Document:

ex10-6.htm

    
      	
              This
      Agreement BETWEEN

            	
              Exhibit
      10.6

            
	 
      	 
      
	
              Harvey
      Pride Jr.

            	
              as
      Landlord

            
	
              and

            	 
      
	
              Lakeland
      Industries, Inc.

            	
              as
      Tenant

            

    

    

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

    

    201 Pride
Lane SW, Decatur, Alabama 35603 consisting of approximately 2,400 sq. feet of
office space

    for the
term of 3 years, renewable by Tenant for four (4) one year terms to commence
from the 1st day of
April 2008 and to end on the 31st day of
March 2011 to be used and occupied only for an office.

    

    1st.
That the Tenant shall pay the annual rent of (see below) upon the
conditions and covenants following:

     

    April 1,
2008 – March 31, 2009 = $18,000.00/annually

    April 1,
2009 – March 31, 2010 = $18,900.00/annually

    April 1,
2010 – March 31, 2011 = $19,845.00/annually

    

    

    said rent
to be paid in equal monthly payments in advance on the term aforesaid, as
follows:

    

    April 1,
2008 – March 31, 2009 = $1,500.00/monthly

    April 1,
2009 – March 31, 2010 = $1,575.00/monthly

    April 1,
2010 – March 31, 2011 = $1,653.75/monthly

    

    2nd.
That the Tenant shall take good care of the premises and shall, at the
Tenant’s own cost and expense make all repairs and at the end or other
expiration of the term, shall deliver up the demised premises in good order or
condition, damages by the elements excepted.

    

    

    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, for the
correction, prevention, and abatement of nuisances or other grievances, in,
upon, or connected with said premises during said term; and shall also promptly
comply with and execute all rules, orders and regulations of the New York Board
of Fire Underwriters, or any other similar body, at the Tenant's own cost and
expense.

    

    4th. That
the Tenant, successors, heirs, executors or administrators shall not assign this
agreement, or underlet or underlease the premises or any part thereof, or make
any alterations on the premises, without the Landlord’s 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. 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.

    

    5th.
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 adjustment. 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 the 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.

    

    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 therefrom, without being liable to prosecution therefore, 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 therefore 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 reenter 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 this day deposited with the Landlord the sum of $0.00 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 the
Tenant without the written consent of the Landlord.

    

    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 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 undertenants 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
and 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 other 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 of 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 or diminution of rent because of
making of repairs, improvements nor 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.

    

    Additional
provisions on the Rider which are attached hereto.

    

    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, he 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 2008.

    

    Signed,
sealed and delivered

    in
the presence of

    

    Landlord

    

    by: /s/
Harvey Pride,
Jr.    L.
S.

              Harvey
Pride, Jr.

    

    Lakeland
Industries, Inc.

    

    by: /s/
Christopher J.
Ryan  L.
S.

              Christopher
J. Ryan/President

     

    ACKNOWLEDGMENT
OUTSIDE NEW YORK STATE (RPL 309-b)

    State
Alabama, County of Decatur ss.:

    On April
28, 2008 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 capacity(ies), and that

    by
his/her/their signature(s) on the instrument,

    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 in

    Alabama

    

    By: /s/
Patricia Hatfield

     (signature
and office of individual taking acknowledgment)

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    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 Landlord’s legal representatives, that if 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
and 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 instituted by the Landlord, to which the
undersigned may be a party.

    

    Witnessed
whereof the undersigned ha set hand and seal this 28th day of
April 2008

    

    By: /s/
Beveryly Wilson  L. S.

    In
Witness Whereof,

    In
Consideration

    Lease

    Dated,
April 1, 2008

    ....................................ex10-7.htm

    

    EXHIBIT
10.7

     

    
      SUBORDINATION
AGREEMENT

    

    

    

    THIS AGREEMENT dated January
27, 2009.

    

    AMONG:

    

    BUSINESS DEVELOPMENT BANK OF
CANADA (“BDC”)

    

    AND:                      WACHOVIA BANK, NATIONAL ASSOCIATION
(the “Lender”)

    

    AND:                      LAKELAND PROTECTIVE WEAR INC.
(the “Obligor”)

    

    

    WHEREAS:

    

    A.           The
Obligor has granted or agreed to grant to BDC a registered security interest, in
all of the Obligor’s present and after-acquired personal property, and such
other security as BDC may from time to time receive from the Obligor to secure
present and future debts and obligations of the Obligor to BDC (the “BDC
Security”);

    

    B.           The
Obligor has granted or agreed to grant to the Lender a registered security
interest, in all of the Obligor’s present and after-acquired personal property,
and such other security as the Lender may from time to time receive from the
Obligor to secure present and future debts and obligations of the Obligor to
Lender (the “Lender Security”);

    

    C.           The
parties hereto have agreed to enter into this agreement in order to set out the
respective priorities of the BDC Security and the Lender Security;

    

    NOW THEREFORE in consideration
of the premises and other good and valuable consideration, the parties hereto
covenant and agree as follows:

    

    ARTICLE 1 -
CONSENT

    

    
      	
              1.01

            	
              BDC
      hereby acknowledges its consent to the creation and issue by the Obligor
      to the Lender of the Lender Security and to the incurring by the Obligor
      of the indebtedness evidenced
thereby.

            

    

    

    
      	
              1.02

            	
              The
      Lender hereby acknowledges its consent to the creation and issue by the
      Obligor to BDC of the BDC Security and to the incurring by the Obligor of
      the indebtedness evidenced thereby.

            

    

    

    
      ARTICLE 2 -
INTERPRETATION

    

    

    
      	
              2.01

            	
              The
      preamble hereto forms an integral part of this
  Agreement.

            

    

    

    
      	
              2.02

            	
              In
      this Agreement, “Collateral” shall mean
      all personal property, business and undertaking of the Obligor now owned
      or hereafter acquired and any proceeds from the sale or other disposition
      thereof.

            

    

    

    
      ARTICLE 3 -
PRIORITIES

    

    

    
      	
              3.01

            	
              The
      BDC Security is hereby postponed and subordinated to the security
      constituted by the Lender Security with respect to the Collateral to the
      extent of the Obligor’s indebtedness to
the

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              Lender
      from time to time, together with all accrued interest thereon and all
      costs, charges and expenses incurred by the Lender in connection
      therewith.

            

    

    

    
      	
              3.02

            	
              The
      subordinations and postponements herein shall apply in all events and
      circumstances regardless of:

            

    

    

    
      	
               
      

            	
              (a)

            	
              the
      date of execution, attachment, registration or perfection of any security
      interest held by BDC or the Lender,
or;

            

    

    

    
      	
               
      

            	
              (b)

            	
              the
      date of any advance or advances made to the Obligor by BDC or the Lender;
      or

            

    

    

    
      	
               
      

            	
              (c)

            	
              the
      date of default by the Obligor under any of the BDC Security or the Lender
      Security or the dates of crystallization of any floating charges held by
      BDC or the Lender; or

            

    

    

    
      	
               
      

            	
              (d)

            	
              any
      priority granted by any principle of law or any statute, including the
      Personal Property
      Security Act (Ontario).

            

    

    

    
      	
              3.03

            	
              Any
      proceeds, including, without limitation, any insurance proceeds received
      by the Obligor or by BDC or the Lender in respect of the collateral
      charged by the BDC Security or the Lender Security shall be dealt with
      according to the preceding provisions hereof as though such proceeds were
      paid or payable as proceeds of realization of the collateral for which
      they compensate.

            

    

    

    
      	
              3.04

            	
              If
      any of the BDC Security or the Lender Security is claimed or found by a
      trustee in bankruptcy or a court of competent jurisdiction to be
      unenforceable, invalid, unregistered or unperfected, then the foregoing
      provisions of this Article 3 shall not apply to such security to the
      extent that such security is so found to be unenforceable, invalid,
      unregistered or unperfected as against a third party unless the secured
      party shall be diligently contesting such a claim and has provided the
      other party with a satisfactory
indemnity.

            

    

    

    
      	
              3.05

            	
              Each
      of the parties hereto shall permit any of the other parties hereto and
      their employees, agents and contractors, access at all reasonable times to
      any property and assets of the Obligor upon which it has a prior charge or
      security interest in accordance with the terms hereof and to permit such
      other party to remove such property and assets from the premises of the
      Obligor at all reasonable times without interference, provided that such
      other party shall promptly repair any damage caused to the premises by the
      removal of any such property or
assets.

            

    

    

    
      ARTICLE 4 - COVENANTS OF THE
OBLIGOR

    

    

    
      	
              4.01

            	
              The
      Obligor hereby confirms to and agrees with BDC and the Lender that so long
      as any of the indebtedness of the Obligor to BDC and the Lender remains
      outstanding, it shall stand possessed of its assets so charged for BDC and
      for the Lender in accordance with their respective interests and
      priorities as herein set out.

            

    

    

    
      ARTICLE 5-
GENERAL

    

    

    
      	
              5.01

            	
              From
      time to time upon request therefor BDC and the Lender may advise each
      other of the particulars of the indebtedness and liability of the Obligor
      to each other and all security held by each
  therefor.

            

    

    

    
      	
              5.02

            	
              BDC
      and the Lender each agree that it will not transfer or assign any of its
      security from the Obligor without first obtaining from the proposed
      assignee or transferee an agreement to be bound by the provisions of this
      Agreement.

            

    

    

    
      	
              5.03

            	
              Prior
      to making any demand for payment on the Obligor or proceeding to enforce
      its security, BDC or the Lender, as the case may be, shall provide notice
      of such demand or enforcement
to

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    the other
of them, provided, however, that neither shall be liable for any accidental
omission to provide the said notice.

    

    
      	
              5.04

            	
              Any
      notice required or permitted to be given pursuant to this Agreement shall
      be in writing and shall be addressed and delivered to the parties hereto
      as follows:

            

    

    

    
      	
               
      

            	
              for
      BDC:

            

    

    

    
      	
               
      

            	
              Business
      Development Bank of Canada, Halton
Branch

            

    

    
      	
               
      

            	
              4145
      North Service Road, Suite 401

            

    

    
      	
               
      

            	
              Burlington,
      Ontario L7L 6A3

            

    

    

    
      	
               
      

            	
              Attention:
      Kim Dunski, Account Manager
(038405)

            

    

    

    
      	
               
      

            	
              for
      the Lender:

            

    

    

    
      	
               
      

            	
              Wachovia
      Bank, National Association

            

    

    
      	
               
      

            	
              12
      East 49th
      Street, 43rd
      Floor

            

    

    
      	
               
      

            	
              New
      York, NY

            

    

    
      	
               
      

            	
              10017

            

    

    

    
      	
               
      

            	
              Attention:
      Daniel O’Donnell, Senior Vice
President

            

    

    

    
      	
              5.05

            	
              Each
      of the Obligor, BDC and the Lender shall do, perform, execute and deliver
      all acts, deeds and documents as may be necessary from time to time to
      give full force and effect to the interests of this Agreement; provided
      however, that no consent of the Obligor shall be necessary to any
      amendment of the terms hereof by BDC and the Lender unless the interests
      of the Obligor are directly affected
thereby.

            

    

    

    
      	
              5.06

            	
              This
      Agreement may be executed in several counterparts, each of which when so
      executed shall be deemed to be an original and such counterparts together
      shall constitute one and the same instrument and shall be effective as of
      the formal date hereof.

            

    

    

    
      	
              5.07

            	
              This
      Agreement shall enure to the benefit of and be binding upon the parties
      hereto and their respective successors and
  assigns.

            

    

    

    
      	
              5.08

            	
              This
      Agreement shall be governed by and construed in accordance with the laws
      of the Province of Ontario and the laws of Canada applicable
      therein.

            

    

    

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, the
parties have executed this agreement.

    

    

    
      	 
      	
              BUSINESS
      DEVELOPMENT BANK OF CANADA

               

               

               

            
	 
      	
              By:

            	
              /s/
      Kim Dunski,

            
	 
      	 
      	
              Name:
      Kim Dunski

            
	 
      	 
      	
              Title:
      Account Manager

            
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    

    

    
      	 
      	
              WACHOVIA
      BANK, NATIONAL ASSOCIATION

               

               

               

            
	 
      	
              By:

            	
              /s/
      Daniel O’Donnell

            
	 
      	 
      	
              Name:
      Daniel O’Donnell

            
	 
      	 
      	
              Title:
      Senior Vice President

            
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Acknowledged
and agreed to by:

    

    
      	 
      	
              LAKELAND
      PROTECTIVE WEAR INC.

               

               

               

            
	 
      	
              By:

            	
              /s/
      Christopher J. Ryan

            
	 
      	 
      	
              Name:
      Christopher J. Ryan

            
	 
      	 
      	
              Title:
      Assistant Secretary

            
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

     

    RESOLUTION
OF THE BOARD OF DIRECTORS

    OF

    LAKELAND
PROTECTIVE WEAR INC.

    

    WHEREAS
the Board of Directors of the Corporation is authorized from time to time to
charge, mortgage, hypothecate or pledge all or any currently owned or
subsequently acquired real or personal property of the Corporation to secure any
obligations or any money borrowed and it is in the interest of the Corporation
that the Board of Directors exercise such authority;

    

    AND
WHEREAS it is further expedient and in the interests of the Corporation to give
security to WACHOVIA BANK, NATIONAL ASSOCIATION ("WACHOVIA”) to secure the
present and future indebtedness and liability of the Corporation to WACHOVIA
whether direct or indirect, and whether arising out of guarantees or
otherwise.

    

    NOW
THEREFORE BE IT RESOLVED THAT:

    

    
      	
              1.

            	
              The
      Corporation create and issue the General Security Agreement dated the
      27th
      day of January, 2009 (the "General Security Agreement"),  in
      substantially the terms as contained in the specimen which has been
      submitted to the meeting, in favour of WACHOVIA containing the security
      interests provided in the General Security Agreement to secure the due
      payment of all present and future indebtedness and liability of the
      Corporation to WACHOVIA whether direct or indirect, and whether arising
      out of guarantees or otherwise;

            

    

    

    
      	
              2.

            	
              The
      Corporation enter into the Blocked Account Agreement with The
      Toronto-Dominion Bank (“TD”) and WACHOVIA regarding the Corporation’s
      account(s) with TD dated the 27th day of January, 2009 (the "Blocked
      Account Agreement"), in substantially the form of and with terms as
      contained in the specimen which has been submitted to the
      meeting;

            

    

    

    
      	
              3.

            	
              The
      Corporation enter into a Subordination Agreement with Business Development
      Bank of Canada and WACHOVIA dated the 27th day of January, 2009 (the "BDC
      Subordination Agreement"), in substantially the form of and with terms as
      contained in the specimen which has been submitted to the
      meeting;

            

    

    

    
      	
              4.

            	
              That
      the President, Peter Brasseur, and the Assistant Secretary, Christopher J.
      Ryan, are hereby authorized for and on behalf of the Corporation to
      execute under its corporate seal or otherwise and deliver the General
      Security Agreement, the Blocked Account Agreement  and the BDC
      Subordination Agreement to WACHOVIA, TD and BDC, as the case may be, with
      such alterations, additions, amendments and deletions as may be approved
      by them, whose signatures shall be conclusive evidence of such approval;
      and

            

    

    

    
      	
              5.

            	
              Any
      one of the persons designated in paragraph 4 is hereby authorized for and
      in the name of the Corporation to execute and deliver under the corporate
      seal or otherwise all such other documents and to do all such other acts
      and things as may be necessary or desirable to give effect to this
      resolution or as may be reasonably required by
  WACHOVIA.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    The
undersigned, being all the directors of the Corporation, hereby sign the
foregoing resolution pursuant to the provisions of the Canada Business Corporations
Act.

    

    Dated
this 27th day of January, 2009.

    

    
      	
              /s/ Peter
      Brasseur

            	
              /s/ Christopher J.
      Ryan

            
	
              Peter
      Brasseur

            	
              Christopher
      J. Ryan

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    RESOLUTION
OF THE BOARD OF DIRECTORS

    OF

    LAKELAND
PROTECTIVE WEAR INC.

    

    WHEREAS
the Board of Directors of the Corporation is authorized from time to time to
charge, mortgage, hypothecate or pledge all or any currently owned or
subsequently acquired real or personal property of the Corporation to secure any
obligations or any money borrowed and it is in the interest of the Corporation
that the Board of Directors exercise such authority;

    

    AND
WHEREAS it is further expedient and in the interests of the Corporation to give
security to WACHOVIA BANK, NATIONAL ASSOCIATION ("WACHOVIA”) to secure the
present and future indebtedness and liability of the Corporation to WACHOVIA
whether direct or indirect, and whether arising out of guarantees or
otherwise.

    

    NOW
THEREFORE BE IT RESOLVED THAT:

    

    

    
      	
              1.

            	
              The
      Corporation create and issue the General Security Agreement dated the 27th
      day of January, 2009 (the "General Security Agreement"),  in
      substantially the terms as contained in the specimen which has been
      submitted to the meeting, in favour of WACHOVIA containing the security
      interests provided in the General Security Agreement to secure the due
      payment of all present and future indebtedness and liability of the
      Corporation to WACHOVIA whether direct or indirect, and whether arising
      out of guarantees or otherwise;

            

    

    

    
      	
              2.

            	
              The
      Corporation enter into the Blocked Account Agreement with The
      Toronto-Dominion Bank (“TD”) and WACHOVIA regarding the Corporation’s
      account(s) with TD dated the 27th day of January, 2009 (the "Blocked
      Account Agreement"), in substantially the form of and with terms as
      contained in the specimen which has been submitted to the
      meeting;

            

    

    

    
      	
              3.

            	
              The
      Corporation enter into a Subordination Agreement  with Business
      Development Bank of Canada and WACHOVIA dated the  27th day of
      January, 2009 (the "BDC Subordination Agreement"), in substantially the
      form of and with terms as contained in the specimen which has been
      submitted to the meeting;

            

    

    

    
      	
              4.

            	
              That
      the President, Peter Brasseur, and the Assistant Secretary, Christopher J.
      Ryan, are hereby authorized for and on behalf of the Corporation to
      execute under its corporate seal or otherwise and deliver the General
      Security Agreement, the Blocked Account Agreement  and
      the  BDC Subordination Agreement to WACHOVIA, TD and BDC, as the
      case may be, with such alterations, additions, amendments and deletions as
      may be approved by them, whose signatures shall be conclusive evidence of
      such approval; and

            

    

    

    
      	
              5.

