Document:

CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS

                                       OF

                   SERIES A JUNIOR CONVERTIBLE PREFERRED STOCK

                                       OF

                       POWERHOUSE TECHNOLOGIES GROUP, INC.

                         (Pursuant to Section 151 of the
                      Delaware General Corporation Law)
                      ---------------------------------

            PowerHouse Technologies Group, Inc., a corporation organized and
existing under the laws of the State of Delaware (the "Company"), hereby
certifies that, pursuant to authority vested in the Board of Directors of the
Company by Article 4 of the Amended Certificate of Incorporation of the Company,
the following resolution was adopted as of April 28, 2004, by the Board of
Directors of the Company pursuant to Section 141 of the Delaware General
Corporation Law:

            "Pursuant to authority vested in the Board of Directors of the
Company by Article 4 of the Company's Amended Certificate of Incorporation, of
the total authorized number of 25,000,000 shares of Company preferred stock (the
"Preferred Stock"), par value $0.0001 per share, there shall be designated a
series of 5,000,000 shares which shall be issued hereunder and constitute a
single series to be known as "Series A Junior Convertible Preferred Stock"
(hereinafter called the "Series A Junior Preferred Stock"). The shares of Series
A Junior Preferred Stock have the voting powers, designations, preferences and
other special rights, and qualifications, limitations and restrictions thereof
set forth below:

            1. Certain Definitions.

            "Average Price" shall mean, with respect to any shares of stock or
securities, including the Common Stock (as defined below), on any date of
determination, the average for the ten (10) consecutive Trading Days (as defined
below) preceding and including such date of determination of the reported last
sale prices per share on the principal national securities exchange or
inter-dealer quotation system on which such stock or security is listed or
admitted to trading, or if not listed or admitted to trading on any national
securities exchange or inter-dealer quotation system or if last sale prices are
not available, the average for the ten (10) consecutive Trading Days preceding
and including the date of determination of the average of the closing bid and
asked prices per share or security in the over-the-counter market as published
by the National Quotation Service or the OTC Bulletin Board or, if no such
quotations are published or

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furnished, by any New York Stock Exchange member firm selected from time
to time by the Company for that purpose.

            "Common Stock" shall mean the common stock, $0.0001 par value, of
the Company, including the stock into which the Series A Junior Preferred Stock
is convertible, and any capital stock of any class of the Company thereafter
authorized that shall not be limited to a fixed sum in respect of the rights of
the holders thereof to participate in dividends or in the distribution of assets
upon the voluntary or involuntary liquidation, dissolution or winding up of the
Company.

            "Current Market Price" shall mean, with respect to any shares of
capital stock or other securities, (i) if such stock or securities are listed or
admitted to trading on a national securities exchange or an inter-dealer
quotation system or traded in the over-the-counter market, the Average Price per
share or security, as the case may be, at the close of trading on the Trading
Day on which the relevant determination is to be made or, if such day is not a
Trading Day, the Trading Day immediately preceding such day and (ii) if such
stock or security is not so listed, admitted or traded, the fair market value of
such stock or security as determined by the Managing Directors of the Company
or, if such parties cannot agree, as determined by an Independent Appraiser (as
defined below).

            "Excluded Stock" shall mean Common Stock issued or to be issued,

      (i) pursuant to the conversion, exercise or exchange of securities
      outstanding as of (a) with respect to the Units, the closing date of the
      Senior A Units Offering and (b) with respect to the Junior Units, the
      closing date of the New Junior A Units Offering;

      (ii) pursuant to the exercise of any equity securities issued in
      accordance with the Company's stock option plan or stock purchase plan, or
      otherwise issued to the Company's employees, consultants or directors in
      transactions not primarily for equity financing purposes and approved by a
      majority of the members of the Compensation Committee (which shall include
      at least one member who is a Director designated by the holders of the
      Series A Senior Preferred Stock) and the Board of Directors;

      (iii) in connection with any joint venture or strategic relationship
      approved by the Board of Directors;

      (iv) in connection with leases, loans and other transactions not
      primarily for equity financing purposes and approved by the Board of
      Directors;

      (v) in connection with any acquisition of or by the Company, whether
      by merger, stock or asset purchase or otherwise;

      (vi) in an underwritten public offering through an internationally
      recognized underwriter at a price not less than three (3) times the
      original Junior Liquidation Preference (as defined below);

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      (vii) except as otherwise provided herein, and following any
      applicable adjustment in the Conversion Price provided for in Subsection
      4D, upon the actual issue of Common Stock or securities convertible into
      Common Stock at the time of exercise of any rights, options or warrants to
      purchase Common Stock or any securities convertible into Common Stock, as
      appropriate, or upon conversion or exchange of securities convertible into
      Common Stock; or

      (viii) to the extent provided for in the Series A Junior Units
      Purchase Agreement (the "Junior Purchase Agreement"), any shares of Series
      A Junior Preferred Stock issued after the closing date of the New Junior A
      Units Offering.

            "Independent Appraiser" shall mean an investment banking firm,
appraisal firm or any other financial expert of recognized national standing in
the United States, selected by the holders of a majority of the Series A Junior
Preferred Stock and reasonably acceptable to the Company, that does not (or
whose directors, officers, employees, affiliates or stockholders do not) have a
direct or indirect material financial interest in the Company or a 5% or greater
holder of Series A Junior Preferred Stock, who has not been, and, at the time
called upon to give independent financial advice to the Company or a holder of
Series A Junior Preferred Stock, is not (and none of its directors, officers,
affiliates or stockholders are) a promoter, director or officer of the Company.

            "New Junior A Units Offering" shall mean the offering by the Company
of Series A Junior Units (each a "Junior Unit"), composed of Series A Junior
Preferred Stock and Series A Junior Common Stock Purchase Warrants (the "Junior
Warrants"), in a private placement to certain current holders of Common Stock
pursuant to the Company's Confidential Rescission Offer and New Junior A Units
Offering Memorandum, dated April 28, 2004 (the "Memorandum").

            "Original  Purchase Price" shall mean $3.06 per share, which shall
be subject to adjustment as provided for in Subsection 4D hereof.

            "Senior A Units Offering" shall mean the offering by the Company of
Series A Senior Units (each a "Unit"), composed of Series A Senior Convertible
Preferred Stock (the "Series A Senior Preferred Stock") and Series A Senior
Common Stock Purchase Warrants (the "Warrants"), in a private placement to
certain investors pursuant to the Company's Confidential Private Placement
Memorandum, dated April 23, 2004 (the "PPM").

            "Trading Day" shall mean (i) if the relevant stock or security is
listed or admitted for trading on the New York Stock Exchange or any other
national securities exchange, a day on which such exchange is open for business;
(ii) if the relevant stock or security is quoted on the Nasdaq National Market
or any other system of automated dissemination of quotations of securities
prices, a day on which trades may be effected through such system; or (iii) if
the relevant stock or security is not listed or admitted for trading on any
national securities exchange or quoted on the Nasdaq National Market or any
other system of automated dissemination of quotation of securities prices, a day
on which the relevant stock or security is traded in a regular

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<PAGE>

way in the over-the-counter market and for which a closing bid and a
closing asked price for such stock or security are available.

            "Triggering Event" shall mean the Company's litigation filed on
September 15, 2003 in the Superior Court of the State of California in and for
the Country of Los Angeles, South West District captioned PowerHouse
Technologies Group, Inc. v. Proctor , et. al., (Case No. YC047491) in which
Joseph Ford Proctor, BrickHouse Captial Venture Limited, Julie Holfinger and
others are named as defendants (the "Proctor Litigation") proving to be
unsuccessful and the shares of Common Stock that are held by any defendant, or
any affiliate of any defendant, in the Proctor Litigation (the "Proctor Group")
being reinstated into the Company's capitalization.

            2. Dividends. The holders of the Series A Junior Preferred Stock are
not entitled to a dividend, other than a liquidating distribution, or ordinary
dividends or distributions declared or paid on the Common Stock, on an
as-converted basis.

            3. Preference on Liquidation

               3A. Liquidation Preference for Series A Junior Preferred Stock.
      Upon any liquidation, dissolution or winding up of the Company, whether
      voluntary or involuntary, the holders of the shares of Series A Senior
      Preferred Stock shall be entitled, before any distributions shall be made
      to the holders of the Common Stock or Series A Junior Preferred Stock, to
      be paid a per share amount equal to 150% of the Original Purchase Price,
      plus any unpaid dividends (appropriately adjusted to reflect the
      occurrence of any stock split, stock dividend, stock combination, stock
      subdivision or like occurrences) (the "Senior Liquidation Preference").
      After the payment of the Senior Liquidation Preference, the holders of the
      Series A Junior Preferred Stock shall be entitled to receive, in
      preference to the holders of the Common Stock, but subordinate to the
      holders of the Series A Senior Preferred Stock, a per share amount equal
      to the greater of $2,600,000 in the aggregate or the Series A Junior
      Preferred holder's share of the liquidation proceeds of the Company,
      determined on an as-converted basis (the "Junior Liquidation Preference").
      With respect to the assets remaining after distribution of the Senior
      Liquidation Preference and the Junior Liquidation Preference, the holders
      of the Series A Senior Preferred Stock and Common Stock shall receive an
      aggregate pro rata liquidating distribution per share on an as-converted
      basis.

