
which is not a Business Day, such payment may be made, or such act may be
performed, on the next succeeding Business Day.  Time is of the
essence in Borrower's performance under all provisions of this Agreement and all
related agreements and documents.

    
      
         

      

      
        45

        
          

        

      

      
         

      

    

     

    9.6         Expenses of
Lender:  At Closing and from time to time thereafter, Borrower
will pay upon demand of Lender all reasonable costs, fees and expenses of Lender
in connection with (i) the analysis, negotiation, preparation, execution,
administration, delivery and termination of this Agreement, and other Loan
Documents and the documents and instruments referred to herein and therein, and
any amendment, amendment and restatement, supplement, waiver or consent relating
hereto or thereto, whether or not any such amendment, amendment and restatement,
supplement, waiver or consent is executed or becomes effective, search costs,
the reasonable fees, expenses and disbursements of counsel for Lender, any fees
or expenses incurred by Lender under Section 6.11 for which Borrower is
obligated thereunder, and reasonable charges of any expert consultant to Lender,
(ii) the enforcement of Lender’s rights hereunder, or the collection of any
payments owing from, Borrower under this Agreement and/or the other Loan
Documents or the protection, preservation or defense of the rights of Lender
hereunder and under the other Loan Documents, and (iii) any refinancing or
restructuring of the credit arrangements provided under this Agreement and other
Loan Documents in the nature of a "work-out" or of any insolvency or bankruptcy
proceedings, or otherwise (including the reasonable fees and disbursements of
counsel for Lender and, with respect to clauses (ii) and (iii), reasonable
allocated costs of internal counsel) (collectively, the
"Expenses");

     

    9.7         Brokerage:  This
transaction was brought about and entered into by Lender and Borrower acting as
principals and without any brokers, agents or finders being the effective
procuring cause hereof.  Borrower represents that it has not committed
Lender to the payment of any brokerage fee, commission or charge in connection
with this transaction.  If any such claim is made on Lender by any
broker, finder or agent or other person, Borrower hereby indemnifies, defends
and saves such party harmless against such claim and further will defend, with
counsel satisfactory to Lender, any action or actions to recover on such claim,
at Borrower's own cost and expense, including such party's reasonable counsel
fees.  Borrower further agrees that until any such claim or demand is
adjudicated in such party's favor, the amount demanded shall be deemed an
Obligation of Borrower under this Agreement.

     

    9.8         Notices:

     

    (a)           Any
notices or consents required or permitted by this Agreement shall be in writing
and shall be deemed given if delivered in person to the person listed below or
if sent by telecopy or by nationally recognized overnight courier, as follows,
unless such address is changed by written notice hereunder:

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  If
      to Lender to:

                                	
                                  TD
      Bank, N.A.

                                
	 
      	
                                  45
      Melville Park Road

                                
	 
      	
                                  Melville,
      New York 11747

                                
	 
      	
                                  Attention:
      John Topolovec, Vice President

                                
	 
      	
                                  Fax
      No.:         
      631-962-2834

                                
	 
      	 
      
	
                                  With
      copies to:

                                	
                                  Farrell
      Fritz, P.C.

                                
	 
      	
                                  1320
      RXR Plaza

                                
	 
      	
                                  Uniondale,
      New York 11556

                                
	 
      	
                                  Attention:  Robert
      C. Creighton, Esq.

                                
	 
      	
                                  Fax
      No.:         
      516-227-0777

                                
	 
      	 
      
	
                                  If
      to Borrower to:

                                	
                                  Lakeland
      Industries, Inc.

                                
	 
      	
                                  701
      Koehler Avenue, Suite 7

                                
	 
      	
                                  Ronkonkoma,
      New York 11779

                                
	 
      	
                                  Attention:
      President

                                
	 
      	
                                  Fax
      No.:          631-981-9751

                                
	 
      	 
      
	
                                  With
      copies to:

                                	
                                  Gilmartin,
      Poster & Shafto LLP

                                
	 
      	
                                  845
      Third Avenue

                                
	 
      	
                                  New
      York, NY  10022

                                
	 
      	
                                  Attention:     
      Robert L. Poster, Esq.

                                
	 
      	
                                  Fax
      No.:         
      212-425-3130

                                

                        

                      

                    

                    

                      
                        
                           

                        

                        
                          46

                          
                            

                          

                        

                        
                           

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    (b)           Any
notice sent by Lender, or Borrower by any of the above methods shall be deemed
to be given when so received.

