Document:

ex4-1.htm

     

    EXHIBIT
4.1

    
      

       

      FIRST
SUPPLEMENTAL INDENTURE

       

      between

       

      PRIVATEBANCORP,
INC.

       

      and

       

      WILMINGTON
TRUST COMPANY

       

      Dated as
of May [   ], 2008

       

       

      Supplement
to Junior Subordinated Indenture,

      dated as
of May [    ], 2008

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

        TABLE
OF CONTENTS

      

       

      
        	 
      	 
      	
                Page

              
	
                Article I

                 

              	
                DEFINITIONS

              	
                1

              
	
                Section
      1.1

                 

              	
                Definitions

              	
                1

              
	
                Article II

                 

              	
                GENERAL
      TERMS AND CONDITIONS OF THE DEBENTURES

              	
                8

              
	
                Section
      2.1

              	
                Designation,
      Principal Amount and Authorized Denomination

              	
                8

              
	
                Section
      2.2

              	
                Repayment

              	
                8

              
	
                Section
      2.3

              	
                Form

              	
                8

              
	
                Section
      2.4

              	
                Rate
      of Interest; Interest Payment Date

              	
                8

              
	
                Section
      2.5

              	
                Interest
      Deferral

              	
                9

              
	
                Section
      2.6

              	
                Dividend
      and Other Payment Stoppages during Deferral Period

              	
                10

              
	
                Section
      2.7

              	
                Alternative
      Payment Mechanism

              	
                11

              
	
                Section
      2.8

              	
                Redemption
      of the Debentures

              	
                13

              
	
                Section
      2.9

              	
                Events
      of Default

              	
                13

              
	
                Section
      2.10

              	
                Securities
      Registrar; Paying Agent; Delegation of Trustee Duties

              	
                14

              
	
                Section
      2.11

              	
                Obligation
      to Seek Shareholder Approval to Increase Authorized Shares

              	 
      
	
                Section
      2.12

              	
                Limitation
      on Claims in the Event of Bankruptcy, Insolvency or
      Receivership

              	
                14

              
	
                Section
      2.13

                 

              	
                Amendment

              	
                14

              
	
                Article III

                 

              	
                REPAYMENT
      OF DEBENTURES

              	
                15

              
	
                Section
      3.1

              	
                Deposit
      of Repayment Amount

              	
                15

              
	
                Section
      3.2

                 

              	
                Repayment
      of Debentures

              	
                15

              
	
                Article IV

                 

              	
                EXPENSES

              	
                15

              
	
                Section
      4.1

                 

              	
                Expenses

              	
                15

              
	
                Article V

                 

              	
                FORM
      OF DEBENTURE

              	
                16

              
	
                Section
      5.1

                 

              	
                Form
      of Debentures

              	
                16

              
	
                Article VI

                 

              	
                ORIGINAL
      ISSUE OF DEBENTURES

              	
                22

              
	
                Section
      6.1

              	
                Original
      Issue of Debentures

              	
                22

              
	
                Section
      6.2

                 

              	
                Calculation
      of Original Issue Discount

              	
                22

              
	
                Article VII

                 

              	
                SUBORDINATION

              	
                22

              
	
                Section
      7.1

              	
                Senior
      Debt

              	
                22

              
	
                Section
      7.2

                 

              	
                Compliance
      with Federal Reserve Rules

              	
                22

              
	
                Article VIII

                 

              	
                MISCELLANEOUS

              	
                23

              
	
                Section
      8.1

              	
                Effectiveness

              	
                23

              
	
                Section
      8.2

              	
                Successors
      and Assigns

              	
                23

              
	
                Section
      8.3

              	
                Further
      Assurances

              	
                23

              
	
                Section
      8.4

              	
                Effect
      of Recitals

              	
                23

              
	
                Section
      8.5

              	
                Ratification
      of Indenture

              	
                23

              
	
                Section
      8.6

              	
                Governing
      Law

              	
                23

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      FIRST SUPPLEMENTAL INDENTURE,
dated as of May [    ], 2008, between PRIVATEBANCORP, INC., a
Delaware corporation (the “Company”), and WILMINGTON TRUST COMPANY, as
trustee (hereinafter called the “Trustee”).

       

      RECITALS
OF THE COMPANY

       

      The
Company and the Trustee entered into a Junior Subordinated Indenture, dated as
of May [    ], 2008 (the “Indenture”).

       

      PrivateBancorp
Capital Trust IV, a Delaware statutory trust (the “Trust”), has offered to the
public its Preferred Securities known as [     ]% Trust
Preferred Securities (the “Trust Preferred Securities”),
which are beneficial interests in the Trust, and proposes to invest the proceeds
from such offering, together with the proceeds of the issuance and sale by the
Trust to the Company of its common securities (the “Trust Common Securities” and,
together with the Trust Preferred Securities, the “Trust Securities”), in the
Debentures (as defined herein).

       

      Pursuant
to Sections 2.1 and 3.1 of the Indenture, the Company desires to provide
for the establishment of a new series of Securities under the Indenture, the
form and substance of such Securities and the terms, provisions and conditions
thereof to be set forth as provided in the Indenture and this First Supplemental
Indenture.

       

      The
Company has delivered to the Trustee an Opinion of Counsel and an Officers’
Certificate pursuant to Section 9.3 of the Indenture to the effect that all
conditions precedent provided for in the Indenture to the Trustee’s execution
and delivery of this First Supplemental Indenture have been complied
with.

       

      The
Company has requested that the Trustee execute and deliver this First
Supplemental Indenture and satisfy all requirements necessary to make this First
Supplemental Indenture a valid instrument in accordance with its terms, and to
make the Debentures, when executed by the Company and authenticated and
delivered by the Trustee, the valid obligations of the Company and all acts and
things necessary have been done and performed to make this First Supplemental
Indenture enforceable in accordance with its terms, and the execution and
delivery of this First Supplemental Indenture has been duly authorized in all
respects.

       

      NOW, THEREFORE, THIS FIRST
SUPPLEMENTAL INDENTURE WITNESSETH: For and in consideration of the
premises and the purchase of the Debentures by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Debentures, as follows:

       

      ARTICLE I

       

      DEFINITIONS

       

      Section
1.1           Definitions.  For
all purposes of this First Supplemental Indenture, except as otherwise expressly
provided or unless the context otherwise requires:

       

      (a)           Terms
defined in the Indenture or the Declaration of Trust (as defined herein) have
the same meaning when used in this First Supplemental Indenture unless otherwise
specified herein.

       

      (b)           The
terms defined in this Article have the meanings assigned to them in this
Article, and include the plural as well as the singular.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      (c)           The
words “herein,” “hereof” and “hereunder” and other words of similar import refer
to this First Supplemental Indenture as a whole and not to any particular
Article, Section or other subdivision, and any reference to an Article,
Section or other subdivision refers to an Article, Section or other
subdivision of this First Supplemental Indenture.

       

      (d)           Any
reference herein to “interest” shall include any Additional
Interest.

       

      “Additional Interest” means the
interest, if any, that shall accrue on any interest on the Securities of any
series the payment of which has not been made on the applicable Interest Payment
Date and that shall accrue at the rate per annum specified or determined as
specified in such Security.

       

      “Administrative Trustee” has
the meaning specified in the Declaration of Trust.

       

      “APM Period” means, with
respect to any Deferral Period, the period commencing on the earlier of
(i) the first Interest Payment Date following the commencement of such
Deferral Period on which the Company pays any current interest on the Debentures
from any source of funds or (ii) the fifth anniversary of the commencement
of the Deferral Period, and ending on the next Interest Payment Date on which
the Company has raised an amount of Eligible Proceeds at least equal to the
aggregate amount of accrued and unpaid deferred interest on the
Debentures.

       

      “Bankruptcy Event” has the
meaning specified in the Declaration of Trust.

       

      “Business Combination” means a
merger, consolidation, amalgamation or conveyance, transfer or lease of assets
substantially as an entirety by one Person to any other Person.

       

      “Capital Treatment Event” means
the Company’s reasonable determination, after consultation with the Federal
Reserve and outside counsel experienced in such matters, that, as a result of
the occurrence of any amendment to, or change (including any announced
prospective change) in, the laws (or any rules or regulations thereunder) of the
United States or any political subdivision thereof or therein, or as a result of
any official or administrative pronouncement or action or judicial decision
interpreting or applying such laws, rules or regulations, which amendment or
change is effective or which pronouncement, action or decision is announced on
or after the date of issuance of the Trust Preferred Securities, there is more
than an insubstantial risk that the Company will not be entitled to treat an
amount equal to the aggregate liquidation amount of the Trust Preferred
Securities as “Tier 1 capital” (or the then equivalent thereof) for purposes of
the capital adequacy guidelines of the Federal Reserve, as then in effect and
applicable to the Company.

       

      “Commercially Reasonable
Efforts” to sell Qualifying APM Securities means commercially reasonable
efforts to complete the offer and sale of Qualifying APM Securities to Persons
other than Subsidiaries in public offerings or private
placements.  The Company shall not be considered to have made
Commercially Reasonable Efforts to effect a sale of Qualifying APM Securities if
it determines not to pursue or complete such sale due to pricing, coupon,
dividend rate or dilution considerations.

       

      “Common Equity Issuance Cap”
has the meaning specified in Section 2.7(a).

       

      “Common Stock” means the common
stock of the Company (including Common Stock issued pursuant to the Company’s
dividend reinvestment plan and employee benefit plans).

       

      “Company” has the meaning
specified in the Recitals.

       

      “Covered Debt” has the meaning
specified in the Replacement Capital Covenant.

       

       

      
        
          
          

        

        
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      “Creditor” has the meaning
specified in Section 4.1.

       

      “Current Stock Market Price”
means, with respect to Common Stock on any date, (i) the closing sale price
per share (or if no closing sale price is reported, the average of the bid and
ask prices or, if more than one in either case, the average of the average bid
and the average ask prices) on that date as reported in composite transactions
by the Nasdaq Global Select Market, (ii) if Common Stock is not then listed
on the Nasdaq Global Select Market, as reported by the principal U.S. securities
exchange on which Common Stock is traded or quoted on the relevant date,
(iii) if Common Stock is not listed on any U.S. securities exchange on the
relevant date, the last quoted bid price for Common Stock in the
over-the-counter market on the relevant date as reported by the OTC Bulletin
Board, Pink Sheets LLC or a similar organization, or (iv) if Common Stock
is not so quoted, the average of the mid-point of the last bid and ask prices
for Common Stock on the relevant date from each of at least three nationally
recognized independent investment banking firms selected by the Company for this
purpose.

       

      “Debentures” has the meaning
set forth in Section 2.1 hereof.

       

      “Declaration of Trust” means
the Amended and Restated Declaration of Trust, dated as of May
[    ], 2008, among the Company, as Sponsor of the Trust,
Wilmington Trust Company, as the Property Trustee, Wilmington Trust Company, as
the Delaware Trustee, and the Administrative Trustees.

       

      “Deferral Period(s)” means the
period commencing on an Interest Payment Date with respect to which the Company
elects to defer interest pursuant to Section 2.5 and ending on the earlier
of (i) the tenth anniversary of that Interest Payment Date and
(ii) the next Interest Payment Date on which the Company has paid the
amount deferred, all deferred amounts with respect to any subsequent period and
all other accrued and unpaid interest on the Debentures.  The
settlement of all deferred interest pursuant to Section 2.5(c), whether it
occurs on an Interest Payment Date or another date, will immediately terminate
the Deferral Period.

       

      “Delaware Trustee” has the
meaning specified in the Declaration of Trust.

       

      “Eligible Proceeds” means, for
each relevant Interest Payment Date, the net proceeds (after deducting
underwriters’ or placement agents’ fees, commissions or discounts and other
expenses relating to the issuance or sale) the Company has received during the
180-day period prior to such Interest Payment Date from the issuance or sale of
Qualifying APM Securities (excluding sales of Qualifying Preferred Stock in
excess of the Preferred Stock Issuance Cap) to Persons that are not the
Company’s Subsidiaries.

       

      “First Supplemental Indenture”
means this instrument as originally executed or as it may from time to time be
supplemented or amended by one or more agreements supplemental hereto entered
into pursuant to the applicable provisions hereof.

       

      “Guarantee Agreement” means the
Guarantee Agreement between the Company, as guarantor, and Wilmington Trust
Company, as guarantee trustee, dated as of May [    ],
2008.

       

      “Indenture” has the meaning
specified in the Recitals.

       

      “Intent-Based Replacement
Disclosure” has the meaning specified in the Replacement Capital
Covenant.

       

      “Interest Payment Dates” shall
have the meaning specified in Section 2.4.

       

       

      
        
          
          

        

        
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      “Interest Period” means the
period beginning on and including any Interest Payment Date (or, in the case of
the first Interest Payment Date, beginning on and including May [____], 2008)
and ending on but excluding the next Interest Payment Date.

       

      “Liquidation Amount” has the
meaning specified in the Declaration of Trust.

       

      “Mandatory Trigger Provision”
has the meaning specified in the Replacement Capital Covenant.

       

      “Market Disruption Event”
means, with respect to the issuance or sale of Qualifying APM Securities
pursuant to Section 2.7, the occurrence or existence of any of the
following events or sets of circumstances:

       

      (i)           Trading
in securities generally (or in the Common Stock or Trust Preferred Securities
specifically) on the Nasdaq Global Select Market or any other national
securities exchange or in the over-the-counter market, on which Common Stock
and/or Trust Preferred Securities are then listed or traded, shall have been
suspended or the settlement of such trading generally shall have been materially
disrupted or minimum prices shall have been established on any such exchange or
market by the United States Securities and Exchange Commission, by the relevant
exchange or by any other regulatory body or governmental body having
jurisdiction, and the establishment of such minimum prices materially disrupts
or otherwise has a material adverse effect on trading in, or the issuance and
sale of, Qualifying APM Securities;

       

      (ii)           The
Company would be required to obtain the consent or approval of a regulatory body
(including, without limitation, any securities exchange but excluding the
Federal Reserve) or governmental authority to issue or sell Qualifying APM
Securities pursuant to the alternative payment mechanism described in
Section 2.7, and such consent or approval has not yet been obtained
notwithstanding the Company’s commercially reasonable efforts to obtain such
consent or approval;

       

      (iii)           A
banking moratorium shall have been declared by the federal or state authorities
of the United States and such disruption materially disrupts or otherwise has a
material adverse effect on trading in, or the issuance or sale of, the
Qualifying APM Securities;

       

      (iv)           A
material disruption shall have occurred in commercial banking or securities
settlement or clearance services in the United States and such disruption
materially disrupts or otherwise has a material adverse effect on trading in, or
the issuance or sale of, the Qualifying APM Securities;

       

      (v)           The
United States shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States, there shall have been a
declaration of a national emergency or war by the United States or there shall
have occurred any other national or international calamity or crisis such that
market trading in, or the issuance and sale of, Qualifying APM Securities has
been materially disrupted;

       

      (vi)           There
shall have occurred such a material adverse change in general domestic or
international economic, political or financial conditions, including without
limitation as a result of terrorist activities, such that market trading in
Qualifying APM Securities has been materially disrupted;

       

       

      
        
          
          

        

        
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      (vii)           An
event occurs and is continuing as a result of which the offering document for
such offer and sale of Qualifying APM Securities would, in the reasonable
judgment of the Company, after consultation with outside counsel experienced in
such matters, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading and either (x) the disclosure of that event at such
time, in the reasonable judgment of the Company, is not otherwise required by
law and would have a material adverse effect on the business of the Company or
(y) the disclosure relates to a previously undisclosed proposed or pending
material business transaction, the disclosure of which would impede the ability
of the Company to consummate such transaction, provided that no single
suspension period contemplated by this paragraph (viii) shall exceed 90
consecutive days and multiple suspension periods contemplated by this paragraph
(viii) shall not exceed an aggregate of 180 days in any 360-day period;
or

       

      (viii)           the
Company reasonably believes, after consultation with outside counsel experienced
in such matters, that the offering document for such offer and sale of
Qualifying APM Securities would not be in compliance with a rule or regulation
of the United States Securities and Exchange Commission (for reasons other than
those referred to in paragraph (viii) above), and the Company is unable to
comply with such rule or regulation or such compliance is unduly burdensome,
provided that no single suspension period contemplated by this paragraph (ix)
shall exceed 90 consecutive days and multiple suspension periods contemplated by
this paragraph (ix) shall not exceed an aggregate of 180 days in any 360-day
period.

       

      “Maturity Date” has the meaning
specified in Section 2.2(a).

       

      “Parity Securities” means debt
securities or guarantees of the Company that rank upon liquidation on a parity
with the Debentures.

       

      “Paying Agent” means, with
respect to the Debentures, Wilmington Trust Company or any other Person
authorized by the Company to pay the principal of (and premium, if any) or
interest on the Debentures on behalf of the Company.

       

      “Paying Agent Office” means the
office of the applicable Paying Agent at which at any particular time its
corporate agency business shall principally be administered in a Place of
Payment, which office at the date hereof in the case of Wilmington Trust
Company, in its capacity as Paying Agent with respect to the Debentures under
the Indenture, is located at Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19801, Attention: Corporate Trust
Administration.

       

      “Permitted Remedies” has the
meaning specified in the Replacement Capital Covenant.

       

      “Preferred Stock” means the
preferred stock of the Company.

       

      “Preferred Stock Issuance Cap”
has the meaning specified in Section 2.7(a).

       

      “Prospectus” means the
prospectus, dated May 8, 2008, of the Company and the Trust relating to the
offering of the Trust Preferred Securities, as supplemented by the prospectus
supplement, dated May 8, 2008.

       

      “Qualifying APM Securities”
means Common Stock, Qualifying Preferred Stock and Qualifying Warrants, provided
that the Company may, without the consent of the holders of the Trust Preferred
Securities or the Debentures, amend the definition of “Qualifying APM
Securities” to eliminate Common Stock or Qualifying Warrants (but not both) from
this definition if after the initial issue date for the Trust Preferred
Securities an accounting standard or interpretive guidance of an existing
accounting

       

      
        
          
          

        

        
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      standard issued by an organization or regulator that has
responsibility for establishing or interpreting accounting standards in the
United States becomes effective such that there is more than an insubstantial
risk that failure to eliminate Common Stock or Qualifying Warrants as a
Qualifying APM Security would result in a reduction in the Company’s earnings
per share as calculated for financial reporting purposes.

       

      “Qualifying Preferred Stock”
means non-cumulative perpetual Preferred Stock of the Company that
(i) contains no remedies other than “Permitted Remedies” and
(ii)(a) is subject to “Intent-Based Replacement Disclosure” and has a
“Mandatory Trigger Provision,” as such terms are defined in the Replacement
Capital Covenant, or (b) is subject to a Qualifying Replacement Capital
Covenant.