            If upon such liquidation, dissolution or winding up of the Company,
      whether voluntary or involuntary, the assets to be distributed among the
      holders of Series A Junior Preferred Stock of the Company shall be
      insufficient to permit payment to the holders of Series A Junior Preferred
      Stock of the full amount of the Junior Liquidation Preference, then the
      entire assets of the Company to be distributed shall be distributed
      ratably to the holders of Series A Junior Preferred Stock in proportion to
      the Junior Liquidation Preference each such holder would otherwise be
      entitled to receive.

               3B. Notice of Liquidation. Written notice of such liquidation,
      dissolution or winding up, stating a payment date, the amount of the
      Junior Liquidation P

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      reference and the place where said sums shall be payable shall be
      given by mail, postage prepaid, not less than 30 or more than 60 days
      prior to the payment date stated therein, to the holders of record of the
      Series A Junior Preferred Stock, such notice to be addressed to each
      shareholder at his post office address as shown by the records of the
      Company.

                  3C. Sale as a Liquidation. Unless waived in writing by the
      holders of a majority of the Series A Junior Preferred Stock then
      outstanding, voting together as one class, a consolidation or merger of
      the Company into or with any other entity or entities, or the sale or
      transfer by the Company of all or substantially all of its assets, in each
      case under circumstances in which the holders of a majority in voting
      power of the outstanding capital stock of the Company, immediately prior
      to such a merger, consolidation or sale, own less than a majority in
      voting power of the outstanding capital stock of the corporation or the
      surviving or resulting corporation or acquirer, as the case may be,
      immediately following such a merger, consolidation or sale (each such
      transaction being hereinafter referred to as a "Corporate Transaction")
      shall be treated as a liquidation within the meaning of this Section 3 for
      the purpose of determining the consideration to be received by holders of
      the Series A Junior Preferred Stock upon redemption of such shares as well
      as the timing of such deemed redemption.

            4. Conversion. The holders of shares of Series A Junior Preferred
Stock shall have the following rights and, in certain cases, obligations, to
convert all or a portion of their shares into fully paid and non-assessable
shares of Common Stock or any capital stock or other securities into which such
Common Stock shall have been changed or any capital stock or other securities
resulting from a reclassification thereof:

                  4A. Right to Convert. Subject to the terms and conditions of
      this paragraph 4A, the holder of any share or shares of Series A Junior
      Preferred Stock shall have the right, at its option at any time, to
      convert any such shares of Series A Junior Preferred Stock into such
      number of fully paid and nonassessable whole shares of Common Stock as is
      obtained by multiplying the number of shares of Series A Junior Preferred
      Stock so to be converted by the Junior Liquidation Preference per share
      and dividing the result by the conversion price of $3.06 per share or, if
      there has been an adjustment of the conversion price, by the conversion
      price as last adjusted and in effect at the date any share or shares of
      Series A Junior Preferred Stock are surrendered for conversion (such
      price, or such price as last adjusted, being referred to herein as the
      "Conversion Price").

      Such rights of conversion shall be exercised by the holder thereof
      by surrender of a certificate or certificates for the shares to be
      converted to the Company at its principal office (or such other office or
      agency of the Company as the Company may designate by notice in writing to
      the holder or holders of the Series A Junior Preferred Stock) at any time
      during its usual business hours on the date set forth in such notice,
      together with a properly completed notice of conversion in the form
      attached to the Series A Junior Preferred Stock certificate with a
      statement of the name or names (with address), subject to compliance with
      applicable laws to the extent such designation shall involve a transfer,
      in which the certificate or certificates for shares of Common Stock, shall
      be issued. Accrued and unpaid dividends on the Series A Junior Preferred
      Stock shall be taken into

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      account in  determining  the  number of shares of Common  Stock to be
      received by holders upon conversion,  provided, however, no dividends will
      be paid on the Series A Junior Preferred Stock at the time of conversion.

            4B. Issuance of Certificates; Time Conversion Effected. Promptly
      after the receipt by the Company of the written notice referred to in
      subparagraph 4A and surrender of the certificate or certificates for the
      share or shares of the Series A Junior Preferred Stock to be converted,
      the Company shall issue and deliver, or cause to be issued and delivered,
      to the holder, registered in such name or names as such holder may direct,
      subject to compliance with applicable laws to the extent such designation
      shall involve a transfer, a certificate or certificates for the number of
      whole shares of Common Stock issuable upon the conversion of such share or
      shares of Series A Junior Preferred Stock. To the extent permitted by law,
      such conversion shall be deemed to have been effected and the Conversion
      Price shall be determined as of the close of business on the date on which
      such written notice shall have been received by the Company and the
      certificate or certificates for such shares shall have been surrendered as
      aforesaid, and at such time the Series A Junior Preferred Stock rights of
      the holder of such share or shares shall cease, and the person or persons
      in whose name or names any certificate or certificates for shares of
      Common Stock shall be issuable upon such conversion shall be deemed to
      have become the holder or holders of record of the shares represented
      thereby.

            4C. Fractional Shares; Dividends; Partial Conversion. No fractional
      shares shall be issued upon conversion of the Series A Junior Preferred
      Stock into Common Stock, and the number of shares of Common Stock to be
      issued shall be rounded to the nearest whole share, and no payment or
      adjustment shall be made upon any conversion on account of any cash
      dividends paid on the Series A Junior Preferred Stock so converted or the
      Common Stock issued upon such conversion. In case the number of shares of
      Series A Junior Preferred Stock represented by the certificate or
      certificates surrendered pursuant to subparagraph 4A exceeds the number of
      shares converted, the Company shall upon such conversion, execute and
      deliver to the holder thereof at the expense of the Company, a new
      certificate for the number of shares of Series A Junior Preferred Stock
      represented by the certificate or certificates surrendered which are not
      to be converted.

            4D. Adjustment of Conversion Price Upon Issuance. The Conversion
      Price shall not be adjusted if the Company shall issue or sell, or is, in
      accordance with subparagraphs 4D(1) through 4D(9), deemed to have issued
      or sold, any shares of Excluded Stock. Further, provided that any
      adjustment of the conversion price of the Series A Junior Preferred Stock
      does not dilute the shares of the Series A Senior Preferred Stock, and if
      and at any time or from time to time, after the date of first issuance of
      shares of Series A Junior Preferred Stock (the "Original Issuance Date") a
      Triggering Event shall occur, the Conversion Price of the Series A Junior
      Preferred Stock shall be immediately adjusted as follows: the aggregate
      number of shares of Common Stock into which the shares of Series A Junior
      Preferred Stock shall be convertible shall be the number of shares of
      Common Stock equal to the result obtained by multiplying (x) the
      "Post-Event Number of Net Common Shares" by (y) the "Pre-Event Junior
      Preferred

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      Portion". For such purposes (I) the Post-Event Number of Net Common
      Shares shall be the difference between (A) the sum of all the shares of
      (i) the Common Stock issued and outstanding (including the shares of
      Common Stock owned or claimed to be owned by the Proctor Group) and (ii)
      reserved for issuance upon exercise or conversion or exchange of all
      outstanding securities of the Company that are exercisable or exchangeable
      for, or convertible into, Common Stock and (B) the sum of all shares of
      Common Stock theretofore issued and issuable upon conversion of the Series
      A Senior Preferred Stock; and (II) the Pre-Event Junior Preferred Portion
      shall be a fraction, (A) the numerator of which shall be the number of
      shares of Common Stock into which the Series A Junior Preferred Stock is
      convertible immediately prior to the occurrence of such Triggering Event
      and (B) the denominator of which shall be the difference between (i) the
      sum of all shares of Common Stock issued and reserved for issuance on such
      date and (ii) the shares of Common Stock issued and reserved for issuance
      upon conversion of the Series A Senior Preferred Stock.

      No adjustment of the Conversion Price, however, shall be made in an
      amount less than $0.01 per share, and any such lesser adjustment shall be
      carried forward and shall be made at the time and together with the next
      subsequent adjustment which together with any adjustments so carried
      forward shall amount to $0.01 per share or more.

      For purposes of this subparagraph 4D, the following paragraphs 4D(1)
      to 4D(8) shall also be applicable:

            4D(1). Issuance of Rights or Options. In case at any time the
      Company shall in any manner grant (whether directly or by assumption in a
      merger or otherwise) any rights to subscribe for or to purchase, or any
      option or warrant for the purchase of, Common Stock or any stock or
      securities convertible into or exchangeable for Common Stock (such rights
      or options being herein called "Options" and such convertible or
      exchangeable stock or securities being herein called "Convertible
      Securities" and, together with Options, the "Common Stock Equivalents"),
      whether or not such Options or the right to convert or exchange any such
      Convertible Securities are immediately exercisable, and the price per
      share for which Common Stock is issuable upon the exercise of such Options
      or upon conversion or exchange of such Convertible Securities (determined
      by dividing (i) the total amount, if any, received or receivable by the
      Company as consideration for the granting of such Options, plus the
      minimum aggregate amount of additional consideration payable to the
      Company upon the exercise of all such Options, plus, in the case of such
      Options which relate to Convertible Securities, the minimum aggregate
      amount of additional consideration, if any, payable upon the issue or sale
      of such Convertible Securities and upon the conversion or exchange thereof
      by (ii) the total maximum number of shares of Common Stock issuable upon
      the exercise of such Options or upon the conversion or exchange of all
      such Convertible Securities issuable upon the exercise of such Options)
      shall be less than the Conversion Price in effect immediately prior to the
      time of the granting of such Options, then the total maximum number of
      shares of Common Stock issuable upon the exercise of such Options or upon
      conversion or exchange of the total maximum amount of such Convertible
      Securities issued upon the exercise of such Options shall be deemed to
      have

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      been issued for such price per share as of the date of granting of
      such Options and thereafter shall be deemed to be outstanding. Except as
      otherwise provided in subparagraph 4D(3), no adjustment of the Conversion
      Price shall be made upon the actual issue of such Common Stock or of such
      Convertible Securities upon exercise of such Options or upon the actual
      issue of such Common Stock upon conversion or exchange of such Convertible
      Securities.