     

    (c)           Lender
shall be fully entitled to rely upon any telecopy transmission or other writing
purported to be sent by any Authorized Officer (whether requesting an Advance or
otherwise) as being genuine and authorized.

     

    9.9         Headings:  The
headings of any paragraph or Section of this Agreement are for convenience only
and shall not be used to interpret any provision of this Agreement.

     

    9.10       Survival:  All
warranties, representations, and covenants made by Borrower herein, or in any
agreement referred to herein or on any certificate, document or other instrument
delivered by it or on its behalf under this Agreement, shall be considered to
have been relied upon by Lender, and shall survive the delivery to Lender of the
Notes, regardless of any investigation made by Lender or on its
behalf.  All statements in any such certificate or other instrument
prepared and/or delivered for the benefit of Lender shall constitute warranties
and representations by Borrower hereunder.  Except as otherwise
expressly provided herein, all covenants made by Borrower hereunder or under any
other agreement or instrument shall be deemed continuing until all Obligations
are satisfied in full.  All indemnification obligations under this
Agreement, including under Section 2.2, 6.5, 9.4 and 9.7, shall survive the
termination of this Agreement and payment of the Obligations for a period of two
(2) years.

     

    9.11       Successors and
Assigns:  This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the
parties.  Borrower may not transfer, assign or delegate any of its
duties or obligations hereunder.  Borrower acknowledges and agrees
that Lender may at any time, and from time to time, (a) sell participating
interests in the Loans, and Lender's rights hereunder to other financial
institutions, and (b) sell, transfer, or assign the Loans and Lender's rights
hereunder, to any one or more additional banks or financial institutions,
subject (as to Lender's rights under this clause (b)) to Borrower's written
consent, which consent shall not be unreasonably withheld; provided that, no
consent under this clause (b) shall be required if an Event of Default exists at
the time of such sale, transfer or assignment.

     

    9.12       Duplicate
Originals:  Two or more duplicate originals of this Agreement
may be signed by the parties, each of which shall be an original but all of
which together shall constitute one and the same instrument.

     

    9.13       Modification:  No
modification hereof or any agreement referred to herein shall be binding or
enforceable unless in writing and signed by Borrower and Lender.

     

    9.14       Signatories:  Each
individual signatory hereto represents and warrants that he is duly authorized
to execute this Agreement on behalf of his principal and that he executes the
Agreement in such capacity and not as a party.

     

    9.15       Third
Parties:  No rights are intended to be created hereunder, or
under any related agreements or documents for the benefit of any third party
done, creditor or incidental beneficiary of Borrower.  Nothing
contained in this Agreement shall be construed as a delegation to Lender of
Borrower's duty of performance, including, without limitation, Borrower's duties
under any account or contract with any other Person.

     

    9.16       Discharge of Taxes,
Borrower's Obligations, Etc.:  Lender,
in its sole discretion, shall have the right at any time, and from time to time,
with at least ten (10) days prior notice to Borrower if Borrower fail to do so,
to: (a) pay for the performance of any of Borrower's obligations hereunder, and
(b) discharge taxes or Liens, at any time levied or placed on Borrower's
Property in violation of this Agreement unless Borrower is in good faith with
due diligence by appropriate proceedings contesting such taxes or Liens and
maintaining proper reserves therefor in accordance with
GAAP.  Expenses and advances shall be added to the Revolving Credit,
and bear interest at the rate applicable to the Revolving Credit, until
reimbursed to Lender.  Such payments and advances made by Lender shall
not be construed as a waiver by Lender of a Default or Event of Default under
this Agreement.

    
      
         

      

      
        47

        
          

        

      

      
         

      

    

     

    9.17         Withholding and Other Tax
Liabilities:  Lender shall have the right to refuse to make any
Advances from time to time unless Borrower shall, at Lender's request, have
given to Lender evidence, reasonably satisfactory to Lender, that Borrower has
properly deposited or paid, as required by law, all withholding taxes and all
federal, state, city, county or other taxes due up to and including the date of
the requested Advance.   Copies of deposit slips showing payment
shall constitute satisfactory evidence for such purpose.  In the event
that any Lien, assessment or tax liability against Borrower shall arise in favor
of any taxing authority, whether or not notice thereof shall be filed or
recorded as may be required by law, Lender shall have the right (but shall not
be obligated, nor shall Lender hereby assume the duty) to pay any such Lien,
assessment or tax liability by virtue of which such charge shall have arisen;
provided, however, that Lender shall not pay any such tax, assessment or Lien if
the amount, applicability or validity thereof is being contested in good faith
and by appropriate proceedings by Borrower.  In order to pay any such
Lien, assessment or tax liability, Lender shall not be obliged to wait until
such lien, assessment or tax liability is filed before taking such action as
hereinabove set forth.  Any sum or sums which Lender shall have paid
for the discharge of any such Lien shall be added to the Revolving Credit and
shall be paid by Borrower to Lender with interest thereon at the rate applicable
to the Revolving Credit, upon demand, and Lender shall be subrogated to all
rights of such taxing authority against Borrower.