            	
              Any
      one of the persons designated in paragraph 4 is hereby authorized for and
      in the name of the Corporation to execute and deliver under the corporate
      seal or otherwise all such other documents and to do all such other acts
      and things as may be necessary or desirable to give effect to this
      resolution or as may be reasonably required by
  WACHOVIA.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    CERTIFIED
to be a true copy of a Special Resolution passed by the board of directors of
Lakeland Protective Wear Inc. the 27th day of
January, 2009, as set forth and recorded in the minute book of the Corporation,
which Resolution is now in full force and effect.

    

    DATED this 27th day of January,
2009.

    

    

    /s/ Peter
Brasseur

    Peter
Brasseur, President

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

     

     

     

    

    GENERAL
SECURITY AGREEMENT

     

    THIS AGREEMENT made as of the
27th
day of January, 2009.

     

    BETWEEN:

     

    LAKELAND PROTECTIVE WEAR
INC.,

     

    (herein
called the “Debtor”)

     

    - and
-

     

    WACHOVIA
BANK, NATIONAL ASSOCIATION

     

    (herein
called the “Secured
Party”)

     

    WHEREAS pursuant to a loan
agreement dated July 7, 2005 between Lakeland Industries, Inc. (the “Borrower”) and the Secured
Party (as the same may be amended, supplemented or replaced from time to time,
the “Loan Agreement”)
and as evidenced by a certain promissory note dated July 7, 2005 from the
Borrower to the Bank (as the same may be amended, supplemented or replaced from
time to time, the “Note”), the Secured Party
agreed to make Advances (as defined in the Loan Agreement) to the
Borrower;

     

    AND WHEREAS pursuant to a
guarantee agreement dated July 7, 2005 by the Debtor in favour of the Secured
Party (as the same may be amended, supplemented or replaced from time to time,
the “Guarantee”), the
Debtor has agreed to guarantee, among other things, obligations under the Loan
Agreement and Note (together, the “Credit
Documents”);

     

    AND WHEREAS the Debtor has
agreed to provide in favour of the Secured Party a first priority security
interest in the Collateral (as hereinafter defined) as security for the payment
of the Secured Obligations.

     

    NOW THEREFORE for good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged) the Debtor agrees with the Secured Party as follows:

     

    ARTICLE 1

    INTERPRETATION

     

    1.1                    
     Defined Terms

     

    All
capitalized terms used herein, which are not otherwise defined herein, shall
have the respective meanings ascribed thereto in the Loan
Agreement.  In this agreement or any amendment hereto, unless the
context clearly indicates to the contrary:

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    “Act” means the Personal Property Security
Act (Ontario), as amended from time to time, and any regulations
thereto.

     

    “Collateral” means all personal
property, business and undertaking of the Debtor now owned or hereafter acquired
and any proceeds from the sale or other disposition thereof, all of which is
further described, without limitation, in Section 2.2.

     

    “Enforcement Date” means the
date on which the principal amount of the Obligations is accelerated pursuant to
the terms of the Credit Documents.

     

    “Secured Obligations” means all
indebtedness, obligations and liabilities, present or future, direct or
indirect, absolute or contingent, matured or not, of the Debtor to the Secured
Party under or in connection with the Guarantee and the other Loan
Documents.

     

    1.2                       
  Other Usages

     

    References
to “this agreement”, “hereof”, “herein”, “hereto” and like references refer to
this General Security Agreement and the Schedules hereto, as the same may be
amended, modified, supplemented or replaced from time to time, and not to any
particular Article, Section or other subdivision of this agreement.  A
reference in this agreement to another agreement refers to that other agreement
as it may be amended, modified, supplemented, restated or replaced from time to
time.  A reference in this agreement to a statute refers to that
statute as it may be amended and to any restated or successor legislation of
comparable effect.

     

    1.3                    
     Number and Gender

     

    Where the
context so requires, the singular number shall include the plural, the plural
the singular, and the use of any gender shall be applicable to all
genders.

     

    1.4              
           Headings

     

    The
insertion of headings in this agreement is for convenience of reference only and
shall not affect the construction or interpretation of this
agreement.

     

    1.5                 
        Applicable Law and Attornment
Clause

     

    This
agreement and all documents delivered pursuant hereto shall be deemed to be
governed by and construed in accordance with the laws of the Province of Ontario
and the laws of Canada applicable therein.  The parties hereby attorn
to the courts of the Province of Ontario and agree that those courts shall have
non-exclusive jurisdiction to determine all disputes relating to this
agreement.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    1.6            
     Prohibited Provisions

     

    In the
event that any provision or any part of any provision hereof is deemed to be
invalid by reason of the operation of any law or by reason of the interpretation
placed thereon by a court, this agreement shall be construed as not containing
such provision or such part of such provision and the invalidity of such
provision or such part shall not affect the validity of any other provision or
the remainder of such provision hereof, and all other provisions hereof which
are otherwise lawful and valid shall remain in full force and
effect.

     

    1.7                   
      Time of the Essence

     

    Time
shall in all respects be of the essence of this agreement.

     

    1.8                   
      Schedules

     

    Each and
every one of the schedules which is referred to in this agreement and attached
to this agreement shall form a part of this agreement.

     

    ARTICLE 2

    SECURITY
INTEREST

     

    2.1                 
        Grant of Security
Interest

     

    As
general and continuing security for the payment and performance of the Secured
Obligations, the Debtor hereby grants to the Secured Party a security interest
in the Collateral.

     

    2.2                 
        Description of
Collateral

     

    A
security interest is taken in all of the present and after-acquired personal
property of the Debtor including, without limitation, a security interest in
favour of the Secured Party in the following:

     

    
      	
               
      

            	
              (a)

            	
              Accounts

            

    

     

    all
debts, amounts, claims, rents (whether arising in respect of leases of real
property or personal property) and moneys which now are, or which may at any
time hereafter be, due or owing to or owned by the Debtor, whether or not earned
by performance including, without limitation, all intercompany loans and
advances made by the Debtor to its affiliates; all securities, mortgages of
personal property, bills, notes and other documents now held or owned, or which
may be hereafter taken, held or owned, by or on behalf of the Debtor, in respect
of the said debts, amounts, claims and moneys or any part thereof; and all
books, documents and papers recording, evidencing or relating to the said debts,
amounts, claims and moneys or any part thereof, all of which are herein called
the “Accounts”;

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    (b)           Inventory

     

    all goods
or chattels now or hereafter forming the inventory of the Debtor, including,
without limitation, all goods, merchandise, raw materials, work in process,
finished goods, goods held for sale or resale or lease or that have been leased
or that are to be, or have been, furnished under a contract of service, and
goods used in or procured for packing or packaging, all of which are herein
called the “Inventory”;

     

    
      	
               
      

            	
              (c)

            	
              Equipment

            

    

     

    all
equipment now owned or hereafter acquired by the Debtor, including, without
limitation, all machinery, trade fixtures (but excluding fixtures constituting
real property), plant, tools, furniture, chattels, vehicles of any kind or
description including, without limitation, motor vehicles, parts, accessories
installed in or affixed or attached to any of the foregoing, all drawings,
specifications, plans and manuals relating thereto, and any other tangible
personal property which is not Inventory, all of which are herein called the
“Equipment”;

     

    
      	
               
      

            	
              (d)

            	
              Intangibles

            

    

     

    all
intangible property now owned or hereafter acquired by the Debtor and which is
not Accounts including, without limitation, all contractual rights, goodwill,
patents, trademarks, trade names, copyrights and other intellectual property of
the Debtor and all other choses in action of the Debtor of every kind, whether
due or owing at the present time or hereafter to become due or owing, all of
which are herein called the “Intangibles”;

     

    
      	
               
      

            	
              (e)

            	
              Documents of
      Title

            

    

     

    any
writing now or hereafter owned by the Debtor that purports to be issued by or
addressed to a bailee and purports to cover such goods and chattels in the
bailee’s possession as are identified or fungible portions of an identified
mass, whether such goods and chattels are Inventory or Equipment, and which
writing is treated in the ordinary course of business as establishing that the
person in possession of such writing is entitled to receive, hold and dispose of
the said writing and the goods and chattels it covers, and further, whether such
writing is negotiable in form or otherwise, including bills of lading and
warehouse receipts, all of which are herein called the “Documents of
Title”;

     

    
      	
               
      

            	
              (f)

            	
              Money

            

    

     

    all money
now or hereafter owned by the Debtor, whether such money is authorized or
adopted by the Parliament of Canada as part of its currency or by any foreign
government as part of its currency, all of which are herein called the “Money”;

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    (g)           Chattel Paper

     

    all
present and future agreements made between the Debtor as secured party and
others which evidence both a monetary obligation and a security interest in or a
lease of specific goods, all of which are herein called the “Chattel Paper”;

     

    
      	
               
      

            	
              (h)

            	
              Instruments

            

    

     

    all
present and future bills, notes and cheques (as such are defined pursuant to the
Bills of Exchange Act
(Canada)) of the Debtor, and all other writings of the Debtor that evidence a
right to the payment of money and are of a type that in the ordinary course of
business are transferred by delivery without any necessary endorsement or
assignment and all letters of credit and advices of credit of the Debtor
provided that such letters of credit and advices of credit state that they must
be surrendered upon claiming payment thereunder, all of which are herein called
the “Instruments”;

     

    
      	
               
      

            	
              (i)

            	
              Securities

            

    

     

    all
present and future securities held by the Debtor, including shares, options,
rights, warrants, joint venture interests, interests in limited partnerships,
trust units, bonds, debentures and all other documents which constitute evidence
of a share, participation or other interest of the Debtor in property or in an
enterprise or which constitute evidence of an obligation of the issuer;
including, without limitation, any uncertificated securities and all
substitutions therefor and, subject to Section 2.6, dividends and income
derived therefrom, all of which are herein called the “Securities”;

     

    
      	
               
      

            	
              (j)

            	
              Documents

            

    

     

    all
documents, including, without limitation, all books, invoices, letters, papers
and other records, in any form evidencing or relating to the Collateral, all of
which are herein called the “Documents”;

     

    
      	
               
      

            	
              (k)

            	
              Proceeds

            

    

     

    all
personal property in any form derived directly or indirectly from any dealing
with the Collateral or the proceeds therefrom, including, without limitation,
property that indemnifies or compensates for the expropriation, destruction or
damage of the Collateral or the proceeds therefrom, all of which are herein
called the “Proceeds”;

     

    
      	
               
      

            	
              (l)

            	
              Leaseholds

            

    

     

    subject
to Section 2.5, all leases in respect of personal property, now owned or
hereafter acquired by the Debtor as tenant (whether oral or written) or any
agreement therefor, all of which are herein called the “Leaseholds”; and

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    (m)           Undertaking

     

    all
present and future personal property, business, and undertaking of the Debtor
not being Accounts, Inventory, Equipment, Intangibles, Documents of Title,
Money, Chattel Paper, Instruments, Securities, Documents, Proceeds or Leaseholds
all of which are herein called the “Undertaking”.

     

    2.3               
          Further Description
of Collateral

     

    Without
limiting the generality of the description of Collateral as set out in
Section 2.2, for greater certainty the Collateral shall include all present
and future tangible personal property of the Debtor located on or about or in
transit to or from the locations set out in Schedule A hereto.

     

    2.4              
           Attachment of
Security Interest

     

    The
parties hereby acknowledge that:

     

    
      	
               
      

            	
              (i)

            	
              value
      has been given;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Debtor has rights in the Collateral;
and

            

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      parties have not agreed to postpone the time for attachment of the
      security interest created by this
agreement.

            

    

     

    The
parties further agree that the security interests created to this agreement are
intended to attach to all Collateral in which the Debtor acquires an interest as
a result of any amalgamation, arrangement or similar proceeding.

     

    2.5              
           Exceptions re:
Real Property, Leaseholds and Contractual Rights

     

    All real
property (but not rents or other monies payable in respect thereof) is
specifically exempted from the security interest created by this
agreement.

     

    The last
day of the term of any lease or sublease in respect of any personal property or
agreement therefor is specifically excepted from the security interest created
by this agreement, but the Debtor agrees to stand possessed of such last day in
trust for such person as the Secured Party may direct and the Debtor shall
assign and dispose thereof in accordance with such direction.  To the
extent that the security interest created by this agreement in any contractual
rights would constitute a breach or cause the acceleration of such contract,
said security interest in such contract shall not be granted hereunder but the
Debtor shall hold its interest therein in trust for the Secured Party, and shall
grant a security interest in such contractual rights to the Secured Party
forthwith upon obtaining the appropriate consents to the granting of said
security interest.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    2.6                 
        Voting and Distributions re:
Securities

     

    At any
time that the security hereby constituted is not enforceable, all interest, cash
dividends, income and revenue from Securities that have been delivered to the
Secured Party pursuant to Section 3.1(e) (but not the proceeds of
disposition of such Securities) shall be collected by and payable to the Debtor
(and not the Secured Party), and such Securities shall be voted by the Debtor,
and all non-cash dividends paid on such Securities, if received by the Debtor,
shall be paid to, and held by, the Secured Party as Collateral.  At
any time while the security hereby constituted is enforceable, all dividends
paid on such Securities, and all interests, income and revenue from such
Securities, if received by the Debtor, shall be paid to the Secured Party, and
the Secured Party shall be entitled to vote or not to vote such Securities as
the Secured Party sees fit.

     

    2.7                          Uncertificated
Securities and Certain Other Investment Property

     

    The
Debtor will permit the Secured Party from time to time to cause the appropriate
issuers (and, if held with a securities intermediary, such securities
intermediary) of uncertificated Securities which are Collateral to mark their
books and records with the numbers and face amounts of all such uncertificated
Securities and all rollovers and replacements therefor to reflect the security
interest of the Secured Party granted pursuant to this agreement.  The
Debtor will take any actions within its power to cause the issuers of
uncertificated Securities which are Collateral to cause the Secured Party to
have and retain control over such Securities.

     

    ARTICLE 3

    WARRANTIES
AND COVENANTS OF THE DEBTOR

     

    3.1                    
     Warranties and Covenants

     

    The
Debtor hereby warrants, covenants and agrees with the Secured Party as
follows:

     

    
      	
               
      

            	
              (a)

            	
              The
      tangible Collateral is now and will be located at the locations set out in
      Schedule A hereto and at such other locations as may be reported to the
      Secured Party in accordance with the Loan Documents, other than any such
      Collateral in transit to and from such locations.  In the event
      the tangible Collateral becomes located at any location other than the
      locations set out in Schedule A, the Debtor shall promptly notify the
      Secured Party in writing of the details thereof.  The Debtor
      shall, at the reasonable request of the Secured Party, mark such
      Collateral which the Debtor owns to indicate clearly that it is subject to
      the security interests created by this
  agreement.

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      Debtor shall keep the Collateral in good condition and repair, reasonable
      wear and tear excepted.

            

    

     

    
      	
               
      

            	
              (c)

            	
              The
      Debtor agrees to promptly notify the Secured Party in writing of the
      acquisition by the Debtor of any personal property which is not of the
      nature or type described by the definition of Collateral, and the Debtor
      agrees to execute

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    
      	
               
      

            	
              and
      deliver at its own expense from time to time amendments to this agreement
      or additional security agreements as may be reasonably required by the
      Secured Party in order that a security interest shall attach to such
      personal property.

            

    

     

    
      	
               
      

            	
              (d)

            	
              The
      Debtor shall prevent any Collateral from becoming an accession to any
      personal property not subject to this agreement, or becoming affixed to
      any real property, other than in the ordinary course of its
      business.

            

    

     

    
      	
               
      

            	
              (e)

            	
              The
      Debtor shall deliver to the Secured Party from time to time upon the
      request of the Secured Party any items of Collateral comprising
      certificated Securities.  Each such delivery shall be effected
      by depositing with the Secured Party all certificates representing such
      Securities.  All certificates so deposited shall be attached to
      duly executed powers of attorney or forms of
  transfer.

            

    

     

    
      	
               
      

            	
              (f)

            	
              The
      Debtor shall notify the Secured Party of any Collateral which constitutes
      a claim against a government or any instrumentality or agency thereof, the
      assignment of which claim is restricted or prohibited, and the details of
      such restrictions or prohibitions.

            

    

     

    
      	
               
      

            	
              (g)

            	
              The
      Debtor shall deliver to the Secured Party upon the request of the Secured
      Party from time to time all items of Collateral comprising Documents of
      Title, Chattel Paper, Instruments and
Documents.

            

    

     

    
      	
               
      

            	
              (h)

            	
              The
      Debtor will not use or acquire for use any Collateral as consumer
      goods.

            

    

     

    3.2                          Performance
of Covenants by the Secured Party

     

    The
Secured Party may, in its sole discretion and upon notice to the Debtor, perform
any covenant of the Debtor under this agreement that the Debtor fails to perform
and that the Secured Party is capable of performing, including any covenant the
performance of which requires the payment of money, provided that the Secured
Party will not be obligated to perform any such covenant on behalf of the Debtor
and no such performance by the Secured Party will require the Secured Party
further to perform the Debtor’s covenants nor operate as a derogation of the
rights and remedies of the Secured Party under this agreement.

     

    ARTICLE 4

    RESTRICTIONS
ON SALE OR DISPOSAL OF COLLATERAL

     

    4.1                
          Permitted
Activities

     

    Except to
the extent restricted by the Loan Documents, the Debtor may, at any time,
without the consent of the Secured Party:

     

    
      	
               
      

            	
              (a)

            	
              lease,
      sell, license, consign or otherwise deal with Collateral in the ordinary
      course of business on commercially reasonable terms and any bona fide purchaser for
      value shall acquire rights to such Collateral free and clear of the
      security interest created by this agreement, but (i) all rights of
      the Debtor as vendor, lessor,

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    
      	
               
      

            	
              licensor
      or consignor shall be subject to the security interest created by this
      agreement and (ii) all proceeds of such sale, lease or other dealing
      shall be subject to the security interest created by this agreement;
      and

            

    

     

    
      	
               
      

            	
              (b)

            	
              continue
      to collect, at its own expense, all amounts due or to become due to the
      Debtor under the Accounts; and in connection with such collections, take
      (and, at the Secured Party’s direction, shall take) such action as the
      Debtor or the Secured Party, as the case may be, may deem necessary or
      advisable to enforce collection of the Accounts; provided, however, that
      the Secured Party shall have the right at any time while the security
      hereby constituted is enforceable to notify the account debtors or
      obligors under any Accounts of the assignment of such Accounts to the
      Secured Party and to direct such account debtors or obligors to make
      payment of all amounts due or to become due to the Debtor thereunder
      directly to the Secured Party and to give valid and binding receipts and
      discharges therefor and in respect thereof and, upon such notification and
      at the expense of the Debtor, to enforce collection of any such Accounts,
      and to adjust, settle or compromise the amount or payment thereof, in the
      same manner and to the same extent as the Debtor might have
      done.