            4D(2). Issuance of Convertible Securities. In case the Company shall
      in any manner issue (whether directly or by assumption in a merger or
      otherwise) or sell any Convertible Securities, whether or not the rights
      to exchange or convert thereunder are immediately exercisable, and the
      price per share for which Common Stock is issuable upon such conversion or
      exchange (determined by dividing (i) the total amount received or
      receivable by the Company as consideration for the issue or sale of such
      Convertible Securities, plus the minimum aggregate amount of additional
      consideration, if any, payable to the Company upon the conversion or
      exchange thereof by (ii) the total maximum number of shares of Common
      Stock issuable upon the conversion or exchange of all such Convertible
      Securities) shall be less than the Conversion Price in effect immediately
      prior to the time of such issue or sale, then the total maximum number of
      shares of Common Stock issuable upon conversion or exchange of all such
      Convertible Securities shall be deemed to have been issued for such price
      per share as of the date of the issue or sale of such Convertible
      Securities and thereafter shall be deemed to be outstanding, provided that
      (a) except as otherwise provided in subparagraph 4D(3) below, no
      adjustment of the Conversion Price shall be made upon the actual issue of
      such Common Stock upon conversion or exchange of such Convertible
      Securities, and (b) if any such issue or sale of such Convertible
      Securities is made upon exercise of any Option to purchase any such
      Convertible Securities for which adjustments of the Conversion Price have
      been or are to be made pursuant to other provisions of this subparagraph
      4D, no further adjustment of the Conversion Price shall be made by reason
      of such issue or sale.

            4D(3). Change in Option Price or Conversion Rate. If (1) the
      purchase price provided for in any Option referred to in subparagraph
      4D(1); (2) the additional consideration, if any, payable upon the
      conversion or exchange of any Convertible Securities referred to in
      subparagraph 4D(1) or 4D(2); or (3) the rate at which any Convertible
      Securities referred to in subparagraph 4D(1) or 4D(2) are convertible into
      or exchangeable for Common Stock shall change at any time (in each case
      other than under or by reason of provisions providing solely for
      protections of the holders of such Option or Convertible Securities
      against dilution), then the Conversion Price in effect at the time of such
      event shall forthwith be readjusted to the Conversion Price which would
      have been in effect at such time had such Options or Convertible
      Securities still outstanding provided for such changed purchase price,
      additional consideration or conversion rate, as the case may be, at the
      time initially granted, issued or sold; and on the expiration of any such
      Option or the termination of any such right to convert or exchange such
      Convertible Securities, the Conversion Price then in effect hereunder
      shall forthwith be increased to the Conversion Price which would have been
      in effect at the time of such expiration or termination had such Option or
      Convertible Securities, to the extent outstanding

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      immediately prior to such expiration or termination never been
      issued, and the Common Stock issuable thereunder shall no longer be deemed
      to be outstanding. If the purchase price provided for in any such Option
      referred to in subparagraph 4D(1) or the rate at which any Convertible
      Securities referred to in subparagraph 4D(1) or 4D(2) are convertible into
      or exchangeable for Common Stock shall be reduced at any time under or by
      reason of provisions with respect thereto providing solely for protection
      of the holders of such Option or Convertible Securities against dilution,
      then, in case of the delivery of Common Stock upon the exercise of any
      such Option or upon conversion or exchange of any such Convertible
      Securities, the Conversion Price then in effect hereunder shall forthwith
      be adjusted to such respective amount as would have been obtained had such
      Option or Convertible Securities never been issued as to such Common Stock
      and had adjustments been made upon the issuance of the shares of Common
      Stock delivered as aforesaid, but only if as a result of such adjustment
      the Conversion Price then in effect hereunder is thereby reduced.

            4D(4). Stock Dividends. In case the Company shall declare a dividend
      or make any other distribution upon any stock of the Company payable in
      Common Stock, Options or Convertible Securities, any Common Stock, Options
      or Convertible Securities, as the case may be, issuable in payment of such
      dividend or distribution shall be deemed to have been issued or sold
      without consideration and the Conversion Price then in effect immediately
      prior to such dividend declaration or distribution shall be reduced as if
      the Company had subdivided its outstanding shares of Common Stock into a
      greater number of shares as provided in subparagraph 4D(5).

            4D(5). Subdivision or Combination of Stock. In case the Company
      shall at any time subdivide its outstanding shares of Common Stock or
      Convertible Securities into a greater number of shares or shall declare or
      pay a dividend on its outstanding shares of Common Stock payable in shares
      of Common Stock, the Conversion Price in effect immediately prior to such
      subdivision shall be proportionately reduced, and conversely, in case the
      outstanding shares of Common Stock of the Company shall be combined into a
      smaller number of shares, the Conversion Price in effect immediately prior
      to such combination shall be proportionately increased.

            4D(6). Consideration for Stock. In case any shares of Common Stock,
      Options or Convertible Securities shall be issued or sold for cash, the
      consideration received shall be deemed to be the amount received by the
      Company therefor, without deduction therefrom of any expenses incurred or
      any underwriting commissions or concessions paid or allowed by the Company
      in connection therewith. In case any shares of Common Stock, Options or
      Convertible Securities shall be issued or sold for a consideration other
      than cash, the amount of the consideration other than cash received by the
      Corporation shall be deemed to be the fair value of such consideration as
      determined in good faith by the Board of Directors of the Company, without
      deduction of any expenses incurred or any underwriting commissions or
      concessions paid or allowed by the Company in connection therewith. The
      amount of consideration deemed to be received by the Company pursuant to
      the foregoing provisions of this subparagraph 4D(6) upon any issuance
      and/or sale of shares of Common Stock, Options or Convertible Securities,
      pursuant to an established

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      compensation plan of the Company, to directors, officers or
      employees of the Company in connection with their employment shall be
      increased by the amount of any tax benefit realized by the Company as a
      result of such issuance and/or sale, the amount of any tax benefit being
      the amount by which the Federal and/or state income or other tax liability
      of the Company shall be reduced by reason of any deduction or credit in
      respect of such issuance and/or sale. In case any Options shall be issued
      in connection with the issue and sale of other securities of the Company,
      together comprising one integral transaction in which no specific
      consideration is allocated to such Options by the parties thereto, such
      Options shall be deemed to have been issued without consideration.

            4D(7). Record Date. In case the Company shall take a record of the
      holders of its Common Stock for the purpose of entitling them (i) to
      receive a dividend or other distribution payable in Common Stock, Options
      or Convertible Securities, or (ii) to subscribe for or purchase Common
      Stock, Options or Convertible Securities, then such record date shall be
      deemed to be the date of the issue or sale of the shares of Common Stock
      deemed to have been issued or sold upon the declaration of such dividend
      or the making of such other distribution or the date of the granting of
      such right of subscription or purchase, as the case may be.

            4D(8). If, at any time or from time to time after the Original
      Issuance Date, the Company shall issue or distribute to the holders of
      shares other than Preferred Shares (the "Dividend Stock") evidences of its
      indebtedness, any other securities of the Company or any cash, property or
      other assets (excluding a subdivision, combination or reclassification, or
      dividend or distribution payable in shares of Common Stock, referred to in
      Section 4D(4) or 4D(5), or dividends on Common Stock and also excluding
      cash dividends or cash distributions paid out of net profits legally
      available therefor in the full amount thereof) (any such non-excluded
      event being herein called a "Special Dividend"), the Conversion Price
      shall be adjusted by multiplying the Conversion Price then in effect by a
      fraction, the numerator of which shall be the then Current Market Price
      per share of the Dividend Stock in effect on the record date of such
      issuance or distribution less the fair market value (as determined in good
      faith by the Company's Board of Directors) of the Special Dividend
      applicable to one share of Dividend Stock and the denominator of which
      shall be the then Current Market Price Per Share of the Dividend Stock in
      effect on the record date of such issuance or distribution. An adjustment
      made pursuant to this Subsection 4D(8) shall become effective immediately
      after the record date of any such Special Dividend.