     

    9.18         Consent to
Jurisdiction:  Borrower and Lender each hereby irrevocably
consent to the non-exclusive jurisdiction of the Courts of the State of New York
or the United States District Court for the Eastern District of New York in any
and all actions and proceedings whether arising hereunder or under any other
agreement or undertaking.  Borrower waives any objection which
Borrower may have based upon lack of personal jurisdiction, improper venue or
forum non conveniens.  Borrower irrevocably agrees to service of
process by certified mail, return receipt requested to the address of the
appropriate party set forth herein.

     

    9.19         Additional
Documentation:  Borrower shall execute and/or re-execute, and
cause any Guarantor or other Person party to any Loan Document, to execute
and/or re-execute and to deliver to Lender or Lender’s counsel, as may be deemed
appropriate, any document or instrument signed in connection with this Agreement
which was incorrectly drafted and/or signed, as well as any document or
instrument which should have been signed at or prior to the Closing, but which
was not so signed and delivered.  Borrower agrees to comply with any
written request by Lender within ten (10) days after receipt by Borrower of such
request.

     

    9.20         Advertisement:

     

     (a)           Lender,
in its sole discretion, shall have the right to announce and publicize the
financing established hereunder, as it deems appropriate, by means and media
selected by Lender.  Such publication shall include all pertinent
information relating to such financing, including without limitation, the term,
purpose, pricing, loan amount, name of Borrower and location of any Real
Property.

     

     (b)           Lender
shall also have the right to display a sign at the Real Property which indicates
that Lender is providing the financing.  If such sign is provided,
Borrower shall cause the sign to be displayed as requested by Lender and shall
maintain such display during the period requested by Lender.

     

     (c)           The
form and content of the sign and/or published information shall be in the sole
discretion of Lender and shall be considered the sole and exclusive property of
Lender.  All expenses related to publicizing the financing shall be
the sole responsibility of Lender.

    
      
         

      

      
        48

        
          

        

      

      
         

      

    

     

    9.21           Waiver of Jury
Trial:  BORROWER AND LENDER
EACH HEREBY WAIVE ANY AND ALL RIGHTS IT MAY HAVE TO A JURY TRIAL IN CONNECTION
WITH ANY LITIGATION, PROCEEDING OR COUNTERCLAIM ARISING WITH RESPECT TO RIGHTS
AND OBLIGATIONS OF THE PARTIES HERETO OR UNDER THE LOAN DOCUMENTS OR WITH
RESPECT TO ANY CLAIMS ARISING OUT OF ANY DISCUSSIONS, NEGOTIATIONS OR
COMMUNICATIONS INVOLVING OR RELATED TO ANY PROPOSED RENEWAL, EXTENSION,
AMENDMENT, MODIFICATION, RESTRUCTURE, FORBEARANCE, WORKOUT, OR ENFORCEMENT OF
THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS.

     

    9.22           Consequential
Damages:  Neither Lender nor agent or attorney of Lender, shall
be liable for any consequential damages arising from any breach of contract,
tort or other wrong relating to the establishment, administration or collection
of the Obligations.

    

    [SIGNATURES
TO FOLLOW ON SEPARATE PAGE]

    
      
         

      

      
        49

        
          

        

      

      
         

      

    

    WITNESS the due execution of this
Agreement as a document under seal as of the date first written
above.

     

    
      
        
          
            
              
                	
                        LAKELAND
      INDUSTRIES, INC.

                      
	 
      	 
      
	
                        By: 

                      	
                        /s/
      Christopher J.
  Ryan   (SEAL)

                      
	
                        Name:  Christopher
      J. Ryan

                      
	
                        Title:   
      Chief Executive Officer and President

                      
	 
      	 
      
	
                        TD
      BANK, N.A.

                      
	 
      	 
      
	
                        By:

                      	
                        /s/
      John Topolovec

                      
	Name: 
      John
      Topolovec 
	Title:   
      Vice
      President

              

            

          

        

      

    

     

    (Signature
Page to Loan and Security Agreement)

    
      
         

      

      
        50

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