       

      “Qualifying Replacement Capital
Covenant” has the meaning specified in the Replacement Capital
Covenant.

       

      “Qualifying Warrants” means any
net share settled warrants to purchase Common Stock that (1) have an
exercise price greater than the Current Stock Market Price of Common Stock and
(2) that the Company is not entitled to redeem for cash and the holders of
which are not entitled to require the Company to purchase for cash in any
circumstances.

       

      “Quarterly Interest Payment
Date” shall have the meaning specified in Section 2.4.

       

      “Redemption Date” means the
date at any time after the date hereof on which the Company elects to redeem the
Securities.

       

      “Redemption Price” has the
meaning specified in Section 2.8(a).

       

      “Replacement Capital Covenant”
means the Replacement Capital Covenant, dated as of May [___], 2008, by the
Company, as the same may be amended or supplemented from time to time in
accordance with the provisions thereof and Section 2.2(a)(ii)
hereof.

       

      “Responsible Officer” means,
with respect to Wilmington Trust Company in its capacity as Paying Agent, any
officer within the Corporate Trust Department (or any successor department, unit
or division of Wilmington Trust Company) assigned to the Paying Agent Office of
Wilmington Trust Company, in its capacity as Paying Agent, who has direct
responsibility for the administration of the Paying Agent functions of the
Indenture.

       

      “Securities Registrar” means,
with respect to the Debentures, Wilmington Trust Company, or any other firm
appointed by the Company, acting as securities registrar for the
Debentures.

       

      “Securities Registrar Office”
means the office of the applicable Securities Registrar at which at any
particular time its corporate agency business shall principally be administered,
which office at the date hereof in the case of Wilmington Trust Company, in its
capacity as Securities Registrar under the Indenture, is located at Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19801, Attention:
Corporate Trust Administration.

       

      “Special Record Date” has the
meaning specified in Section 2.5(c).

       

      “Supervisory Event” shall
commence upon the date the Company has notified the Federal Reserve of its
intention and affirmatively requested Federal Reserve approval both (1) to
sell Qualifying APM Securities and (2) to apply the net proceeds of such
sale to pay deferred interest on the Debentures, and the Company has been
notified that the Federal Reserve disapproves of either of these actions, even
though the Company has affirmatively requested approval.  A
Supervisory Event shall cease on the Business Day following the earlier to occur
of (i) the 10th anniversary of the commencement of any

       

       

      
        
          
          

        

        
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      Deferral
Period or (ii) the day on which the Federal Reserve notifies the Company in
writing that it no longer disapproves of the Company’s intention to both
(1) issue or sell Qualifying APM Securities and (2) apply the net
proceeds from such sale to pay deferred interest on the Debentures.

       

      “Tax Event” means the receipt
by the Company or the Trust of an Opinion of Counsel experienced in such matters
to the effect that, as a result of any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein, or as a result of any official administrative pronouncement or judicial
decision interpreting or applying such laws or regulations, which amendment or
change is effective or which pronouncement or decision is announced on or after
the date of issuance of the Trust Preferred Securities, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days of the
date of such Opinion of Counsel, subject to U.S. federal income tax with respect
to income received or accrued on the corresponding series of Securities issued
by the Company to the Trust, (ii) interest payable by the Company on such
corresponding series of Securities is not, or within 90 days of the date of such
Opinion of Counsel, will not be, deductible by the Company, in whole or in part,
for U.S. federal income tax purposes or (iii) the Trust is, or will be
within 90 days of the date of such Opinion of Counsel, subject to more than a de
minimis amount of other taxes, duties or other governmental
charges.

       

      “Trading Day” means a day on
which Common Stock is traded on the Nasdaq Global Select Market, or if not then
listed on the Nasdaq Global Select Market, a day on which Common Stock is traded
or quoted on the principal U.S. securities exchange on which it is listed or
quoted, or if not then listed or quoted on a U.S. securities exchange, a day on
which Common Stock is quoted in the over-the-counter market.

       

      “Trust” has the meaning
specified in the Recitals.

       

      “Trust Common Securities” has
the meaning specified in the Recitals.

       

      “Trustee” has the meaning
specified in the Recitals.

       

      “Trust Preferred Securities”
has the meaning specified in the Recitals.

       

      “Trust Securities” has the
meaning specified in the Recitals.

       

      “Underwriting Agreement” means
the Underwriting Agreement, dated as of May [___], 2008, among the Trust, the
Company and the underwriters named therein.

       

      ARTICLE II

       

      GENERAL
TERMS AND CONDITIONS OF THE DEBENTURES

       

      Section 2.1    
Designation,
Principal Amount and Authorized Denomination.  There is hereby
authorized a series of Securities designated the [__]% Junior Subordinated
Debentures due 2068 (the “Debentures”), the amount of
which to be issued shall be as set forth in any Company Order for the
authentication and delivery of Debentures pursuant to the
Indenture.  The denominations in which Debentures shall be issuable is
$25 principal amount and integral multiples thereof.  The maximum
aggregate principal amount of Debentures that may be authenticated and delivered
under the Indenture and this First Supplemental Indenture is $75,000,000 (except
for Debentures authenticated and delivered upon registration of transfer of, or
exchange for, or in lieu of, other Debentures pursuant to Section 3.4, 3.5,
3.6, 9.6, 11.6 or 14.3 of the Indenture).

       

       

      
        
          
          

        

        
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      Section
2.2           Repayment.

       

      (a)           Maturity
Date.

       

      (i)           The
principal amount of, and all accrued and unpaid interest on, the Debentures
shall be payable in full on June 15, 2068 or, if such day is not a Business Day,
the following Business Day (the “Maturity Date”) regardless of
the amount of Qualifying APM Securities the Company may have issued and sold by
that time.

       

      (ii)           The
Company shall not amend or supplement the Replacement Capital Covenant to amend
the definitions incorporated into this First Supplement Indenture except with
the consent of the holders of a majority by principal amount of the debt that at
the time of the amendment or supplement is the covered debt (the “Covered
Debt”).  Except as aforesaid, the Company may amend or
supplement the Replacement Capital Covenant in accordance with its terms and
without the consent of the holders of the Covered Debt.

       

      Section
2.3           Form.  The
Debentures shall be issued in fully registered definitive form without interest
coupons.  Principal of and interest on the Debentures issued in
definitive form will be payable, the transfer of such Debentures will be
registrable and such Debentures will be exchangeable for Debentures bearing
identical terms and provisions and notices and demands to or upon the Company in
respect of the Debentures and the Indenture may be served at the Corporate Trust
Office of the Trustee, and the Company appoints the Trustee as its agent for the
foregoing purposes, provided that payment of interest may be made at the option
of the Company by check mailed to the Holder at such address as shall appear in
the Securities Register or by wire transfer in immediately available funds to
the bank account number of the Holder specified in writing by the Holder not
less than 10 days before the relevant Interest Payment Date and entered in the
Securities Register by the Securities Registrar, provided further that if the
Property Trustee, on behalf of the Trust, is the sole Holder of the Debentures
then payment of interest shall be made by wire transfer in immediately available
funds to a bank account number specified by the Property Trustee.  The
Debentures may be presented for registration of transfer or exchange at the
Securities Registrar Office.

       

      Section
2.4           Rate of
Interest; Interest Payment Date.

       

      (a)           Rate of
Interest.  The Debentures shall bear interest from and
including May [____], 2008 at the annual rate of [_____]%, computed on the basis
of a 360-day year comprised of twelve 30-day months.  Accrued interest
that is not paid on the applicable Interest Payment Date, including interest
deferred pursuant to Section 2.5, will bear Additional Interest, to the
extent permitted by law, at the same interest rate in effect on the Debentures,
from the relevant Interest Payment Date, compounded on each subsequent Interest
Payment Date.

       

      (b)           Interest Payment
Date.  Subject to the other provisions hereof, interest on the
Debentures shall be payable quarterly in arrears on March 15, June 15,
September 15 and December 15 of each year, commencing on September 15,
2008 (each such date, a “Quarterly Interest Payment
Date” and collectively, the “Interest Payment Dates”), or
if any such day is not a Business Day, the following Business Day (and no
interest shall accrue as a result of such postponement).

       

      Section
2.5           Interest
Deferral.

       

      (a)           Option to Defer Interest
Payments.  The provisions of this First Supplemental Indenture
relating to deferral of interest shall apply in lieu of, and not in addition to,
Section 3.11 of the Indenture.

       

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      (i)           The
Company shall have the right at any time and from time to time, to defer the
payment of interest on the Debentures for one or more consecutive Interest
Periods up to 10 years, provided that no Deferral Period shall extend beyond the
Maturity Date or the earlier repayment or redemption in full of the
Debentures.  Upon termination of any Deferral Period and upon the
payment of all deferred interest then due on any Interest Payment Date the
Company may elect to begin a new Deferral Period pursuant to this
Section 2.5.  At the end of any Deferral Period, the Company
shall pay all deferred interest on the Debentures to the Persons in whose names
the Debentures are registered in the Securities Register at the close of
business on the Regular Record Date with respect to the Interest Payment Date at
the end of such Deferral Period.

       

      (ii)           The
Company may elect to pay interest on any Interest Payment Date during any
Deferral Period to the extent permitted by Section 2.5(b).

       

      (b)           Payment of Deferred
Interest.  The Company will not pay deferred interest on the
Debentures on any Interest Payment Date during any Deferral Period prior to the
Maturity Date from any source other than Eligible
Proceeds.  Notwithstanding the foregoing, (i) the Company may pay
current interest during a Deferral Period or at any other time from any
available funds and (ii) if a Supervisory Event or an Event of Default has
occurred and is continuing, then the Company may (but is not obligated to) pay
deferred interest with cash from any source.  In addition, if the
Company sells Qualifying APM Securities pursuant to Section 2.7 but a
Supervisory Event arises as a result of the Federal Reserve disapproving the use
of the proceeds to pay deferred interest, the Company may use the proceeds for
other purposes and continue to defer interest on the Debentures, subject to
Section 2.5(a).

       

      (c)           Business Combination
Exception.  If the Company is involved in a Business
Combination where immediately after its consummation more than 50% of the voting
stock of the Person formed by such Business Combination, or the Person that is
the surviving entity of such Business Combination, or the Person to whom such
properties and assets are conveyed, transferred or leased in such Business
Combination, is owned by the shareholders of the other party to such Business
Combination, then Section 2.5(b) and Section 2.7 shall not apply to
any Deferral Period that is terminated on the next Interest Payment Date
following the date of consummation of such Business Combination (or if later, at
any time within 90 days following the date of consummation of the Business
Combination).  The settlement of all deferred interest, whether it
occurs on an Interest Payment Date or another date, will immediately terminate
the Deferral Period.  The Company will establish a Special Record Date
for the payment of any deferred interest pursuant to this Section 2.5(c) on
a date other than an Interest Payment Date.

       

      (d)           Notice of
Deferral.  The Company shall give written notice of its
election to begin or extend any Deferral Period, (x) if the Property
Trustee, on behalf of the Trust, is the sole Holder of the Debentures, to the
Property Trustee and the Delaware Trustee at least five Business Days before the
earlier of (A) the next succeeding date on which the distributions on the
Trust Preferred Securities are payable and (B) the date the Property
Trustee is required to give notice to holders of the Trust Preferred Securities
of the record or payment date for the related distribution, or (y) if the
Property Trustee, on behalf of the Trust, is not the sole Holder of the
Debentures, to Holders of the Debentures and the Trustee at least five Business
Days before the next Interest Payment Date.  Notice of the Company’s
election of a Deferral Period shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than three Business Days
after the Property Trustee receives written notice from the Company to each
holder of Trust Securities at such holder’s address appearing in the Security
Register.

       

      Section
2.6            Dividend
and Other Payment Stoppages during Deferral Period.

       

      (a)           Dividend and Other Payment
Stoppages.  So long as any Debentures remain outstanding, if
the Company has given notice of its election to defer interest payments on the
Debentures

       

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      but the
related Deferral Period has not yet commenced or a Deferral Period is
continuing, the Company shall not, and shall not permit any Subsidiary of the
Company to:

       

      (i)           declare
or pay any dividends or distributions on any shares of capital stock of the
Company or any Subsidiary, or redeem, purchase, acquire or make a liquidation
payment with respect to, any shares of capital stock of the
Company;

       

      (ii)           make
any payment of principal of, or interest or premium, if any, on, or repay,
purchase or redeem any Parity Securities or any debt securities or guarantees of
the Company that ranks pari passu with or junior in interest upon liquidation to
the Debentures; or

       

      (iii)           make
any payments under any guarantee by the Company that ranks pari passu with or
junior to the Guarantee Agreement;

       

      provided,
however, the restrictions in clauses (i), (ii) and (iii) above do not apply to:
(1) any purchase, redemption or other acquisition of shares of the
Company’s capital stock by the Company in connection with (A) any
employment contract, benefit plan or other similar arrangement with or for the
benefit of any one or more of its employees, officers, directors, consultants or
independent contractors, (B) the satisfaction of the Company’s obligations
pursuant to any contract entered into in the ordinary course prior to the
beginning of the applicable Deferral Period (including pursuant to a
contractually binding stock repurchase plan), (C) a dividend reinvestment
or stockholder purchase plan, (D) the issuance of the Company’s capital
stock, or securities convertible into or exercisable for such capital stock, as
consideration in an acquisition transaction entered into prior to the applicable
Deferral Period, (E) any exchange, redemption or conversion of any class or
series of the Company’s capital stock, or the capital stock of one of its
Subsidiaries, for any other class or series of its capital stock, or of any
class or series of its indebtedness for any class or series of its capital
stock, (F) any purchase of fractional interests in shares of the Company’s
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the securities being converted or exchanged, or in effect prior to the
applicable Deferral Period, (G) any declaration of a dividend in connection
with any stockholder rights plan, or the issuance of rights, stock or other
property under any stockholder rights plan, or the redemption or purchase of
rights pursuant thereto, (H) payments by the Company under any guarantee
agreement executed for the benefit of the holders of the Trust Preferred
Securities, (I) any dividend in the form of stock, warrants, options or
other rights where the dividend stock or stock issuable upon exercise of such
warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks equally with or junior to such stock,
(J) any payment of current or deferred interest on Parity Securities that
is made pro rata to the amounts due on such Parity Securities (including the
Debentures) provided that such payments are made in accordance with the
limitations described in Section 2.7(c) to the extent they apply, and any
payments of principal or deferred interest on Parity Securities that, if not
made, would cause the Company to breach the terms of the instrument governing
such Parity Securities.  The distribution restrictions and exceptions
in this Section 2.6 shall be in lieu of the distribution restrictions and
exceptions in Section 3.11 of the Indenture.

       

      (b)           Additional Limitation upon
Deferral Lasting over One Year.  If any Deferral Period lasts
longer than one year, the Company may not repurchase or acquire any securities
ranking junior to or pari passu with any Qualifying APM Securities the proceeds
of which were used to settle deferred interest during the relevant Deferral
Period before the first anniversary of the date on which all deferred interest
on the Debentures has been paid, subject to the exceptions listed in
Section 2.6(a).  However, if the Company is involved in a
Business Combination then the one year restriction on such repurchases in the
preceding sentence will not apply to any Deferral Period that is terminated on
or prior to the next Interest Payment Date following the date of consummation of
such Business Combination (or

       

       

      
        
          
          

        

        
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      if later,
at any time within 90 calendar days following the date of consummation of such
Business Combination).

       

      Section
2.7           Alternative
Payment Mechanism.

       

      (a)           Obligation to Issue
Qualifying APM Securities.  During the APM Period, the Company
shall, subject to the occurrence and continuation of a Supervisory Event or a
Market Disruption Event as described under Section 2.7(b) and subject to
Section 2.5(c), issue one or more types of Qualifying APM Securities until
the Company has raised an amount of Eligible Proceeds at least equal to the
aggregate amount of accrued and unpaid deferred interest on the Debentures and
applied such Eligible Proceeds raised during any Deferral Period pursuant to the
alternative payment mechanism described in this Section 2.7 to pay unpaid
deferred interest on the Debentures, provided that:

       

      (i)           the
foregoing obligations shall not apply to the extent that, with respect to
deferred interest attributable to the first five years of any Deferral Period,
the net proceeds of any issuance of Common Stock (or, if the definition of
Qualifying APM Securities has been modified to exclude Common Stock, Qualifying
Warrants) applied during such Deferral Period to pay interest on the Debentures
pursuant to this Section 2.7, together with the net proceeds of all prior
issuances of Common Stock and Qualifying Warrants so applied for such Deferral
Period, would exceed an amount equal to 2% of the product of (A) the average of
the Current Stock Market Prices of the Common Stock on the 10 consecutive
Trading Days ending on the second Trading Day immediately preceding the date of
issuance multiplied by (B) the total number of issued and outstanding shares of
Common Stock as of the date of the Company’s then most recent publicly available
consolidated financial statements (the “Common Equity Issuance Cap”);
provided that the Common Equity Issuance Cap will cease to apply after the fifth
anniversary of the commencement of any Deferral Period, at which point the
Company must pay any deferred interest regardless of the time at which it was
deferred, pursuant to this Section 2.7, subject to any Supervisory Event or
Market Disruption Event; and provided, further, that if the Common Equity
Issuance Cap is reached during a Deferral Period and the Company subsequently
repays all deferred interest, the Common Equity Issuance Cap will cease to apply
at the termination of such Deferral Period and will not apply again unless and
until the Company starts a new Deferral Period; and

       

      (ii)           the
foregoing obligations shall not apply to the extent that the net proceeds of any
issuance of Qualifying Preferred Stock applied to pay interest on the Debentures
pursuant to this Section 2.7, together with the net proceeds of all prior
issuances of Preferred Stock so applied during the current and all prior
Deferral Periods, would exceed 25% of the aggregate principal amount of the
Debentures initially issued under the Indenture (the “Preferred Stock Issuance
Cap”).

       

      For the
avoidance of doubt, (x) once the Company reaches the Common Equity Issuance
Cap for a Deferral Period, the Company shall not be required to issue more
Common Stock (or Qualifying Warrants if the definition of Qualifying APM
Securities has been modified to exclude Common Stock) with respect to deferred
interest attributable to the first five years of such Deferral Period pursuant
to this Section 2.7, even if the amount referred to in clause (i) of
this Section 2.7 subsequently increases because of a subsequent increase in
the Current Stock Market Price of Common Stock or the number of outstanding
shares of Common Stock, and (y) so long as the definition of Qualifying APM
Securities has not been amended to eliminate Common Stock, the sale of
Qualifying Warrants to pay deferred interest is an option that may be exercised
at the Company’s sole discretion, subject to the Common Equity Issuance Cap, and
the Company shall not be obligated to sell Qualifying Warrants or to apply the
proceeds of any

       

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

      such sale
to pay deferred interest on the Debentures, and no class of investors of the
Company’s securities, or any other party, may require the Company to issue
Qualifying Warrants.