            

    

     

    At any
time while the security hereby constituted is enforceable,

     

    
      	
               
      

            	
              (i)

            	
              all
      money or other form of payment received by the Debtor in respect of the
      Accounts shall be received in trust for the benefit of the Secured Party
      hereunder, shall be segregated from other funds of the Debtor and shall be
      forthwith paid over to the Secured Party in the same form as so received
      (with any necessary endorsement) to be held as cash collateral and applied
      to repay the Obligations in accordance with the Credit Documents;
      and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Debtor shall not adjust, settle or compromise the amount or payment of any
      Accounts, or release wholly or partly any account debtor or obligor
      thereof, or allow any credit or discount
  thereon.

            

    

     

    4.2                    
      Release by the Secured Party

     

    The
Secured Party (i) may, at its discretion, at any time release from the security
interest created by this agreement any part or parts of the Collateral or any
other security or any surety for the Secured Obligations of the Debtor either
with or without sufficient consideration therefor without thereby releasing any
other part of the Collateral or any person from this agreement; and (ii) shall
release the security interest created by this agreement on any part or parts of
the Collateral that are sold or transferred pursuant to a third party pursuant
to any transaction permitted by the Indenture as provided therein.

     

    4.3              
            Proceeds
Held in Trust

     

    All
Proceeds that are monies collected or received by the Debtor will be received by
the Debtor in trust for the Secured Party and will be forthwith paid to the
Secured Party.  The Secured Party shall not exercise its rights under
this Section 4.3, and the Debtor’s trust

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    obligations
under this Section 4.3 need not be complied with, unless such Proceeds
arise from a disposition of Collateral which is not permitted hereunder or
unless and until the security hereby constituted is then
enforceable.

     

    ARTICLE 5

    ENFORCEMENT

     

    5.1                            Enforcement

     

    The
Debtor shall be deemed to be in default under this agreement and the security
hereby constituted shall immediately become enforceable without further notice
of any kind, which notice is expressly waived by the Debtor, to the extent
permitted by applicable law, on or after the Enforcement Date.

     

    5.2                 
         Remedies

     

    At any
time while the security hereby constituted is enforceable, the Secured Party
shall have the following rights, powers and remedies:

     

    
      	
               
      

            	
              (a)

            	
              to
      appoint any person to be an agent or any person to be a receiver, manager
      or receiver and manager (herein called the “Receiver”) of the
      Collateral and to remove any Receiver so appointed and to appoint another
      if the Secured Party so desires; it being agreed that any Receiver
      appointed pursuant to the provisions of this agreement shall have all of
      the powers of the Secured Party hereunder, and in addition, shall have the
      power to carry on the business of the
Debtor;

            

    

     

    
      	
               
      

            	
              (b)

            	
              to
      make payments to parties having prior charges or encumbrances on
      properties on which the Secured Party may hold charges or
      encumbrances;

            

    

     

    
      	
               
      

            	
              (c)

            	
              to
      enter onto any premises where the Collateral may be
    located;

            

    

     

    
      	
               
      

            	
              (d)

            	
              to
      take possession of all or any part of the Collateral with power to exclude
      the Debtor, its agents and its servants
  therefrom;

            

    

     

    
      	
               
      

            	
              (e)

            	
              to
      preserve, protect and maintain the Collateral and make such replacements
      thereof and additions thereto as the Secured Party shall deem
      advisable;

            

    

     

    
      	
               
      

            	
              (f)

            	
              to
      enjoy and exercise all powers necessary or incidental to the performance
      of all functions provided for in this agreement including, without
      limitation, the power to purchase on credit, the power to borrow in the
      Debtor’s name or in the name of the Receiver and to advance its own money
      to the Debtor at such rates of interest as it may deem reasonable,
      provided that the Receiver shall borrow money only with the prior consent
      of the Secured Party, and to grant security interests in the Collateral in
      priority to the security interest created by this agreement, as security
      for the money so borrowed;

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    
      	
               
      

            	
              (g)

            	
              to
      sell, lease or dispose of all or any part of the Collateral whether by
      public or private sale or lease or otherwise and on any terms so long as
      every aspect of the disposition is commercially reasonable, including,
      without limitation, terms that provide for payment of credit; provided
      that:

            

    

     

    
      	
               
      

            	
              (i)

            	
              any
      such sale, lease or disposition shall be on commercially reasonable terms,
      having regard to the circumstances;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Secured Party or the Receiver will not be required to sell, lease or
      dispose of the Collateral, but may peaceably and quietly take, hold, use,
      occupy, possess and enjoy the Collateral without molestation, eviction,
      hindrance or interruption by the Debtor or any other person or persons
      whomsoever for such period of time as is commercially
      reasonable;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      Secured Party or the Receiver may convey, transfer and assign to a
      purchaser or purchasers the title to any of the Collateral so sold;
      and

            

    

     

    
      	
               
      

            	
              (iv)

            	
              the
      Debtor will be entitled to be credited with the actual proceeds of any
      such sale, lease or other disposition only when such proceeds are received
      by the Secured Party or the Receiver in cash or such other form of
      compensation as may be acceptable to the Secured Party, in its sole
      discretion;

            

    

     

    
      	
               
      

            	
              (h)

            	
              to
      enjoy and exercise all of the rights and remedies of a secured party under
      the Act;

            

    

     

    
      	
               
      

            	
              (i)

            	
              to
      dispose of all or any part of the Collateral in the condition in which it
      was on the date possession of it was taken, or after any commercially
      reasonable repair, processing or preparation for
    disposition;

            

    

     

    
      	
               
      

            	
              (j)

            	
              to
      sell or otherwise dispose of any part of the Collateral without giving any
      notice whatsoever where:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Collateral is perishable;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Secured Party or the Receiver believes on reasonable grounds that the
      Collateral will decline speedily in
value;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      Collateral is of a type customarily sold on a recognized
      market;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              the
      cost of care and storage of the Collateral is disproportionately large
      relative to its value;

            

    

     

    
      	
               
      

            	
              (v)

            	
              every
      person entitled by law to receive a notice of disposition consents in
      writing to the immediate disposition of the Collateral;
  or

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    
      	
               
      

            	
              (vi)

            	
              the
      Receiver disposes of the Collateral in the course of the Debtor’s
      business;

            

    

     

    
      	
               
      

            	
              (k)

            	
              to
      have Securities included in the Collateral registered on the books of the
      issuers of such Securities in the name of the Secured Party or such
      nominee of the Secured Party as the Secured Party shall
      direct;

            

    

     

    
      	
               
      

            	
              (l)

            	
              to
      commence, continue or defend proceedings in any court of competent
      jurisdiction in the name of the Secured Party, the Receiver or the Debtor
      for the purpose of exercising any of the rights, powers and remedies set
      out in this Section 5.2, including the institution of proceedings for
      the appointment of a receiver, manager or receiver and manager of the
      Collateral; and

            

    

     

    
      	
               
      

            	
              (m)

            	
              at
      the sole option of the Secured Party, provided notice is given in the
      manner required by the Act to the Debtor and to any other person to whom
      the Act requires notice be given and the relevant provisions otherwise
      allow it, to elect to retain all or any part of the Collateral in
      satisfaction of the Secured Obligations of the
  Debtor.

            

    

     

    5.3                          License

     

    The
Secured Party is hereby granted a license or other right to use, at any time
while the security hereby constituted is enforceable, without charge, the
Debtor’s labels, patents, copyrights, rights of use of any name, trade secrets,
trade names, trademarks, service marks, customer lists and advertising matter,
or any property of a similar nature, as it pertains to the Collateral, in
completing production of, advertising for sale, and selling any Collateral, and
after the security hereby constituted becomes enforceable, the Debtor’s rights
under all licenses and all franchise agreements shall inure to the Secured
Party’s benefit.  In addition, the Debtor hereby irrevocably agrees
that the Secured Party may, at any time while the security hereby constituted is
enforceable, sell any of the Inventory directly to any person, including without
limitation, persons who have previously purchased the Inventory from the Debtor
and in connection with any such sale or other enforcement of the Secured Party’s
rights under this agreement, may sell Inventory which bears any trademark owned
by or licensed to the Debtor and any Inventory that is covered by any copyright
owned by or licensed to the Debtor and any Inventory that is covered by any
copyright owned by or licensed to the Debtor and the Secured Party may finish
any work in process and affix any trademark owned by or licensed to the Debtor
and sell such Inventory as provided herein.

     

    5.4                  
       Receiver as Secured Party

     

    The
Receiver shall be deemed to be the agent of the Debtor for the purpose of
establishing liability for the acts or omissions of the Receiver and the Secured
Party shall not be liable for such acts or omissions and, without restricting
the generality of the foregoing, the Debtor hereby irrevocably authorizes the
Secured Party to give instructions to the Receiver relating to the performance
of its duties as set out herein.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    5.5                   
      Expenses of Enforcement

     

    The
Debtor shall pay to the Receiver the remuneration of the Receiver and all costs
and expenses (including, without limitation, reasonable legal fees and
disbursements on a solicitor and his own client basis) incurred by the Receiver
pursuant to its appointment and the exercise of its powers hereunder, and shall
pay to the Secured Party and the Receiver as required all amounts of money
(including interest thereon) borrowed or advanced by either of them pursuant to
the powers set out herein, and the obligations of the Debtor to the Secured
Party and the Receiver pursuant to this Section 5.5 shall be payable on
demand and shall bear interest at the Default Rate (as defined in the Note),
which interest shall be calculated and compounded monthly and payable on
demand.

     

    5.6                          Indulgences
and Releases

     

    Either
the Secured Party or the Receiver may grant extensions and other indulgences,
take and give up securities, accept compositions, grant releases and discharges,
release any part of the Collateral to third parties and otherwise deal with the
Debtor, debtors of the Debtor, sureties and others and with the Collateral and
other security as the Secured Party or the Receiver may see fit without
prejudice to the Secured Obligations of the Debtor or the right of the Secured
Party and the Receiver to repossess, hold, collect and realize the
Collateral.

     

    5.7             
            No
Liability for Failure to Exercise Remedies

     

    The
Secured Party and the Receiver shall not be liable or accountable to the Debtor
or to any other person for any failure to exercise any of the rights, powers and
remedies set out in Section 5.2, and shall not be bound to commence,
continue or defend proceedings for the purpose of preserving or protecting any
rights of the Secured Party, the Receiver, the Debtor or any other party in
respect of the same.

     

    5.8           
              Restriction
on Debtor

     

    Upon the
Secured Party taking possession of the Collateral or the appointment of a
Receiver, all the powers, functions, rights and privileges of the Debtor or any
officer, director, servant or Secured Party of the Debtor with respect to the
Collateral shall, to the extent permitted by law, be suspended unless
specifically continued by the written consent of the Secured Party.

     

    5.9              
           Rights
Cumulative

     

    All
rights and remedies of the Secured Party set out in this agreement shall be
cumulative and no right or remedy contained herein is intended to be exclusive
but each shall be in addition to every other right or remedy contained herein or
in any existing or future security document or now or hereafter existing at law
or in equity or by statute.  The taking of a judgment or judgments
with respect to any of the Secured Obligations of the Debtor shall not operate
as a merger of any of the covenants contained in this agreement.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    5.10                  
     Care by the Secured Party

     

    The
Secured Party shall be deemed to have exercised reasonable care in the custody
and preservation of any of the Collateral in the Secured Party’s possession if
it takes such action for that purpose as the Debtor requests in writing, but
failure of the Secured Party to comply with any such request shall not be deemed
to be (or to be evidence of) a failure to exercise reasonable care, unless any
such failure to comply constitutes gross negligence or wilful misconduct, and no
failure of the Secured Party to preserve or protect any rights with respect to
such Collateral against prior parties, or to do any act with respect to the
preservation of such Collateral not so requested by the Debtor, shall be deemed
a failure to exercise reasonable care in the custody or preservation of such
Collateral, unless any such failure or act constitutes gross negligence or
wilful misconduct.

     

    5.11               
        Standards of Sale

     

    Without
prejudice to the ability of the Secured Party to dispose of the Collateral in
any manner which is commercially reasonable, the Debtor acknowledges that a
disposition of Collateral by the Secured Party which takes place substantially
in accordance with the following provisions shall not be deemed to have been
made in a commercially unreasonable manner solely by reason
thereof:

     

    
      	
               
      

            	
              (a)

            	
              Collateral
      may be disposed of in whole or in
part;

            

    

     

    
      	
               
      

            	
              (b)

            	
              Collateral
      may be disposed of by public sale following one advertisement in a
      newspaper or trade publication having general circulation appropriate to
      the public sale of such Collateral at least seven days prior to such
      sale;

            

    

     

    
      	
               
      

            	
              (c)

            	
              Collateral
      may be disposed of by private sale after receipt by the Secured Party of
      not less than three bona
      fide written offers from arm’s length, unrelated
      parties;

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      purchaser or lessee of such Collateral may be a customer of the Secured
      Party, provided that such customer acts at arm’s length with the Secured
      Party;

            

    

     

    
      	
               
      

            	
              (e)

            	
              the
      disposition may be for cash or credit, or part cash and part credit;
      and

            

    

     

    
      	
               
      

            	
              (f)

            	
              the
      Secured Party may establish a reserve bid in respect of all or any portion
      of the Collateral.

            

    

     

    5.12             
          Securities of the
Debtor

     

    The
Debtor recognizes that the Secured Party may be unable to effect a public sale
of any or all of the Securities that form part of the Collateral by reason of
certain prohibitions contained in the applicable securities laws or otherwise,
but may be compelled to resort to one or more private sales thereof to a
restricted group of purchasers who will be obliged to agree, among other things,
to acquire such Securities for their own account for investment and not with a
view to the distribution or resale thereof.  The Debtor acknowledges
and agrees that any such private sale may result in prices and other terms less
favourable to the seller than if

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    such sale
were a public sale and, notwithstanding such circumstances, agrees that any such
private sale shall not be deemed to have been made in a commercially
unreasonable manner solely by reason of its being a private sale.  The
Secured Party shall be under no obligation to delay a sale of any of the
Collateral for the period of time necessary to permit the issuer of such
Securities to register such Securities for public sale under the applicable
securities law, or otherwise, even if the issuer would agree to do
so.

     

    ARTICLE 6

    GENERAL

     

    6.1                     
    Waiver

     

    Any
breach by the Debtor of any of the provisions contained in this agreement or any
default by the Debtor in the observance or performance of any covenant or
condition required to be observed or performed by the Debtor hereunder, may only
be waived by the Secured Party in writing, provided that no such waiver by the
Secured Party shall extend to or be taken in any manner to affect any subsequent
breach or default or the rights resulting therefrom.

     

    6.2                   
      The Secured Party as Attorney

     

    The
Debtor hereby irrevocably appoints the Secured Party and any person further
designated by the Secured Party, with full power of substitution, to be the
attorney of the Debtor for and in the name of the Debtor to execute and do any
deeds, documents, transfers, demands, assignments, assurances, consents and
things which the Debtor is obliged to sign, execute or do hereunder and, as of
the Enforcement Date, to commence, continue and defend any proceedings
authorized to be taken hereunder and generally to use the name of the Debtor in
the exercise of all or any of the powers hereby conferred on the Secured
Party.  The power of attorney hereby granted is coupled with an
interest, is irrevocable and shall extend to the successor and assigns of the
Debtor.  The Debtor agrees to be bound by any representations and
actions made or taken in good faith by the Secured Party pursuant to this power
of attorney in accordance with the terms thereof and hereby waives any and all
defences which may be available to it to contest, negate or disaffirm the
actions of the Secured Party taken in good faith under this power of
attorney.

     

    6.3              
           Further
Assurances

     

    The
Debtor shall do, execute, acknowledge and deliver or cause to be done, executed,
acknowledged and delivered, such further acts, deeds, mortgages, transfers and
assurances and take all such further action or cause such further action to be
taken as the Secured Party shall reasonably require for the better assuring,
charging, assigning and conferring unto the Secured Party a security interest in
the Collateral or property intended to be charged hereunder, or which the Debtor
may hereafter become bound to charge in favour of the Secured Party (including,
without limiting the generality of the foregoing, any real property in which the
Debtor may have any interest from time to time), for the purpose of
accomplishing and effecting the intention of this agreement.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    6.4                      
   Continuing Security

     

    The
security interest constituted hereby shall be deemed to be a continuing security
for the Secured Obligations of the Debtor until all of the Secured Obligations
of the Debtor from time to time are paid and performed in full and this
agreement is terminated.

     

    6.5                           No
Obligation to Advance

     

    Neither
the execution nor delivery of this agreement shall obligate the Secured Party to
advance any moneys to the Debtor.

     

    6.6                  
       Consumer Goods

     

    Notwithstanding
any other clause in this agreement, in no event shall goods that are used or
acquired for use primarily for personal, family or household purposes form part
of the Collateral.

     

    6.7                           Notices

     

    All
notices or other communications provided for herein shall be in writing and
shall be personally delivered to an officer or other responsible employee of the
addressee or sent by telefacsimile, charges prepaid, at or to the address or
telefacsimile number of the party set opposite its name below or to such other
address or addresses, telefacsimile number or numbers as either party may from
time to time designate to the other party in such manner.  Any
communication which is personally delivered as aforesaid shall be deemed to have
been validly and effectively given on the date of such delivery if such date is
a business day and such delivery was made prior to 4:00 p.m. (Toronto time);
otherwise, it shall be deemed to have been validly and effectively given on the
business day next following such date of delivery.  Any communication
which is transmitted by telefacsimile shall be deemed to have been validly and
effectively given on the date of transmission if such date is a business day and
such transmission was prior to 4:00 p.m. (Toronto time); otherwise, it shall be
deemed to have been validly and effectively given on the business day next
following such date of transmission.

     

    In the
case of the Debtor:

     

    Lakeland
Protective Wear Inc.

    59 Bury
Court

    Brantford,
Ontario

    N3S
0A9

     

    Attention:                  Peter
Brasseur

    Telefax:                      (519)
757-0799

     

    In the
case of the Secured Party:

     

    Wachovia
Bank, National Association

    12 East
49th
Street, 43rd
Floor

    New York,
New York

    10017

     

    Attention:                 Robert
Maichin, Senior Vice President

    Telefax:                      (212)
241-4111

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    6.8                          Successors
and Assigns

     

    This
agreement shall enure to the benefit of and shall be binding upon the parties
hereto and their respective successors and permitted assigns.