            4E. Reorganization or Reclassification. If any capital
      reorganization or reclassification of the capital stock of the Company
      shall be effected in such a way (including, without limitation, by way of
      consolidation or merger, but excluding a consolidation, merger or sale
      which is treated as a liquidation with respect to holders of Series A
      Junior Preferred Stock for purposes of Section 3) that holders of Common
      Stock shall be entitled to receive stock, securities or assets with
      respect to or in exchange for Common Stock then, as a condition of such
      reorganization or reclassification, lawful and adequate provision (in form
      satisfactory to the holders of at least a majority of the outstanding
      shares of Series A Junior Preferred Stock, voting together as one class)
      shall

                                       10
<PAGE>

      be made whereby each holder of a share or shares of Series A Junior
      Preferred Stock shall thereafter have the right to receive, upon the basis
      and upon the terms and conditions specified herein and in lieu of the
      shares of Common Stock of the Company immediately theretofore receivable
      upon the conversion of such share or shares of the Series A Junior
      Preferred Stock, such shares of stock, securities or assets as may be
      issued or payable with respect to or in exchange for a number of
      outstanding shares of Common Stock equal to the number of shares of such
      stock immediately theretofore so receivable had such reorganization or
      reclassification not taken place and in any such case appropriate
      provision shall be made with respect to the rights and interests of such
      holder to the end that the provisions hereof (including without limitation
      provisions for adjustments of the Conversion Price) shall thereafter be
      applicable, as nearly as may be, in relation to any shares of stock,
      securities or assets thereafter deliverable upon the exercise of such
      conversion rights (including an immediate adjustment, by reason of such
      reorganization or reclassification, of the Conversion Price to the value
      for the Common Stock reflected by the terms of such reorganization or
      reclassification if the value so reflected is less than the Conversion
      Price in effect immediately prior to such reorganization or
      reclassification). In the event of a merger or consolidation of the
      Company as a result of which a greater or lesser number of shares of
      common stock of the surviving corporation are issuable to holders of the
      Common Stock of the Company outstanding immediately prior to such merger
      or consolidation, the Conversion Price in effect immediately prior to such
      merger or consolidation shall be adjusted in the same manner as though
      there were a subdivision or combination of the outstanding shares of
      Common Stock of the Company. The Company shall not effect any such
      consolidation or merger, or any sale of all or substantially all its
      assets and properties, unless prior to the consummation thereof the
      successor corporation (if other than the Company) resulting from such
      consolidation or merger or the corporation purchasing such assets shall
      assume by written instrument (in form satisfactory to the holders of at
      least a majority of the outstanding shares of Series A Junior Preferred
      Stock voting together as one class) executed and mailed or delivered to
      each holder of shares of Series A Junior Preferred Stock at the last
      address of such holder appearing on the books of the Company, the
      obligation to deliver to such holder such shares of stock, securities or
      assets as, in accordance with the foregoing provisions, such holder may be
      entitled to receive.

            4F. Notice of Adjustment. Upon any adjustment of the Conversion
      Price, then, and in each such case the Company shall give written notice
      thereof by first class mail, postage prepaid, addressed to each holder of
      shares of Series A Junior Preferred Stock at the address of such holder as
      shown on the books of the Company, which notice shall state the Conversion
      Price resulting from such adjustment, setting forth in reasonable detail
      the method of calculation and the facts upon which such calculation is
      based.

            4G. Other Notices. In case at any time:

                                       11
<PAGE>

                  (1)   the Company shall declare any dividend upon its Common
                        Stock payable in cash or stock or make any other
                        distribution to the holders of its Common Stock;

                  (2)   the Company shall offer for subscription pro rata to the
                        holders of its Common Stock any additional shares of
                        such stock of any class or other rights;

                  (3)   there shall be any capital reorganization or
                        reclassification of the capital stock of the Company, or
                        a consolidation or merger of the Company with, or a sale
                        of all or substantially all its assets to, another
                        corporation; or

                  (4)   there shall be a voluntary or involuntary dissolution,
                        liquidation or winding up of the Company;

      then, in any one or more of said cases, the Company shall give, by
      first class mail, postage prepaid, addressed to each holder of any shares
      of Series A Junior Preferred Stock at the address of such holder as shown
      on the books of the Company, (a) at least 15 days prior written notice of
      the date on which the books of the Company shall close or a record shall
      be taken for such dividend, distribution or subscription rights or for
      determining rights to vote in respect of any such reorganization,
      reclassification, consolidation, merger, sale, dissolution, liquidation or
      winding up, and (b) in the case of any such reorganization,
      reclassification, consolidation, merger, sale, dissolution, liquidation or
      winding up, at least 15 days prior written notice of the date when the
      same shall take place. Such notice in accordance with the foregoing clause
      (a) shall also specify, in the case of any such dividend, distribution or
      subscription rights, the date on which the holders of Common Stock shall
      be entitled thereto, and such notice in accordance with the foregoing
      clause (b) shall also specify the date on which the holders of Common
      Stock shall be entitled to exchange their Common Stock for securities or
      other property deliverable upon such reorganization, reclassification,
      consolidation, merger, sale, dissolution, liquidation or winding up, as
      the case may be.

            4H. Mandatory Conversion. Each share of Series A Junior Preferred
      Stock shall be converted, automatically and without further action on the
      part of any person or the Company, into that number of shares of Common
      Stock as is equal to the quotient obtained by dividing (i) the Junior
      Liquidation Preference per share of the Series A Junior Preferred Stock by
      (ii) the then applicable Conversion Price (A) no less than 30 days after
      the Company provides written notice to holders of the Series A Junior
      Preferred Stock certifying that the minimum closing price (determined on
      the basis of the average weighted daily trading price) of the Common Stock
      for 35 consecutive trading days has exceeded three times the original
      Junior Liquidation Preference of the Series A Junior Preferred Stock, plus
      accrued and unpaid dividends, and has traded in volumes of at least
      100,000 shares per day during such 35-day period; (B) upon receipt of the
      written notice of holders of a majority of the then-outstanding shares of
      Series A Junior Preferred Stock of their election to cause an automatic
      conversion pursuant to this subparagraph 4H; or

                                       12
<PAGE>

      (C) upon the closing of an underwritten public offering of at least
      15% of the Common Stock outstanding immediately prior to such offering
      (including a Rule 144A/Regulation S offering) with proceeds of at least
      $25,000,000 to the Company, at a price per share of at least six times the
      Original Purchase Price (appropriately adjusted to reflect the occurrence
      of any stock split, stock dividend, stock combination, stock subdivision
      or like occurrences), plus any accrued but unpaid dividends owed to
      holders of the Series A Junior Preferred Stock on an as-converted basis (a
      "Qualified Financing"). Any such conversion shall be effected in
      accordance with the provisions of subparagraphs 4B and 4C hereof.

            4I. Stock to be Reserved. The Company shall at all times reserve and
      keep available out of its authorized but unissued Common Stock solely for
      the purpose of issuance upon the conversion of the Series A Junior
      Preferred Stock as herein provided, such number of shares of Common Stock
      as shall then be issuable upon the conversion of all outstanding shares of
      Series A Junior Preferred Stock. All shares of Common Stock which shall be
      so issued shall be duly and validly issued and fully paid and
      nonassessable and free from all liens, duties and charges arising out of
      or by reason of the issue thereof (including, without limitation, in
      respect of taxes) and, without limiting the generality of the foregoing,
      the Company covenants that it shall from time to time take all such action
      as may be requisite to assure that the par value per share of the Common
      Stock is at all times equal to or less than the effective Conversion
      Price. The Company shall take all such action within its control as may be
      necessary on its part to assure that all such shares of Common Stock may
      be so issued without violation of any applicable law or regulation, or of
      any requirements of any national securities exchange upon which the Common
      Stock of the Company may be listed. The Company shall not take any action
      which results in any adjustment of the Conversion Price if after such
      action the total number of shares of Common Stock issued and outstanding
      and thereafter issuable upon exercise of all options and conversion of
      Convertible Securities, including upon conversion of the Series A Junior
      Preferred Stock, would exceed the total number of shares of such class of
      Common Stock then authorized by the Company's Certificate of
      Incorporation.

            4J. No Reissuance of Series A Junior Preferred Stock. Shares of
      Series A Junior Preferred Stock that are converted into shares of Common
      Stock as provided herein shall not be reissued.

            4K. Issue Tax. The issuance of certificates for shares of Common
      Stock upon conversion of the Series A Junior Preferred Stock shall be made
      without charge to the holders thereof for any issuance tax, stamp tax,
      transfer tax, duty or charge in respect thereof, provided that the Company
      shall not be required to pay any tax, duty or charge which may be payable
      in respect of any transfer involved in the issuance and delivery of any
      certificate in a name other than that of the holder of the Series A Junior
      Preferred Stock which is being converted.

            4L. Closing of Books. The Company will at no time close its transfer
      books against the transfer of any Series A Junior Preferred Stock or of
      any shares of Common Stock issued or issuable upon the conversion of any
      shares of Series A Junior Preferred

                                       13
<PAGE>

      Stock in any manner which interferes with the timely conversion of
      such Series A Junior Preferred Stock; provided, however, nothing herein
      shall be construed to prevent the Company from setting record dates for
      the holders of its securities.

            5. Restriction on Employee Shares. All Common Stock held by
employees of the Company shall be nontransferable by such employees until the
effective date of a registration statement filed by the Company with respect to
such shares. In the event that any such employee shares become transferable by
operation of law, the Company shall have the right to repurchase such shares at
book value, based on the Company's then most current financial statements.