       

      (b)           Market Disruption Event and
Supervisory Event.  Section 2.7(a) shall not apply, with
respect to any Interest Payment Date, if the Company shall have provided to the
Trustee (and to the Property Trustee of the Trust to the extent the Trust is the
sole Holder of the Debentures) no more than 15 and no less than 10 Business Days
prior to such Interest Payment Date an Officers’ Certificate stating that
(i) a Market Disruption Event was existing after the immediately preceding
Interest Payment Date and (ii) either (x) the Market Disruption Event
continued for the entire period from the Business Day immediately following the
preceding Interest Payment Date to the Business Day immediately preceding the
date on which such Officers’ Certificate is provided or (y) the Market
Disruption Event continued for only part of such period but the Company was
unable after Commercially Reasonable Efforts to raise sufficient Eligible
Proceeds during the rest of that period to pay all accrued and unpaid interest
due on the Interest Payment Date with respect to which such Officers’
Certificate is being delivered.  Section 2.7(a) shall not apply,
with respect to any Interest Payment Date, if the Company shall have provided to
the Trustee (and to the Property Trustee of the Trust to the extent the Trust is
the sole Holder of the Debentures) on or prior to such Interest Payment Date an
Officers’ Certificate stating that (i) a Supervisory Event was existing
after the immediately preceding Interest Payment Date and (ii) (x) the
Supervisory Event prevented the sale of Qualifying APM Securities for the entire
period from the Business Day immediately following the preceding Interest
Payment Date to the Business Day immediately preceding the date on which such
Officers’ Certificate is provided or (y) the Supervisory Event prevented
the sale of Qualifying APM Securities for only part of such period but the
Company was unable after Commercially Reasonable Efforts to raise sufficient
Eligible Proceeds during the rest of that period to pay all accrued and unpaid
interest due on the Interest Payment Date with respect to which such Officers’
Certificate is being delivered or (z) the Supervisory Event prevents the
Company from applying the net proceeds of sales of Qualifying APM Securities to
pay deferred interest on such Interest Payment Date.

       

      (c)           Partial Payment of Deferred
Interest.

       

      (i)           If
the Company has raised some but not all Eligible Proceeds necessary to pay all
deferred interest on any Interest Payment Date pursuant to this
Section 2.7, such Eligible Proceeds shall be allocated to pay accrued and
unpaid interest on the applicable Interest Payment Date in chronological order
based on the date each payment was first deferred, subject to the Common Equity
Issuance Cap and the Preferred Stock Issuance Cap, and payment on each
installment of deferred interest shall be distributed to Holders of such
installment on a pro rata basis (based upon the respective principal amounts of
the Debentures held thereby).

       

      (ii)           If
the Company has outstanding Parity Securities under which the Company is
obligated to sell securities that are Qualifying APM Securities and apply the
net proceeds to the payment of deferred interest or distributions, then on any
date and for any period the amount of net proceeds received by the Company from
those sales and available for payment of the deferred interest and distributions
shall be applied to the Debentures and those other Parity Securities on a pro
rata basis up to the Common Equity Issuance Cap and the Preferred Stock Issuance
Cap (or comparable provisions in the instruments governing those other Parity
Securities) in proportion to the total amounts that are due on the Debentures
and such other Parity Securities, or on such other basis as the Federal Reserve
may approve.

       

      (d)           Qualifying APM Securities
Definition Change.  The Company shall send written notice to
the Trustee (which notice the Trustee shall promptly forward upon receipt to the
Administrative Trustees, who shall forward such notice to each holder of record
of Trust Preferred Securities) in advance

       

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      of any
change in the definition of Qualifying APM Securities to eliminate Common Stock
or Qualifying Warrants.

       

      (e)           Termination of
Obligation.  The Company’s obligations pursuant to
Section 2.7(a) shall not apply upon maturity of the Debentures or if an
Event of Default with respect to the Debentures has occurred and is
continuing.

       

      Section
2.8           Redemption
of the Debentures.

       

      (a)           Redemption
Price.  The Debentures shall be redeemable in accordance with
Article XI of the Indenture, provided that (i) the Debentures are
redeemable in whole or in part at the option of the Company at any time after
June 15, 2013 at a Redemption Price equal to 100% of their principal amount
plus accrued and unpaid interest to the Redemption Date; and (ii) the
Debentures are redeemable in whole but not in part at any time within 90 days
following the occurrence of and during the continuation of a Tax Event, an
Investment Company Event or a Capital Treatment Event at a Redemption Price
equal to 100% of their principal amount plus accrued and unpaid interest to the
Redemption Date (the “Redemption
Price”).  The Company may not redeem the Debentures in part if
the principal amount of the Debentures has been accelerated and such
acceleration has not been rescinded unless all accrued and unpaid interest
including deferred interest has been paid in full on all outstanding Debentures
for all Interest Periods terminating on or before the Redemption
Date.

       

      (b)           Sinking
Fund.  The Debentures are not entitled to any sinking fund
payments or similar provisions.

       

      Section
2.9           Events of
Default.

       

      (a)           So
long as any Debentures are held by or on behalf of the Trust, the Trustee shall
provide to the holders of the Trust Preferred Securities such notices as it
shall from time to time provide under Section 6.2 of the
Indenture.  In addition, the Trustee shall provide to the holders of
the Trust Preferred Securities notice of any Event of Default or event that,
with the giving of notice or lapse of time, or both, would become an Event of
Default with respect to the Debentures within 30 days after the actual knowledge
of a Responsible Officer of the Trustee of such Event of Default or other
event.

       

      (b)           For
the avoidance of doubt, and without prejudice to any other remedies that may be
available to the Trustee, the Holders of the Debentures or the holders of the
Trust Preferred Securities under the Indenture, no breach by the Company of any
covenant or obligation under the Indenture or the terms of the Debentures shall
be an Event of Default with respect to the Debentures other than those specified
as Events of Default in Section 5.1 of the Indenture.

       

      Section
2.10         Securities
Registrar; Paying Agent; Delegation of Trustee Duties.

       

      (a)           The
Company appoints Wilmington Trust Company, as Securities Registrar and Paying
Agent with respect to the Debentures.

       

      (b)           Notwithstanding
any provision contained herein, to the extent permitted by applicable law, the
Trustee may delegate its duty to provide such notices and to perform such other
duties as may be required to be provided or performed by the Trustee under the
Indenture, and, to the extent such obligation has been so delegated, the Trustee
shall not be responsible for monitoring the compliance of, nor be liable for the
default or misconduct of, any such designee.

       

      Section
2.11         Obligation to Seek
Shareholder Approval to Increase Authorized Shares

       

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      (a)           The
Company shall use commercially reasonable efforts to seek shareholder consent to
increase the number of its authorized shares at its next regularly scheduled
shareholders’ meeting if, at any date, the Shares Available for Issuance fall
below two times the number of shares that the Company would need to issue to
raise sufficient proceeds to pay (assuming a price per share equal to the
average trading price of the shares over the 10 Trading Day period preceding
such date) (x) then outstanding deferred interest on the Debentures plus (y)
twelve additional months of deferred interest on the Debentures.

       

      (b)           The
Company may modify the definition of Shares Available for Issuance and the
related provisions hereof without the consent of holders of the Trust Preferred
Securities or Debentures, provided that (i) the Company has determined, in its
reasonable discretion, that such modification is not materially adverse to such
holders and (ii) the number of Shares Available for Issuance after giving effect
to such modification will not fall below the then applicable threshold set forth
in Section 2.11(a) above.

       

      Section
2.12          Limitation
on Claims in the Event of Bankruptcy, Insolvency or
Receivership.  Each Holder, by such Holder’s acceptance of the
Debentures, agrees that if a Bankruptcy Event of the Company shall occur prior
to the redemption or repayment of such Debentures, such Holder shall have no
claim for, and thus no right to receive, any deferred interest pursuant to
Section 2.5 that has not been paid pursuant to Sections 2.5 and 2.7 to
the extent the amount of such interest exceeds the first two years of
accumulated and unpaid interest (including compounded interest thereon) on such
Holder’s Debentures. 

       

      Section
2.13         Amendment.  For
the purposes of the Debentures (but not for the purposes of any other Securities
unless specifically set forth in the terms of such Securities), Section 9.1
of the Indenture is hereby amended to add the following Section (10):

       

      (10)           to
add to or change any terms of the Indenture or the Debentures to conform the
terms of this Indenture or the Debentures to the description of the Debentures
in the Prospectus (as defined in the Declaration of Trust).

       

      ARTICLE III

       

      REPAYMENT
OF DEBENTURES

       

      Section
3.1          Deposit
of Repayment Amount.  Prior to 10:00 a.m. New York City
time on the Maturity Date, the Company will deposit with the Trustee or with one
or more Paying Agents (or if the Company is acting as its own Paying Agent, the
Company will segregate and hold in trust as provided in Section 10.3 of the
Indenture) an amount of money sufficient to pay the principal amount of, and any
accrued interest on, all the Debentures. 

       

      Section
3.2          Repayment
of Debentures.  On presentation and surrender of such
Debentures at a Place of Payment specified in the Debentures, the said
securities shall be paid by the Company at their principal amount, together with
accrued interest to the Maturity Date. 

       

      ARTICLE IV

       

      EXPENSES

       

      Section
4.1           Expenses.  In
connection with the offering, sale and issuance of the Debentures to the
Property Trustee on behalf of the Trust and in connection with the sale of the
Trust Securities by the Trust, the Company, in its capacity as borrower with
respect to the Debentures, shall: 

       

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      (a)           pay
all costs and expenses relating to the offering, sale and issuance of the
Debentures, including commissions to the underwriters payable pursuant to the
Underwriting Agreement and compensation and indemnification of the Trustee under
this First Supplemental Indenture in accordance with the provisions of this
First Supplemental Indenture; and

       

      (b)           be
responsible for and shall pay all debts and obligations (except for any amounts
owed to holders of the Debentures in their respective capacities as holders) and
all costs and expenses of the Trust (including, but not limited to, costs and
expenses relating to the organization, maintenance and dissolution of the
Trust), the offering, sale and issuance of the Trust Securities (including
commissions to the underwriters in connection therewith), the indemnities, fees
and expenses (including reasonable counsel fees and expenses) of the Property
Trustee, the Delaware Trustee, the Administrative Trustees, the Securities
Registrar and the Paying Agent, the costs and expenses relating to the operation
of the Trust, including, costs and expenses of accountants, attorneys,
statistical or bookkeeping services, expenses for printing and engraving and
computing or accounting equipment, paying agent(s), registrar(s), transfer
agent(s), duplicating, and travel and telephone and other telecommunications
expenses and costs and expenses incurred in connection with the acquisition,
financing, and disposition of Trust assets and the enforcement by the Property
Trustee of the rights of the Holders of the Debentures.

       

      The
Company’s obligations under this Section 4.1 shall be for the benefit of,
and shall be enforceable by, any Person to whom such debts, obligations and
costs are owed (a “Creditor”) whether or not such
Creditor has received notice hereof.  Any such Creditor may enforce
the Company’s obligations under this Section 4.1 directly against the
Company and the Company irrevocably waives any right or remedy to require that
any such Creditor take any action against the Trust or any other Person before
proceeding against the Company.  The Company agrees to execute such
additional agreements as may be necessary or desirable in order to give full
effect to the provisions of this Section 4.1.

       

      ARTICLE V

       

      FORM
OF DEBENTURE 

       

      Section
5.1            Form of
Debentures.  The Debentures are to be substantially in the
following form and shall bear any legend required by Section 2.4 of the
Indenture: 

       

      THIS NOTE
IS NOT A DEPOSIT OR OTHER OBLIGATION OF A DEPOSITORY INSTITUTION AND IS NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL
AGENCY.

       

      
        	
                No.
      _________

              	
                Principal
      Amount: $________

              
	
                Issue
      Date:  __________, 2008

              	 
      

      

      

      PRIVATEBANCORP,
INC.

       

      [•]
% JUNIOR SUBORDINATED DEBENTURES

       

      PRIVATEBANCORP, INC., a
Delaware corporation (hereinafter called the “Company”, which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to, or registered assigns, the principal
sum of ____________ ($________) and all accrued and unpaid interest thereof on
June 15, 2068, or if such day is not a Business Day, the following Business Day
(the “Maturity
Date”).

       

      The
Company further promises to pay interest on said principal sum from and
including May [_], 2008, or from and including the most recent interest payment
date on which interest has been paid or duly provided for, quarterly in arrears
on each March 15, June 15, September 15 and December 15,
beginning

       

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      on
September 15, 2008 (each such date a “Quarterly Interest Payment
Date” and, collectively “Interest Payment Dates”), at
the annual rate of [______]% (computed on the basis of a 360-day year comprised
of twelve 30-day months), plus Additional Interest, if any, until the principal
hereof is paid or duly provided for or made available for
payment.  Accrued interest that is not paid on the applicable Interest
Payment Date, including interest deferred pursuant to Section 2.5 of the
First Supplemental Indenture, will bear Additional Interest, to the extent
permitted by law, at the then applicable rate described in the first sentence of
this paragraph, from the relevant Interest Payment Date, compounded on each
subsequent Interest Payment Date.  If any Interest Payment Date occurs
on a date that is not a Business Day, the payment of interest for such Interest
Payment Date shall be made on the next succeeding Business Day with the same
force and effect as if such payment were made on the relevant Interest Payment
Date.  A “Business Day” shall mean any day other than a Saturday,
Sunday, or any other day on which banking institutions and trust companies in
New York, New York, Wilmington, Delaware or Chicago, Illinois, are permitted or
required by any applicable law to close.  The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in the Indenture, be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest installment, which shall
be the date that is the last day of the month immediately preceding the month in
which such Interest Payment Date falls (whether or not a Business
Day).  Any such interest installment not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture.

       

      The
Company shall have the right at any time or from time to time during the term of
this Security to defer payment of interest on this Security for one or more
consecutive interest payment periods (each an “Deferral Period”) up to 10
years, during which Deferral Periods the Company shall have the right to make
partial payments of interest on any Interest Payment Date, and at the end of
which the Company shall pay all interest then accrued and unpaid (together with
Additional Interest thereon to the extent permitted by applicable law);
provided, however, that no Deferral Period shall extend beyond the Maturity Date
or the earlier redemption in full of the Securities.  Upon the
termination of any Deferral Period and upon the payment of all deferred interest
then due, the Company may elect to begin a new Deferral Period, subject to the
above requirements.  Deferred interest on the Security will bear
interest at the then applicable interest rate, compounded on each Interest
Payment Date, subject to applicable law.  No interest shall be due and
payable during a Deferral Period except at the end
thereof.  Additional limitations may apply, pursuant to
Section 2.6 of the First Supplemental Indenture, if any Deferral Period
lasts longer than one year.

       

      So long
as any Securities remain outstanding, if the Company has given notice of its
election to defer interest payments on the Securities but the related Deferral
Period has not yet commenced or a Deferral Period is continuing, the Company
shall not, and shall not permit any Subsidiary of the Company to,
(i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to any shares of the
Company’s capital stock, (ii) make any payment of principal of, or interest
or premium, if any, on, or repay, purchase or redeem any debt securities or
guarantees of the Company that rank upon the Company’s liquidation on a parity
with this Security (including this Security, the “Parity Securities”), or junior
in interest to this Security (except for partial payments of interest with
respect to the Security) or (iii) make any payments under any guarantee by
the Company that ranks pari passu with or junior to the Guarantee Agreement
(other than any purchase, redemption or other acquisition of shares of the
Company’s capital stock in connection with (1) any

       

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      employment
contract, benefit plan or other similar arrangement with or for the benefit of
any one or more of its employees, officers, directors, consultants or
independent contractors, (2) the satisfaction of the Company’s obligations
pursuant to any contract entered into in the ordinary course prior to the
beginning of the Deferral Period (including pursuant to a contractually binding
stock repurchase plan), (3) a dividend reinvestment or stockholder purchase
plan, (4) the issuance of the Company’s capital stock, or securities
convertible into or exercisable for such capital stock, as consideration in an
acquisition transaction entered into prior to the applicable Deferral Period,
(5) any exchange, redemption or conversion of any class or series of the
Company’s capital stock, or the capital stock of one of its subsidiaries, for
any other class or series of the Company’s capital stock, or any class or series
of the Company’s indebtedness for any class or series of its capital stock,
(6) any purchase of fractional interests in shares of the Company’s capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the securities being converted or exchanged, (7) any declaration of a
dividend in connection with any rights plan, or the issuance of rights, stock or
other property under any rights plan, or the redemption or purchase of rights
pursuant thereto, (8) payments under any PrivateBancorp Guarantee executed
for the benefit of the holders of the Trust Preferred Securities, (9) any
dividend in the form of stock, warrants, options or other rights where the
dividend stock or stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid or
ranks equally with or junior to such stock, (10) any payment of current or
deferred interest on Parity Securities that is made pro rata to the amounts due
on such Parity Securities and any payments of deferred interest on Parity
Securities that, if not made, would cause the Company to breach the terms of the
instrument governing such Parity Securities, provided that such payments are
made in accordance with the limitations described in Section 2.7(c) of the
First Supplemental Indenture to the extent they apply, or (11) any payments
of principal or deferred interest in respect of Parity Securities necessary to
avoid a breach of the instrument governing such Parity
Securities).  In addition, if any Deferral Period lasts longer than
one year, the Company will not repurchase or acquire any securities ranking
junior to or pari passu with any Qualifying APM Securities the proceeds of which
were used to settle deferred interest during the relevant Deferral Period until
the first anniversary of the date on which all deferred interest on this
Security has been paid, subject to the exceptions listed above.

       

      The
Company shall give written notice of its election to begin or extend any
Deferral Period, (x) if the Property Trustee, on behalf of the Trust, is
the sole holder of the Securities, to the Property Trustee and the Delaware
Trustee at least five Business Days before the earlier of (A) the next
succeeding date on which the distributions on the Trust Preferred Securities are
payable and (B) the date the Property Trustee is required to give notice to
holders of the Trust Preferred Securities of the record or payment date for the
related distribution, or (y) if the Property Trustee, on behalf of the
Trust, is not the sole Holder of the Securities, to Holders of the Securities
and the Trustee at least five Business Days before the next Interest Payment
Date.  Notice of the Company’s election of a Deferral Period shall be
given by the Property Trustee by first-class mail, postage prepaid, mailed not
less than three Business Days after the Property Trustee receives written notice
from the Company to each holder of Trust Securities at such holder’s address
appearing in the Security Register.

       

      Payment
of the principal of (and premium, if any) and interest on this Security will be
made at the office or agency of the Company maintained for that purpose in the
United States, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payment of interest may be
made (i) by check mailed to the address of the Person entitled thereto as
such address shall appear in the Securities Register or (ii) by wire
transfer in immediately available funds at the bank account number as may be
designated by the Person entitled thereto as specified in the Securities
Register in writing not less than ten days before the relevant Interest Payment
Date.