     

    6.9                          Entire
Agreement

     

    This
agreement, the Loan Documents and any other agreements referred to herein
constitute the entire agreement between the parties hereto and supersedes any
prior agreements, undertakings, declarations, representations and undertakings,
both written and oral, in respect of the subject matter hereof.

     

    6.10               
        Receipt of Financing Statement,
etc.

     

    The
receipt by the Debtor’s legal counsel of a financing statement or financing
change statement shall be deemed to be receipt of same by the
Debtor.

     

    6.11                
       Acknowledgement

     

    The
Debtor hereby acknowledges receipt of an executed copy of this
agreement.

     

    6.12                
       Paramouncy

     

    In the
event of any conflict or inconsistency between the provisions of this agreement
and the provisions of the Credit Documents, the provisions of the Credit
Documents shall prevail and be paramount.

     

    6.13               
       Counterparts

     

    This
agreement may be executed in any number of counterparts, all of which shall be
deemed to be an original and such counterparts taken together shall constitute
one agreement, and any of the parties hereto may execute this agreement by
signing any such counterpart.

     

    6.14             
         Confirmation of
Guarantee

     

    The
Debtor hereby ratifies and confirms that it is bound by the terms of the
Guarantee and confirms that such Guarantee continues in full force and
effect.  The Debtor hereby further ratifies and confirms that the
Guarantee guarantees the payment of the Secured Obligations
and the Secured Obligations include, without limitation, the present and future
obligations of the Borrower to the Bank under the Loan Agreement.

     

    [The
remainder of this page is intentionally left blank.]

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    IN
WITNESS WHEREOF the Debtor has executed this
agreement.

    

    
      	 
      	
              LAKELAND
      PROTECTIVE WEAR INC.

               

               

               

            
	 
      	
              By:

            	
              /s/
      Christopher J. Ryan

            
	 
      	 
      	
              Name:
      Christopher J. Ryan

            
	 
      	 
      	
              Title:
      Assistant Secretary

            

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    SCHEDULE
A

     

    LOCATION
OF THE COLLATERAL

     

    

    59 Bury
Court, Brantford, Ontario, N3S 0A9

     

     

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

       

       

      BLOCKED ACCOUNTS
AGREEMENT

       

      THIS AGREEMENT dated the 27th
day of January, 2009.

       

      A
M O N G :

       

      LAKELAND
PROTECTIVE WEAR INC.

      as the
“Company”

       

      - and
-

       

      WACHOVIA
BANK, NATIONAL ASSOCIATION

      as the
“Secured
Party”

       

      - and
-

       

      THE
TORONTO-DOMINION BANK

      as “Bank”

       

       

      RECITALS

       

      
        	
                A.

              	
                Lakeland
      Industries, Inc. (the “Borrower”) and the
      Secured Party are party to a Loan Agreement dated as of July 7, 2005 (as
      amended, supplemented, restated or otherwise modified from time to time,
      the “Credit
      Agreement”).

              

      

       

      
        	
                B.

              	
                As
      required by the Credit Agreement, the Company, a wholly owned subsidiary
      of the Borrower, has granted security to Secured Party and the Credit
      Agreement requires the implementation of the cash management arrangements
      provided for in this Agreement.

              

      

       

      FOR VALUE
RECEIVED, the parties agree as follows:

       

      SECTION
1

      INTERPRETATION

       

      
        	
                1.1

              	
                Definitions

              

      

       

      In this
Agreement:

       

      
        	
                (a)

              	
                Activation
      Date means a date specified by Secured Party in the Activation
      Notice delivered by Secured Party to Bank which shall fall no sooner than
      a date that is three (3) Business Days following Bank’s receipt of said
      Activation Notice.

              

      

       

      
        	
                (b)

              	
                Activation
      Notice means a notice
      from the Secured Party to Bank in the form appearing at Schedule B
      hereto.

              

      

       

      
        	
                (c)

              	
                Branch of
      Account means the branch of Bank located
  at:

              

      

       

      4031
Fairview, Burlington, Ontario

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (d)           Business
Day means any day on which the Branch of Account is open for business to
the public.

       

      
        	
                (e)

              	
                Cheques
      means all cheques, money orders, wire transfers, notes, drafts and other
      orders for payment of money or other remittances payable to the
      Company.

              

      

       

      
        	
                (f)

              	
                Receivables
      means all present and future accounts, accounts receivable, debts and book
      debts of any nature or type of the
Company.

              

      

       

      
        	
                1.2

              	
                Interpretation

              

      

       

      In
interpreting this Agreement, the headings and the division of the Sections are
inserted for convenience only and are to be ignored in construing this
Agreement; all references to Sections, subsections, clauses and Schedules are to
Sections, subsections, clauses and Schedules to this Agreement; the words
“hereto,” “herein,” “hereof,” “hereunder,” “this Agreement” and similar
expressions mean this Agreement as a whole and not any particular Section,
subsection or Schedule unless expressly so stated; grammatical variations of any
term defined herein shall have similar meanings and words importing the singular
shall include the plural and vice versa; reference herein to any agreement or
other document shall be deemed to include reference to such agreement or other
document as the same may from time to time be amended, supplemented, restated or
otherwise modified.

       

      SECTION
2

      ACKNOWLEDGEMENT
OF SECURITY

       

      
        	
                2.1

              	
                Acknowledgement
      of Security

              

      

       

      The
Company acknowledges that it has granted to, and has created in favour of,
Secured Party a first priority perfected security interest in:

       

      
        	
                (a)

              	
                its
      interest in all Cheques and other remittances received by the
      Company;

              

      

       

      
        	
                (b)

              	
                the
      depository accounts in the name of the Company described in Schedule A
      hereto as blocked accounts (the “Blocked Accounts”),
      including all sums now on deposit in or payable to and any interest
      accrued or payable on the credit balances therein;
  and

              

      

       

      
        	
                (c)

              	
                the
      disbursement accounts described in Schedule A hereto as disbursement
      accounts (the “Disbursement Accounts”),
      including all sums now on deposit in or payable to and any interest
      accrued or payable on the credit balances
  therein.

              

      

       

      SECTION
3

      COLLECTION
OF RECEIVABLES

       

      
        	
                3.1

              	
                Collections

              

      

       

      The
Company shall, as soon as practically possible, and, in any event, within 24
hours of receipt thereof, deliver to Bank for deposit into the Blocked Accounts
any and all Cheques.  The Company shall hold all post-dated Cheques
received by it until they may be included in a deposit made by or on behalf of
the Company.  Until all cash and Cheques received by the Company are
delivered to Bank for deposit in the Blocked Accounts, the Company shall hold
all such cash and Cheques in trust and as mandatory for Secured Party,
segregated from all other funds and other property of the Company.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SECTION
4

      BLOCKED
ACCOUNTS OPERATION

       

      
        	
                4.1

              	
                Blocked
      Account

              

      

       

      Commencing
on the Activation Date, Bank shall transfer, prior to the end of each Business
Day, all amounts on deposit in the Blocked Accounts to Secured Party’s account
or accounts or such other account or accounts with such depositories as Secured
Party may from time to time designate in writing (each, a “Collection Account”, and,
collectively, the “Collection
Accounts”).  As of the date hereof, the only Collection
Accounts are the collection accounts described in Schedule A
hereto.  The transfers of amounts from the Blocked Accounts to the
Collection Accounts shall be effected in accordance with Bank’s usual banking
practices on each Business Day on which amounts are on deposit in the Blocked
Accounts.  The Secured Party shall be entitled to deliver the
Activation Notice upon or at any time after the occurrence of an Event of
Default (as defined in the Credit Agreement).  Prior to the Activation
Date, the Bank and the Company shall be entitled to operate all accounts
including the Blocked Accounts and Disbursement Accounts all without prior
notice to or consent of the Secured Party.

       

      
        	
                4.2

              	
                Instructions

              

      

       

      After the
Activation Date, the Blocked Accounts shall be subject to written instructions
only from Secured Party which alone, as between the Company and Secured Party,
shall have all authority and right in connection with the Blocked
Accounts.  Bank shall be entitled to act upon the instructions of any
person who Bank believes, acting reasonably, is a person that Secured Party has
identified in writing from time to time to Bank as being a person authorized by
Secured Party to give instructions to Bank.

       

      
        	
                4.3

              	
                Payment
      Not Realization

              

      

       

      The
Company and Secured Party acknowledge and agree that:

       

      
        	
                (a)

              	
                the
      actions and proceedings contemplated by this Section 4 are instrumental to
      the operation of the cash management system that is required by the Credit
      Agreement; and

              

      

       

      
        	
                (b)

              	
                any
      action or proceeding pursuant to this Section 4 shall not be considered as
      a realization on, or enforcement of, security or a demand for payment
      under the Credit Agreement but rather, among other things, following the
      Activation Date, a standing irrevocable direction by the Company to Bank
      to thereafter transfer daily to the appropriate Collection Account on the
      direction of Secured Party all credit balances in the Blocked Accounts as
      contemplated by Section 4.1.

              

      

       

      
        	
                4.4

              	
                Wire
      Transfers

              

      

       

      Bank
shall apply and credit to the applicable Blocked Account all wire transfers
directed to that Blocked Account in accordance with Bank’s standard
procedures.

       

      
        	
                4.5

              	
                Adverse
      Claims

              

      

       

      
        	
                (a)

              	
                In
      the event that Bank shall receive notice that any third party shall have
      asserted an adverse claim by legal process against the Disbursement
      Accounts, Blocked Accounts or any sums on deposit therein, whether such
      claim shall have arisen by tax lien, execution of judgment, statutory
      attachment, garnishment, levy, claim of a trustee in bankruptcy,
      debtor-in-possession, post-bankruptcy petition lender, court appointed
      receiver, or other judicial or regulatory order or process (each, a “Claim”), the Bank may,
      in addition to other remedies it possesses under
  this

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                Agreement
      or at law or in equity: (i) suspend disbursements from the Disbursement
      Accounts or Blocked Accounts without any liability until Bank shall have
      received an appropriate court order or other assurances reasonably
      acceptable to Bank in its sole discretion establishing that funds may
      continue to be disbursed according to instructions then applicable to the
      Disbursement Accounts or Blocked Accounts, and/or (ii) interplead such
      funds in the Disbursement Accounts or Blocked Accounts as permitted by
      applicable law.  Bank’s costs, expenses and reasonable legal
      fees incurred in connection with any such Claim shall be reimbursed to
      Bank by the Company.  Upon request, Bank shall provide a copy of
      any such notice to the Company or (if the notice referred to in Section
      4.1 has been delivered) to Secured Party, and the Company shall promptly
      provide to the Secured Party a copy of any such notice received by the
      Company from Bank and Secured Party shall promptly provide to the Company
      a copy of any such notice received by Secured Party from
    Bank.

              

      

       

      
        	
                (b)

              	
                If
      a bankruptcy or insolvency proceeding were commenced by or against the
      Company, Bank shall be entitled, without any liability, to refuse to (i)
      permit withdrawals or transfers from the Blocked Accounts or Disbursement
      Accounts or (ii) accept or comply with the notice thereafter received by
      Bank, until Bank shall have received an appropriate court order or other
      assurances reasonably acceptable to Bank in its sole discretion
      establishing that (A) continued withdrawals or transfers from the Blocked
      Accounts or Disbursement Accounts or honoring or following any instruction
      from the Secured Party are authorized and shall not violate any law,
      regulation, or order of any court and (B) the Bank shall have received
      adequate protection for its right to set off against or charge the Blocked
      Accounts or Disbursement Accounts or otherwise be reimbursed for related
      expenses or Chargebacks.

              

      

       

      

       

      SECTION
5

      FEES,
EXPENSES, CHARGEBACKS AND INDEMNITY

       

      
        	
                5.1

              	
                Waiver
      of Bank’s Rights

              

      

       

      Except as
expressly provided in this Agreement, Bank waives and agrees not to assert,
claim or endeavour to exercise any right of deduction, set-off, pledge or other
right to claim with respect to the Blocked Accounts, or the funds
therein.

       

      
        	
                5.2

              	
                Company’s
      Fee Obligations

              

      

       

      The
Company hereby agrees that it is responsible for all normal and customary fees
and expenses established by Bank from time to time for the services provided
hereunder (all such amounts, the “fees and
expenses”).  If any of the fees and expenses are not paid by
the Company when due, Bank shall be entitled to automatically debit, by
mechanical, electronic or manual means, any of the Disbursement Accounts for
such fees and expenses.  If there are insufficient funds in the
Disbursement Accounts for Bank to recover the fees and expenses, Bank may
automatically debit, by mechanical, electronic or manual means, any of the
Blocked Accounts in an amount equal to the deficiency of funds in the
Disbursement Accounts.

       

      
        	
                5.3

              	
                Chargebacks

              

      

       

      Notwithstanding
Section 5.1, Bank shall be entitled to automatically debit, by mechanical,
electronic or manual means, any one or more of the Blocked Accounts and the
Disbursement Accounts at any time and from time to time solely for:

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (a)           the
amount of any Cheque deposited in a Blocked Account after the date hereof which
is subsequently returned to Bank for any reason whatsoever (“Returned Amounts”);
and

       

      
        	
                (b)

              	
                the
      amount of any required adjustments due to clerical errors or calculation
      errors directly related to any Blocked Account or Disbursement Account
      (“Error Amounts”
      and, together with Returned Amounts, “Chargebacks”),

              

      

       

      and
provided, further, that if Bank has transferred to a Collection Account the
funds on deposit in a Blocked Account in respect of which Bank is entitled to a
Chargeback and the funds in the Blocked Accounts and the Disbursement Accounts
are insufficient to cover the amount of the relevant Chargeback, Secured Party
shall pay to Bank the amount of the Chargeback not recoverable from the Blocked
Accounts or Disbursement Accounts, within ten (10) Business Days of receipt of a
statement signed by Bank confirming the details of such Chargeback and Bank’s
entitlement to it under this Section 5.3 in form satisfactory to Secured Party;
provided however, Secured Party shall only be required to make any such payment
if Bank has made such request for payment in the case of (i) a Returned Amount,
within ninety-five (95) days after the date the value represented by the
Returned Amount was transferred to a Collection Account or otherwise paid to or
to the order of Secured Party, and (ii) an Error Amount, within eighty-five (85)
days after the error forming the basis of the Error Amount was
made.

       

      
        	
                5.4

              	
                Indemnity

              

      

       

      The
Company and Secured Party hereby jointly and severally agree to pay, indemnify
and hold harmless Bank from and against any and all loss, liability, cost, claim
and expense incurred by it with respect to the performance of this Agreement by
Bank or any of Bank’s directors, officers, or employees, unless arising from its
or their own violation of law, gross negligence or wilful
misconduct.

       

      SECTION
6

      GENERAL
PROVISIONS

       

      
        	
                6.1

              	
                Power
      of Attorney

              

      

       

      The
Company constitutes and irrevocably appoints Secured Party its true and lawful
attorney, with full power of substitution, without limitation, to demand,
collect, receive and, following a Default (as defined in the Credit Agreement)
that is continuing, sue for all amounts which may become due or payable in
respect of  any Blocked Account or any Disbursement Account, and,
before or after a Default, to execute all withdrawal receipts or other orders
for the Company, in its own name or in the Company’s name or otherwise, which
Secured Party deems necessary or appropriate to protect and preserve its right,
title and interest in any Blocked Account or any Disbursement Account, and,
otherwise, to carry out the provisions and purposes of this
Agreement.

       

      
        	
                6.2

              	
                Limitation
      of Bank’s Liability

              

      

       

      Bank
undertakes to perform only such duties as are expressly set forth in this
Agreement and to deal with the Blocked Accounts and Disbursement Accounts with
the degree of skill and care that Bank accords to all accounts and funds
maintained and held by it on behalf of its customers.  Notwithstanding
any other provision of this Agreement, it is agreed by the parties hereto that
Bank shall not be liable for any action taken by it or any of its directors,
officers or employees in accordance with this Agreement except for its or their
own violation of law, gross negligence or wilful misconduct.  In no
event shall Bank be liable for losses or delays resulting from computer
malfunctions or interruption of communication facilities which are beyond Bank’s
control or from other causes which are beyond Bank’s control or from force
majeure or for indirect, special or consequential damages.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      6.3           Records

       

      Bank
shall maintain a record of all money, Cheques and other remittance items
deposited in and transfers to the Blocked Accounts and the Disbursement Accounts
in accordance with Bank’s standard procedures.

       

      
        	
                6.4

              	
                Provision
      of Information

              

      

       

      Bank
shall provide to the Company and Secured Party, at the Company’s expense,
monthly statements summarizing the daily activity in each Blocked Account and
Disbursement Account.  Bank shall also provide to Secured Party, at
the Company’s expense, such information compiled by Bank in accordance with the
activity, on a daily, weekly or monthly basis, in each Blocked Account and
Disbursement Account, as may be reasonably requested by Secured Party in
writing.

       

      
        	
                6.5

              	
                Termination.

              

      

       

      Subject
to the other provisions of this Section 6.5, this Agreement shall remain in
full force and effect and be binding in accordance with and to the extent of its
terms until the obligations of the Company to Secured Party under and in
connection with the Credit Agreement have been paid and performed in full and
Secured Party has no further obligation to make any further advances to the
Company under the Credit Agreement.  Secured Party may terminate this
Agreement at any time upon thirty (30) days’ prior written notice to Bank and
the Company.  Bank may terminate this Agreement only upon thirty (30)
days’ prior written notice to the other parties hereto. For a period of thirty
(30) days after termination Bank shall hold any Cheques received for Secured
Party and after such time shall process the same according to Bank’s usual
practices without liability to or on the part of Bank.  Sections 5.3
and 5.4 shall survive termination of this Agreement.

       

      
        	
                6.6

              	
                Notices

              

      

       

      Except as
otherwise provided herein, any notice, demand, request, consent, approval,
declaration or other communication (collectively, “Communication”) to be served,
given or delivered by one party to the other in connection with or under this
Agreement shall be in writing and shall be deemed to have been validly served,
given or delivered the earlier of (i) upon confirmation by the receiving party
of receipt of Communication or (ii) three (3) Business Days after receipt of the
Communication.

       

      
        	
                (a)

              	
                Communications
      with the Company shall be addressed as
follows:

              

      

       

      Lakeland
Protective Wear Inc.