            6. Voting - Series A Junior Preferred Stock. In addition to any
class voting rights provided by law and this Certificate of Designation, the
holders of Series A Junior Preferred Stock shall have the right to vote together
with the holders of Common Stock as a single class on any matter on which the
holders of Common Stock are entitled to vote. With respect to the voting rights
of the holders of the Series A Junior Preferred Stock pursuant to the preceding
sentence, each holder of Series A Junior Preferred Stock shall be entitled to
one vote for each share of Common Stock that would be issuable to such holder
upon the conversion of all the shares of Series A Junior Preferred Stock held by
such holder on the record date for the determination of shareholders entitled to
vote (including as adjusted after giving effect to a Triggering Event).

            7. Restrictions on Transfer. Transfers of the Series A Junior
Preferred Stock shall be unrestricted, except (a) as to legal compliance (e.g.,
that the transaction is not subject to the registration requirements of the
Securities Act and any applicable state securities laws); (b) as to transfers to
certain persons or entities that are competitors of the Company; and (c) as to
transfers to any member of the Proctor Group or any former director or officer
of Agate Technologies, Inc. All transferees of the Junior Preferred Stock are
required to certify that they are not members of the Proctor Group by completing
and furnishing to the Company a transfer certification in substance and form
reasonably satisfactory to the Company.

            8. No Waiver. Except as otherwise modified or provided for herein,
the holders of Series A Junior Preferred Stock shall also be entitled to, and
shall not be deemed to have waived, any other applicable rights granted to such
holders under the applicable provisions of Delaware law.

            9. No Impairment. The Company shall not, through any reorganization,
transfer of assets, merger, dissolution, issue or sale of securities on any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the Company but shall
at all time in good faith assist in the carrying out of all the provisions of
Article Four and in the taking of all such action as may be necessary or
appropriate in order to protect the conversion rights and liquidation
preferences granted hereunder of the holders of the Series A Junior Preferred
Stock against impairment.

                                       14
<PAGE>

            IN WITNESS WHEREOF, this Certificate of Designation has been
executed by the Company by its President as of this 28th day of April, 2004.

                                    POWERHOUSE TECHNOLOGIES GROUP, INC.

                                       By:  /s/ Jay Elliot
                                          --------------------------------------
                                          Name:    Jay Elliot
                                          Title:   Chief Executive Officer

                                       15THIS AGREEMENT BETWEEN                                  EXHIBIT 10.6

JBJ REALTY, 376 Fulton Street, Farmingdale, NY  11735                As Landlord
and LAKELAND INDUSTRIES, INC.,

As Tenant
WITNESSETH: The Landlord hereby leases to the Tenant the following premises:

      APPROXIMATELY 4362 S.F. OF SPACE KNOWN AS
      711-2 Koehler Avenue
      Ronkonkoma, New York 11779

For the term of ONE (1) YEAR WITH ONE (1) YEAR OPTION TO RENEW.

to commence from the FIRST day of July 2004 and to the end on the

LAST day of June, 2005

                        to be used and occupied only for

LIGHT INDUSTRIAL
upon the conditions and covenants following:

1st That the Tenant shall pay the annual rent of

      1ST YR.-FORTY FOUR THOUSAND SEVEN HUNDRED OLLARS AND 00/100($44,700.00)
      OPT.YR.-FORTY FIVE THOUSAND SIX HUNDRED OLLARS AND 00/100($45,600.00)

said rent to be paid in equal monthly payments in advance on the first day of
each and every month during the term aforesaid, as follows:

1ST.YR.-THREE THOUSAND SEVEN HUNDRED TWENTY FIVE DOLLARS AND 00/100($3,725.00)
OPT.YR.-THREE THOUSAND EIGHT HUNDRED DOLLARS AND OO/00($45,600.00)

2nd That the Tenant shall take Good care of the premises and shall, at the
Tenant's own cost and expense make all repairs EXCEPT STRUCTURAL NOT TO EXCEED
TEN (10%) OF ANNUAL LEASE PAYMENTS, BALANCE OF COST TO BE PAID BY LANDLORD.

3rd That the Tenant shall promptly execute and comply with all statutes,
ordinances, rules, orders, regulations and requirements of the Federal, State
and Local Governments and of any and all their Departments and Bureaus
applicable to said premises during said term; and shall also promptly comply
with and execute all rules, order and regulations of the New York Board of Fire
Underwriters, or any other similar body, at the Tenant's own cast and expense.

4th That the Tenant, successors, heirs, executors or administrators shall not
assign this agreement, or underlet or under lease the premises, or any part
thereof, or make any alterations on the premises, without the Landlords consent
in writing; or occupy, or permit or suffer the same to be occupied for any
business or purpose deemed disreputable or extra-hazardous on account of fire,
under the penalty of damages and forfeiture, and in the event of a breach
thereof, the term herein shall immediately cease and determine at the option of
the Landlord as if it were the expiration of the original term.

5th Tenant must give Landlord prompt notice of fire, accident, damage or
dangerous or defective condition. If the Premises can not be used because of
fire or other casualty, Tenant is not required to pay rent for the time the
Premises are unusable. If part of the Premises can not be used, Tenant must pay
rent for the usable part. Landlord shall have the right to decide which part of
the Premises is usable. Landlord need only repair the damaged structural parts
of the Premises. Landlord is not required to repair or replace any equipment,
fixtures, furnishings, or decorations unless originally installed by Landlord.
Landlord is not responsible for delays due to settling insurance claims,
obtaining estimates, labor and supply problems or any other cause not fully
under Landlord's control.

      If the fire or other casualty is caused by an act or neglect of Tenant,
Tenant's employees or invitees, or at the time of the fire or casualty Tenant is
in default in any term of this Lease, then all repairs will be made at Tenant's
expense and Tenant must pay the full rent with no adjustments. The cost of the
repairs will be added rent.

      Landlord has the right to demolish or rebuild the Building if there is
substantial damage by fire or other casualty. Landlord may cancel this Lease
within 30 days after the substantial fire or casualty by giving Tenant notice of
Landlord's intention to demolish or rebuild. The Lease will end 30 days after
Landlord's cancellation notice to Tenant. Tenant must deliver the Premises to
Landlord on or before the cancellation date in the notice and pay all rent due
to date of the fire or casualty. If the Lease is cancelled Landlord is not
required to repair the Premises or Building. The cancellation does not release
Tenant of liability in connection with the fire or casualty. This Section is
intended to replace the terms of New York Real Property Law Section 227.

6th The said Tenant agrees that the said Landlord and the Landlord's agents and
other representatives shall have the right to enter into and upon said premises,
or any part thereof, at all reasonable hours for the purpose of examining the
same, or making such repairs or alterations therein as may be necessary for the
safety and preservation thereof.

7th The Tenant also agrees to permit the Landlord or the Landlord's agents to
show the premises to persons wishing to hire or purchase the same; and the
Tenant further agrees that on and after the sixth month, next preceding the
expiration of the term hereby granted, the Landlord or the Landlord's agents
shall have the right to place notices on the front of said premises, or any part
thereof offering the premises "To Let" or "For Sale", and the Tenant hereby
agrees to permit the same to remain thereon without hindrance or molestation.

<PAGE>

8th That if the said premises, or any part thereof shall be deserted or become
vacant during said term, or if any default be made in the payment of the said
rent or any part thereof, or if any default be made in the performance of any of
the covenants herein contained, the Landlord or representatives may re-enter the
said premises by force, summary proceedings or otherwise, and remove all persons
there from, without being liable to prosecution therefor, and the Tenant hereby
expressly waives the service of any notice in writing of intention to re-enter,
and the Tenant shall pay at the same time as the rent becomes payable under the
terms hereof a sum equivalent to the rent reserved herein, and the Landlord may
rent the premises on behalf of the Tenant, reserving the right to rent the
premises for a longer period of time than fixed in the original lease without
releasing the original Tenant from any liability, applying any moneys collected,
first to the expense of resuming or obtaining possession, second to restoring
the premises to a rentable condition, and then to the payment of the rent and
all other charges due and to grow due to the Landlord, any surplus to be paid to
the Tenant, who shall remain liable for any deficiency.

9th Landlord may replace at the expense of Tenant, any and all broken glass in
and about the demised premises. Landlord may insure, and keep insured, all plate
glass in the demised premises for and in the name of Landlord. Bills, for the
premiums therefor shall be rendered by Landlord to Tenant at such times as
Landlord may elect, and shall be due from, and payable by Tenant when rendered,
and the amount thereof shall be deemed to be, and be paid as, additional rental.
Damage and injury to the said premises, caused by the carelessness, negligence
or improper conduct on the part of the said Tenant or the Tenant's agents or
employees shall be repaired as speedily as possible by the Tenant at the
Tenant's own cost and expense.

10th That the Tenant shall neither encumber nor obstruct the sidewalk in front
of , entrance to, or halls and stairs of said premises, nor allow the same to be
obstructed or encumbered in any manner.

11th The Tenant shall neither place, or cause or allow to be placed, any sign or
signs of any kind whatsoever at, in or about the entrance to said premises or
any other part of same, except in or at such place or places as may be indicated
by the Landlord and consented to by the Landlord in writing. And in case the
Landlord or the Landlord's representatives shall deem it necessary to remove any
such sign or signs in order to paint the said premises or the building wherein
same is situated or make any other repairs, alterations or improvements in or
upon said premises or building or any part thereof, the Landlord shall have the
right to do so, providing the same be removed and replaced at the Landlord's
expense, whenever the said repairs alterations or improvements shall be
completed.