       

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      The
indebtedness evidenced by this Security is, to the extent provided in the
Indenture, subordinate and junior in right of payment to the prior payment in
full of all Senior Debt, and this Security is issued subject to the provisions
of the Indenture with respect thereto.  Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions,
(b) authorizes and directs the Trustee on his behalf to take such actions
as may be necessary or appropriate to effectuate the subordination so provided
and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes.  Each Holder hereof, by his acceptance hereof, waives all
notice of the acceptance of the subordination provisions contained herein and in
the Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.

       

      Reference
is hereby made to the further provisions of this Security set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.

       

      Unless
the certificate of authentication hereon has been executed by the Trustee
referred to on the reverse hereof by manual signature, this Security shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.

       

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

         

      

      IN WITNESS WHEREOF, the
Company has caused this instrument to be duly executed.

       

      
        
          	 	PRIVATEBANCORP,
      INC.	 
	 	 	 	 
	
                   

                	
                  By:
      

                	 	 
	 	 	
                  President
      or Vice President

                	 
	 	 	 	 
	 	 	 	 

        

      

       

      
        	
                ATTEST:

                 

                 

                ________________________________________

                Secretary
      or Assistant Secretary

              	 
      

      

      

      CERTIFICATE
OF AUTHENTICATION

       

      This is
one of the Securities referred to in the within mentioned
Indenture.

       

      
        
          	 	WILMINGTON TRUST
      COMPANY, not in its individual capacity but solely as
    Trustee	 
	 	 	 	 
	
                  
                    Dated:  ________________

                  

                	
                  By:
      

                	 	 
	 	 	
                  Authorized
      Officer

                	 
	 	 	 	 
	 	 	 	 

        

      

       

       

      (FORM
OF REVERSE OF DEBENTURE)

       

      This
Security is one of a duly authorized issue of securities of the Company (herein
called the “Securities”), issued and to be
issued in one or more series under the Junior Subordinated Indenture, dated as
of May [___], 2008 (herein called the “Base Indenture”), between the
Company and Wilmington, as trustee (the “Trustee”), as amended and
supplemented by the First Supplemental Indenture, dated as of
May [  ], 2008, between the Company and the Trustee (the “First Supplemental Indenture”,
and together with the Base Indenture, the “Indenture” ), to which
Indenture and all other indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Trustee, the Company and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered.  By the terms of the Indenture, the
Securities are issuable in series that may vary as to amount, date of maturity,
rate of interest, rank and in any other respect provided in the
Indenture.

       

      All terms
used in this Security that are defined in the Indenture or in the Amended and
Restated Declaration of Trust, dated as of May [_____], 2008, as amended (the
“Declaration of Trust”),
for PrivateBancorp Capital Trust IV among PrivateBancorp, Inc., as Sponsor,
Wilmington Trust Company, as the Property Trustee, Wilmington Trust Company, as
the Delaware Trustee, and the Administrative Trustees, shall have the meanings
assigned to them in the Indenture or the Declaration of Trust, as the case may
be.

       

      This
Security shall be redeemable at the option of the Company in accordance with the
terms of the Indenture.  In particular, (i) this Security is
redeemable at the option of the Company at any time after

       

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      June 15,
2013 hereof at a Redemption Price equal to 100% of its principal amount plus
accrued and unpaid interest to the Redemption Date; and (ii) this Security
is redeemable at any time within 90 days following the occurrence of and during
the continuation of a Tax Event, Investment Company Event or a Capital Treatment
Event at a Redemption Price equal to 100% of its principal amount plus accrued
and unpaid interest to the Redemption Date.

       

      No
sinking fund is provided for the Securities.

       

      The
Indenture permits, with certain exceptions as therein provided, the Company and
the Trustee at any time to enter into a supplemental indenture or indentures for
the purpose of modifying in any manner the rights and obligations of the Company
and of the Holders of the Securities, with the consent of the Holders of not
less than a majority in principal amount of the Outstanding Securities to be
affected by such supplemental indenture.  The Indenture also contains
provisions permitting Holders of specified percentages in principal amount of
the Securities at the time Outstanding, on behalf of the Holders of all
Securities, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their
consequences.  Any such consent or waiver by the Holder of this
Security shall be conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the registration of
transfer hereof or in exchange therefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.

       

      As
provided in and subject to the provisions of the Indenture, if an Event of
Default with respect to the Securities at the time Outstanding occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in principal amount of the Outstanding Securities may declare the
entire principal amount and all accrued but unpaid interest of all the
Securities to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), provided that, in the case of
the Securities issued to and held by PrivateBancorp Capital Trust IV, or any
trustee thereof or agent therefor, if upon an Event of Default, the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities fails to declare the entire principal and all accrued but unpaid
interest of all the Securities to be immediately due and payable, the holders of
at least 25% in aggregate Liquidation Amount of the Trust Preferred Securities
then outstanding shall have such right by a notice in writing to the Company and
the Trustee; and upon any such declaration the principal amount of and the
accrued but unpaid interest (including any Additional Interest) on all the
Securities shall become immediately due and payable, provided that the payment
of principal and interest (including any Additional Interest) on such Securities
shall remain subordinated to the extent provided in Article XIII of the
Indenture.

       

      No
reference herein to the Indenture and no provision of this Security or of the
Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of (and premium, if any) and interest on
this Security at the times, place and rate, and in the coin or currency, herein
prescribed.

       

      As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Security is registrable in the Securities Register, upon
surrender of this Security for registration of transfer at the office or agency
of the Company maintained under Section 10.2 of the Indenture duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Company and the Securities Registrar duly executed by, the Holder hereof or
his attorney duly authorized in writing, and thereupon one or more new
Securities, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or
transferees.  No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.

       

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

      Prior to
due presentment of this Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee shall treat the Person in
whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company, the Trustee
nor any such agent shall be affected by notice to the contrary.

       

      The
Securities are issuable only in registered form without coupons in minimum
denominations of $25 and any integral multiples of $25 in excess
thereof.  As provided in the Indenture and subject to certain
limitations therein set forth, Securities are exchangeable for a like aggregate
principal amount of Securities of a different authorized denomination, as
requested by the Holder surrendering the same.

       

      The
Company and, by its acceptance of this Security or a beneficial interest
therein, the Holder of, and any Person that acquires a beneficial interest in,
this Security agree to treat for United States Federal income tax purposes
(i) the Securities as indebtedness of the Company, and (ii) the stated
interest on the Securities as ordinary interest income that is includible in the
Holder’s or beneficial owner’s gross income at the time the interest is paid or
accrued in accordance with the Holder’s or beneficial owner’s regular method of
tax accounting, and otherwise to treat the Securities as described in the
Prospectus.

       

      The
Indenture and this Security shall be governed by and construed in accordance
with the laws of the State of Illinois.

       

      This is
one of the Securities referred to in the within mentioned
Indenture.

       

      ASSIGNMENT

       

      FOR VALUE
RECEIVED, the undersigned assigns and transfers this Security to:

       

      
        	 
      __________________________________________________________________________________________________________________________________________
	 
      __________________________________________________________________________________________________________________________________________
	 
      __________________________________________________________________________________________________________________________________________
	
                (Insert
      assignee’s social security or tax identification
  number)

              

      

      

      
        	 
      __________________________________________________________________________________________________________________________________________
	 
      __________________________________________________________________________________________________________________________________________
	 
      __________________________________________________________________________________________________________________________________________ 
	
                (Insert
      address and zip code of assignee)

              

      

      

      agent to
transfer this Security on the books of the Securities Registrar.  The
agent may substitute another to act for him or her.

       

      
        	
                Dated:  ___________

              	
                     
      _____________________________________________

                Signature

              
	 
      	
                     

                    
       _____________________________________________

                Signature
      Guarantee

              

      

      

      (Sign
exactly as your name appears on the other side of this Security)

       

      Signatures
must be guaranteed by an “eligible guarantor institution” meeting the
requirements of the Securities Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other
“signature guarantee program” as may be determined by the Securities Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

       

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

       

      ARTICLE VI

       

      ORIGINAL
ISSUE OF DEBENTURES 

       

      Section
6.1          Original
Issue of Debentures.  Debentures in the aggregate principal
amount of $75,000,000 may, upon execution of this First Supplemental Indenture,
be executed by the Company and delivered to the Trustee or an Authenticating
Agent for authentication, and the Trustee or an Authenticating Agent shall
thereupon authenticate and deliver said Debentures in accordance with a Company
Order. 

       

      Section
6.2         Calculation
of Original Issue Discount.  If during any calendar year any
original issue discount shall have accrued on the Debentures, the Company shall
file with each Paying Agent (including the Trustee if it is a Paying Agent)
promptly at the end of each calendar year (i) a written notice specifying
the amount of original issue discount (including daily rates and accrual
periods) accrued on Outstanding Securities as of the end of such year and
(ii) such other specific information relating to such original issue
discount as may then be relevant under the Internal Revenue Code of 1986, as
amended from time to time.  

       

      ARTICLE VII

       

      SUBORDINATION

       

      Section
7.1          
 Senior
Debt.  The subordination provisions of Article XIII of the
Indenture shall apply, except that for the purposes of the Debentures (but not
for the purposes of any other Securities unless specifically set forth in the
terms of such Securities): 

       

      (a)           The
definition of “Senior Debt” in the Indenture is hereby amended to delete clauses
(ii), (iii) and (v), renumber clause (iv) as clause (ii), and add the
following:

       

      “(iii)
(x) indebtedness that (a) qualifies or is issued to financing vehicles
issuing securities that qualify as tier 1 capital of the Company under the
capital guidelines of the Federal Reserve or does not at the time of issuance
prevent the Company’s [___]% Junior Subordinated Debentures (the “Debentures”) from qualifying
as tier 1 capital of the Company under the capital guidelines of the Federal
Reserve and (b) by its terms is not superior in right of payment to the
Debentures or to other debt that is pari passu with or junior to the Debentures;
and (y) guarantees of indebtedness described in clause (x) or
securities issued by one or more financing vehicles described in clause
(x).”

       

      (b)           Notwithstanding
the foregoing or any other provision of the Indenture or of this First
Supplemental Indenture, provided that the Company is not subject to a
bankruptcy, insolvency, liquidation or similar proceeding, the priority of the
Debentures in right of payment as to Parity Securities is subject to the
provisions of Section 2.6 hereof and the Company shall be permitted to pay
interest or principal on Parity Securities in accordance with Section 2.6
hereof.

       

      Section
7.2          Compliance
with Federal Reserve Rules.  The Company shall not incur any
additional indebtedness for borrowed money that ranks pari passu with or junior
to the Debentures (if then subject to Article XIII of the Indenture),
except in compliance with applicable regulations and guidelines of the Federal
Reserve. 

       

       

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

       

      ARTICLE VIII

       

      MISCELLANEOUS

       

      Section
8.1             Effectiveness.  This
First Supplemental Indenture will become effective upon its execution and
delivery. 

       

      Section
8.2             Successors
and Assigns.  All covenants and agreements in the Indenture, as
supplemented and amended by this First Supplemental Indenture, by the Company
shall bind its successors and assigns, whether so expressed or not.

       

      Section
8.3            
Further
Assurances.  The Company will, at its own cost and expense,
execute and deliver any documents or agreements, and take any other actions that
the Trustee or its counsel may from time to time request in order to assure the
Trustee of the benefits of the rights granted to the Trustee under the
Indenture, as supplemented and amended by this First Supplemental Indenture.

       

      Section
8.4             Effect of
Recitals.  The recitals contained herein and in the Debentures,
except the Trustee’s certificates of authentication, shall be taken as the
statements of the Company, and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness.  The Trustee makes
no representations as to the validity or sufficiency of this First Supplemental
Indenture or of the Debentures.  Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of the Debentures or the proceeds thereof. 

       

      Section
8.5             Ratification
of Indenture.  The Indenture as supplemented by this First
Supplemental Indenture, is in all respects ratified and confirmed, and this
First Supplemental Indenture shall be deemed part of the Indenture in the manner
and to the extent herein and therein provided. 

       

      Section
8.6             Governing
Law.  This First Supplemental Indenture and the Debentures
shall be governed by and construed in accordance with the laws of the State of
Illinois. 

       

      *    *    *    *

       

      This
instrument may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.

       

       

      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

       

      IN WITNESS WHEREOF, the
parties hereto have caused this First Supplemental Indenture to be duly executed
as of the day and year first above written.

       

      
        
          	 	
                  PRIVATEBANCORP,
      INC.

                	 
	 	 	 	 
	
                   

                	
                  By:
      

                	 	 
	 	Name:	 
	 	Title:	 
	 	 	 	 

        

      

       

      
        	
                 ATTEST:

                 

                 

                By:   ____________________________________________

                 

              	 

      

       

      
        
          
            	 	
                    WILMINGTON
      TRUST COMPANY, as
      Trustee

                  	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	 	 
	 	Name:	 
	 	Title:	 
	 	 	 	 

          

        

         

      

      
        
          	
                   ATTEST:

                   

                   

                  By:   ____________________________________________

                   

                	 

        

         

         

        
          
            
            

          

          
            24Unassociated Document

    
      

    

    
      Execution
copy

      

      Exhibit
10.1

      SHARE
PURCHASE AGREEMENT

      

      

      AGREEMENT
dated as of May 2nd, 2008
among Lakeland do Brasil
Empreendimentos e Participações Ltda., a limited company (sociedade limitada) organized
under the laws of Brazil (the “Purchaser”),  Lakeland Industries, Inc., a
Delaware corporation (“Lakeland”), Miguel Antonio dos Guimarães
Bastos, Brazilian Citizen, married, businessman, bearer of the
identification Card RG N. 4607520 SSP/BA, enrolled with the Brazilian Taxpayers’
Registry (CPF/MF) under N. 125.891.957-53, resident and domiciled in the City of
Lauro de Freitas, State of Bahia, at Condominio Encontro das Águas, Quadra I,
Lote 39, 42700-000 (“Miguel”), Elder Marcos Vieira da
Conceição, Brazilian Citizen, single, businessman, bearer of the
identification Card RG N. 05746155.47 SSP/BA, enrolled with the Brazilian
Taxpayers’ Registry (CPF/MF) under N. 793.295.605-63, resident and domiciled in
the City of Salvador, State of Bahia, at Rua Clarival do Prado Valladares, 371,
Condomínio Monte Trianon – Bairro Caminho das Arvores, CEP 41820-700, (“Elder”), Márcia Cristina Vieira da Conceição
Antunes, Brazilian Citizen, married, businesswoman, bearer of the
identification Card RG N. 02504273.46 SSP/BA, enrolled with the Brazilian
Taxpayers’ Registry (CPF/MF) under N. 507.932.685-91, resident and domiciled in
the City of Salvador, State of Bahia, at Alameda Cabo Frio, Quadra 34, Lote 10,
Bairro Praias do Flamengo, CEP 41603-115  (“Márcia”, and together
with Miguel and Elder, the “Sellers”), Nordeste Empreendedor Fundo Mútuo de
Investimento em Empresas Emergentes, enrolled with the Taxpayers’
Registry (CNPJ/MF) under N. 05.047.787/0001-60, by its legal representative UBS
Pactual Serviços Financeiros S.A. – Distribuidora de Títulos e Valores
Mobiliários, with offices in the City of Rio de Janeiro, State of Rio de
Janeiro, at Praia do Botafogo, 501, 6o andar, parte, enrolled with the
Taxpayers’ Registry (CNPJ/MF) under N. 29.650.082/0001-00 ("Nordeste
Empreendedor”), Qualytextil S.A., a
corporation (sociedade por
ações) organized under the laws of Brazil (the “Company”), Conceição Maria Passos de
Queiróz, Brazilian Citizen, married, doctor, bearer of the Identification
Card RG N. 1190033, enrolled with the Brazilian Taxpayers’ Registry (CPF/MF)
under N. 183.884.185-72, resident and domiciled in the City of Lauro de Freitas,
State of Bahia, at Condominio Encontro das Águas, Quadra I, Lote 39, 42700-000,
and Elton de Carvalho
Antunes, Brazilian, married, industrial, bearer of ID Card N. 9012051018
SSP/BA, enrolled with the Brazilian Taxpayers’ Registry under CPF/MF N.
294.962.250-04, resident and domiciled in the City of Salvador, State of Bahia,
at Alameda Cabo Frio, s/n., Quadra 34, Lote 10, Praia do Flamengo, 40280-440
(“Elton”).

      

      W I T N E
S S E T H

      

      WHEREAS,
on or prior to the Closing Date, the Sellers will be the record and beneficial
owners of all of the outstanding capital stock of the Company, comprised of
1,507,701 shares, being 1,492,624 shares of common stock and 15,077 shares of
Class A preferred stock, without par value, of the Company (the “Shares”), to be
distributed among the Sellers, in accordance with the table contained in Exhibit A
hereto;

      
        
           

        

        
          
          

          
            

          

        

        
           

          Execution
copy

        

      

      WHEREAS,
the Sellers desire to sell the Shares to the Purchaser and the Purchaser desires
to purchase the Shares, free and clear of any Lien, on the terms and conditions
hereinafter set forth;

      

      WHEREAS,
to induce the Purchaser to enter into this Agreement and to purchase the Shares
hereunder, the Sellers have agreed to make certain representations, warranties,
covenants, indemnities and other agreements hereunder for the benefit of the
Company, the Purchaser and its shareholders;

      

      NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements set forth herein, the parties hereto agree to enter into this Share
Purchase Agreement ("Agreement"), under
the terms and conditions as follows:

      

      ARTICLE
1

      Definitions

      

      Section
1.01.  Definitions.  The
following terms, when used in this Agreement, shall have the following meanings
(given that such meanings are to be equally applicable to the singular and
plural forms of the terms defined):

      

      “2008 Adjusted Purchase Price”
shall have the meaning set forth in Section 2.05 of this Agreement;

      

      “Affiliate” means, with respect
to any Person, any other Person directly or indirectly controlling, controlled
by, or under common control with such Person, as control is defined in Article
116 of Brazilian Corporation Law;

      

      “Agreement” means this Share
Purchase Agreement and Exhibits attached herein;

      

      “Brazilian Corporation Law”
means Law No. 6,404/76 as amended;

      

      “Brazilian GAAP” means
generally accepted accounting principles in Brazil;

      

      “Business” means production,
manufacture, and sale of personnel protective equipment;

      

      “Business Day” means any day
other than a Saturday, Sunday, or other day on which commercial banks in the
City of São Paulo, State of São Paulo are authorized by law to
close;

      

      “CDI” means the average daily
rate offered for Extra-Group Overnight Interbank Deposits, calculated and
released daily by Central de Custódia e Liquidação Financeira de Títulos - CETIP
and capitalized on an annual basis (for a 252-business-day year), or, in case of
temporary unavailability or discontinuance thereof, another National Financial
System benchmark rate replacing it, as agreed on between the
parties.