       

      59 Bury Court

      Brantford, Ontario

      N3S 0A9

       

      Attention:                            Peter
Brasseur

      Telephone
No.:                   (519)
757-0700

      Fax
No.:                                (519)
757-0799

       

      
        	
                (b)

              	
                Communications
      with Bank shall be addressed as
follows:

              

      

       

      The
Toronto-Dominion Bank

      4031
Fairview

      Burlington, Ontario

      L7L 2A4

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Attention:                             Denise
Dickson

      Telephone
No.:                   (905)
681-1050 x250

      Fax
No.:                                (905)
681-1780

       

      
        	
                (c)

              	
                Communications
      with Secured Party shall be addressed as
  follows:

              

      

       

      Wachovia
Bank, National Association

      12 East
49th
Street, 43rd
Floor

      New York,
NY

      10017

       

      Attention:                            Daniel
O’Donnell, Senior Vice President

      Telephone
No.:             
     (212) 214-4145

      Fax
No.:                                (212)
214-4111

       

      
        	
                6.7

              	
                Governing
      Law

              

      

       

      This
Agreement shall be governed by, and construed and interpreted in accordance
with, the laws of the Province of Ontario and the laws of Canada applicable
therein and the parties hereto irrevocably attorn to the non-exclusive
jurisdiction of the courts of the Province of Ontario in respect of all matters
pertaining to this Agreement.

       

      
        	
                6.8

              	
                Amendments

              

      

       

      This
Agreement may only be amended or modified by written instrument signed by
Secured Party, the Company and Bank.

       

      
        	
                6.9

              	
                Severability

              

      

       

      Any
provision of this Agreement that is or becomes unenforceable shall be
unenforceable to the extent of such unenforceability without invalidating the
remaining provisions hereof.  To the extent permitted by Applicable
Law, each of the parties hereby waives any provision of law that renders any
provision hereof unenforceable in any respect.

       

      
        	
                6.10

              	
                Authorization

              

      

       

      For the
purposes of this Agreement, any attorney, officer, employee or agent of Secured
Party shall be authorized to act, and to give instructions and notice, on behalf
of Secured Party hereunder, and any attorney, officer, manager or agent of Bank
shall be authorized to act and give instructions and notice on behalf of Bank
hereunder.

       

      
        	
                6.11

              	
                Remedies
      Cumulative

              

      

       

      The
rights enumerated in this Agreement are in addition to and not in substitution
for any other rights of Secured Party pursuant to any security held by Secured
Party and except as otherwise contemplated in this Agreement, nothing in this
Agreement is to be interpreted as restricting the rights of Secured Party
pursuant to any security held by Secured Party.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      6.12           Further
Assurances

       

      The
parties shall at all times do, execute, acknowledge and deliver such acts, deeds
and agreements as may be reasonably necessary or desirable to give effect to the
terms of this Agreement.

       

      
        	
                6.13

              	
                No
      Fiduciary Obligations

              

      

       

      Nothing
in this Agreement shall constitute any party to this Agreement a fiduciary in
relation to any other party to this Agreement.

       

      
        	
                6.14

              	
                Successors
      and Assigns

              

      

       

      This
Agreement shall be binding upon and enure to the benefit of the parties hereto
and their respective successors and assigns; provided that this Agreement may
not be assigned by any of the parties hereto without the prior written consent
of Bank.

       

      
        	
                6.15

              	
                Counterparts

              

      

       

      This
Agreement may be executed in counterparts and by facsimile, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.

       

      [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      The
parties have executed this Agreement.

       

      
        
          
            	 	
                    THE
      TORONTO-DOMINION BANK

                     

                     

                     

                  
	 	
                    By:

                  	
                    /s/
      Denise Dickson

                  
	 	 
      	
                    Name:                      Denise
      Dickson

                  
	 	 
      	
                    Title:

                  

          

        

      

      

       

      
        
          
            	 	
                    WACHOVIA
      BANK, NATIONAL ASSOCIATION

                     

                     

                     

                  
	 	
                    By:

                  	
                    /s/
      Daniel O’Donnell,

                  
	 	 
      	
                    Name:   Daniel
      O’Donnell

                  
	 	 
      	
                    Title:                      Senior
      Vice President

                  

          

        

      

      

       

      
        
          
            	 	
                    LAKELAND
      PROTECTIVE WEAR INC.

                     

                     

                     

                  
	 	
                    By:

                  	
                    /s/
      Christopher J. Ryan

                  
	 	 
      	
                    Name:                      Christopher
      J. Ryan

                  
	 	 
      	
                    Title:                      Assistant
      Secretary

                  

          

        

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE
A

       

      ACCOUNTS

       

      

       

      Part
1 – Blocked Accounts

       

      (a)           Business
Chequing Account #0631844

       

      Part
2 – Disbursement Accounts

       

      (a)           Business
Chequing Account  #0613927

       

      (b)           Business
Chequing Account  #7300431

       

      Part
3 – Collection Accounts

       

      (a)           DDA
#2000018590584

       

      

       

      

       

      

       

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE
B

       

      ACTIVATION
NOTICE

       

      To:          THE TORONTO-DOMINION BANK
(“Bank”)

       

      
        	
                Re:

              	
                Blocked
      Accounts Agreement dated l,
      20l
      among Lakeland Protective Wear Inc., as Company, Wachovia Bank, National
      Association, as
      Secured Party, and The Toronto-Dominion Bank (as amended, restated,
      supplemented or otherwise modified from time to time, the “Blocked Accounts
      Agreement”).

              

      

       

      Terms
with initial capital letters in this notice and not otherwise defined herein
shall have the meanings given to them in the Blocked Accounts
Agreement.

       

      The
Secured Party hereby notifies Bank that  January
27 , 2009, shall be the Activation Date (which date shall be not
later than the third (3rd)
Business Day following receipt by Bank of this notice) such that, pursuant to
Section 4 of the Blocked Accounts Agreement, on the Activation Date and on each
Business Day thereafter, Bank shall transfer, prior to the end of each such
Business Day, all funds on deposit in Blocked Accounts as provided for in the
Blocked Accounts Agreement.

       

      Dated
l, 20
l.

       

      
        
          
            
              	 	
                      WACHOVIA
      BANK, NATIONAL ASSOCIATION

                       

                       

                    
	 	
                      By:

                    	
                      /s/
      Daniel O’Donnell,

                    
	 	 
      	
                      Name:   Daniel
      O’Donnell

                    
	 	 
      	
                      Title:     Senior
      Vice President

                    

            

          

        

      

       

      

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        

         

         

        

        OFFICER’S
CERTIFICATE

        

        
          	
                  TO:

                	
                  WACHOVIA
      BANK, NATIONAL ASSOCIATION (the “Bank”)

                   

                
	
                  AND
      TO:

                	
                  FASKEN
      MARTINEAU DUMOULIN LLP (“Faskens”)

                   

                
	
                  AND
      TO:

                	
                  SUSMAN,
      DUFFY & SEGALOFF P.C. (“Susman”)

                   

                
	
                  AND
      TO:

                	
                  SCARFONE
      HAWKINS LLP (“Scarfone”)

                   

                
	
                  FROM:

                	
                  LAKELAND
      PROTECTIVE REAL ESTATE INC. (the “Corporation”)

                   

                
	
                  RE:

                	
                  General
      Security Agreement dated as of January 27th, 2009 (the “Security Agreement”) by
      the Corporation in favour of the Bank

                   

                

        

         

        I,
CHRISTOPHER J. RYAN, certify in my capacity as Vice President of the
Corporation, and not in my personal capacity, as follows:

         

        1.                      I
am the duly appointed Vice President of the Corporation and I am familiar with
the transactions contemplated by the Security Agreement and all loan
documentation contemplated in connection therewith (the “Documents”).

         

        2.                      I
have made or caused to be made such examinations or investigations as are, in my
opinion, necessary to fully inform myself of the matters addressed in this
Certificate and to make the statements below, and I have furnished this
Certificate with the intent that it may be relied upon by the Bank as a basis
for the consummation of the transactions contemplated by the Documents in
connection therewith and by Faskens, Susman and Scarfone in rendering legal
opinions to the Bank in respect thereof.

         

        3.                      A
true and complete copy of the articles of incorporation of the Corporation
(collectively, the “Articles”) is attached to this
Certificate and marked as Schedule A.  The Articles are in full force and
effect and have not been amended as of or prior to the date hereof and no
proceedings have been taken or are pending to amend, supplement, surrender or
cancel the Articles.

         

        4.                      A
true and complete copy of the By-laws of the Corporation (the “By-laws”) is attached to this
Certificate and marked as Schedule B.  The By-laws are in full force and
effect, unamended on the date hereof and no proceedings have been taken or are
pending to amend, supplement, revoke or repeal the By-laws.

         

        5.                      A
true and complete copy of a board of directors resolution of the Corporation
approving the execution and delivery of, among other things, the Documents and
the consummation of the transactions contemplated thereby (the “Board of Directors
Resolution”)

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        is
attached to this Certificate and marked as Schedule C.  The Board
of Directors Resolution is in full force and effect, unamended on the date
hereof and no proceedings have been taken or are pending to amend, supplement,
revoke or repeal the Board of Directors Resolution.

         

        6.                      Each
person listed in Schedule D is at the date hereof a duly elected or appointed
director or officer of the Corporation, such person holds the position(s)
indicated opposite his or her name, and the specimen or facsimile signature
appearing opposite the name of that person is the true signature of such
person.

         

        7.                      Each
person listed below is at the date hereof a duly elected director of the
Corporation and there are no other directors of the Corporation:

        

        Peter
Brasseur

        Christopher
Ryan

         

        8.                      There
is no unanimous shareholder declaration or agreement in effect pertaining to the
Corporation that restricts in whole or in part the powers of the directors to
manage or supervise the management of the business and affairs of the
Corporation.

         

        9.                      The
Corporation is not aware of any proceedings having been taken by any person,
firm, corporation, government or governmental authority which may result in the
winding-up, liquidation, dissolution, bankruptcy or receivership of the
Corporation or the cancellation of the Corporation’s charter.  No
resolution has been passed and no application has been made on behalf of the
Corporation to wind-up, dissolve or liquidate the Corporation or to seek the
protection of any bankruptcy or insolvency law or otherwise threaten the
existence of the Corporation.

         

        10.                      The
chief executive office and only place of business of the Corporation is located
in the Province of Ontario.

         

        [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        DATED
as of this 27th
day of January, 2009.

        

        
          	 
      	 
      	 
      
	 
      	 
      	 
      	
                  /s/
      Christopher J. Ryan

                
	 
      	 
      	 
      	
                  Name:
      Christopher J. Ryan

                  Title:  Vice
      President

                

        

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        

         

        SCHEDULE A

         

        (See
Attached)

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        SCHEDULE B

         

        (See
Attached)

        
          
             

          

          
             

            
              

            

          

          
             

          

        

         

        SCHEDULE C

         

        (See Attached)

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        RESOLUTION
OF THE BOARD OF DIRECTORS

        OF

        LAKELAND
PROTECTIVE REAL ESTATE INC.

        

        WHEREAS
the Board of Directors of the Corporation is authorized from time to time to
charge, mortgage, hypothecate or pledge all or any currently owned or
subsequently acquired real or personal property of the Corporation to secure any
obligations or any money borrowed and it is in the interest of the Corporation
that the Board of Directors exercise such authority;

        

        AND
WHEREAS it is further expedient and in the interests of the Corporation to give
security to WACHOVIA BANK, NATIONAL ASSOCIATION ("WACHOVIA”) to secure the
present and future indebtedness and liability of the Corporation to WACHOVIA
whether direct or indirect, and whether arising out of guarantees or
otherwise.

        

        NOW
THEREFORE BE IT RESOLVED THAT:

        

        

        
          	
                  1.

                	
                  The
      Corporation create and issue the General Security Agreement dated the 27th
      day of January, 2009 (the "General Security Agreement"),  in
      substantially the terms as contained in the specimen which has been
      submitted to the meeting, in favour of WACHOVIA containing the security
      interests provided in the General Security Agreement to secure the due
      payment of all present and future indebtedness and liability of the
      Corporation to WACHOVIA whether direct or indirect, and whether arising
      out of guarantees or otherwise;

                

        

        

        
          	
                  2.

                	
                  The
      Corporation enter into the Blocked Account Agreement with The
      Toronto-Dominion Bank (“TD”) and WACHOVIA regarding the Corporation’s
      account(s) with TD dated the 27th day of January, 2009 (the "Blocked
      Account Agreement"), in substantially the form of and with terms as
      contained in the specimen which has been submitted to the
      meeting;

                

        

        

        
          	
                  3.

                	
                  That
      the President, Peter Brasseur, and the Vice President, Christopher J.
      Ryan, are hereby authorized for and on behalf of the Corporation to
      execute under its corporate seal or otherwise and deliver the General
      Security Agreement and the Blocked Account Agreement to WACHOVIA and TD,
      as the case may be, with such alterations, additions, amendments and
      deletions as may be approved by them, whose signatures shall be conclusive
      evidence of such approval; and

                

        

        

        
          	
                  4.

                	
                  Any
      one of the persons designated in paragraph 3 is hereby authorized for and
      in the name of the Corporation to execute and deliver under the corporate
      seal or otherwise all such other documents and to do all such other acts
      and things as may be necessary or desirable to give effect to this
      resolution or as may be reasonably required by
  WACHOVIA.

                

        

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        

        CERTIFIED
to be a true copy of a Special Resolution passed by the board of directors of
Lakeland Protective Real Estate Inc. the 27th day of January, 2009, as set forth
and recorded in the minute book of the Corporation, which Resolution is now in
full force and effect.

        

        DATED this 27th day of January,
2009.

        

        

        /s/ Peter Brasseur

        Peter Brasseur,
President

        
          
             

          

          
             

            
              

            

          

          
             

          

        

        SCHEDULE D

        Incumbency

         

        

        
          
            	
                    Name

                  	
                    Position(s)

                  	
                    Specimen
      Signature

                  
	
                    PETER
      BRASSEUR

                  	
                    PRESIDENT

                  	
                     

                    /s/
      Peter Brasseur

                  
	
                    NORM
      BROWN

                  	
                    SECRETARY

                  	
                     

                    /s/
      Norm Brown

                  
	
                    CHRISTOPHER
      J. RYAN

                  	
                    VICE
      PRESIDENT

                  	
                     

                    /s/
      Christopher J. Ryan

                  
	
                     

                    GARY
      POKROSSA

                  	
                    CHIEF
      FINANCIAL OFFICER

                  	
                    /s/
      Gary Pokrassa

                  
	
                     

                    ZOEY
      GREENE

                  	
                    INTERNATIONAL
      CONTROLLER

                  	
                    /s/
      Zoey Greene

                  

          

        

         

      

       

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      

      

       

       

      

      RESOLUTION
OF THE BOARD OF DIRECTORS

      OF

      LAKELAND
PROTECTIVE REAL ESTATE INC.

      

      WHEREAS
the Board of Directors of the Corporation is authorized from time to time to
charge, mortgage, hypothecate or pledge all or any currently owned or
subsequently acquired real or personal property of the Corporation to secure any
obligations or any money borrowed and it is in the interest of the Corporation
that the Board of Directors exercise such authority;

      

      AND
WHEREAS it is further expedient and in the interests of the Corporation to give
security to WACHOVIA BANK, NATIONAL ASSOCIATION ("WACHOVIA”) to secure the
present and future indebtedness and liability of the Corporation to WACHOVIA
whether direct or indirect, and whether arising out of guarantees or
otherwise.

      

      NOW
THEREFORE BE IT RESOLVED THAT:

      

      
        	
                1.

              	
                The
      Corporation create and issue the General Security Agreement dated the 27th
      day of January, 2009 (the "General Security Agreement"),  in
      substantially the terms as contained in the specimen which has been
      submitted to the meeting, in favour of WACHOVIA containing the security
      interests provided in the General Security Agreement to secure the due
      payment of all present and future indebtedness and liability of the
      Corporation to WACHOVIA whether direct or indirect, and whether arising
      out of guarantees or otherwise;

              

      

      

      
        	
                2.

              	
                The
      Corporation enter into the Blocked Account Agreement with The
      Toronto-Dominion Bank (“TD”) and WACHOVIA regarding the Corporation’s
      account(s) with TD dated the 27th day of January, 2009 (the "Blocked
      Account Agreement"), in substantially the form of and with terms as
      contained in the specimen which has been submitted to the
      meeting;

              

      

      

      
        	
                3.

              	
                That
      the President, Peter Brasseur, and the Vice President, Christopher J.
      Ryan, are hereby authorized for and on behalf of the Corporation to
      execute under its corporate seal or otherwise and deliver the General
      Security Agreement and the Blocked Account Agreement  to
      WACHOVIA and TD, as the case may be, with such alterations, additions,
      amendments and deletions as may be approved by them, whose signatures
      shall be conclusive evidence of such approval;
  and

              

      

      

      
        	
                4.

              	
                Any
      one of the persons designated in paragraph 3 is hereby authorized for and
      in the name of the Corporation to execute and deliver under the corporate
      seal or otherwise all such other documents and to do all such other acts
      and things as may be necessary or desirable to give effect to this
      resolution or as may be reasonably required by
  WACHOVIA.

              

      

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      

      

      

      The
undersigned, being all the directors of the Corporation, hereby sign the
foregoing resolution pursuant to the provisions of the Ontario Business
Corporations Act, R.S.O. 1990, c.B-16.

      

      Dated
this 27th day of January, 2009.

      /s/ Peter
Brasseur                                                                           /s/ Christopher J.
Ryan

      Peter
Brasseur                                                                             
  Christopher J. Ryan

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      

      RESOLUTION
OF THE BOARD OF DIRECTORS

      OF

      LAKELAND
PROTECTIVE REAL ESTATE INC.

      

      WHEREAS
the Board of Directors of the Corporation is authorized from time to time to
charge, mortgage, hypothecate or pledge all or any currently owned or
subsequently acquired real or personal property of the Corporation to secure any
obligations or any money borrowed and it is in the interest of the Corporation
that the Board of Directors exercise such authority;

      

      AND
WHEREAS it is further expedient and in the interests of the Corporation to give
security to WACHOVIA BANK, NATIONAL ASSOCIATION ("WACHOVIA”) to secure the
present and future indebtedness and liability of the Corporation to WACHOVIA
whether direct or indirect, and whether arising out of guarantees or
otherwise.

      

      NOW
THEREFORE BE IT RESOLVED THAT:

      

      

      
        	
                1.

              	
                The
      Corporation create and issue the General Security Agreement dated the 27th
      day of January, 2009 (the "General Security Agreement"),  in
      substantially the terms as contained in the specimen which has been
      submitted to the meeting, in favour of WACHOVIA containing the security
      interests provided in the General Security Agreement to secure the due
      payment of all present and future indebtedness and liability of the
      Corporation to WACHOVIA whether direct or indirect, and whether arising
      out of guarantees or otherwise;

              

      

      

      
        	
                2.