12th That the Landlord is exempt from any and all liability for any damage or
injury to person or property caused by or resulting from steam, electricity,
gas, water, rain, ice or snow, or any leak or flow from or into any part of said
building or from any damage or injury resulting or arising from any other cause
or happening whatsoever unless said damage or injury be caused by or be due to
the negligence of the Landlord.

13th That if default be made in any of the covenants herein contained, then it
shall be lawful for the said Landlord to re-enter the said premises, and the
same to have again, re-possess and enjoy. The said Tenant hereby expressly
waives the service of any notice in writing of intention to re-enter.

14th That this instrument shall not be a lien against said premises in respect
to any mortgages that are now on or that hereafter may be placed against said
premises, and that the recording of such mortgage or mortgages shall have
preference and precedence and be superior and prior in lien of this lease,
irrespective of the date of recording and the Tenant agrees to execute without
cost, any such instrument which may be deemed necessary or desirable to further
effect the subordination of this lease to any such mortgage or mortgages, and a
refusal to execute such instrument shall entitle the Landlord, or the Landlord's
assigns and legal representatives to the option of cancelling this lease without
incurring any expense or damage and the term hereby granted is expressly limited
accordingly.

15th The Tenant has ALREADY deposited with the Landlord the sum of $5089.88 as
security for the full and faithful performance by the Tenant of all the terms,
covenants and conditions of this lease upon the Tenant's part to be performed,
which said sum shall be returned to the Tenant after the time fixed as the
expiration of the term herein, provided the Tenant has fully and faithfully
carried out all of said terms, covenants and conditions on Tenant's part to be
performed. In the event of a bona fide sale, subject to this lease, the Landlord
shall have the right to transfer the security to the vendee for the benefit of
the Tenant and the Landlord shall be considered released by the Tenant from all
liability for the return of such security; and the Tenant agrees to look to the
new Landlord solely for the return of the said security, and it is agreed that
this shall apply to every transfer or assignment made of the security to a new
Landlord.

16th That the security deposited under this lease shall not be mortgaged,
assigned or encumbered by EITHER PARTY without the written consent of the OTHER
PARTY.

17th It is expressly understood and agreed that in case the demised premises
shall be deserted or vacated, or if default be made in the payment of the rent
or any part thereof as herein specified, or if, without the consent of the
Landlord, the Tenant shall sell, assign or mortgage this lease or if default be
made in the performance of any of the covenants and agreements in this lease
contained on the part of the Tenant to be kept and performed, or if the Tenant
shall fail to comply with any of the statutes, ordinances, rules, orders,
regulations and requirements of the Federal, State and Local Governments or of
any and all their Departments and Bureaus, applicable to said premises, or if
the Tenant shall file or there be filed against Tenant a petition in bankruptcy
or arrangement or Tenant be adjudicated a bankrupt or make an assignment for the
benefit of creditors or take advantage of any insolvency act, the Landlord may,
if the Landlord so elects, at any time thereafter terminate this lease and the
term hereof, on giving to the Tenant five days notice in writing of the
Landlord's intention so to do, and this lease and the term hereof shall expire
and come to an end on the date fixed in such notice as if the said date

<PAGE>

were the date originally fixed in this lease for the expiration hereof. Such
notice may be given by mail to the Tenant addressed to the demised premises.

18th Tenant shall pay to Landlord the rent or charge, which may, during the
demised term, be assessed or imposed for the water used or consumed in or on the
said premises, whether determined by meter or otherwise, as soon as and when the
same may be assessed or imposed, and will also pay the expenses for the setting
of a water meter in the said premises should the latter be required. Tenant
shall pay Tenant's proportionate part of the sewer rent or charge imposed upon
the building. All such rents or charges or expenses shall be paid as additional
rent and shall be added to the next month's rent thereafter to become due.

19th That the Tenant will not nor will the Tenant permit under tenants or other
persons to do anything in said premises, or bring anything into said premises,
or permit anything to be brought into said premises or to be kept therein, which
will in any way increase the rate of fire insurance on said demised premises,
nor use the demised premises or any part thereof, nor suffer or permit their use
for any business or purpose which would cause an increase in the rate of fire
insurance on said building, and the Tenant agrees to pay on demand any such
increase.

20th The failure of the Landlord to insist upon a strict performance of any of
the terms, conditions and covenants herein, shall not be deemed a waiver of any
rights or remedies that the Landlord may have, and shall not be deemed a waiver
of any subsequent breach or default in the terms, conditions and covenants
herein contained. This instrument may not be changed, modified, discharged or
terminated orally.

21st If the whole or any part of the demised premises shall be acquired or
condemned by Eminent Domain for any public or quasi public use or purpose, then
and in that event, the term of this lease shall cease and terminate from the
date of title vesting in such proceeding and Tenant shall have no claim against
Landlord for the value of any unexpired term of said lease. No part of any award
shall belong to the Tenant.

22nd If after default in payment of rent or violation of any other provision of
this lease, or upon the expiration of this lease, the Tenant moves out or is
dispossessed and fails to remove any trade fixtures or other property prior to
such said default, removal, expiration of lease, or prior to the issuance of the
final order or execution of the warrant, then and in that event, the said
fixtures and property shall be deemed abandoned by the said Tenant and shall
become the property of the Landlord.

23rd In the event that the relation of the Landlord and Tenant may cease or
terminate by reason of the re-entry of the Landlord under the terms and
covenants contained in this lease or by the ejectment of the Tenant by summary
proceedings or otherwise, or after the abandonment of the premises by the
Tenant, it is hereby agreed that the Tenant shall remain liable and shall pay in
monthly payments the rent which accrues subsequent to the re-entry by the
Landlord, and the Tenant expressly agrees to pay as damages for the breach of
the covenants herein contained, the difference between the rent reserved and the
rent collected and received, if any, by the Landlord during the remainder of the
unexpired term, such difference or deficiency between the rent herein reserved
ant the rent collected if any, shall become due and payable in monthly payments
during the remainder of the unexpired term, as the amounts of such difference or
deficiency shall from time to time be ascertained; and it is mutually agreed
between Landlord and Tenant that the respective parties hereto shall and hereby
do waive trial by jury in any action, proceeding or counterclaim brought by
either of the parties against the other on any matters whatsoever arising out of
or in any way connected with this lease, the Tenant's use or occupancy of said
premises, and/or any claim of injury or damage.

24th The Tenant waives all rights to redeem under any law.

25th This lease and the obligation of Tenant to pay rent hereunder and perform
all of the covenants and agreements hereunder on part of Tenant to be performed
shall in nowise be affected, impaired or excused because Landlord is unable to
supply or is delayed in supplying any service expressly or impliedly to be
supplied or is unable to make or is delayed in making any repairs, additions,
alterations or decorations or is unable to supply or is delayed in supplying any
equipment or fixtures if Landlord is prevented or delayed from so doing by
reason of governmental preemption in connection with a National Emergency or in
connection with any rule, order or regulation of any department or subdivision
thereof of any governmental agency or by reason of the condition of supply and
demand which have been or are affected by war or other emergency.

26th No diminution or abatement of rent, or other compensation, shall be claimed
or allowed for inconvenience or discomfort arising from the making of repairs or
improvements to the building or to its appliances, nor for any space taken to
comply with any law, ordinance or order of a governmental authority. In respect
to the various "services," if any, herein expressly or impliedly agreed to be
furnished by the Landlord to the Tenant, it is agreed that there shall be no
diminution or abatement of the rent, or any other compensation, for interruption
or curtailment of such "service" when such interruption or curtailment shall be
due to accident, alterations or repairs desirable or necessary to be made or to
inability or difficulty in securing supplies or labor for the maintenance of
such "service" or to some other cause, not gross negligence on the part of the
Landlord. No such interruption or curtailment or any such "service" shall be
deemed a constructive eviction. The Landlord shall not be required to furnish,
and the Tenant shall not be entitled to receive, any of such "services" during
any period wherein the Tenant shall be in default in respect to the payment of
rent. Neither shall there be any abatement of diminution of rent because of
making of repairs, improvements or decorations to the demised premises after the
date above fixed for the commencement of the term, it being understood that rent
shall, in any event, commence to run at such date so above fixed.

27th Landlord shall not be liable for failure to give possession of the premises
upon commencement date by reason of the fact that premises are not ready for
occupancy or because a prior Tenant or any other person is wrongfully holding
over or is in wrongful possession, or for any other reason. The rent shall not
commence until possession is given or is available, but the term herein shall
not be extended.

<PAGE>

SEE RIDERS ANNEXED HERETY AND MADE A PART HEREOF

      And the said Landlord doth covenant that the said Tenant on paying the
said yearly rent, and performing the covenants aforesaid, shall and may
peacefully and quietly have, hold and enjoy the said demised premises for the
term aforesaid, provided however, that this covenant shall be conditioned upon
the retention of title to the premises by the Landlord.

      And it is mutually understood and agreed that the covenants and agreements
contained in the within lease shall be binding upon the parties hereto and upon
their respective successors, heirs, executors and administrators.

      In Witness Whereof, the parties have interchangeably set their hands and
seals (or caused these presents to be signed by their proper corporate officers
and caused their proper corporate seal to be hereto affixed) this 1st day of
April, 2004

Signed, sealed and delivered
      In the presence of                JBJ REALTY As Landlord

                                        By: /s/ Peter Hofrichter, Agent
                                            ----------------------------
                                                Peter Hofrichter, Agent

                                        Lakeland Industries, Inc.