      

      “Claim” shall have the meaning
set forth in Section 10.03 of this Agreement;

      

      “Closing” shall have the
meaning set forth in Section 8.01 of this Agreement;

      

      “Closing Date” shall have the
meaning set forth in Section 8.01 of this Agreement;

      
        
           

        

        
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      “Closing Transactions” shall
have the meaning set forth in Section 8.02 of this Agreement;

      

      “Company” means Qualytextil
S.A.;

      

      “Confidential Information”
shall have the meaning set forth in Section 6.02 of this Agreement;

      

      “2007 EBITDA” shall mean the amount
of R$3,118,000.00;

      

      “Employees” shall mean the
registered employees (including those who are retired but still registered) and
appointed officers of the Company or any of its Affiliates, including, but not
limited to the employees of Prestserv, as of the date of this
Agreement;

      

      “Environmental Laws” shall mean
any Law, including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of the environment or natural
resources;

      

      “Financial Statements” shall
have the meaning set forth in Section 3.05 of this Agreement;

      

      “Governmental Authority” means
any government, governmental entity, regulatory authority, department,
commission, board, agency or instrumentality, any recognized stock exchange and
any court, arbitrator, tribunal, whether foreign or domestic with jurisdiction
over the Parties;

      

      “Indemnified Party” shall have
the meaning set forth in Section 10.01 hereof;

      

      “Intellectual Property” shall
mean the intellectual property listed in Exhibit 3.12 attached
herein and any other existing technical documentation related to
that;

      

      “Law” shall mean any federal,
state, or local statute, law, ordinance, regulation, rule, code, decree, other
requirement or rule of law of Brazil or any other jurisdiction, and any other
similar act or law;

      

      “Liens” shall mean liens,
security interests, options, rights of first refusal, easements, charges,
indentures, encroachments, licenses to third parties, leases to third parties,
security agreements, or any other encumbrances and other restrictions or
limitations on the transfer, license, sale, disposal or use of real or personal
property;

      

      “Loss” shall have the meaning
set forth in Section 10.1 hereof. Any Losses due under this Agreement shall be
paid by the Sellers net of any negative or positive Tax effect or potential
effect on the Indemnified Party thereof;

      

      “Outstanding Debts” shall mean
the actual amount of the outstanding debts of the Company listed in Exhibit B of this
Agreement as of the Closing Date;

      

      “Parties” means the Purchaser,
Lakeland, the Sellers, and the Company; and “Party” means any of
them;

      

      “Permits” shall have the
meaning set forth in Section 3.11 of this Agreement;

      
        
           

        

        
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      “Person” means any individual,
corporation, partnership, limited liability company, association, trust or other
entity or organization, including a government or political subdivision or an
agency or instrumentality thereof;

      

      “Prestserv” means Prestserv
Serviços Ltda., a limited company (sociedade limitada) organized
under the laws of Brazil, enrolled with the Brazilian Taxpayers Registry under
no 05.411.989/0001-40, an Affiliate of the Company.

      

      “Purchase Price” shall mean the
amount in Reais equivalent to seven (7) times the 2007 EBITDA less all
Outstanding Debts;

      

      “R$” or “Reais” shall mean the lawful
currency in Brazil;

      

      “Retained Amount” shall mean
the aggregate of: (i) up to R$ 649,000.00 to satisfy indemnification
regarding the contingencies of the Company, as detailed in Exhibit C hereto,
which funds will remain in escrow for five (5) years or upon expiration of the
statute of limitations applicable to such contingencies (whichever occurs first)
and will only be released by mutual agreement between the Parties; (ii) the
amounts of R$ 355,369.00 corresponding to 10% of the receivables and R$
268,874.00, corresponding to 10% of the stocks of the Company both on December
31, 2007, to satisfy indemnification regarding contingencies of the Company, as
detailed in Exhibit C hereto, which funds will remain in escrow for a period of
(a) 6 months with respect to the receivables, and (b) one (1) year with respect
to the stocks, and will only be released by mutual agreement between the
Parties; (iii) 10% of the Purchase Price to satisfy indemnifications for unknown
contingencies, representations and warranties, including but not limited to any
tax issues, which funds will remain in escrow for the period of two (2) years
from the Closing Date, and will only be released by mutual agreement between the
Parties; and (iv) 20% of the Purchase Price, which funds shall remain in escrow
until the 2008 EBITDA is determined, in order to satisfy the payment of eventual
2008 Adjusted Purchase Price, as set forth in Section 2.05 below;

      

      “Right of First Refusal” shall
have the meaning set forth in Section 2.10 of this Agreement;

      

      “Shares” shall mean the shares
of common stock and shares of preferred stock of the Company, representing, in
the aggregate, 100% of the Company’s voting and total capital
stock;

      

      “Supplementary Purchase Price”
shall have the meaning set forth in Section 2.06 hereof; and

      

      “Tax” means all taxes, charges,
fees, levies or other assessments imposed by any taxing authority, including,
without limitation, income, gross receipts, sales, use, goods and services,
capital transfer, bulk transfer, franchise, profits, license, withholding,
payroll, employment, employer health, social contributions, social security,
excise, estimated, severance, stamp, occupation, property, or other taxes,
customs duties, fees, assessments or charges of any kind whatsoever, together
with any interest and any penalties, additions to tax or additional amounts,
including any amounts payable as a result of the application of monetary
correction or any other similar factor imposed by any taxing
authority.

      
        
           

        

        
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      ARTICLE
2

      Purchase
and Sale of Shares

      

      Section 2.01.  Purchase and Sale of
Shares.  Upon the terms and subject to the conditions of this
Agreement, and upon the basis of the representations and warranties contained
herein, the Sellers agree to sell, convey, assign, transfer and deliver to the
Purchaser, and the Purchaser agrees to purchase and acquire from the Sellers,
all of the Shares, free and clear of any Lien, at the Closing.

      

      Section 2.02.  Purchase Price.  In
consideration for the sale of all the Shares, the Purchaser shall pay to the
Sellers proportionally to the capital stock held by each one of them, on the
Closing Date, the Purchase Price (taking into account the actual amount of the
Outstanding Debts as of the Closing Date), payable in cash as provided in
Section 2.03,  less the Retained Amount, which shall be deposited in
one or more escrow accounts with a reputable bank or agent specialized in
providing escrows (the “Escrow Agent”) to be
designated by mutual agreement among the Purchaser and the Sellers.

      

      Section
2.03.  Payment
Conditions.  The Purchase Price (less the Retained Amount)
shall be paid on the Closing Date to the Sellers by means
of  electronic transfer (TED) or a bank draft or any
other similar mean of immediately available funds, in Reais, to the bank
accounts set forth in Schedule 2.03
hereto.

      

      Section
2.04.  Escrow.  The
Retained Amount shall be held in escrow by the Escrow Agent pursuant to the
terms and conditions set forth in the Escrow Agreements to be executed on the
Closing Date, substantially in the form of Schedule 2.04 hereto,
and the funds in escrow shall only be released:

      

      (a) to
the Purchaser or, at the Purchaser’s discretion, the Company to satisfy (i)
indemnifications regarding the contingencies specified in Exhibit C hereto, (ii)
indemnifications for unknown contingencies of the Company or representations and
warranties provided by the Sellers, including but not limited to any tax issues,
or (iii) the payment of eventual 2008 Adjusted Purchase Price, as set forth in
Section 2.05 below; or

      

      (b) to
the Sellers upon expiration of the terms established in Section 1.01 above
(see  definition of Retained Amount), for each Retained
Amount.

      

      Section
2.05.  Purchase
Price Adjustment.  To the extent that the Company’s EBITDA in
2008 is less than the 2007 EBITDA, the Purchase Price shall be automatically
adjusted to an amount in Reais equal to seven (7) times the Company’s EBTIDA in
2008 (the “2008
Adjusted Purchase Price”). For the purposes of determining the Company’s
EBITDA in 2008, within up to 90 (ninety) days after December 31, 2008, the
Purchaser shall cause the Company to provide the Sellers with a written and
audited statement describing the Company’s EBITDA in 2008, prepared in
accordance with Brazilian GAAP and in a manner consistent with the manner in
which the 2007 EBITDA was determined by the Parties. Should the Purchaser and
the Sellers agree on the amounts so presented as the Company’s EBITDA in 2008,
then the amount of the difference between the Purchase Price and the 2008
Adjusted Purchase Price (plus the amount to be determined in accordance with
Section 2.07(b)(i), if any) shall, within 30 (thirty) Business Days after the
presentation of the mentioned statement by the

      
        
           

        

        
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      Company,
be released from the Escrow Account in benefit of the Purchaser, provided
however that in no event the adjustment shall exceed the amount equivalent to
20% of the Purchase Price accrued of interests (if any), obtained with the
investments permitted under the Escrow Agreement, specifically in relation to
the portion of Retained Amount corresponding to the 2008 Adjusted Purchase
Price. Should the Purchaser and the Sellers disagree with the amounts presented
by the Company as the Company’s EBITDA in 2008, and should the Parties and their
respective external auditors not be able to reach an agreement upon such values
within 30 (thirty) Business Days as from the presentation of referred original
statement, then the Parties shall jointly appoint (and equally bear the costs
of) another auditing firm selected among Deloitte Touche Tomahatsu, KPMG,
Ernst&Young or PriceWaterhouseCoopers. Should the Parties not reach an
agreement as to the third auditing firm within the immediately subsequent 5
(five) Business Days, then it shall be chosen following the order that they
appear above. The retained third auditing firm shall, within 15 (fifteen)
Business Days following its engagement, issue a final and binding statement
contemplating the Company’s EBITDA in 2008 (the third auditing firm shall
prepare and issue its final statement in accordance with Brazilian GAAP and in a
manner consistent with the manner in which the 2007 EBITDA was determined by the
Parties). The payment of the Adjusted Purchase Price (plus the amount to be
determined in accordance with Section 2.07(b)(i), if any), if any, derived from
the final statement by the third auditing firm shall be made within 5 (five)
Business Days as from the issuance of such final statement.

      

      Section
2.06.  Supplementary
Purchase Price.  (a) Subject to the Company’s EBITDA in 2010
being equal to or greater than R$ 4,449,200, the Purchaser shall then pay to the
Sellers the difference between six (6) times the Company’s EBITDA in 2010 and
seven (7) times the 2007 EBITDA (R$ 21,826,000.00), less any unpaid disclosed or
undisclosed contingencies (other than Outstanding Debts) from pre-closing which
exceeds R$ 100,000.00 ("Supplementary Purchase
Price"). The Supplementary Purchase Price in no event shall be greater
than R$ 27,750,000.00. For the purposes of determining the Company’s EBITDA in
2010, within up to ninety (90) days after December 31, 2010, the Purchaser shall
cause the Company to provide the Sellers with a written and audited statement
describing the Company’s EBITDA in 2010, prepared in accordance with Brazilian
GAAP and in a manner consistent with the manner in which the 2007 EBITDA was
determined by the Parties. Should the Purchaser and the Sellers agree on the
amounts so presented as the Company’s EBITDA in 2010, then the Supplementary
Purchase Price shall, within 30 (thirty) Business Days after the presentation of
the mentioned statement by the Company, be paid by the Purchaser to the Sellers.
Should the Purchaser and the Sellers disagree with the amounts presented by the
Company as the Company’s EBITDA in 2010, and should the Parties and their
respective external auditors not be able to reach an agreement upon such values
within 30 (thirty) Business Days as from the presentation of referred original
statement, then the Parties shall jointly appoint (and equally bear the costs
of) another auditing firm selected among Deloitte Touche Tomahatsu, KPMG,
Ernst&Young or PriceWaterhouseCoopers. Should the Parties not reach an
agreement as to the third auditing firm within the immediately subsequent 5
(five) Business Days, then it shall be chosen following the order that they
appear above. The retained third auditing firm shall, within 15 (fifteen)
Business Days following its engagement, issue a final and binding statement
contemplating the Company’s EBITDA in 2010 (the third auditing firm shall
prepare and issue its final statement in accordance with Brazilian GAAP and in a
manner consistent with the manner in which the 2007 EBITDA was determined by the
Parties). The payment of the Supplementary Purchase Price, if any, derived from
the final

      
        
           

        

        
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      statement
by the third auditing firm shall be made within 5 (five) Business Days as from
the issuance of such final statement. To the extent that the Company’s EBITDA in
2010 is greater than R$6,356,000, the Supplementary Purchase Price will be
payable in February 2011 based on a multiple of six (6) times such capped amount
of R$6,356,000 and the remaining amount of the Supplementary Purchase Price
shall be paid in February 2012, provided however that this remainder will be due
only if the actual Company’s EBITDA in 2011 corresponds to at least 90% of the
Company’s EBITDA in 2010.

      

      (b) If
the Management Agreement contemplated by Section 5.04 hereto is terminated
either by the Company without cause or by any of the Sellers with cause as
provided for in Section 7.5 of the Management Agreement, then the Supplementary
Purchase Price shall amount R$ 27,750,000.00, regardless of the actual amount of
the Company’s EBITDA in 2010 and the Supplementary Purchase Price will then be
payable in full in February 2011. For the avoidance of any doubt, the Management
Agreement will be deemed to be terminated without cause by the Company if
termination is made without the occurrence of any of the events described in
Section 7.3 of the Management Agreement.

      

      Section 2.07.  Outstanding
Debts.  On the
Closing Date the Purchaser undertakes to transfer to the Company the funds in
the amount then estimated by the Parties for the debt described in Exhibit C
with a view to repaying all Outstanding Debts, including without limitation the
debentures issued by the Company, provided that the Sellers must obtain the
consent of all lenders of the Company to accept the repayment of the debts
without penalties and under the same terms and conditions set forth in the
respective agreements and to the change in control of the Company. If it is not
possible to pay any of the Outstanding Debts on the Closing Date, the Purchaser
shall pay the remaining Outstanding Debts within thirty (30) days from the
Closing Date, except for the debentures issued by the Company that must be paid
on the Closing Date. The Parties hereby expressly agree that due to the
nature of the Outstanding Debts the actual amounts that shall be paid may vary
from the estimated amount of the Outstanding Debts on the Closing Date and the
Parties shall make adjustments to the Purchase Price in order to reflect such
variations should such difference be greater than R$20,000.00. If the actual
amount of the Outstanding Debts is: (i) greater than the estimated amount of the
Outstanding Debts on the Closing Date, then the Purchaser shall be entitled to
adjust the Purchase Price to deduct the difference between the estimated amount
of the Outstanding Debts on the Closing Date and the actual amount of the
Outstanding Debts from the Purchase Price, with due observance to Section 2.05
above; and (ii) less than the estimated amount of the Outstanding Debts on the
Closing Date, then the Purchaser shall cause the Company to pay to the Sellers
the difference between the amount of the estimated amount of the Outstanding
Debts on the Closing Date and the actual amount of the Outstanding Debts within
thirty days as of the payment in full of the Outstanding Debts.

      

      Section
2.08. Penalty upon
Default. In case the Purchaser fails to pay any and all amounts due
hereunder at its due date, such amounts shall be duly adjusted by the CDI from
the date any of the payments are effectively due until the date the respective
amount is paid by the Purchaser. Additionally, the Purchaser shall pay a
punitive penalty (multa
punitiva não-compensatória) of 2% over the outstanding amount duly
adjusted by CDI, as described above.

      
        
           

        

        
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      Section
2.09. Lakeland’s
Guarantee. The Parties additionally agree that Lakeland shall guarantee
to the Sellers any and all payments due hereunder by the Purchaser, provided,
however, that the Sellers shall necessarily proceed first against the Purchaser
before proceeding to enforce this guaranty and as a condition to payment or
performance by Lakeland hereon.

      

      Section
2.10. Right of First Refusal
and Pledge of Shares.  (a) If the Purchaser, at any time before
the payment of the Supplementary Purchase Price, receives an offer to sell its
shares in the Company, it shall (i) give the Sellers the right to acquire those
shares on the same terms and conditions set forth in such offer (“Right of First
Refusal”), exercisable by written notice given by the Sellers to the
Purchaser within thirty (30) days after the receipt of a notice from the
Purchaser informing the terms and conditions of the offer and (ii) concurrently
with the sale of the shares to a third party and as a condition of the latter to
acquire shares in the Company, grant, or cause the third party acquiring the
shares to grant, to the Sellers as security for the payment of the Supplementary
Purchase Price a first priority security interest in and to shares representing
30% of the total issued and outstanding capital stock of the
Company.

      

      (b) The
Purchaser shall not be bound to transfer shares to the Sellers as a result of
the exercise of the Right of First Refusal by the Sellers if those shares do not
represent all of the shares contemplated in the offer made by the third
party.

      

      (c) If
the Sellers elect not to exercise its Right of First Refusal or if they fail to
timely exercise the Right of First Refusal, then the Purchaser may sell the
shares to the third party offering to purchase the shares.

      

      ARTICLE
3

      Representations
and Warranties of the Sellers and Nordeste Empreendedor

      

      A)    The
Sellers severally represent and warrant to the Purchaser that each of the
following representations and warranties is, as of the date hereof, and will be,
on the Closing Date, true and correct and in full force and effect:

      

      Section
3.01.  Existence and
Power.  (a) Each of the Company and its Affiliates (including
Prestserv) is duly organized, validly existing and in good standing under the
laws of the Federative Republic of Brazil. The Company has all corporate powers,
governmental licenses, authorizations, permits, consents and approvals required
to own its respective properties and to carry on its business as presently
conducted. The Exhibit
3.01 contains a true and complete copy of the amended and restated bylaws
of the Company, as currently in effect and shall be on the Closing Date duly
registered before the appropriate trade board or applicable authorities. The
Company has and will have as of the Closing Date all clearance certificates that
enable the transaction contemplated herein to be performed as described in the
Agreement. Except for Prestserv, the Company has no and will have no direct or
indirect subsidiary.

      

      Section
3.02.  Authorization, Required Filings and
Consents.  (a) The execution, delivery and performance by the
Sellers and the Company of this Agreement and the consummation of the
transactions contemplated hereby are duly and validly authorized by all
necessary corporate action,

      
        
           

        

        
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      and no
other corporate proceedings on the part of the Sellers, or the Company are
necessary to consummate the transactions contemplated herein.

      

      (b)
Except for any contrary disposition hereof, no filing or registration with, or
notification by the Sellers or the Company to, and no permit, authorization,
consent or approval of, any Governmental Authority is necessary for the
execution and delivery of this Agreement by the Sellers, or the consummation by
the Sellers of the transactions contemplated by this Agreement.