              	
                The
      Corporation enter into the Blocked Account Agreement with The
      Toronto-Dominion Bank (“TD”) and WACHOVIA regarding the Corporation’s
      account(s) with TD dated the 27th day of January, 2009 (the "Blocked
      Account Agreement"), in substantially the form of and with terms as
      contained in the specimen which has been submitted to the
      meeting;

              

      

      

      
        	
                3.

              	
                That
      the President, Peter Brasseur, and the Vice President, Christopher J.
      Ryan, are hereby authorized for and on behalf of the Corporation to
      execute under its corporate seal or otherwise and deliver the General
      Security Agreement and the Blocked Account Agreement to WACHOVIA and TD,
      as the case may be, with such alterations, additions, amendments and
      deletions as may be approved by them, whose signatures shall be conclusive
      evidence of such approval; and

              

      

      

      
        	
                4.

              	
                Any
      one of the persons designated in paragraph 3 is hereby authorized for and
      in the name of the Corporation to execute and deliver under the corporate
      seal or otherwise all such other documents and to do all such other acts
      and things as may be necessary or desirable to give effect to this
      resolution or as may be reasonably required by
  WACHOVIA.

              

      

      

      
        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

      

      

      CERTIFIED
to be a true copy of a Special Resolution passed by the board of directors of
Lakeland Protective Real Estate Inc. the 27th day of January, 2009, as set forth
and recorded in the minute book of the Corporation, which Resolution is now in
full force and effect.

      

      DATED this 27th day of
January, 2009.

      

      

      /s/ Peter Brasseur

      Peter Brasseur, President

      

       

    

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

    

    

    GENERAL
SECURITY AGREEMENT

     

    THIS AGREEMENT made as of the
27th day of January, 2009.

     

    BETWEEN:

     

    LAKELAND PROTECTIVE REAL ESTATE
INC.,

     

    (herein
called the “Debtor”)

     

    - and
-

     

    WACHOVIA
BANK, NATIONAL ASSOCIATION

     

    (herein
called the “Secured
Party”)

     

    WHEREAS pursuant to a loan
agreement dated July 7, 2005 between Lakeland Industries, Inc. (the “Borrower”) and the Secured
Party (as the same may be amended, supplemented or replaced from time to time,
the “Loan Agreement”)
and as evidenced by a certain promissory note dated July 7, 2005 from the
Borrower to the Bank (as the same may be amended, supplemented or replaced from
time to time, the “Note”), the Secured Party
agreed to make Advances (as defined in the Loan Agreement) to the
Borrower;

     

    AND WHEREAS pursuant to a
guarantee agreement dated December ___, 2007 by the Debtor in favour of the
Secured Party (as the same may be amended, supplemented or replaced from time to
time, the “Guarantee”),
the Debtor has agreed to guarantee, among other things, obligations under the
Loan Agreement and Note (together, the “Credit
Documents”);

     

    AND WHEREAS the Debtor has
agreed to provide in favour of the Secured Party a first priority security
interest in the Collateral (as hereinafter defined) as security for the payment
of the Secured Obligations.

     

    NOW THEREFORE for good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged) the Debtor agrees with the Secured Party as follows:

     

    ARTICLE 1

    INTERPRETATION

     

    1.1                  
        Defined Terms

     

    All
capitalized terms used herein, which are not otherwise defined herein, shall
have the respective meanings ascribed thereto in the Loan
Agreement.  In this agreement or any amendment hereto, unless the
context clearly indicates to the contrary:

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    “Act” means the Personal Property Security
Act (Ontario), as amended from time to time, and any regulations
thereto.

     

    “Collateral” means all personal
property, business and undertaking of the Debtor now owned or hereafter acquired
and any proceeds from the sale or other disposition thereof, all of which is
further described, without limitation, in Section 2.2.

     

    “Enforcement Date” means the
date on which the principal amount of the Obligations is accelerated pursuant to
the terms of the Credit Documents.

     

    “Secured Obligations” means all
indebtedness, obligations and liabilities, present or future, direct or
indirect, absolute or contingent, matured or not, of the Debtor to the Secured
Party under or in connection with the Guarantee and the other Loan
Documents.

     

    1.2                
         Other Usages

     

    References
to “this agreement”, “hereof”, “herein”, “hereto” and like references refer to
this General Security Agreement and the Schedules hereto, as the same may be
amended, modified, supplemented or replaced from time to time, and not to any
particular Article, Section or other subdivision of this agreement.  A
reference in this agreement to another agreement refers to that other agreement
as it may be amended, modified, supplemented, restated or replaced from time to
time.  A reference in this agreement to a statute refers to that
statute as it may be amended and to any restated or successor legislation of
comparable effect.

     

    1.3             
            Number
and Gender

     

    Where the
context so requires, the singular number shall include the plural, the plural
the singular, and the use of any gender shall be applicable to all
genders.

     

    1.4                          Headings

     

    The
insertion of headings in this agreement is for convenience of reference only and
shall not affect the construction or interpretation of this
agreement.

     

    1.5                
         Applicable Law and
Attornment Clause

     

    This
agreement and all documents delivered pursuant hereto shall be deemed to be
governed by and construed in accordance with the laws of the Province of Ontario
and the laws of Canada applicable therein.  The parties hereby attorn
to the courts of the Province of Ontario and agree that those courts shall have
non-exclusive jurisdiction to determine all disputes relating to this
agreement.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    1.6                      
   Prohibited Provisions

     

    In the
event that any provision or any part of any provision hereof is deemed to be
invalid by reason of the operation of any law or by reason of the interpretation
placed thereon by a court, this agreement shall be construed as not containing
such provision or such part of such provision and the invalidity of such
provision or such part shall not affect the validity of any other provision or
the remainder of such provision hereof, and all other provisions hereof which
are otherwise lawful and valid shall remain in full force and
effect.

     

    1.7                 
        Time of the Essence

     

    Time
shall in all respects be of the essence of this agreement.

     

    1.8              
           Schedules

     

    Each and
every one of the schedules which is referred to in this agreement and attached
to this agreement shall form a part of this agreement.

     

    ARTICLE 2

    SECURITY
INTEREST

     

    2.1                
         Grant of Security
Interest

     

    As
general and continuing security for the payment and performance of the Secured
Obligations, the Debtor hereby grants to the Secured Party a security interest
in the Collateral.

     

    2.2                
       Description of Collateral

     

    A
security interest is taken in all of the present and after-acquired personal
property of the Debtor including, without limitation, a security interest in
favour of the Secured Party in the following:

     

    
      	
               
      

            	
              (a)

            	
              Accounts

            

    

     

    all
debts, amounts, claims, rents (whether arising in respect of leases of real
property or personal property) and moneys which now are, or which may at any
time hereafter be, due or owing to or owned by the Debtor, whether or not earned
by performance including, without limitation, all intercompany loans and
advances made by the Debtor to its affiliates; all securities, mortgages of
personal property, bills, notes and other documents now held or owned, or which
may be hereafter taken, held or owned, by or on behalf of the Debtor, in respect
of the said debts, amounts, claims and moneys or any part thereof; and all
books, documents and papers recording, evidencing or relating to the said debts,
amounts, claims and moneys or any part thereof, all of which are herein called
the “Accounts”;

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    (b)           Inventory

     

    all goods
or chattels now or hereafter forming the inventory of the Debtor, including,
without limitation, all goods, merchandise, raw materials, work in process,
finished goods, goods held for sale or resale or lease or that have been leased
or that are to be, or have been, furnished under a contract of service, and
goods used in or procured for packing or packaging, all of which are herein
called the “Inventory”;

     

    
      	
               
      

            	
              (c)

            	
              Equipment

            

    

     

    all
equipment now owned or hereafter acquired by the Debtor, including, without
limitation, all machinery, trade fixtures (but excluding fixtures constituting
real property), plant, tools, furniture, chattels, vehicles of any kind or
description including, without limitation, motor vehicles, parts, accessories
installed in or affixed or attached to any of the foregoing, all drawings,
specifications, plans and manuals relating thereto, and any other tangible
personal property which is not Inventory, all of which are herein called the
“Equipment”;

     

    
      	
               
      

            	
              (d)

            	
              Intangibles

            

    

     

    all
intangible property now owned or hereafter acquired by the Debtor and which is
not Accounts including, without limitation, all contractual rights, goodwill,
patents, trademarks, trade names, copyrights and other intellectual property of
the Debtor and all other choses in action of the Debtor of every kind, whether
due or owing at the present time or hereafter to become due or owing, all of
which are herein called the “Intangibles”;

     

    
      	
               
      

            	
              (e)

            	
              Documents of
      Title

            

    

     

    any
writing now or hereafter owned by the Debtor that purports to be issued by or
addressed to a bailee and purports to cover such goods and chattels in the
bailee’s possession as are identified or fungible portions of an identified
mass, whether such goods and chattels are Inventory or Equipment, and which
writing is treated in the ordinary course of business as establishing that the
person in possession of such writing is entitled to receive, hold and dispose of
the said writing and the goods and chattels it covers, and further, whether such
writing is negotiable in form or otherwise, including bills of lading and
warehouse receipts, all of which are herein called the “Documents of
Title”;

     

    
      	
               
      

            	
              (f)

            	
              Money

            

    

     

    all money
now or hereafter owned by the Debtor, whether such money is authorized or
adopted by the Parliament of Canada as part of its currency or by any foreign
government as part of its currency, all of which are herein called the “Money”;

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    (g)           Chattel Paper

     

    all
present and future agreements made between the Debtor as secured party and
others which evidence both a monetary obligation and a security interest in or a
lease of specific goods, all of which are herein called the “Chattel Paper”;

     

    
      	
               
      

            	
              (h)

            	
              Instruments

            

    

     

    all
present and future bills, notes and cheques (as such are defined pursuant to the
Bills of Exchange Act
(Canada)) of the Debtor, and all other writings of the Debtor that evidence a
right to the payment of money and are of a type that in the ordinary course of
business are transferred by delivery without any necessary endorsement or
assignment and all letters of credit and advices of credit of the Debtor
provided that such letters of credit and advices of credit state that they must
be surrendered upon claiming payment thereunder, all of which are herein called
the “Instruments”;

     

    
      	
               
      

            	
              (i)

            	
              Securities

            

    

     

    all
present and future securities held by the Debtor, including shares, options,
rights, warrants, joint venture interests, interests in limited partnerships,
trust units, bonds, debentures and all other documents which constitute evidence
of a share, participation or other interest of the Debtor in property or in an
enterprise or which constitute evidence of an obligation of the issuer;
including, without limitation, any uncertificated securities and all
substitutions therefor and, subject to Section 2.6, dividends and income
derived therefrom, all of which are herein called the “Securities”;

     

    
      	
               
      

            	
              (j)

            	
              Documents

            

    

     

    all
documents, including, without limitation, all books, invoices, letters, papers
and other records, in any form evidencing or relating to the Collateral, all of
which are herein called the “Documents”;

     

    
      	
               
      

            	
              (k)

            	
              Proceeds

            

    

     

    all
personal property in any form derived directly or indirectly from any dealing
with the Collateral or the proceeds therefrom, including, without limitation,
property that indemnifies or compensates for the expropriation, destruction or
damage of the Collateral or the proceeds therefrom, all of which are herein
called the “Proceeds”;

     

    
      	
               
      

            	
              (l)

            	
              Leaseholds

            

    

     

    subject
to Section 2.5, all leases in respect of personal property, now owned or
hereafter acquired by the Debtor as tenant (whether oral or written) or any
agreement therefor, all of which are herein called the “Leaseholds”; and

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    (m)           Undertaking

     

    all
present and future personal property, business, and undertaking of the Debtor
not being Accounts, Inventory, Equipment, Intangibles, Documents of Title,
Money, Chattel Paper, Instruments, Securities, Documents, Proceeds or Leaseholds
all of which are herein called the “Undertaking”.

     

    2.3                          Further
Description of Collateral

     

    Without
limiting the generality of the description of Collateral as set out in
Section 2.2, for greater certainty the Collateral shall include all present
and future tangible personal property of the Debtor located on or about or in
transit to or from the locations set out in Schedule A hereto.

     

    2.4               
           Attachment of
Security Interest

     

    The
parties hereby acknowledge that:

     

    
      	
               
      

            	
              (i)

            	
              value
      has been given;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Debtor has rights in the Collateral;
and

            

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      parties have not agreed to postpone the time for attachment of the
      security interest created by this
agreement.

            

    

     

    The
parties further agree that the security interests created to this agreement are
intended to attach to all Collateral in which the Debtor acquires an interest as
a result of any amalgamation, arrangement or similar proceeding.

     

    2.5                     
     Exceptions re: Real Property, Leaseholds and
Contractual Rights

     

    All real
property (but not rents or other monies payable in respect thereof) is
specifically exempted from the security interest created by this
agreement.

     

    The last
day of the term of any lease or sublease in respect of any personal property or
agreement therefor is specifically excepted from the security interest created
by this agreement, but the Debtor agrees to stand possessed of such last day in
trust for such person as the Secured Party may direct and the Debtor shall
assign and dispose thereof in accordance with such direction.  To the
extent that the security interest created by this agreement in any contractual
rights would constitute a breach or cause the acceleration of such contract,
said security interest in such contract shall not be granted hereunder but the
Debtor shall hold its interest therein in trust for the Secured Party, and shall
grant a security interest in such contractual rights to the Secured Party
forthwith upon obtaining the appropriate consents to the granting of said
security interest.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    2.6                       
  Voting and Distributions re: Securities

     

    At any
time that the security hereby constituted is not enforceable, all interest, cash
dividends, income and revenue from Securities that have been delivered to the
Secured Party pursuant to Section 3.1(e) (but not the proceeds of
disposition of such Securities) shall be collected by and payable to the Debtor
(and not the Secured Party), and such Securities shall be voted by the Debtor,
and all non-cash dividends paid on such Securities, if received by the Debtor,
shall be paid to, and held by, the Secured Party as Collateral.  At
any time while the security hereby constituted is enforceable, all dividends
paid on such Securities, and all interests, income and revenue from such
Securities, if received by the Debtor, shall be paid to the Secured Party, and
the Secured Party shall be entitled to vote or not to vote such Securities as
the Secured Party sees fit.

     

    2.7                    
     Uncertificated Securities and Certain Other
Investment Property

     

    The
Debtor will permit the Secured Party from time to time to cause the appropriate
issuers (and, if held with a securities intermediary, such securities
intermediary) of uncertificated Securities which are Collateral to mark their
books and records with the numbers and face amounts of all such uncertificated
Securities and all rollovers and replacements therefor to reflect the security
interest of the Secured Party granted pursuant to this agreement.  The
Debtor will take any actions within its power to cause the issuers of
uncertificated Securities which are Collateral to cause the Secured Party to
have and retain control over such Securities.

     

    ARTICLE 3

    WARRANTIES
AND COVENANTS OF THE DEBTOR

     

    3.1                     
    Warranties and Covenants

     

    The
Debtor hereby warrants, covenants and agrees with the Secured Party as
follows:

     

    
      	
               
      

            	
              (a)

            	
              The
      tangible Collateral is now and will be located at the locations set out in
      Schedule A hereto and at such other locations as may be reported to the
      Secured Party in accordance with the Loan Documents, other than any such
      Collateral in transit to and from such locations.  In the event
      the tangible Collateral becomes located at any location other than the
      locations set out in Schedule A, the Debtor shall promptly notify the
      Secured Party in writing of the details thereof.  The Debtor
      shall, at the reasonable request of the Secured Party, mark such
      Collateral which the Debtor owns to indicate clearly that it is subject to
      the security interests created by this
  agreement.

            

    

     

    
      	
               
      

            	
              (b)

            	
              The
      Debtor shall keep the Collateral in good condition and repair, reasonable
      wear and tear excepted.

            

    

     

    
      	
               
      

            	
              (c)

            	
              The
      Debtor agrees to promptly notify the Secured Party in writing of the
      acquisition by the Debtor of any personal property which is not of the
      nature or type described by the definition of Collateral, and the Debtor
      agrees to execute

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    
      	
               
      

            	
              and
      deliver at its own expense from time to time amendments to this agreement
      or additional security agreements as may be reasonably required by the
      Secured Party in order that a security interest shall attach to such
      personal property.

            

    

     

    
      	
               
      

            	
              (d)

            	
              The
      Debtor shall prevent any Collateral from becoming an accession to any
      personal property not subject to this agreement, or becoming affixed to
      any real property, other than in the ordinary course of its
      business.

            

    

     

    
      	
               
      

            	
              (e)

            	
              The
      Debtor shall deliver to the Secured Party from time to time upon the
      request of the Secured Party any items of Collateral comprising
      certificated Securities.  Each such delivery shall be effected
      by depositing with the Secured Party all certificates representing such
      Securities.  All certificates so deposited shall be attached to
      duly executed powers of attorney or forms of
  transfer.

            

    

     

    
      	
               
      

            	
              (f)

            	
              The
      Debtor shall notify the Secured Party of any Collateral which constitutes
      a claim against a government or any instrumentality or agency thereof, the
      assignment of which claim is restricted or prohibited, and the details of
      such restrictions or prohibitions.

            

    

     

    
      	
               
      

            	
              (g)

            	
              The
      Debtor shall deliver to the Secured Party upon the request of the Secured
      Party from time to time all items of Collateral comprising Documents of
      Title, Chattel Paper, Instruments and
Documents.

            

    

     

    
      	
               
      

            	
              (h)

            	
              The
      Debtor will not use or acquire for use any Collateral as consumer
      goods.

            

    

     

    3.2                          Performance
of Covenants by the Secured Party

     

    The
Secured Party may, in its sole discretion and upon notice to the Debtor, perform
any covenant of the Debtor under this agreement that the Debtor fails to perform
and that the Secured Party is capable of performing, including any covenant the
performance of which requires the payment of money, provided that the Secured
Party will not be obligated to perform any such covenant on behalf of the Debtor
and no such performance by the Secured Party will require the Secured Party
further to perform the Debtor’s covenants nor operate as a derogation of the
rights and remedies of the Secured Party under this agreement.