                                        By: /s/ Christopher J. Ryan
                                            ----------------------------
                                        Christopher J. Ryan, President

<PAGE>

ACKNOWLEDGMENT IN NEW YORK STATE
State of  New York, Count of
On                          before me, the undersigned,
Personally appeared

Personally known to me or proved to me on the basis of satisfactory evidence to
be the individual(s) whose name(s) is (are) subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
signature(s) on the instruments, the individual(s), or the person upon behalf of
which the individual(s) acted, executed the instrument.

            ________________________________________________________________
            Signature and office of individual taking acknowledgment

                      ACKNOWLEDGMENT OUTSIDE NEW YORK STATE

State of                                County of
On                                      before me, the undersigned

Personally known to me or proved to me on the basis of satisfactory evidence to
be the individual(s) whose name(s) is (are) subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
capacity(ies), and that by his/her/their signature(s) on the instruments, the
individual(s), or the person upon behalf of which the individual(s) acted,
executed the instrument, and that such individual made such appearance before
the undersigned

            ________________________________________________________________
            Signature and office of individual taking acknowledgment

ACKNOWLEDGMENT BY SUBSCRIBING WITNESS(ES)
State of
County of

On                          Before me, the  undersigned
Personally appeared

the subscribing witness(es) to the foregoing instrument, with whom I am
personally acquainted, who, being by me duly sworn, did depose and say that
he/she/they reside(s) in (if the place of residence is in a city, include the
street and street number, if any thereof)

that he/she/they know(s)

to be the individual(s) described in and who executed the foregoing instruments;
that said subscribing witness(es) was (were) present and saw said

execute the same; and that said witness(es) at the same time subscribed
his/her/their name(s) as a witness(es) thereto.

(_[]if taken outside New York State insert city or political subdivision and
state or country or other place acknowledgment taken and that said subscribing
witness(es) made such appearance before the undersigned in

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

____________________________________________________________
(signature and office of individual taking acknowledgement

<PAGE>

LEASE

                  Dated _________________

In consideration of the letting of the premises within mentioned to the within
named Tenant and the sum of $1.00 paid to the undersigned by the within named
Landlord, the undersigned do hereby covenant and agree, to and with the Landlord
and the Landlords legal representatives, that it default shall at any time be
made by the said Tenant in the payment of the rent and the performance of the
covenants contained in the within lease, on the Tenant's part to be paid an
performed, that the undersigned will well and truly pay the said rent, or any
arrears thereof, that may remain due unto the said Landlord, and also pay all
damages that may arise in consequence of the non-performance of said covenants,
or either of them, without requiring notice of any such default from the said
Landlord. The undersigned hereby waives all right to trial by jury in any action
or proceeding hereinafter by the Landlord, to which the undersigned may be a
party.

In Witness Whereof, the undersigned has set hand and seal this    day of

WITNESS                                                          L.S
                                        ----------------------------

<PAGE>

RIDERS TO BE ANNEXED TO AND MADE PART OF LEASE BETWEEN JBJ REALTY AS LANDLORD,
AND LAKELAND INDUSTRIES, INC. AS TENANT. DATED 7/1/2004.

28th The Tenant agrees to keep in force and provide during the term of this
lease for the benefit of the Landlord general liability policy of insurance in
standard from protecting the Landlord against any liability whatsoever
occasioned by accident in or about the demised premises, in which the Landlord
shall be named as additional insured, and shall be protected against all
liability occasioned by any occurrence insured against. Such policies shall
cover and leased premises and shall provide for at least five days' notice to
the Landlord before cancellation. A certification thereof shall be delivered to
their Landlord. Said policies shall provide for the following minimum
coverage's; $300,000.00 for injury or death of one person; $500,000.00 for
injury or death arising out of one accident; and $25,000.00 for property damage.
In the event the Tenant fails to effect such insurance, the Landlord may do so,
and add the cost thereof to the rent for the month next ensuing, and the amount
thereof shall be deemed to be, and shall be, paid as additional rent.

29th. If any mechanic's lien or liens shall be filed against the premises for
work done or materials furnished to the Tenant, the Tenant shall within thirty
days thereafter, and at its own cost and expense cause such lien or liens to be
discharged by filing the bond or bonds required for that purpose by law. In the
event the Tenant fails to have such liens discharged, the Landlord may do so at
the Tenant's expense.

30th. All annexations to the freehold made or installed in such a manner that
their removal would cause injury to the freehold shall be the property of the
Landlord and may not be removed by the Tenant except that all trade fixtures
shall be deemed the property of the Tenant, and may be removed by the Tenant
provided that all injury to the freehold resulting therefrom shall be repaired
at the expense of the Tenant.

31st. There are no representations, warranties, terms, or obligations other than
those expressed in this agreement. No variation of this lease shall be valid
unless in writing and signed by the party to be charged. Any holding over by the
Tenant after the term of this lease shall be unlawful and in no manner
constitute a renewal or extension of this lease agreement. In the event,
however, Tenant does become a holdover, the use and occupancy charges shall be
125% of the last rental amount. In addition to the provisions of Paragraph 4.
Tenant shall, before making any alterations, additions, installations, or
improvements, obtain at its sole cost and expense all permits, approvals, and
certificates required by any governmental or quasi-governmental authorities and
upon completion of same, certificates of final approval thereof shall promptly
deliver to the Landlord copies of all such permits, approvals, and certificates.

32nd. The Landlord shall not be liable for damage or injury to person or
property unless written notice of any defect alleged to have caused such damage
or injury shall have been given to the Landlord a sufficient time before such
occurrence to have reasonable time to enable the Landlord to correct such
defect. Nothing herein contained shall impose any additional obligation on the
Landlord to make repairs. Should any additional construction be undertaken on
the interior of the premises, Tenant must:

      a)    Obtain a Permit;

      b)    Obtain the permission and signature of the Landlord on application;
            and

      c)    Supply Landlord with copy of plans, specifications, and Certificate
            of Compliance.

33rd. It is mutually covenanted that if the Landlord shall reasonably payor be
compelled to pay any sum of money, or shall reasonably perform any act or be
compelled to perform any act, which act shall require the payment of any sum of
money be reason of the failure of the Tenant after thirty days' notice, to
perform anyone or more of the covenants herein contained, the sum or sums shall,
after the ten days' notice, in writing and demand, be added to the rent
installment next due and shall be collectible in the same manner and with the
same remedies as if originally reserved as rent hereunder. The failure to pay
rent and to make payment pursuant to this paragraph shall be deemed a material
default.

/s/ Peter Hofrichter, Agent             /s/ Christopher J. Ryan, President
JBJ REALTY                              LAKELAND INDUSTRIES,INC.
----------                              ------------------------
LANDLORD                                TENANT

<PAGE>

RIDERS TO BE ANNEXED TO AND MADE PART OF LEASE BETWEEN JBJ REALTY AS LANDLORD,
AND LAKELAND INDUSTRIES, INC. AS TENANT. DATED 7/1/2004.

34th. Notwithstanding any provisions of this Lease to the contrary, in the event
of a breach or default by Landlord, its successors or assigns, of any of its
obligations hereunder of any kind or nature whatsoever, or of any provisions of
this Lease. Tenant shall look solely to the equity of the Landlord, its
successors, or assigns in the demised premises or the building of which they are
a part for the satisfaction of Tenant's remedies and no personal judgment shall
be sought against the Landlord, its successors or assigns under the terms,
covenants, conditions, warranties and obligations of this Lease shall in no
event exceed the loss of its equity in the demised premises or the building of
which they are a part.

35th. The Tenant agrees at its own cost and expense to pay for all electricity,
telephone, gas, fuel, etc., consumed and used by it, it being the understanding
and intention of the parties hereto that the Landlord rents, and the Tenant
hires, the demised premises without any service of any kind whatsoever.

36th. Anything to the contrary herein notwithstanding, Tenant may assign this
Lease as long as Tenant is not in default, and the Landlord shall not
unreasonably withhold its consent to the assignment and/or sub-lease agreement
upon the following conditions:

a)    Each assignment and/or sublease of this lease shall be accompanied by an
      agreement, in writing, executed by the assignee for the benefit of the
      Landlord, wherein the assignee shall assume all the duties and obligations
      of the Tenant herein.

b)    Said agreement executed by the assignee shall be deposited with the
      Landlord within five days of the making of the assignment.

c)    The assignment and/or sub-lease of this lease agreement shall in no way
      operate to release the assignor security shall be required.

d)    An additional security of 0 shall be deposited with the Landlord by the
      assignee to be held by the Landlord in accordance with the provisions of
      Paragraph "15" herein.

e)    No further or additional assignments of this lease shall be made except
      upon compliance with, and subject to, the provisions of this paragraph,
      except that no further security shall be required.

37th. In the event the premium for the Landlord's policy of insurance covering
fire and extended coverage with all of the usage and customary endorsements its
increased over the basic rate for same as determined by the appropriate
insurance underwriting organization as a result of Tenants use or occupancy of
the premises, then Tenant shall pay such insurance as additional rent. Landlord
shall provide Tenant with a copy of pertinent invoices for insurance, and Tenant
shall reimburse Landlord. Failure to make such reimbursement shall be deemed a
material default hereunder.