      

      Section
3.03.  Noncontravention.  The
execution, delivery and performance of this Agreement and any other agreement or
document related hereto and the consummation of the transactions contemplated
hereby by the Sellers or the Company do not and will not (i) violate the
organizational documents or its article of association, (ii) conflict with or
violate any Law applicable to the Sellers, (iii) require any consent or other
action by any Person, constitute a default, or give rise to any right of
termination, cancellation, vesting or acceleration of any right or obligation,
of the Company, or to a loss of any benefit to which the Company is entitled
under any provision of any agreement or other instrument binding upon the
Company, or (iv) result in the creation or imposition of any Lien on any asset
of the Company.

      

      Section
3.04.  Capitalization.  (a)
Currently, the capital stock of the Company, totally subscribed and paid in, is
of R$1,507,701.00, comprised of 1,492,624 shares of common stock and 15,077
shares of preferred stock and there are no (i) other outstanding shares (voting
or not), other securities (voting or not) issued by the Company nor other
ownership interests of the Company, (ii) securities issued by the Company
convertible into or exchangeable for shares of capital stock, voting securities
or other ownership interests of the Company, except for the debentures described
in Exhibit 3.04
hereto, which shall be totally redeemed on the Closing Date as set forth in
Section 8 or (iii) options or other rights to acquire from the Company or from
the Seller or, or other obligation of the Company to issue, any shares of
capital stock, voting securities or securities convertible into or exchangeable
for shares of capital stock, voting securities or other ownership interests of
the Company. There are no outstanding obligations of the Company to repurchase,
redeem or otherwise acquire any shares of capital stock of the
Company.

      

      (b) The
Sellers shall be on the Closing Date the legal holder and registered owner of
shares of common stock and shares of preferred stock of the Company,
representing, in the aggregate, 100% of the Company’s voting and total capital
stock. Exhibit
3.04(b) contains a table indicating the current ownership structure of
the Company as of this date. Sellers further represents and warrants to
Purchaser that, as of the date hereof until the Closing Date, Sellers will have
full and valid title of the Shares, free and clear of any Lien or any third
party rights, except for any contrary disposition in this
Agreement.

      

      Section
3.05.  Financial
Statements.  Exhibit 3.05 hereto
contains a true copy of the audited consolidated financial statements of the
Company for the fiscal year ended on December 31, 2007 (the “Financial
Statements”), which have been prepared in accordance with the Brazilian
GAAP and consistent with the Company’s past practices. The Financial Statements
are true, correct and complete, can be reconciled with the books and records of
the Company in all aspects and adequately reflect the financial situation of the
Company on such dates, as well as the results of the Company’s

      
        
           

        

        
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      activities
in the time periods, not having occurred any transactions out of the ordinary
course of business.  All accounts, notes receivable and other
receivables reflected in the Financial Statements are valid, genuine and fully
collectible in the aggregate amount thereof, subject to normal and customary
trade discounts, less any reserves for doubtful accounts recorded on the
Financial Statements. Except as disclosed by the Sellers in this Agreement or in
its Exhibits, all the financial or other debts of the Company, duly reflected in
the Financial Statements, are not due on the date hereof and there is no current
default under any obligation of the Company.

      

      Section
3.06.  Properties.  (a)
Except for the mortgages described in Exhibit 3.06(a), the
Company has good and marketable, indefeasible, legitimate title, free and clear
of any Liens, or, in the case of leased property and assets, has valid leasehold
interests in, all property and assets (whether real, personal, tangible or
intangible) reflected on the Financial Statements. Except for the mortgages
described in Exhibit
3.06(a), none of such property or assets is subject to any
Lien.

      

      (b) The
properties and assets owned, leased or subleased or licensed by the Company, or
which it otherwise has the right to use, constitute all of the properties and
assets used or held for use in connection with the business of the Company and
are adequate to conduct such business as currently conducted.  All of
the Company’s properties and assets are in good working condition and repair,
ordinary wear and tear excepted, and have been maintained in a manner consistent
with generally accepted industry practice.

      

      Section
3.07.  Absence of
Certain Changes.  Except as (a) approved in writing by the
Purchaser or (b) otherwise permitted or required by this Agreement, or (c)
required by Law, any judgement, decree or order, or (d) in the ordinary course
of business and consistent with past practices, as from December 31, 2007 and up
to the date hereof, there has been:

      

      (i) no
physical damage, destruction, loss or abandonment of any asset or property of
the Company;

      

      (ii) no
acquisition, sale, assignment, transfer, lease, sublease, license or other
disposal of any asset or property of the Company;

      

      (iii) no
change in the management practices of the Company;

      

      (iv) no
change in the accounting policies and practices of the Company;

      

      (v) no
creation of any Liens on all or any portion of any asset or property of the
Company;

      

      (vi) no
amendment, modification, alteration, failure to renew or termination of any
contract;

      

      (vii) no
waiver of any rights of the Company or any cancellation of any claims, debts or
accounts receivable owing to the Company, other than in the ordinary course of
business;

      

      (viii) no
redemption of capital stock or declaration or payment of any dividends or
distributions (whether in cash, securities or other property) to the current
holders of capital stock of the Company and no other forms of transfer of funds
from the Company to its shareholders;

      
        
           

        

        
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      (ix) no
issuance of shares of capital stock, notes, bonds or other securities,
convertible or not into shares of capital stock, or any option, warrant or other
right to acquire the same, or any other interest in the Company;

      

      (x) no
advance or capital contribution to or investment by the Company;

      

      (xi) no
entering into any joint venture or similar arrangement by the
Company;

      

      (xii) no
entering into any form of financial agreement;

      

      (xiii) no
revaluation of any tangible or intangible assets of the Company;

      

      (xiv) no
litigation, which has had or could have an adverse effect on the Company or its
financial condition;

      

      (xv) no
incurrence of any damage, destruction or similar loss, whether or not covered by
insurance;

      

      (xvi) no
material adverse change in the Company’s financial condition, business,
operations or prospects;

      

      (xvii) no
change in the labor conditions of the Employees, or increase in the compensation
or benefits or establishment of any new bonus, insurance, severance, retirement,
profit sharing, or other similar employee benefit plans to any
Employees;

      

      (xviii)
no event that could reasonably be expected to prevent or materially delay the
performance of the Sellers or the Company's obligation pursuant to this
Agreement and the consummation of the transaction contemplated herein;
and

      

      (xix) no
commitment by the Sellers or the Company to do any of the
foregoing.

      

      Section
3.08.  Contracts.  (a)
Exhibit 3.08
(a)(i) hereto contains a list of all agreements entered into and executed
by the Company in force as of this date. All the agreements presently in force
to which the Company is a party were entered into and executed in the ordinary
course of business, having conformed to all the required legal formalities, are
valid, binding and in full force and effect and are enforceable against the
Company. Except for those listed in Exhibit 3.08 (a)(ii),
the Company is not in default of any obligations arising from these agreements,
there is no event, occurrence, condition or act (including the Closing of the
transaction contemplated herein) which, with the giving of notice or the lapse
of time or both would become a default by the Company.

      

      (b)
Except for the agreements described in Exhibit 3.08(b), no
consent or approval is required in order to consummate the transactions
contemplated herein, including without limitation the change of control of the
Company.

      
        
           

        

        
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      Section
3.09.  Guaranties.  The
Company has not secured any third parties’ obligations, including obligations of
the Sellers.

      

      Section
3.10.  Litigation.  (a)
Except as disclosed in Exhibit 3.10(a)
hereto, there is no, and on the Closing Date there will not be any, claim,
action, suit, investigation or proceeding (or any basis thereof) pending
against, threatened against or affecting, the Company or any of their respective
properties before any court or arbitrator or any Governmental
Authority.  Except as disclosed in Exhibit 3.10(a)
hereto, the Company is not subject to any judgment, injunction, order, decree or
arbitration award. There is no, and on the Closing Date there will not be any,
claim, action, suit, litigation, investigation or proceeding (or any basis
therefor) outstanding or pending against, threatened against or affecting the
Company or any of their respective properties before any court or arbitrator or
any Governmental Authority that would prevent the Company from entering into or
implementing the transactions contemplated in this Agreement.

      

      (b) The
Sellers are not aware of any facts or circumstances which could result in a
private or governmental claim, action, suit, investigation or proceeding (or any
basis therefor) against the Company. On the Closing Date there will be no
judgement, decree or order against the Company that could prevent, enjoy, or
alter or delay any of the transactions contemplated herein.

      

      Section
3.11.  Licenses and
Permits.  Exhibit 3.11
correctly describes each license, permit, certificate, approval or other similar
authorization affecting, or relating in any way to, the assets or business of
the Company (the “Permits”) together
with the name of the Government Authority or other entity issuing such
Permit.  The Seller represents and warrants that, as of the date
hereof, and on the Closing Date (i) each Permit is valid and in full force and
effect, (ii) the Company is not in default under, and no condition exists that
with notice or lapse of time or both would constitute a default under, any
Permit and (iii) none of the Permits will be terminated or impaired or become
terminable, in whole or in part, as a result of the transactions contemplated
hereby.  The Permits constitute all of the material licenses,
franchises, permits, certificates, approvals or other similar authorization
necessary to conduct the Company’s business as currently conducted.

      

      Section
3.12.  Intellectual
Property Rights.  (a) Exhibit 3.12 contains
a true and complete list of all Intellectual Property Rights owned by the
Company and all Intellectual Property Rights used by the Company by license or
other agreement.  The Intellectual Property Rights represent all items
of intellectual property necessary to permit the Company to conduct its
operations as currently conducted. Company's Intellectual Property Rights are
duly registered, or may be the case, filed for registry, with INPI and are in
good standing with all fees and filings due as of the date hereof and the
Closing Date. Company's Intellectual Property Rights are not licensed in any way
to any third party and the use thereof by any third party is not in any way
authorized.

      

      (b) There
is no claim, action, suit, investigation or proceeding (or any basis therefor)
pending against the use by the Company of any Intellectual Property Right.
Neither the Sellers nor the Company has received notice of any claims (i)
challenging the validity, effectiveness or ownership of the Intellectual
Property, or (ii) to the effect that the use, distribution, licensing,
sublicensing, sale or any other exercise of rights in any product, work,
technology or process as now used or offered or proposed for use, licensing,
sublicensing or sale by the Company infringes on or misappropriates
any

      
        
           

        

        
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      intellectual
property or other proprietary or personal right of any Person. All of the rights
within the Intellectual Property are valid. There is no unauthorized use,
infringement or misappropriation of any Company's Intellectual Property by any
third party or by any Employee or former employee.

      

      Section
3.13.  Taxes.  (a) Except
as set forth in Exhibit 3.13 hereto,
all Taxes and Tax Liabilities of the Company for all taxable periods before the
date hereof and due until the Closing Date, were and shall be duly and timely
performed, paid or accrued for. There is no proceeding against, or audit of, the
Company now pending or threatened by any Governmental Authority regarding any
Taxes assessed on and due by the Company.

      

      (b)
Except as set forth in Exhibit 3.13 hereto:
(i) the Company has filed in a timely manner (or there has been filed on its
behalf) with the appropriate Governmental Authorities all Tax Returns required
to be filed by it and all such Tax Returns are true, complete and correct as
filed; (ii) all Taxes required to be paid by the Company (including Taxes
required to be deducted or withheld and paid over to a taxing authority) have
been timely paid in full or are reflected as Tax reserve on the Financial
Statements of the Company; (iii) there are no outstanding agreements or waivers
extending the statutory period of limitations applicable to any Taxes or Tax
Returns of the Company; (iv) no audits or other administrative proceedings or
court proceedings have formally commenced or are presently pending with regard
to any Taxes or Tax Return of or including the Company, and no notification has
been received by the Company or the Seller that such an audit or other
proceeding is pending or threatened with respect to any Taxes due from or with
respect to the Company or any Tax Return filed (or required to have been filed)
by or with respect to the Company; (v) there are no Liens for Taxes upon the
assets of the Company; (vi) the Company is not a party to, is bound by, or has
any obligation under any agreement or arrangement providing for the allocation,
sharing or indemnification of Taxes or is otherwise obligated to indemnify any
party for any Taxes; and (vii) the Company has not requested an extension of
time within which to file any Tax Return in respect of any taxable year, which
Tax Return has not since been filed.

      

      Section
3.14.  Employee
Matters.  (a) Exhibit 3.14(a)
hereto sets forth an accurate and complete list of the names, titles, hiring
dates, accrued vacation time, current monthly rates of salary, bonus, employee
benefits and other compensation of all employees (including, without limitation,
managers, officers and directors) of the Company and of Prestserv, including any
such employee who is on disability leave or any other leave of
absence.

      

      (b) There
is no liability of any kind with respect to amounts withheld or deducted amounts
from employees' earnings, for the period ending on or the date hereof and there
will be no liability of any kind ending on or the Closing Date. The Company is
in compliance with all Brazilian federal, state, municipal and other applicable
laws and regulations relating to the employment of labour, including all such
laws, regulations and orders relating to wages and hours, labour relations,
civil rights, safety and health, workers' compensation, and social security and
other taxes.

      

      (c) There
is no (and has not been during the last five years) labour strike, slow down,
stoppage or other material labour difficulty, actual or threatened, against or
affecting the Company.

      
        
           

        

        
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      (d) The
Company has established an adequate accounting reserve for all labour
obligations, dues and liabilities with respect to the period until the date
hereof. There are no overdue and payable sums owed to Employees, other than the
respective accounting provisions.

      

      (e)
Neither the Seller nor the Company is a party to, and has no obligations under
or with respect to, any collective bargaining or other labor union contract
applicable to the Employees and no collective bargaining agreement is being
negotiated by the Company that may obligate it thereunder.

      

      Section
3.15.  Environmental
Matters.  The Company has at all times been in compliance with
all applicable Environmental Laws. The Company has applied for and received all
permits required under Environmental Laws for their respective assets and
business (“Environmental
Permits”) and has, and will have until the Closing Date obtained or filed
for all the Environmental Permits, approvals, licenses and authorizations
required by law to carry on the business as now conducted by the Company. There
are no pending claims in writing by any Governmental Authority or any other
person in respect of Environmental Laws affecting the Company or the business.
The Company has not received any written notice of any violations of any
Environmental Laws or has received any written warning notices, administrative
complaints, judicial complaints or other formal or informal notices from any
person alleging that conditions of the business of the Company are, or may be,
in violation of any Environmental Laws. There is not now, nor has there ever
been, any treatment, storage, disposal, discharge or other type of release of
hazardous substances on property adjacent to or near the real properties owned
and/or leased by the Company or to the surface or ground water flowing to the
real properties owned and/or leased by the Company which has resulted in
contamination of such real properties.

      

      Section
3.16.  Insurance.  Exhibit 3.16.
contains all of the insurance policies or programs relating to the properties
and assets of the Company in effect as of the date hereof. All of such insurance
policies are and will be on the Closing Date (i) in full force and effect; (ii)
underwritten by financially sound and reputable insurers, (iii) sufficient for
all applicable requirements of law; and (iv) secure coverage in amounts and
against all risks that are normal and customary for the operation of the
businesses of the Company. All of such insurance policies will remain in full
force and effect in accordance with their terms and will not terminate or lapse
by reason of any of the transactions contemplated hereby. The Company is not in
default with respect to its obligations under any of such Insurance
Policies.

      

      Section
3.17.  Powers of
Attorney.  Exhibit 3.17 hereto
contains copies of all powers of attorney granted by the Company and in full
force and effect. The powers of attorney were validly granted by the Company and
in good standing under its by-laws, and all acts executed pursuant any of the
powers of attorneys were valid and effective.

      

      Section
3.18.  Inventory. All the inventory
of the Company are in good physical condition and are fully usable,
merchantable, saleable and fit for the purpose for which it was manufactured or
produced. The Company has no obligations, contingent or otherwise, to repurchase
or replace any product it has sold other than in the ordinary course of
business. The expected costs of such repurchases and replacements are expected
to be consistent in amount and scope with prior experience.  There is
no inventory on consignment. Except for inventory in transit in the ordinary
course, the inventory is located in the main address at the Company or in any of
its branches. From

      
        
           

        

        
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      the date
hereof until the Closing Date the Company and the Sellers undertake to take all
the measures so as to prevent the occurrence of any changes in the inventory of
the Company out of the ordinary course of business.

      

      Section
3.19.  No
Undisclosed Liabilities.  There are no liabilities of the
Company of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, and there is no existing condition,
situation or set of circumstances that could reasonably be expected to result in
such a liability, other than (i) liabilities provided for in the Financial
Statements; or (ii) disclosed in any Exhibit attached herein.

      

      Section
3.20.  Certain
Representations with respect to the U.S. Regulations.  Neither
the Company, nor any of its Affiliates, nor any of its current or former
shareholders (directly or indirectly), directors, officers, employees, agents or
other persons acting on behalf of the Company have ever violated or committed
any act or made any payment in violation of, or that requires disclosure under,
the United States Foreign Corrupt Practices Act, including but not limited to
have offered, promised or given, or authorized or approved the payment, gift or
promise of anything of value, directly or through a third party, to any
“government official” (broadly defined to include any official, employee or
agent of an entity owned or controlled by a government, any official or employee
of a public international organization, any candidate for political office, and
any political party or party official) for the purpose of securing any improper
business advantage for the Company or any of its Affiliates in relation to the
business, including to obtain or retain business or agreements.

      

      Section
3.21.  Representations
Complete.  None of the representations or warranties made by
the Sellers and the Company herein or in any other related document, have or
will have at the Closing Date any untrue statement, or omits or will omit as of
date hereof and at the Closing Date to state any fact necessary in order to make
the statements contained herein or therein, in the light of the circumstances
under which made, not misleading.

      

      B)   
Nordeste Empreendedor represents and warrants to the Purchaser that each of the
following representations and warranties is, as of the date hereof, and will be,
on the Closing Date, true and correct and in full force and effect:

      

      Section
3.22.  Existence and
Power.  Nordeste Empreendedor is duly organized, validly
existing and in good standing under the laws of the Federative Republic of
Brazil.

      

      Section
3.23.  Authorization, Required Filings and
Consents.  (a) The execution, delivery and performance by
Nordeste Empreendedor of this Agreement and the consummation of the transactions
contemplated hereby are duly and validly authorized by all necessary corporate
action, and no other corporate proceedings on the part of Nordeste Empreendedor
are necessary to consummate the transactions contemplated herein.

      

      (b) No
filing or registration with, or notification by Nordeste Empreendedor to, and no
permit, authorization, consent or approval of, any Governmental Authority is
necessary for the execution and delivery of this Agreement by Nordeste
Empreendedor, or the consummation by Nordeste Empreendedor of the transactions
contemplated by this Agreement.

      

      
        
           

        

        
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      Section
3.24.  Noncontravention.  (a)
The execution, delivery and performance of this Agreement and any other
agreement or document related hereto and the consummation of the transactions
contemplated hereby by Nordeste Empreendedor do not and will not (i) violate the
organizational documents or its article of association, (ii) conflict with or
violate any Law applicable to Nordeste Empreendedor, nor (iii) require any
consent or other action by any Person.