     

    ARTICLE 4

    RESTRICTIONS
ON SALE OR DISPOSAL OF COLLATERAL

     

    4.1                           Permitted
Activities

     

    Except to
the extent restricted by the Loan Documents, the Debtor may, at any time,
without the consent of the Secured Party:

     

    
      	
               
      

            	
              (a)

            	
              lease,
      sell, license, consign or otherwise deal with Collateral in the ordinary
      course of business on commercially reasonable terms and any bona fide purchaser for
      value shall acquire rights to such Collateral free and clear of the
      security interest created by this agreement, but (i) all rights of
      the Debtor as vendor, lessor,

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    
      	
               
      

            	
              licensor
      or consignor shall be subject to the security interest created by this
      agreement and (ii) all proceeds of such sale, lease or other dealing
      shall be subject to the security interest created by this agreement;
      and

            

    

     

    
      	
               
      

            	
              (b)

            	
              continue
      to collect, at its own expense, all amounts due or to become due to the
      Debtor under the Accounts; and in connection with such collections, take
      (and, at the Secured Party’s direction, shall take) such action as the
      Debtor or the Secured Party, as the case may be, may deem necessary or
      advisable to enforce collection of the Accounts; provided, however, that
      the Secured Party shall have the right at any time while the security
      hereby constituted is enforceable to notify the account debtors or
      obligors under any Accounts of the assignment of such Accounts to the
      Secured Party and to direct such account debtors or obligors to make
      payment of all amounts due or to become due to the Debtor thereunder
      directly to the Secured Party and to give valid and binding receipts and
      discharges therefor and in respect thereof and, upon such notification and
      at the expense of the Debtor, to enforce collection of any such Accounts,
      and to adjust, settle or compromise the amount or payment thereof, in the
      same manner and to the same extent as the Debtor might have
      done.

            

    

     

    At any
time while the security hereby constituted is enforceable,

     

    
      	
               
      

            	
              (i)

            	
              all
      money or other form of payment received by the Debtor in respect of the
      Accounts shall be received in trust for the benefit of the Secured Party
      hereunder, shall be segregated from other funds of the Debtor and shall be
      forthwith paid over to the Secured Party in the same form as so received
      (with any necessary endorsement) to be held as cash collateral and applied
      to repay the Obligations in accordance with the Credit Documents;
      and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Debtor shall not adjust, settle or compromise the amount or payment of any
      Accounts, or release wholly or partly any account debtor or obligor
      thereof, or allow any credit or discount
  thereon.

            

    

     

    4.2                          Release
by the Secured Party

     

    The
Secured Party (i) may, at its discretion, at any time release from the security
interest created by this agreement any part or parts of the Collateral or any
other security or any surety for the Secured Obligations of the Debtor either
with or without sufficient consideration therefor without thereby releasing any
other part of the Collateral or any person from this agreement; and (ii) shall
release the security interest created by this agreement on any part or parts of
the Collateral that are sold or transferred pursuant to a third party pursuant
to any transaction permitted by the Indenture as provided therein.

     

    4.3                    
      Proceeds Held in Trust

     

    All
Proceeds that are monies collected or received by the Debtor will be received by
the Debtor in trust for the Secured Party and will be forthwith paid to the
Secured Party.  The Secured Party shall not exercise its rights under
this Section 4.3, and the Debtor’s trust

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    obligations
under this Section 4.3 need not be complied with, unless such Proceeds
arise from a disposition of Collateral which is not permitted hereunder or
unless and until the security hereby constituted is then enforceable.

     

    ARTICLE 5

    ENFORCEMENT

     

    5.1            
             Enforcement

     

    The
Debtor shall be deemed to be in default under this agreement and the security
hereby constituted shall immediately become enforceable without further notice
of any kind, which notice is expressly waived by the Debtor, to the extent
permitted by applicable law, on or after the Enforcement Date.

     

    5.2              
           Remedies

     

    At any
time while the security hereby constituted is enforceable, the Secured Party
shall have the following rights, powers and remedies:

     

    
      	
               
      

            	
              (a)

            	
              to
      appoint any person to be an agent or any person to be a receiver, manager
      or receiver and manager (herein called the “Receiver”) of the
      Collateral and to remove any Receiver so appointed and to appoint another
      if the Secured Party so desires; it being agreed that any Receiver
      appointed pursuant to the provisions of this agreement shall have all of
      the powers of the Secured Party hereunder, and in addition, shall have the
      power to carry on the business of the
Debtor;

            

    

     

    
      	
               
      

            	
              (b)

            	
              to
      make payments to parties having prior charges or encumbrances on
      properties on which the Secured Party may hold charges or
      encumbrances;

            

    

     

    
      	
               
      

            	
              (c)

            	
              to
      enter onto any premises where the Collateral may be
    located;

            

    

     

    
      	
               
      

            	
              (d)

            	
              to
      take possession of all or any part of the Collateral with power to exclude
      the Debtor, its agents and its servants
  therefrom;

            

    

     

    
      	
               
      

            	
              (e)

            	
              to
      preserve, protect and maintain the Collateral and make such replacements
      thereof and additions thereto as the Secured Party shall deem
      advisable;

            

    

     

    
      	
               
      

            	
              (f)

            	
              to
      enjoy and exercise all powers necessary or incidental to the performance
      of all functions provided for in this agreement including, without
      limitation, the power to purchase on credit, the power to borrow in the
      Debtor’s name or in the name of the Receiver and to advance its own money
      to the Debtor at such rates of interest as it may deem reasonable,
      provided that the Receiver shall borrow money only with the prior consent
      of the Secured Party, and to grant security interests in the Collateral in
      priority to the security interest created by this agreement, as security
      for the money so borrowed;

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    
      	
               
      

            	
              (g)

            	
              to
      sell, lease or dispose of all or any part of the Collateral whether by
      public or private sale or lease or otherwise and on any terms so long as
      every aspect of the disposition is commercially reasonable, including,
      without limitation, terms that provide for payment of credit; provided
      that:

            

    

     

    
      	
               
      

            	
              (i)

            	
              any
      such sale, lease or disposition shall be on commercially reasonable terms,
      having regard to the circumstances;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Secured Party or the Receiver will not be required to sell, lease or
      dispose of the Collateral, but may peaceably and quietly take, hold, use,
      occupy, possess and enjoy the Collateral without molestation, eviction,
      hindrance or interruption by the Debtor or any other person or persons
      whomsoever for such period of time as is commercially
      reasonable;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      Secured Party or the Receiver may convey, transfer and assign to a
      purchaser or purchasers the title to any of the Collateral so sold;
      and

            

    

     

    
      	
               
      

            	
              (iv)

            	
              the
      Debtor will be entitled to be credited with the actual proceeds of any
      such sale, lease or other disposition only when such proceeds are received
      by the Secured Party or the Receiver in cash or such other form of
      compensation as may be acceptable to the Secured Party, in its sole
      discretion;

            

    

     

    
      	
               
      

            	
              (h)

            	
              to
      enjoy and exercise all of the rights and remedies of a secured party under
      the Act;

            

    

     

    
      	
               
      

            	
              (i)

            	
              to
      dispose of all or any part of the Collateral in the condition in which it
      was on the date possession of it was taken, or after any commercially
      reasonable repair, processing or preparation for
    disposition;

            

    

     

    
      	
               
      

            	
              (j)

            	
              to
      sell or otherwise dispose of any part of the Collateral without giving any
      notice whatsoever where:

            

    

     

    
      	
               
      

            	
              (i)

            	
              the
      Collateral is perishable;

            

    

     

    
      	
               
      

            	
              (ii)

            	
              the
      Secured Party or the Receiver believes on reasonable grounds that the
      Collateral will decline speedily in
value;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              the
      Collateral is of a type customarily sold on a recognized
      market;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              the
      cost of care and storage of the Collateral is disproportionately large
      relative to its value;

            

    

     

    
      	
               
      

            	
              (v)

            	
              every
      person entitled by law to receive a notice of disposition consents in
      writing to the immediate disposition of the Collateral;
  or

            

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    
      	
               
      

            	
              (vi)

            	
              the
      Receiver disposes of the Collateral in the course of the Debtor’s
      business;

            

    

     

    
      	
               
      

            	
              (k)

            	
              to
      have Securities included in the Collateral registered on the books of the
      issuers of such Securities in the name of the Secured Party or such
      nominee of the Secured Party as the Secured Party shall
      direct;

            

    

     

    
      	
               
      

            	
              (l)

            	
              to
      commence, continue or defend proceedings in any court of competent
      jurisdiction in the name of the Secured Party, the Receiver or the Debtor
      for the purpose of exercising any of the rights, powers and remedies set
      out in this Section 5.2, including the institution of proceedings for
      the appointment of a receiver, manager or receiver and manager of the
      Collateral; and

            

    

     

    
      	
               
      

            	
              (m)

            	
              at
      the sole option of the Secured Party, provided notice is given in the
      manner required by the Act to the Debtor and to any other person to whom
      the Act requires notice be given and the relevant provisions otherwise
      allow it, to elect to retain all or any part of the Collateral in
      satisfaction of the Secured Obligations of the
  Debtor.

            

    

     

    5.3             
            License

     

    The
Secured Party is hereby granted a license or other right to use, at any time
while the security hereby constituted is enforceable, without charge, the
Debtor’s labels, patents, copyrights, rights of use of any name, trade secrets,
trade names, trademarks, service marks, customer lists and advertising matter,
or any property of a similar nature, as it pertains to the Collateral, in
completing production of, advertising for sale, and selling any Collateral, and
after the security hereby constituted becomes enforceable, the Debtor’s rights
under all licenses and all franchise agreements shall inure to the Secured
Party’s benefit.  In addition, the Debtor hereby irrevocably agrees
that the Secured Party may, at any time while the security hereby constituted is
enforceable, sell any of the Inventory directly to any person, including without
limitation, persons who have previously purchased the Inventory from the Debtor
and in connection with any such sale or other enforcement of the Secured Party’s
rights under this agreement, may sell Inventory which bears any trademark owned
by or licensed to the Debtor and any Inventory that is covered by any copyright
owned by or licensed to the Debtor and any Inventory that is covered by any
copyright owned by or licensed to the Debtor and the Secured Party may finish
any work in process and affix any trademark owned by or licensed to the Debtor
and sell such Inventory as provided herein.

     

    5.4               
          Receiver as Secured
Party

     

    The
Receiver shall be deemed to be the agent of the Debtor for the purpose of
establishing liability for the acts or omissions of the Receiver and the Secured
Party shall not be liable for such acts or omissions and, without restricting
the generality of the foregoing, the Debtor hereby irrevocably authorizes the
Secured Party to give instructions to the Receiver relating to the performance
of its duties as set out herein.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    5.5                   
      Expenses of Enforcement

     

    The
Debtor shall pay to the Receiver the remuneration of the Receiver and all costs
and expenses (including, without limitation, reasonable legal fees and
disbursements on a solicitor and his own client basis) incurred by the Receiver
pursuant to its appointment and the exercise of its powers hereunder, and shall
pay to the Secured Party and the Receiver as required all amounts of money
(including interest thereon) borrowed or advanced by either of them pursuant to
the powers set out herein, and the obligations of the Debtor to the Secured
Party and the Receiver pursuant to this Section 5.5 shall be payable on
demand and shall bear interest at the Default Rate (as defined in the Note),
which interest shall be calculated and compounded monthly and payable on
demand.

     

    5.6                   
      Indulgences and Releases

     

    Either
the Secured Party or the Receiver may grant extensions and other indulgences,
take and give up securities, accept compositions, grant releases and discharges,
release any part of the Collateral to third parties and otherwise deal with the
Debtor, debtors of the Debtor, sureties and others and with the Collateral and
other security as the Secured Party or the Receiver may see fit without
prejudice to the Secured Obligations of the Debtor or the right of the Secured
Party and the Receiver to repossess, hold, collect and realize the
Collateral.

     

    5.7                 
        No Liability for Failure to
Exercise Remedies

     

    The
Secured Party and the Receiver shall not be liable or accountable to the Debtor
or to any other person for any failure to exercise any of the rights, powers and
remedies set out in Section 5.2, and shall not be bound to commence,
continue or defend proceedings for the purpose of preserving or protecting any
rights of the Secured Party, the Receiver, the Debtor or any other party in
respect of the same.

     

    5.8             
            Restriction
on Debtor

     

    Upon the
Secured Party taking possession of the Collateral or the appointment of a
Receiver, all the powers, functions, rights and privileges of the Debtor or any
officer, director, servant or Secured Party of the Debtor with respect to the
Collateral shall, to the extent permitted by law, be suspended unless
specifically continued by the written consent of the Secured Party.

     

    5.9               
          Rights
Cumulative

     

    All
rights and remedies of the Secured Party set out in this agreement shall be
cumulative and no right or remedy contained herein is intended to be exclusive
but each shall be in addition to every other right or remedy contained herein or
in any existing or future security document or now or hereafter existing at law
or in equity or by statute.  The taking of a judgment or judgments
with respect to any of the Secured Obligations of the Debtor shall not operate
as a merger of any of the covenants contained in this agreement.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    5.10                  
     Care by the Secured Party

     

    The
Secured Party shall be deemed to have exercised reasonable care in the custody
and preservation of any of the Collateral in the Secured Party’s possession if
it takes such action for that purpose as the Debtor requests in writing, but
failure of the Secured Party to comply with any such request shall not be deemed
to be (or to be evidence of) a failure to exercise reasonable care, unless any
such failure to comply constitutes gross negligence or wilful misconduct, and no
failure of the Secured Party to preserve or protect any rights with respect to
such Collateral against prior parties, or to do any act with respect to the
preservation of such Collateral not so requested by the Debtor, shall be deemed
a failure to exercise reasonable care in the custody or preservation of such
Collateral, unless any such failure or act constitutes gross negligence or
wilful misconduct.

     

    5.11                  
      Standards of Sale

     

    Without
prejudice to the ability of the Secured Party to dispose of the Collateral in
any manner which is commercially reasonable, the Debtor acknowledges that a
disposition of Collateral by the Secured Party which takes place substantially
in accordance with the following provisions shall not be deemed to have been
made in a commercially unreasonable manner solely by reason
thereof:

     

    
      	
               
      

            	
              (a)

            	
              Collateral
      may be disposed of in whole or in
part;

            

    

     

    
      	
               
      

            	
              (b)

            	
              Collateral
      may be disposed of by public sale following one advertisement in a
      newspaper or trade publication having general circulation appropriate to
      the public sale of such Collateral at least seven days prior to such
      sale;

            

    

     

    
      	
               
      

            	
              (c)

            	
              Collateral
      may be disposed of by private sale after receipt by the Secured Party of
      not less than three bona
      fide written offers from arm’s length, unrelated
      parties;

            

    

     

    
      	
               
      

            	
              (d)

            	
              the
      purchaser or lessee of such Collateral may be a customer of the Secured
      Party, provided that such customer acts at arm’s length with the Secured
      Party;

            

    

     

    
      	
               
      

            	
              (e)

            	
              the
      disposition may be for cash or credit, or part cash and part credit;
      and

            

    

     

    
      	
               
      

            	
              (f)

            	
              the
      Secured Party may establish a reserve bid in respect of all or any portion
      of the Collateral.

            

    

     

    5.12            
           Securities of
the Debtor

     

    The
Debtor recognizes that the Secured Party may be unable to effect a public sale
of any or all of the Securities that form part of the Collateral by reason of
certain prohibitions contained in the applicable securities laws or otherwise,
but may be compelled to resort to one or more private sales thereof to a
restricted group of purchasers who will be obliged to agree, among other things,
to acquire such Securities for their own account for investment and not with a
view to the distribution or resale thereof.  The Debtor acknowledges
and agrees that any such private sale may result in prices and other terms less
favourable to the seller than if

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    such sale
were a public sale and, notwithstanding such circumstances, agrees that any such
private sale shall not be deemed to have been made in a commercially
unreasonable manner solely by reason of its being a private sale.  The
Secured Party shall be under no obligation to delay a sale of any of the
Collateral for the period of time necessary to permit the issuer of such
Securities to register such Securities for public sale under the applicable
securities law, or otherwise, even if the issuer would agree to do
so.

     

    ARTICLE 6

    GENERAL

     

    6.1               
          Waiver

     

    Any
breach by the Debtor of any of the provisions contained in this agreement or any
default by the Debtor in the observance or performance of any covenant or
condition required to be observed or performed by the Debtor hereunder, may only
be waived by the Secured Party in writing, provided that no such waiver by the
Secured Party shall extend to or be taken in any manner to affect any subsequent
breach or default or the rights resulting therefrom.

     

    6.2               
          The Secured Party as
Attorney

     

    The
Debtor hereby irrevocably appoints the Secured Party and any person further
designated by the Secured Party, with full power of substitution, to be the
attorney of the Debtor for and in the name of the Debtor to execute and do any
deeds, documents, transfers, demands, assignments, assurances, consents and
things which the Debtor is obliged to sign, execute or do hereunder and, as of
the Enforcement Date, to commence, continue and defend any proceedings
authorized to be taken hereunder and generally to use the name of the Debtor in
the exercise of all or any of the powers hereby conferred on the Secured
Party.  The power of attorney hereby granted is coupled with an
interest, is irrevocable and shall extend to the successor and assigns of the
Debtor.  The Debtor agrees to be bound by any representations and
actions made or taken in good faith by the Secured Party pursuant to this power
of attorney in accordance with the terms thereof and hereby waives any and all
defences which may be available to it to contest, negate or disaffirm the
actions of the Secured Party taken in good faith under this power of
attorney.

     

    6.3              
           Further
Assurances

     

    The
Debtor shall do, execute, acknowledge and deliver or cause to be done, executed,
acknowledged and delivered, such further acts, deeds, mortgages, transfers and
assurances and take all such further action or cause such further action to be
taken as the Secured Party shall reasonably require for the better assuring,
charging, assigning and conferring unto the Secured Party a security interest in
the Collateral or property intended to be charged hereunder, or which the Debtor
may hereafter become bound to charge in favour of the Secured Party (including,
without limiting the generality of the foregoing, any real property in which the
Debtor may have any interest from time to time), for the purpose of
accomplishing and effecting the intention of this agreement.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    6.4                   
      Continuing Security

     

    The
security interest constituted hereby shall be deemed to be a continuing security
for the Secured Obligations of the Debtor until all of the Secured Obligations
of the Debtor from time to time are paid and performed in full and this
agreement is terminated.

     

    6.5                
          No Obligation to
Advance

     

    Neither
the execution nor delivery of this agreement shall obligate the Secured Party to
advance any moneys to the Debtor.

     

    6.6               
          Consumer
Goods

     

    Notwithstanding
any other clause in this agreement, in no event shall goods that are used or
acquired for use primarily for personal, family or household purposes form part
of the Collateral.