38th. The Tenant shall pay to the Landlord during each year of the term herein
demised as and for additional rent hereunder the amount of any increase of the
aggregate of all real estate taxes of every nature and description, including
assessments, if any, levied against the demised premises and herein referred to
as the basic taxes. The basic tax, as aforementioned, shall be the aggregate of
all real estate taxes of each and every nature, including assessments levied
against the demised premises after the completion of the building and
constituting the first assessment predicated upon a completed building. The
amount of any such increase shall be deemed additional rent and shall be paid by
the Tenant to the Landlord not later than the first day of the calendar month
occurring subsequent to the giving of notice to the Tenant of the amount of such
increase, and the simultaneous exhibiting to the Tenant of a copy of a tax bill
evidencing such increase. Such notice to be given by the Landlord to the Tenant
may be given personally, or by certified mail, return receipt requested. The
Tenant shall be responsible only for the payment of that portion of such
increase, if any; as shall be applicable to that portion of the overall premises
lease by Tenant. The base tax year will be July 1. 2004 through June 31. 2005.
Any additional taxes over and above the base tax year shall be passed on to the
Tenant according to their proportionate share.

39th. Notwithstanding the provisions of Paragraph 15, the Landlord shall have
the right to deduct from the security deposit, if kept in an interest-bearing
account, the sum equivalent to one percent (1 %) per annum of the security
monies so deposited as administrative expenses. With regard to Tenant's
security, this money shall be in lieu of all other administrative and custodial
expenses.

40th. The parties herein acknowledge that No One is the broker which brought
about this leasing agreement, and Commissions therefore shall be paid by the
Landlord pursuant to separate agreement.

/s/ Peter Hofrichter, Agent             /s/ Christopher J. Ryan, President
JBJ REALTY                              LAKELAND INDUSTRIES,INC.
----------                              ------------------------
LANDLORD                                TENANT

<PAGE>

RIDERS TO BE ANNEXED TO AND MADE PART OF LEASE BETWEEN JBJ REALTY AS LANDLORD,
AND LAKELAND INDUSTRIES, INC. AS TENANT. DATED 7/1/2004.

41 st. In the event the summary proceeding is commenced by the Landlord or its
successors and assigns, for non payment of rent during any part of the term
hereunder; then the Landlord shall be entitled to costs and attorney's fees
incurred during the summary proceeding as added rent in default and such costs
and attorney's fees may be added to the amount demanded in any such summary
proceeding. A summary proceeding shall be deemed to have been commenced
hereunder upon service of a three-day Notice.

42nd. Landlord will put all cooling, heating, and plumbing systems in good
working order for new Tenant. It is the responsibility of all tenants to
maintain the systems in like condition and to provide service and maintenance
for heating system. Minimal heat must be provided by Tenant at all times during
the winter months. To prevent frozen pipes and heating damage. Should this not
be done, any repairs necessary will be at the sole cost of the Tenant. Tenant
shall pay for all electricity, gas, fuel, telephone, garbage disposal. Should
the septic systems and/or pools become contaminated and in need of service, the
Tenant responsible for such repair will be billed for the necessary repair.
Should the source of the problems be of such indeterminate nature, other than
faulty installation, all Tenants will be billed for the service in proportion
with their occupancy of the building. Tenant shall be responsible for repair and
maintenance of plate glass, overhead doors, plumbing, heating, and cooling
systems.

43rd. If, during the term of the lease or Tenant's occupancy of the demised
premise, Landlord or any predecessor in title to the premises of which the
demised premises are a part is required to undertake the removal, clean-up,
neutralization or any other affirmative act with respect to the presence of
hazardous, toxic or dangerous materials or substances, whether of the Landlord's
own choice or as the result of a directive or order from any governmental
authority or court having jurisdiction, the Tenant specifically acknowledges and
agrees that any such action shall not be a breach of the covenant of quiet
enjoyment of the premises and further, the Tenant shall not be entitled to any
diminution or abatement of rent in such event notwithstanding any other
provisions of this lease to the contrary. Tenant further agrees to cooperate
fully with the Landlord in connection with any such action. It is specifically
understood and agreed that the Tenant will not contaminate the premises with any
hazardous, toxic, or dangerous material or substance and nothing herein
contained shall relieve the Tenant from any liability to the Landlord or any
governmental authority as a result of any actions of the Tenant, its employees,
agents, or invitee with respect to the causation of any such hazardous,
dangerous, or toxic condition at the premises.

43-2. In the event the Landlord has reason to believe that the Tenant, or
      Tenant's employees or agents are in violation of any provision of this
      lease pertaining to the use or maintenance of Hazardous Substances or
      Hazardous Materials, the Landlord shall give written notice to the Tenant
      concerning the suspected issues of non-compliance. The Tenant shall
      respond in writing the Landlord's concerns within ten (10) days, and shall
      provide such other documents or information which the Landlord deems
      necessary to determine that the Tenant is in compliance with all the
      provisions in the leas involving Hazardous Substances or Hazardous
      Materials.

43-3. In the event the Tenant fails to provide the assurances required by this
      paragraph within the time specified, the Landlord and the Landlord's
      designated agent shall have the right to enter and inspect the premises to
      determine the Tenant's compliance with the provisions of the lease
      pertaining to Hazardous Substances and Hazardous Materials. The Landlord,
      in its sole discretion, shall also have the right to conduct an
      environmental audit of the leased premises for the purposes of
      establishing the Tenant's compliance with the provisions of this lease
      which involve Hazardous Substances or Materials. The cost of any such
      environments audit shall be borne by the Tenant.

/s/ Peter Hofrichter, Agent             /s/ Christopher J. Ryan, President
JBJ REALTY                              LAKELAND INDUSTRIES,INC.
----------                              ------------------------
LANDLORD                                TENANT

<PAGE>

RIDERS TO BE ANNEXED TO AND MADE PART OF LEASE BETWEEN JBJ REALTY AS LANDLORD,
AND LAKELAND INDUSTRIES, INC. AS TENANT. DATED 7/1/2004.

44 TH. Tenant agrees not to allow garbage or refuse to accumulate outside the
building or grounds of the demised premises. Any violations regarding debris
from the local municipality shall be made known to the Tenant and should the
violation not be corrected in the given period of time, the Tenant will payment
as rent, all fines and legal fees incurred.

45th. All rents are due and payable on the first day of the month. In the event
of a default by the Tenant for non-payment of rent, and such default continues
for a period of ten (10) days subsequent to the due date, there shall be added
to the monthly rental then due and payable a sum designated as a late charge,
which shall be equal to five (5) cents for each dollar of the monthly payment
past due rent, shall become immediately due and payable with the succeeding
month's rent. Should Tenant issue a check with insufficient funds, an additional
twenty-five dollars and 001100 ($25.00) fee per check will be applied to the
next month's invoice. If this occurs, Tenant will be expected to substitute cash
or a certified check in person within a three- (3) day period.

45-2. Notwithstanding any provisions in the Lease permitting Tenant to cure any
default within a specified period of time, if Tenant shall default(I) in the
timely payments of rent or additional rent, and such default shall continue or
be repeated for two consecutive months or for a total of four months in any
period of twelve months or (ii) in the performance of any particular term,
condition or covenant of this Lease more than two times in any period of six
months, then, notwithstanding that such defaults shall have each been cured
within the period after notice if any, as provided in this Lease. Any further
similar default shall be deemed to be deliberate and Landlord thereafter may
cancel or terminate this Lease as provided herein without according to Tenant an
opportunity to cure such further default.

46th. The Tenant agrees to comply with the following rules and regulations and
with such reasonable and additions thereto as the Landlord may hereafter from
time to time make for the premises. The Landlord shall not be responsible for
non-compliance by any other Tenant of any said rules and regulations, however,
will request the non-complying Tenant to comply with all haste.

a) Tenant will not store materials, supplies, or equipment outside the premises.

b) Tenant will keep loading area/overhead door clean and unobstructed in order
to allow for parking lot, lawn, and other maintenance.

c) Tenant will be responsible for any damage done to the building or parking lot
area by trucks making deliveries for the Tenant's business.

d) Parking or storage of unregistered vehicles is expressly prohibited.

47th. Certificate of Insurance with owner named as co-insured must accompany
this Lease in order for it to become valid. (See Paragraph 28)

48th. In conjunction with Lease signing, Tenant agrees to pay Landlord Two (2)
month's security and one (1) month's rent in advance.

49th. In the event Tenant vacates the premises prior to the termination date of
this Lease, the corporate officers or shareholders or the general partners
executing this Lease on behalf of Tenant or such other guarantors who execute
the guarantee at the end of this Rider personally guarantee the payment of all
rent and additional rent that has accrued to the date the premises are vacated
together with the costs of restoring the premises in accordance with the
provisions of this Lease and Tenant's obligations under Paragraph 43 hereof.

/s/ Peter Hofrichter, Agent             /s/ Christopher J. Ryan, President
JBJ REALTY                              LAKELAND INDUSTRIES,INC.
----------                              ------------------------
LANDLORD                                TENANT

The provisions of Paragraphs 43 and 48 are hereby personally accepted and the
Tenant's performance and payments thereof personally guaranteed.

                                                  N/A
                                                ---------
                                                GUARANTOR

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