      

      (b) For
the purposes of Section 3.04, on or prior to the Closing Date, Nordeste
Empreendedor (together with the members of the Board of Directors of the Company
holding one (1) preferred class A share of capital stock of the Company each)
agrees to sell, convey, assign, transfer and deliver to the Sellers and the
Sellers agree to purchase and acquire from Nordeste Empreendedor (and from the
members of the Board of Directors of the Company holding one (1) preferred
class A share of capital stock of the Company each) all of the 15,077 shares of
class A preferred stock jointly held by Nordeste Empreendedor and the members of
the Board of Directors of the Company, so that on the Closing Date the Seller be
the legal holder and registered owner of all the Shares, including such 15,077
preferred shares of class A stock, in the proportion set forth in Exhibit A
hereto.

      

      ARTICLE
4

      Representations
and Warranties of the Purchaser

      

      The
Purchaser hereby represents and warrants to the Sellers and the Company that
each of the following representations and warranties is, as of the date hereof,
and will be, on the Closing Date, true and correct and in full force and
effect:

      

      Section
4.01.  Existence.  The
Purchaser have been duly organized and is validly existing and in good standing
under the laws of its jurisdiction of organization.

      

      Section
4.02.  Authorization, Binding
Effect.  The execution, delivery and performance by Purchaser
of this Agreement and the consummation of the transactions contemplated hereby
are within the powers of the Purchaser and have been duly authorized by all
necessary action on the part of the Purchaser. This Agreement and Exhibits have
been duly executed and delivered by the Purchaser and, assuming the due
authorization, execution and delivery by the Seller and the Company, constitutes
a legal, valid and binding obligation of the Purchaser enforceable against it in
accordance with its terms, except to the extent that its enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of creditors’ rights generally.

      

      Section
4.03.  Governmental
Authorization.  The execution, delivery and performance by the
Purchaser of this Agreement and the consummation of the transactions
contemplated hereby require no action, approval, consent or declaration by or in
respect of, notice or filing with, any Governmental Authority, agency or
official.

      

      Section
4.04.  No Conflict.  The
execution and delivery of this Agreement by the Purchaser do not, and the
performance by the Purchaser of its obligations hereunder and the consummation
of the transactions contemplated herein will not, (i) conflict with or violate
any provision of its by-laws, (ii) conflict with or violate any Law applicable
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      or
affected or (iii) result in any breach of or constitute a default (or an event
which with the giving of notice or lapse of time or both could reasonably be
expected to become a default) under, or give to others any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or other encumbrance on any of their property or asset pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation.

      

      Section
4.05.  Representations
Complete.  None of the representations or warranties made by
the Purchaser herein contains at the date hereof or will contain at the Closing
Date any untrue statement of a material fact, or omits at the date hereof or
will omit at the Closing Date to state any material fact necessary in order to
make the statements contained herein, in the light of the circumstances under
which made, not misleading.

      

      ARTICLE
5

      Covenants
of the Company, the Sellers

      

      Section
5.01.  Conduct of
Business.

      

      

      (a) From
the date hereof until the Closing Date, the Sellers shall cause the Company to,
and the Company shall conduct its business in the ordinary and usual course of
business. In addition to the above, the Sellers shall not take any action that
may lead the Company to cause or experience: (i) physical damage, destruction,
loss or abandonment of any asset or property of the Company; (ii) acquisition,
sale, assignment, transfer, lease, sublease, license or other disposal of any
asset or property of the Company; (iii) any change in the management practices
of the Company; (iv) any change in the accounting policies and practices of the
Company; (v) creation of any Liens on all or any portion of any asset or
property of the Company; (vi) any amendment, modification, alteration, failure
to renew or termination of any material contract; (vii) waiver of any rights of
the Company or any cancellation of any claims, debts or accounts receivable
owing to the Company, other than in the ordinary course of business; (viii)
redemption of capital stock or declaration or payment of any dividends or
distributions (whether in cash, securities or other property) to the current
holders of capital stock of the Company and no other forms of transfer of funds
from the Company to its shareholders; (ix) issuance of shares of capital stock,
notes, bonds or other securities, convertible or not into shares of capital
stock, or any option, warrant or other right to acquire the same, or any other
interest in the Company; (x) advance or capital contribution to or investment by
the Company; (xi) entering into any joint venture or similar arrangement by the
Company; (xii) entering into any form of financial agreement; (xiii) revaluation
of any tangible or intangible assets of the Company; (xiv) litigation, which
could have a material adverse effect on the Company or its financial condition;
(xv) any loss to the Company; or (xvi) any adverse change in the Company’s
financial condition, business, operations or prospects.

      

      (b) If
any of the events described above occurred or are reasonably expected to occur,
the Sellers  shall promptly give notice to the Purchaser and to the
extent possible, shall discuss with the Purchaser any action to be taken by the
Company as a result thereof.

      
        
           

        

        
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      (c)
Notwithstanding Section 5.01(a) above, prior to the Closing Date the Company
shall not, and the Sellers shall not cause the Company to, enter into, modify,
amend or terminate any contract having an aggregate value of more than
R$200,000.00, except as first approved in writing by the Purchaser.

      

      Section
5.02.  Access to
Information; Confidentiality.  From the date hereof until the
Closing Date, the Company, and the Sellers  will (i) from time to time
upon reasonable prior notice and during regular business hours, give the
Purchaser and its counsel, financial advisors, auditors and other authorized
representatives full access to the offices, properties, books and records
relating to the Company, (ii) furnish to the Purchaser and its counsel,
financial advisors, auditors and other authorized representatives such financial
and operating data and other information relating to the Company as such Persons
may reasonably request and (iii) instruct the employees, counsel and financial
advisors of the Sellers or the Company to cooperate with the Purchaser in its
investigation of the Company. No investigation by the Purchaser or its counsel,
financial advisors, auditors or any other person or other information received
by the Purchaser or its counsel, financial advisors, auditors or any other
person shall operate as a waiver or otherwise affect any representation,
warranty or agreement given or made by the Company or the Sellers
hereunder.

      

      Section
5.03.  Exclusive
Dealing.  From the date hereof until the Closing Date, the
Company, the Sellers  shall cause their respective shareholders,
officers, directors, employees, agents, representatives, financial advisors,
attorneys, accountants and other agents to, as applicable, refrain from taking
any action, directly or indirectly, to encourage, initiate, solicit or engage in
discussions or negotiations with, or provide any information to, any Person,
other than the Purchaser and its respective Affiliates, concerning any direct or
indirect sale of the capital stock of the Company or any merger, sale or
transfer of assets or similar transaction involving the Company. The Company and
the Sellers further agrees that, in the event of a breach of or a default under
this Section 5.03, the remedies foreseen in Article 10 would be insufficient and
that the aggrieved Party shall be entitled to (i) specific performance to enjoin
any breach, or the continuation of any breach, of the provisions of this Section
5.03 and (ii) a punitive penalty (multa punitiva
não-compensatória) for each of the violating party and for each violation
individually the amount of R$500,000.00 (five hundred thousand
Reais).

      

      Section
5.04.  Certain
Employees.   The Sellers shall continue in their current
positions with the Company until December 31, 2011, and they shall cause Elton
to serve as a manager of the Company until December 31, 2011, pursuant to the
terms and conditions set forth in the Management Agreements to be executed on
the Closing Date, substantially in the form of Exhibit 5.04 hereto
and upon payment of a market salary.

      

      ARTICLE
6

      Covenants
of the Company, the Sellers and the Purchaser

      

      Section
6.01.  Best Efforts; Further
Assurances.  Subject to the terms and conditions of this
Agreement, the Parties hereto will use their respective best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary or desirable under applicable laws and regulations to consummate the
transactions contemplated by this Agreement, including but not

      
        
           

        

        
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      limited
to the Purchaser’s obligation of using its best efforts to obtain and deliver to
Wachovia Bank, National Association all the documents listed in Exhibit 6.01,
for the purposes of meeting the condition set forth in Section 7.02(k). The
Parties agree to cause the Company to execute and deliver all such documents,
certificates, agreements and other writings and to take such other actions as
may be necessary or desirable in order to consummate or implement expeditiously
the transactions contemplated by this Agreement.

      

      Section
6.02.  Confidentiality.  From
and after the date hereof, the Parties agree to hold, and to use their best
efforts to cause their Affiliates and respective officers, directors, employees,
accountants, counsel, consultants, advisors and agents to hold, in confidence,
any and all information regarding the terms and conditions of this Agreement,
any financial, Tax-related or commercial information of the Parties (“Confidential
Information”).  The terms and conditions of this Agreement may
only be disclosed in the event that any of the Parties is compelled to disclose
such information by law, rule, regulation, order or decree enacted by a
Governmental Authority to which the Party is subject or as a result of judicial
or administrative process in connection with any action, suit, proceeding or
investigation.  In any event the terms and conditions of this
Agreement are disclosed, the Party concerned shall take all such steps as may be
reasonable in the circumstances to agree the contents of such disclosure with
the other Party before making such disclosure.

      

      Section
6.03.  Certain
Filings.  The Parties agree to cooperate with one another (i)
in determining whether any action by or in respect of, or filing with, any
governmental body, agency, official or authority is required, or any actions,
consents, approvals or waivers are required to be obtained from parties to any
material contracts, in connection with the consummation of the transactions
contemplated by this Agreement and (ii) in taking such actions or making any
such filings, furnishing information required in connection therewith and
seeking timely to obtain any such actions, consents, approvals or
waivers.

      

      Section
6.04.  Public
Announcements.  The Parties agree to consult with each other
before issuing any press release or making any public statement with respect to
this Agreement or the transactions contemplated hereby and, except for any press
releases and public statements the making of which may be required by applicable
law or any listing agreement with any national securities exchange, will not
issue any such press release or make any such public statement prior to such
consultation.

      

      ARTICLE 7

      Conditions
to Closing

      

      Section
7.01.  Conditions to
Obligations of the Purchaser and the Sellers.  The obligations
of the Purchaser and the Sellers to consummate the Closing are subject to the
satisfaction of the following conditions:

      

      (a) There
shall not be threatened, instituted or pending any action or proceeding
challenging this Agreement or the transactions contemplated hereby, or seeking
to prohibit, alter, prevent or materially delay the Closing by any Person before
any court, arbitrator or governmental body, agency or official.

      
        
           

        

        
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      (b) No
provision of any applicable law or regulation and no judgment, injunction, order
or decree shall prohibit the consummation of the Closing.

      

      (c) All
actions by or in respect of or filings with any governmental body, agency,
official or authority required to permit the consummation of the Closing shall
have been taken, made or obtained.

      

      Section
7.02.  Conditions to Obligation of the
Purchaser.  The obligation of the Purchaser to consummate the
Closing is subject to the satisfaction (or waiver by Purchaser) of the following
further conditions:

      

      (a) (i)
Each of the Sellers shall have performed in all material respects all of its
obligations hereunder required to be performed by it on or prior to the Closing
Date, (ii) the representations and warranties of the Sellers contained in this
Agreement and in any certificate or other writing delivered pursuant hereto (A)
that are qualified by materiality or material adverse effect shall be true at
and as of the Closing Date as if made at and as of such date, and (B) that are
not qualified by materiality or material adverse effect shall be true in all
material respects at and as of the Closing Date as if made at and as of such
time, (iii) the Purchaser shall have received a certificate signed by each of
the Sellers to the foregoing effect and such other information as the Purchaser
may reasonably request to determine the satisfaction of this
condition.

      

      (b) There
shall not be threatened, instituted or pending any action or proceeding by any
Person before any court or governmental authority or agency, domestic or
foreign, (i) seeking to restrain, prohibit or otherwise interfere with the
purchase and sale of the Shares or the ownership or operation by the Company or
the Purchaser of all or any material portion of the business or assets of the
Company or of the Purchaser or any of their respective Affiliates or to compel
the Company or the Purchaser or any of their respective Affiliates to dispose of
all or any material portion of the business or assets of the Company or of the
Purchaser or any of their respective Affiliates, (ii) seeking to impose or
confirm limitations on the ability of the Purchaser effectively to exercise full
rights of ownership of the Shares, including without limitation, the right to
vote all additional Shares on all matters properly presented to the Company’s
stockholders or (iii) seeking to require divestiture by the Purchaser of any
Shares.

      

      (c) There
shall not be any action taken, or any statute, rule, regulation, injunction,
order or decree proposed, enacted, enforced, promulgated, issued or deemed
applicable to the acquisition of the Shares, by any court, government or
governmental authority or agency, domestic or foreign, that, in the reasonable
judgment of the Purchaser could, directly or indirectly, result in any of the
consequences referred to in clauses 7.02(b)(i) through 7.02(b)(iii)
above.

      

      (d) The
Purchaser shall have received evidence establishing that, at the time of the
Closing the representations and warranties contained in Section 3.04 shall be
true and correct in all respects.

      

      (e) The
Purchaser shall have received all documents it may reasonably request relating
to the existence of the Sellers and the authority of the Sellers to execute,
deliver and perform this Agreement, all in form and substance satisfactory to
the Purchaser.

      
        
           

        

        
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      (f) All
obligations, agreements, contracts, powers of attorney, plans, leases,
arrangements and commitments owed between any Affiliate, on the one hand, and
the Company, on the other hand, as of the Closing shall have been settled or
terminated.

      

      (g) The
Purchaser shall have received the following clearance certificates in the name
of the Seller and the Company: (i) Debt Clearance Certificate - CND issued by
the Instituto Nacional do Seguro Social (Brazilian Social Security Institute -
INSS); (ii) Federal Taxes Clearance Certificate issued by the Secretaria da
Receita Federal (Brazilian Federal Revenue Office); (iii) Clearance Certificate
- CRS issued by the Fundo de Garantia por Tempo de Serviço (Brazilian
Unemployment Compensation Fund - FGTS).

      

      (h) The
Purchaser shall have received (a) a written resignation from each one of the
members of the Board of Directors of the Company, and (b) a written release from
each member of the Board of Directors of the Company, releasing the Company from
any and all obligations or liabilities that may be owed by the Company to such
member in its capacity of member of Board of Directors and individual
shareholder of the Company.

      

      (i) The
Purchaser shall have received evidence that the Company has obtained all the
consents and approvals listed in Exhibit 3.08(b).

      

      (j) The
Purchaser shall have been satisfied, in its sole discretion, with the results of
its legal, accounting, labor, tax and business due diligence review of the
Company, including, without limitation, the operation, business, assets, working
capital, liabilities and prospects of the Company and any Affiliates
thereof.

      

      (k)
Wachovia Bank, National Association shall have disbursed the loan contemplated
by the $30,000,000 Second Amended and Restated Promissory Note and the Third
Modification to Note and Loan Agreement and Reaffirmation of Guaranty, among
Lakeland, National Association Bank and others.

      

      ARTICLE
8

      Closing

      

      Section
8.01.  Closing.  Subject
to the terms and conditions set forth herein, and the satisfactory completion
(or waiver) of each of the conditions precedents contemplated in Article 7
above, the closing of the deal contemplated by this contract ("Closing") shall take
place at the offices of Mattos Filho, Veiga Filho, Marrey Jr. e Quiroga, at
Alameda Joaquim Eugênio de Lima, 447, in the City of São Paulo, State of São
Paulo, on May 9th, 2008
(“Closing
Date”).

      

      Section
8.02.  Closing
Transactions.  On the Closing Date, the following actions shall
be taken by the Parties, all of which considered to have taken place
simultaneously ("Closing
Transactions"):

      
        
           

        

        
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      (i) The
Purchaser shall pay to the Sellers the Purchase Price less the Retained Amount,
in Reais, by wire transfer, in immediately available funds, to the Sellers’ bank
account in Brazil, designated in Exhibit 2.03, and cause the Company to pay all
the Outstanding Debts with due regard for item 2.07.

      

      (ii) The
Parties shall hold a shareholders' meeting in the form contained in Exhibit 8.02(ii)
hereto in order to accept the resignation of actual members of Board of Director
of the Company and elect the new members of the Board of Directors, to be
appointed by the Purchaser.

      

      (iii) The
Purchaser shall deposit the Retained Amount with the Escrow Agent upon execution
and delivery of the Escrow Agreements, substantially in the form of Schedule
2.04 hereto.

      

      (iv) The
Sellers and the Purchaser shall execute in the share transfer book (livro de transferência de ações
nominativas) of the Company deeds of transfer of 1,492,624 shares of
common stock and 15,077 shares of preferred stock, representing, in the
aggregate, 100% of the Company’s voting and total capital stock, free and clear
of any Liens, together with all documents reasonably required to transfer assign
and deliver title to such Shares to the Purchaser.

      

      (v) The
Company and Miguel, Marcia, Elder and Elton shall execute and deliver the
Management Agreements contemplated by Section 5.04.

      

      (vi) The
Company and Wachovia Bank, National Association  shall execute and
deliver certain collateral agreements on terms and conditions to be mutually
agreed by the Purchaser and Wachovia Bank, National Association , pursuant to
which the Company shall grant a first priority security interest in and to all
of its assets to secure the payment of all amounts required to be paid under the
Third Modification to Note and Loan Agreement and Reaffirmation of Guaranty,
among Lakeland, Wachovia Bank, National Association and others.

      

      (vii)
Each Party shall confirm that all the representations and warranties given
by them are true and correct as of the Closing Date; and that there has not been
any breach of the representations and warranties given by each Party nor of any
covenant pursuant to this Agreement.

      

      ARTICLE
9

      Post-Closing
Obligations

      

      Section
9.01.  Employees of
Prestserv.  Within six (6) months from the Closing Date, the
Parties shall negotiate in good faith the terms pursuant to which the Company
shall absorb the employees of Prestserv associated with the activities of
production and manufacture of personnel equipment of the Company. The Parties
shall agree on terms that are less burdensome to the Company.

      

      Section
9.02.  Non Compete
and Non-Solicitation.  (a) Each of the Sellers agrees that for
a period of seven (7) years from the Closing Date (or 7 (seven) years from the
termination of the relevant Management Agreements, whichever occurs later), it
shall not, directly or indirectly (i) provide consulting or other services to,
serve as a director or other advisor to, maintain any employee relationship
with, or make any loan, extend credit to, or have any ownership interest in, any
Person that competes with the Business or operates a business similar to the
Business within the territory of

      
        
           

        

        
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      Brazil,
(ii) solicit any Person not to conduct business with the Company, the Purchaser
or their respective Affiliates or to conduct its business with any Person that
operates a business similar to the Business within the territory of Brazil or
otherwise interfere with such customer relationship.

      

      (b) None
of the Sellers shall directly or indirectly, and the Sellers shall cause any of
their respective Affiliates or Persons in which they have or may have an equity
interest, not to directly or indirectly, at any time prior to the 7th
(seventh) anniversary of the Closing Date, solicit (x) any Person who is offered
employment by the Company or their respective Affiliates, not to accept such
offer of employment or (y) any Person who is employed by the Company or their
Affiliates, to leave the employment in the Company or their Affiliates and to
work for, or to form a new entity with any Person.

      

      (c) Each
of the Sellers hereby acknowledges and agrees that the provisions of this
Section 9.02 are reasonable and necessary for the Company, the Sellers, the
Purchaser and their respective Affiliates’ protection and that if any portion
thereof shall be held contrary to Law or invalid or unenforceable in any respect
in any jurisdiction, or as to one or more periods of time, areas of business
activities, or any part thereof, the remaining provisions shall not be affected
but shall remain in full force and effect and that any such invalid or
unenforceable provision shall be deemed, without further action on the part of
any Person, modified and limited to the extent necessary to render the same
valid and enforceable in such jurisdiction. Each of the Parties further agrees
that, in the event of a breach of or a default under this Section 9.02, the
remedies foreseen in Article 10 would be insufficient and that the aggrieved
Party shall be entitled to (i) specific performance to enjoin any breach, or the
continuation of any breach, of the provisions of this Section 9.02 and (ii) a
punitive penalty (multa
punitiva não-compensatória) for each of the violating party and for each
violation individually considered in the amount of R$500,000.00 (five hundred
thousand Reais), being such penalty exclusively due by the defaulting
Seller.

      

      Section
9.03.  Access to
Books and Records.  On and after the Closing Date, the Sellers
will afford promptly to the Company, the Purchaser, Lakeland and their
respective agents reasonable access to its books of account, financial and other
records (including, without limitation, accountant’s work papers), information,
employees and auditors to the extent necessary or useful for the Company, the
Purchaser or Lakeland in connection with any audit, investigation, dispute or
litigation or any other reasonable business purpose relating to the
Company.

      

      Section
9.04.  Non-disparagement. From the
date hereof until the termination hereof, Sellers will not, and will not permit
any of their respective Affiliates, to knowingly make any statement, written or
oral, which disparages or is derogatory to the Company in any communications
with any Person.

      

      ARTICLE
10

      Indemnification

      

      Section 10.01.  Indemnification.  Subject
to Sections 10.02 and 10.03 below, each Party hereby agrees to indemnify and
hold the other Party, the Company and its shareholders, officers, directors and
employees, and their respective Affiliates and successors (“Indemnified
Parties”), harmless from any and all liability, loss, damage, fine,
penalty, partially or totally non-existing assets or
receivables,

      
        
           

        

        
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      claims,
awards, judgments, costs and expenses (including reasonable fees and expenses of
attorneys) (“Losses”) incurred or
suffered by any of the Indemnified Parties in connection with, relating to or as
a result of (i) any misdisclosure, inaccuracy, untruthfulness, violation or
breach of any representations and warranties given in this Agreement; and/or
(ii) any breach  of any covenant or agreement contained in this
Agreement. Additionally, the Sellers hereby agree to indemnify and hold the
Indemnified Parties, harmless from any and all Losses incurred or suffered by
any of the Indemnified Parties in connection with, relating to or as a result of
any and all debts and liabilities of any kind (tax, labour, civil, environmental
etc.), including but not limited to those related to judicial or administrative
procedures, resulting from any act or omission, fact, event or circumstance
related to the Company or its business that occurred on or prior to the Closing
Date, which have not been recorded in the Financial Statements, whether or not
known by the Sellers and whether or not included in the Exhibits hereto
attached, or which, if recorded in the Financial Statements, are not adequately
provisioned in the Company’s accounting records.

      

      Section
10.02.  Survival of
Indemnity Obligation.  The obligation to indemnify pursuant to
this Article 10 shall remain in full force and effect for the survival periods
of the indemnification obligations according to the applicable law.

      

      Section
10.03.  Indemnification
Procedures.  (a) In the event that any action, suit,
proceeding, demand, assessment or other notice of claim (“Claim”) is at any
time instituted against or made upon any Indemnified Party for which
indemnification may be due from the Sellers pursuant to Section 10.01 above,
such Indemnified Party shall notify the Sellers of the assertion of any claim,
or the commencement of any suit, action or proceeding in respect of which
indemnity may be sought under this Agreement. The Sellers shall have the right,
at its election, to take over the defense of such claim by giving written notice
to the Indemnified Party at least 5 (five)  Business Days prior to the
time when an answer or other responsive pleading or notice with respect thereto
is required. If the Sellers make such election, they may conduct the defense of
such claim through counsel reasonably acceptable to the Indemnified Party, shall
be solely responsible for the expenses of such defense and shall be bound by the
results of its defense or settlement of the claim; provided, that if the
Indemnified Party shall have concluded that there may be legal defenses
available to it which are different from or in conflict with those available to
the Seller, the Indemnified Party shall have the right to select separate
counsel (reasonably acceptable to the Sellers) to assume such legal defenses or
to otherwise participate in the defense of such action at the expense of the
Sellers. The Sellers shall not settle any such claim without prior notice to and
consultation with the Indemnified Party, and no such settlement which might have
an adverse effect on the Indemnified Party may be agreed to without the written
consent of the Indemnified Party. So long as the Sellers are diligently
contesting any such claim in good faith, the Indemnified Party may pay or settle
such claim only at its own expense; provided, that the Seller shall not be
obligated to indemnify the Indemnified Party in connection with any such payment
or settlement unless the Seller shall have consented thereto, such consent not
to be unreasonably withheld. If the Sellers do not make an election to take over
defense or settlement of a claim, or having made such election does not, in the
reasonable opinion of the Indemnified Party, proceed diligently to defend such
claim, then the Indemnified Party may (after written notice to the Seller
Party), at the expense of the Sellers, take over the defense of and proceed to
handle such claim in its discretion and the Sellers shall be bound by any
defense or settlement that the Indemnified Party may make in good
faith.

      
        
           

        

        
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      (b) The
Party responsible for the conduct of the defense of a lawsuit or arbitration
proceeding shall provide the other Party with copies of the main court or
arbitration filings (peças processuais) as well as quarterly reports regarding
the conduct of the defense, which shall include, among others, the status and
the analysis of the probability of success of such defense.

      

      Section
10.04.  Cooperation.  The
Parties agree to cooperate in defending such claims and the Sellers, the Company
and the Indemnified Party shall provide any information necessary to the other
party and such access to its books, records and properties as any Seller or
Indemnified Party shall reasonably request with respect to any matter for which
indemnification is sought thereunder; and the parties hereto agree to cooperate
with each other in order to ensure the adequate defense thereof. Any information
obtained under these provisions shall be deemed confidential and its use in
relation to any third party or any claim shall be used upon and in accordance
with a prior written agreement between the Indemnified Party and the
Seller.

      

      Section
10.05.  Due
Date.  (a) With regard to third party claims for which
indemnification is payable hereunder such indemnification (and not expenses and
similar costs, which become due as and when incurred) shall become due by the
Seller upon the earlier to occur of: (i) the entry of a judgment against the
Indemnified Party and the expiration of any applicable appeal period, or if
earlier, five Business Days  after the date that the judgment creditor
has the right to execute the judgment; (ii) the entry of an unappealable
judgment or final appellate decision against the Indemnified Party; or (iii) a
settlement of the claim in accordance with the preceding
paragraphs.  Notwithstanding the foregoing, the reimbursement of
expenses, fees and similar costs of the Indemnified Party shall be due on a
current basis by the Sellers if such expenses are a liability of the Sellers.
With regard to other claims for which indemnification is payable hereunder, such
indemnification shall be due promptly by the Sellers upon demand by the
Indemnified Party.

      

      (b) Any
amounts to be indemnified by a Party to another Party shall be duly adjusted by
the CDI from the date any of the Losses are effectively incurred, suffered or
paid by the Indemnified Party until the date the respective indemnification is
paid by the Sellers. All payments to be made by the Sellers pursuant to this
Article 10 that are not paid after due date or a valid demand for payment is
made (whichever is earlier) shall continue to be adjusted by the CDI from the
date any such amount is due until the date of the respective payment.
Additionally, the Seller shall pay a punitive penalty (multa punitiva
não-compensatória) of 2% (two per cent) over the outstanding amount duly
adjusted by CDI, as described above.

      

      Section
10.06.  Guarantee
(”Fiança”). To secure the payment of all amounts required to be paid by
the Sellers under this Agreement, with interest at the rates set forth
herein, and the full performance by the Sellers of all of the other terms,
covenants and obligations set forth herein, the Sellers, with the consent
of their spouses, hereby irrevocably and irreversibly, jointly and
severally, guarantee the Sellers’ obligation to pay any indemnity under
this Article 10, waiving all benefits under Articles 827, 834, 835, 836,
837,837, 838 and 839 of the Brazilian Civil Code.

      
        
           

        

        
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      ARTICLE 11

      Termination

      

      Section
11.01.  Right to
Terminate.  This Agreement may be terminated at any time prior
to the Closing without liability or penalty to any of the Parties:

      

      (i) by
the mutual written consent of the Parties;

      

      (ii) by
either Party in the event that any Governmental Authority shall have issued an
order, decree or ruling or taken any other action restraining or otherwise
prohibiting the transactions contemplated by this Agreement and such order,
decree, ruling or other action shall have become final and unappealable;
and

      

      (iii) by
either Party in the event that the Closing does not occur until 9th May
2008, so as long as the terminating Party is not in breach of any of its
representations, warranties, covenants or agreements hereunder before the
termination.

      

      Section
11.02.  Effects of
Termination.  In the event of termination of this Agreement as
provided in Section 11.01, this Agreement shall immediately become void and
there shall be no liability on the part of any Party to this Agreement, except
that:

      

      (i) the
obligations under Sections 6.02, 12.01 and 13.06 will survive; and

      

      (ii)
nothing in this Article 11 shall relieve either Party from liability for any
breach, failure to perform or comply with this Agreement which has given the
right to the other Party to exercise the right of termination pursuant to
Section 11.1 of this Agreement.

      

      Section
11.03.  Remedies.  (a) At
any time prior to the Closing, either Party may:

      

      (i)
extend the time for the performance of any of the obligations or other acts of
the other Party;

      

      (ii)
waive any inaccuracies in the representations and warranties contained in this
Agreement or in any document delivered pursuant to this Agreement;
or

      

      (iii)
waive compliance with any of the agreements or conditions contained in this
Agreement.

      

      (b) This
Agreement may only be terminated prior to Closing and in accordance with Section
11.01 of this Agreement.  After the Closing has taken place, the
indemnification rights provided for in Article 10 of this Agreement shall be the
sole and ultimate remedy available to the Parties with respect to any breach of
the representations and warranties of the Parties in this Agreement, and/or any
breach of any covenant or other term in this Agreement.

      

      ARTICLE
12

      Dispute
Resolution

      
        
           

        

        
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      Section
12.01.  Arbitration.  (a)
Any dispute arising between the Parties in connection with this Agreement, its
interpretation, validity, performance, enforceability, breach or termination,
shall be settled in an amicable way by the Parties by direct negotiations held
in good faith for a term not exceeding 30 (thirty) calendar days.

      

      (b) If,
upon expiration of the 30-day period, the Parties have not reached an amicable
settlement, the dispute must be submitted to the decision of an arbitration
panel and shall be finally settled under the rules of Arbitration of the Chamber
of Commerce Brasil-Canadá (“CCBC”) by 3 (three) arbitrators appointed in
accordance with the said rules. Language of the proceeding shall be English.
Place of arbitration and the issuance of the award shall be the City of São
Paulo, State of São Paulo, Brazil. The claims and disputes taken before the
arbitration proceeds shall be solved according to Brazilian law, which will also
be applicable to solve any controversy regarding this arbitration Article.
Notwithstanding the arbitration provisions above, the Parties hereto shall have
the right to go to court in the County of São Paulo in order to (i) obtain
injunctive relief or (ii) to enforce the submission of the other Party to the
arbitration proceeding.

      

      ARTICLE
13

      Miscellaneous

      

      Section
13.01.  Binding
Effect. This Agreement will be binding and inure to the benefit of the
Parties, their respective legal successors and permitted assignees.

      

      Section
13.02.  Assignability.  The
rights and obligations set forth in this Agreement must not be assigned, except
for (i) the right of the Purchaser to act through any Affiliate incorporated in
Brazil or elsewhere; or (ii) with the written consent of the other
Parties.

      

      Section
13.03.  Severability. In case any
term or provision set forth in this Agreement is considered invalid, illegal or
not applicable, due to any legal provision or final court decision, all the
other conditions and provisions hereto will remain in full force and effect. In
case any term or provision is considered invalid, illegal or inapplicable, the
Parties will negotiate, in good faith, the amendment of this Agreement, so as to
effect the original intent of the Parties hereto as closely as
possible.

      

      Section
13.04.  Waiver;
Amendment.  (a) No failure of delay in exercising any right,
power or privilege hereunder will be considered as a waiver thereof, nor will
any single or partial exercise thereof prevent the future exercise thereof or
the exercise of any other right, power or privilege. The rights and legal
measures set forth herein will be cumulated and will not prevent any other
rights or legal measures set forth in the law or in this Agreement.

      

      (b) Any
provision of this Agreement may only be amended or waived if through written
form and signed by all the Parties hereto.

      

      Section
13.05.  Notices.  All
notices and communications required or allowed pursuant to this Agreement, will
be made in written form, in English, and will be sent by registered mail, by fax
(receipt confirmed) or e-mail (receipt confirmed), to the following
addresses:

      
        
           

        

        
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      If to the
Purchaser:

      

      Lakeland
Industries Inc.

      701
Koehler Avenue, suite 7

      Ronkonkoma,
NY 11779, USA

      Fax:
631-981-9751

      At.:
Garry Pokrassa and Christopher J. Ryan

      e-mail:
GAPokrassa@lakeland.com and CJRyan@lakeland.com

      

      if to the
Sellers:

      

      Miguel
Antonio dos Guimarães Bastos

      Condominio
Encontro das Águas, Quadra I, Lote 39

      42700-000
– Lauro de Freitas - BA

      Fax: 55
71 3390-3013

      E-mail:
mgb@qualytextil.com.br

      

      

      Elder
Marcos Vieira da Conceição

      Rua
Clarival do Prado Valladares, 371, Condomínio Monte Trianon

      Bairro
Caminho das Arvores, CEP 41820-700

      Salvador,
BA

      Fax: 55
71 3390-3013

      E-mail:
marcos.vieira@qualytextil.com.br

      

      Márcia
Cristina Vieira da Conceição Antunes

      Alameda
Cabo Frio, Quadra 34, Lote 10

      Bairro
Praias do Flamengo, CEP 41603-115

      Salvador,
BA

      Fax: 55
71 3390-3013

      E-mail:
marciaantunes@qualytextil.com.br

      

      if to the
Company:

      

      Qualytextil
S.A.

      Rua do
Luxemburgo, 260

      41.230-130  Salvador
BA

      Fax: (55
71) 3390-3001

      At.
Miguel Antonio dos Guimarães Bastos

      e-mail:
mgb@qualytextil.com.br

      with copy
to the Purchaser.

      

      The
Parties are entitled to amend, by means of written communication, pursuant to
this Section 13.05, the addresses above.

      
        
           

        

        
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      Section
13.06.  Expenses.  All
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby will be paid by the Party incurring such cost
or expense.

      

      Section
13.07.  Counterparts.  This
Agreement may be signed in any number of counterparts, each of which will be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.

      

      Section
13.08.  Entire
Agreement. This Agreement (including the Exhibits attached hereto)
constitute the entire agreement between the Parties with respect to the subject
matter of this Agreement and supersede all prior agreements, understandings and
offers, both oral and written, between the Parties with respect to the subject
matter of this Agreement.

      

      Section
13.09.  Language. This Agreement is
being executed in the English language. The version in the Portuguese language,
a copy of which is attached hereto as Exhibit 13.09, is
only for reference of the Parties. In the event of any discrepancy between the
English and Portuguese versions of this Agreement, the English version of the
Agreement shall prevail.

      

      Section
13.10.  Applicable
Law.  This Agreement is governed and interpreted in accordance
with the laws of the Federative Republic of Brazil.

      

      IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed by their respective authorized officers, as of the day and year first
above written, in the presence of the two witnesses named below.

      

      

      
        	
                São
      Paulo, May 2, 2008.

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                LAKELAND
      DO BRASIL EMPREENDIMENTOS E PART. LTDA.

              
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/ Jose Tavares
      Lucena

              	 
      	 
      	 
      
	
                Name:

              	
                Jose
      Tavares Lucena

              	 
      	 
      	 
      
	
                Title:

              	
                Administrator

              	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                LAKELAND
      INDUSTRIES, INC.

              
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/ Gary A.
      Pokrassa

              	 
      	 
      	 
      
	
                Name:

              	
                Gary
      A. Pokrassa

              	 
      	 
      	 
      
	
                Title:

              	
                CFO

              	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                MIGUEL
      ANTONIO DOS GUIMARÃES BASTOS

              
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/ Miguel Antonio Dos
      Guimaraes Bastos

              

      

       

      
        
           

        

        
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                ELDER
      MARCOS VIEIRA DA CONCEIÇÃO

              
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/ Elder Marcos
      Vieira Da Conceicao

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                MÁRCIA
      CRISTINA VIEIRA DA CONCEIÇÃO ANTUNES

              
	
                By:

              	
                /s/ Marcia Cristina
      Vieira Da Conceicao Antunes

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                NORDESTE
      EMPREENDEDOR FUNDO MÚTUO DE INV. EM EMP. EM.

              
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	 
      	 
      	 
      	 
      
	
                Name:

              	 
      	 
      	 
      	 
      
	
                Title:

              	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	 
      	 
      	 
      	 
      
	
                Name:

              	 
      	 
      	 
      	 
      
	
                Title:

              	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                QUALYTEXTIL
      S.A.

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/ Miguel G.
      Bastos

              	 
      	
                By:

              	
                /s/ Elder Marcos
      Vieira da Conceicao

              
	
                Name:

              	
                Miguel
      G. Bastos

              	 
      	
                Name:

              	
                Elder
      Marcos Vieira da Conceicao

              
	
                Title:

              	
                CFO

              	 
      	
                Title:

              	
                CEO

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                CONCEIÇÃO
      MARIA PASSOS DE QUEIROZ

              
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/ Conceicao Maria
      Passos De Queiroz

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                ELTON
      DE CARVALHO ANTUNES

              
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	
                /s/ Elton De Carvalho
      Antunes

              

      

      

      
        
           

        

        
          30

          
            

          

        

        
           

          Execution
copy

        

      

      

      
        	
                WITNESSES:

              	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                1.

              	 
      	
                2.

              
	
                Name:

              	 
      	
                Name:

              
	
                ID:

              	 
      	
                ID:

              

      

      
 

    

     31

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00142-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00142-of-00352.parquet"}]]