     

    6.7            
             Notices

     

    All
notices or other communications provided for herein shall be in writing and
shall be personally delivered to an officer or other responsible employee of the
addressee or sent by telefacsimile, charges prepaid, at or to the address or
telefacsimile number of the party set opposite its name below or to such other
address or addresses, telefacsimile number or numbers as either party may from
time to time designate to the other party in such manner.  Any
communication which is personally delivered as aforesaid shall be deemed to have
been validly and effectively given on the date of such delivery if such date is
a business day and such delivery was made prior to 4:00 p.m. (Toronto time);
otherwise, it shall be deemed to have been validly and effectively given on the
business day next following such date of delivery.  Any communication
which is transmitted by telefacsimile shall be deemed to have been validly and
effectively given on the date of transmission if such date is a business day and
such transmission was prior to 4:00 p.m. (Toronto time); otherwise, it shall be
deemed to have been validly and effectively given on the business day next
following such date of transmission.

     

    In the
case of the Debtor:

     

    Lakeland
Protective Real Estate Inc.

    59 Bury
Court

    Brantford,
Ontario

    N3S
0A9

     

    Attention:             
   Peter Brasseur

    Telefax:                      (519)
757-0799

     

    In the
case of the Secured Party:

     

    Wachovia
Bank, National Association

    12 East
49th
Street, 43rd
Floor

    New York,
New York

    10017

     

    Attention:                  Robert
Maichin, Senior Vice President

    Telefax:                      (212)
214-4111

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    6.8                      
    Successors and Assigns

     

    This
agreement shall enure to the benefit of and shall be binding upon the parties
hereto and their respective successors and permitted assigns.

     

    6.9                      
    Entire Agreement

     

    This
agreement, the Loan Documents and any other agreements referred to herein
constitute the entire agreement between the parties hereto and supersedes any
prior agreements, undertakings, declarations, representations and undertakings,
both written and oral, in respect of the subject matter hereof.

     

    6.10                
       Receipt of Financing Statement,
etc.

     

    The
receipt by the Debtor’s legal counsel of a financing statement or financing
change statement shall be deemed to be receipt of same by the
Debtor.

     

    6.11                  
     Acknowledgement

     

    The
Debtor hereby acknowledges receipt of an executed copy of this
agreement.

     

    6.12                  
     Paramouncy

     

    In the
event of any conflict or inconsistency between the provisions of this agreement
and the provisions of the Credit Documents, the provisions of the Credit
Documents shall prevail and be paramount.

     

    6.13               
        Counterparts

     

    This
agreement may be executed in any number of counterparts, all of which shall be
deemed to be an original and such counterparts taken together shall constitute
one agreement, and any of the parties hereto may execute this agreement by
signing any such counterpart.

     

    6.14               
        Confirmation of
Guarantee

     

    The
Debtor hereby ratifies and confirms that it is bound by the terms of the
Guarantee and confirms that such Guarantee continues in full force and
effect.  The Debtor hereby further ratifies and confirms that the
Guarantee guarantees the payment of the Secured

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    Obligations
and the Secured Obligations include, without limitation, the present and future
obligations of the Borrower to the Bank under the Loan Agreement.

     

    [The
remainder of this page is intentionally left blank.]

     

     

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    IN
WITNESS WHEREOF the Debtor has executed this
agreement.

    

    
      	 
      	
              LAKELAND
      PROTECTIVE REAL ESTATE INC.

               

               

               

            
	 
      	
              By:

            	
              /s/
      Christopher J. Ryan

            
	 
      	 
      	
              Name:
      Christopher J. Ryan

            
	 
      	 
      	
              Title:
      Vice President

            

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

     

    SCHEDULE
A

     

    LOCATION
OF THE COLLATERAL

     

    

    59 Bury
Court, Brantford, Ontario, N3S 0A9

    
 

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

     

     

     

     

    BLOCKED ACCOUNTS
AGREEMENT

     

    THIS AGREEMENT dated the 27th
day of January, 2009.

     

    A
M O N G :

     

    LAKELAND
PROTECTIVE REAL ESTATE INC.

    as the
“Company”

     

    - and
-

     

    WACHOVIA
BANK, NATIONAL ASSOCIATION

    as the
“Secured
Party”

     

    - and
-

     

    THE
TORONTO-DOMINION BANK

    as “Bank”

     

     

    RECITALS

     

    
      	
              A.

            	
              Lakeland
      Industries, Inc. (the “Borrower”) and the
      Secured Party are party to a Loan Agreement dated as of July 7, 2005 (as
      amended, supplemented, restated or otherwise modified from time to time,
      the “Credit
      Agreement”).

            

    

     

    
      	
              B.

            	
              As
      required by the Credit Agreement, the Company, a wholly owned subsidiary
      of the Borrower, has granted security to Secured Party and the Credit
      Agreement requires the implementation of the cash management arrangements
      provided for in this Agreement.

            

    

     

    FOR VALUE
RECEIVED, the parties agree as follows:

     

    SECTION
1

    INTERPRETATION

     

    
      	
              1.1

            	
              Definitions

            

    

     

    In this
Agreement:

     

    
      	
              (a)

            	
              Activation
      Date means a date specified by Secured Party in the Activation
      Notice delivered by Secured Party to Bank which shall fall no sooner than
      a date that is three (3) Business Days following Bank’s receipt of said
      Activation Notice.

            

    

     

    
      	
              (b)

            	
              Activation
      Notice means a notice
      from the Secured Party to Bank in the form appearing at Schedule B
      hereto.

            

    

     

    
      	
              (c)

            	
              Branch of
      Account means the branch of Bank located
  at:

            

    

     

    4031
Fairview, Burlington, Ontario

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    (d)           Business
Day means any day on which the Branch of Account is open for business to
the public.

     

    
      	
              (e)

            	
              Cheques
      means all cheques, money orders, wire transfers, notes, drafts and other
      orders for payment of money or other remittances payable to the
      Company.

            

    

     

    
      	
              (f)

            	
              Receivables
      means all present and future accounts, accounts receivable, debts and book
      debts of any nature or type of the
Company.

            

    

     

    
      	
              1.2

            	
              Interpretation

            

    

     

    In
interpreting this Agreement, the headings and the division of the Sections are
inserted for convenience only and are to be ignored in construing this
Agreement; all references to Sections, subsections, clauses and Schedules are to
Sections, subsections, clauses and Schedules to this Agreement; the words
“hereto,” “herein,” “hereof,” “hereunder,” “this Agreement” and similar
expressions mean this Agreement as a whole and not any particular Section,
subsection or Schedule unless expressly so stated; grammatical variations of any
term defined herein shall have similar meanings and words importing the singular
shall include the plural and vice versa; reference herein to any agreement or
other document shall be deemed to include reference to such agreement or other
document as the same may from time to time be amended, supplemented, restated or
otherwise modified.

     

    SECTION
2

    ACKNOWLEDGEMENT
OF SECURITY

     

    
      	
              2.1

            	
              Acknowledgement
      of Security

            

    

     

    The
Company acknowledges that it has granted to, and has created in favour of,
Secured Party a first priority perfected security interest in:

     

    
      	
              (a)

            	
              its
      interest in all Cheques and other remittances received by the
      Company;

            

    

     

    
      	
              (b)

            	
              the
      depository accounts in the name of the Company described in Schedule A
      hereto as blocked accounts (the “Blocked Accounts”),
      including all sums now on deposit in or payable to and any interest
      accrued or payable on the credit balances therein;
  and

            

    

     

    
      	
              (c)

            	
              the
      disbursement accounts described in Schedule A hereto as disbursement
      accounts (the “Disbursement Accounts”),
      including all sums now on deposit in or payable to and any interest
      accrued or payable on the credit balances
  therein.

            

    

     

    SECTION
3

    COLLECTION
OF RECEIVABLES

     

    
      	
              3.1

            	
              Collections

            

    

     

    The
Company shall, as soon as practically possible, and, in any event, within 24
hours of receipt thereof, deliver to Bank for deposit into the Blocked Accounts
any and all Cheques.  The Company shall hold all post-dated Cheques
received by it until they may be included in a deposit made by or on behalf of
the Company.  Until all cash and Cheques received by the Company are
delivered to Bank for deposit in the Blocked Accounts, the Company shall hold
all such cash and Cheques in trust and as mandatory for Secured Party,
segregated from all other funds and other property of the Company.

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    SECTION
4

    BLOCKED
ACCOUNTS OPERATION

     

    
      	
              4.1

            	
              Blocked
      Account

            

    

     

    Commencing
on the Activation Date, Bank shall transfer, prior to the end of each Business
Day, all amounts on deposit in the Blocked Accounts to Secured Party’s account
or accounts or such other account or accounts with such depositories as Secured
Party may from time to time designate in writing (each, a “Collection Account”, and,
collectively, the “Collection
Accounts”).  As of the date hereof, the only Collection
Accounts are the collection accounts described in Schedule A
hereto.  The transfers of amounts from the Blocked Accounts to the
Collection Accounts shall be effected in accordance with Bank’s usual banking
practices on each Business Day on which amounts are on deposit in the Blocked
Accounts.  The Secured Party shall be entitled to deliver the
Activation Notice upon or at any time after the occurrence of an Event of
Default (as defined in the Credit Agreement).  Prior to the Activation
Date, the Bank and the Company shall be entitled to operate all accounts
including the Blocked Accounts and Disbursement Accounts all without prior
notice to or consent of the Secured Party.

     

    
      	
              4.2

            	
              Instructions

            

    

     

    After the
Activation Date, the Blocked Accounts shall be subject to written instructions
only from Secured Party which alone, as between the Company and Secured Party,
shall have all authority and right in connection with the Blocked
Accounts.  Bank shall be entitled to act upon the instructions of any
person who Bank believes, acting reasonably, is a person that Secured Party has
identified in writing from time to time to Bank as being a person authorized by
Secured Party to give instructions to Bank.

     

    
      	
              4.3

            	
              Payment
      Not Realization

            

    

     

    The
Company and Secured Party acknowledge and agree that:

     

    
      	
              (a)

            	
              the
      actions and proceedings contemplated by this Section 4 are instrumental to
      the operation of the cash management system that is required by the Credit
      Agreement; and

            

    

     

    
      	
              (b)

            	
              any
      action or proceeding pursuant to this Section 4 shall not be considered as
      a realization on, or enforcement of, security or a demand for payment
      under the Credit Agreement but rather, among other things, following the
      Activation Date, a standing irrevocable direction by the Company to Bank
      to thereafter transfer daily to the appropriate Collection Account on the
      direction of Secured Party all credit balances in the Blocked Accounts as
      contemplated by Section 4.1.

            

    

     

    
      	
              4.4

            	
              Wire
      Transfers

            

    

     

    Bank
shall apply and credit to the applicable Blocked Account all wire transfers
directed to that Blocked Account in accordance with Bank’s standard
procedures.

     

    
      	
              4.5

            	
              Adverse
      Claims

            

    

     

    
      	
              (a)

            	
              In
      the event that Bank shall receive notice that any third party shall have
      asserted an adverse claim by legal process against the Disbursement
      Accounts, Blocked Accounts or any sums on deposit therein, whether such
      claim shall have arisen by tax lien, execution of judgment, statutory
      attachment, garnishment, levy, claim of a trustee in bankruptcy,
      debtor-in-possession, post-bankruptcy petition lender, court appointed
      receiver, or other judicial or regulatory order or process (each, a “Claim”), the Bank may,
      in addition to other remedies it possesses under
  this

            

    

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    
      	
               
      

            	
              Agreement
      or at law or in equity: (i) suspend disbursements from the Disbursement
      Accounts or Blocked Accounts without any liability until Bank shall have
      received an appropriate court order or other assurances reasonably
      acceptable to Bank in its sole discretion establishing that funds may
      continue to be disbursed according to instructions then applicable to the
      Disbursement Accounts or Blocked Accounts, and/or (ii) interplead such
      funds in the Disbursement Accounts or Blocked Accounts as permitted by
      applicable law.  Bank’s costs, expenses and reasonable legal
      fees incurred in connection with any such Claim shall be reimbursed to
      Bank by the Company.  Upon request, Bank shall provide a copy of
      any such notice to the Company or (if the notice referred to in Section
      4.1 has been delivered) to Secured Party, and the Company shall promptly
      provide to the Secured Party a copy of any such notice received by the
      Company from Bank and Secured Party shall promptly provide to the Company
      a copy of any such notice received by Secured Party from
    Bank.

            

    

     

    
      	
              (b)

            	
              If
      a bankruptcy or insolvency proceeding were commenced by or against the
      Company, Bank shall be entitled, without any liability, to refuse to (i)
      permit withdrawals or transfers from the Blocked Accounts or Disbursement
      Accounts or (ii) accept or comply with the notice thereafter received by
      Bank, until Bank shall have received an appropriate court order or other
      assurances reasonably acceptable to Bank in its sole discretion
      establishing that (A) continued withdrawals or transfers from the Blocked
      Accounts or Disbursement Accounts or honoring or following any instruction
      from the Secured Party are authorized and shall not violate any law,
      regulation, or order of any court and (B) the Bank shall have received
      adequate protection for its right to set off against or charge the Blocked
      Accounts or Disbursement Accounts or otherwise be reimbursed for related
      expenses or Chargebacks.

            

    

     

    

     

    SECTION
5

    FEES,
EXPENSES, CHARGEBACKS AND INDEMNITY

     

    
      	
              5.1

            	
              Waiver
      of Bank’s Rights

            

    

     

    Except as
expressly provided in this Agreement, Bank waives and agrees not to assert,
claim or endeavour to exercise any right of deduction, set-off, pledge or other
right to claim with respect to the Blocked Accounts, or the funds
therein.

     

    
      	
              5.2

            	
              Company’s
      Fee Obligations

            

    

     

    The
Company hereby agrees that it is responsible for all normal and customary fees
and expenses established by Bank from time to time for the services provided
hereunder (all such amounts, the “fees and
expenses”).  If any of the fees and expenses are not paid by
the Company when due, Bank shall be entitled to automatically debit, by
mechanical, electronic or manual means, any of the Disbursement Accounts for
such fees and expenses.  If there are insufficient funds in the
Disbursement Accounts for Bank to recover the fees and expenses, Bank may
automatically debit, by mechanical, electronic or manual means, any of the
Blocked Accounts in an amount equal to the deficiency of funds in the
Disbursement Accounts.

     

    
      	
              5.3

            	
              Chargebacks

            

    

     

    Notwithstanding
Section 5.1, Bank shall be entitled to automatically debit, by mechanical,
electronic or manual means, any one or more of the Blocked Accounts and the
Disbursement Accounts at any time and from time to time solely for:

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    (a)           the
amount of any Cheque deposited in a Blocked Account after the date hereof which
is subsequently returned to Bank for any reason whatsoever (“Returned Amounts”);
and

     

    
      	
              (b)

            	
              the
      amount of any required adjustments due to clerical errors or calculation
      errors directly related to any Blocked Account or Disbursement Account
      (“Error Amounts”
      and, together with Returned Amounts, “Chargebacks”),

            

    

     

    and
provided, further, that if Bank has transferred to a Collection Account the
funds on deposit in a Blocked Account in respect of which Bank is entitled to a
Chargeback and the funds in the Blocked Accounts and the Disbursement Accounts
are insufficient to cover the amount of the relevant Chargeback, Secured Party
shall pay to Bank the amount of the Chargeback not recoverable from the Blocked
Accounts or Disbursement Accounts, within ten (10) Business Days of receipt of a
statement signed by Bank confirming the details of such Chargeback and Bank’s
entitlement to it under this Section 5.3 in form satisfactory to Secured Party;
provided however, Secured Party shall only be required to make any such payment
if Bank has made such request for payment in the case of (i) a Returned Amount,
within ninety-five (95) days after the date the value represented by the
Returned Amount was transferred to a Collection Account or otherwise paid to or
to the order of Secured Party, and (ii) an Error Amount, within eighty-five (85)
days after the error forming the basis of the Error Amount was
made.

     

    
      	
              5.4

            	
              Indemnity

            

    

     

    The
Company and Secured Party hereby jointly and severally agree to pay, indemnify
and hold harmless Bank from and against any and all loss, liability, cost, claim
and expense incurred by it with respect to the performance of this Agreement by
Bank or any of Bank’s directors, officers, or employees, unless arising from its
or their own violation of law, gross negligence or wilful
misconduct.

     

    SECTION
6

    GENERAL
PROVISIONS

     

    
      	
              6.1

            	
              Power
      of Attorney

            

    

     

    The
Company constitutes and irrevocably appoints Secured Party its true and lawful
attorney, with full power of substitution, without limitation, to demand,
collect, receive and, following a Default (as defined in the Credit Agreement)
that is continuing, sue for all amounts which may become due or payable in
respect of  any Blocked Account or any Disbursement Account, and,
before or after a Default, to execute all withdrawal receipts or other orders
for the Company, in its own name or in the Company’s name or otherwise, which
Secured Party deems necessary or appropriate to protect and preserve its right,
title and interest in any Blocked Account or any Disbursement Account, and,
otherwise, to carry out the provisions and purposes of this
Agreement.

     

    
      	
              6.2

            	
              Limitation
      of Bank’s Liability

            

    

     

    Bank
undertakes to perform only such duties as are expressly set forth in this
Agreement and to deal with the Blocked Accounts and Disbursement Accounts with
the degree of skill and care that Bank accords to all accounts and funds
maintained and held by it on behalf of its customers.  Notwithstanding
any other provision of this Agreement, it is agreed by the parties hereto that
Bank shall not be liable for any action taken by it or any of its directors,
officers or employees in accordance with this Agreement except for its or their
own violation of law, gross negligence or wilful misconduct.  In no
event shall Bank be liable for losses or delays resulting from computer
malfunctions or interruption of communication facilities which are beyond Bank’s
control or from other causes which are beyond Bank’s control or from force
majeure or for indirect, special or consequential damages.

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    6.3           Records

     

    Bank
shall maintain a record of all money, Cheques and other remittance items
deposited in and transfers to the Blocked Accounts and the Disbursement Accounts
in accordance with Bank’s standard procedures.

     

    
      	
              6.4

            	
              Provision
      of Information

            

    

     

    Bank
shall provide to the Company and Secured Party, at the Company’s expense,
monthly statements summarizing the daily activity in each Blocked Account and
Disbursement Account.  Bank shall also provide to Secured Party, at
the Company’s expense, such information compiled by Bank in accordance with the
activity, on a daily, weekly or monthly basis, in each Blocked Account and
Disbursement Account, as may be reasonably requested by Secured Party in
writing.

     

    
      	
              6.5

            	
              Termination.

            

    

     

    Subject
to the other provisions of this Section 6.5, this Agreement shall remain in
full force and effect and be binding in accordance with and to the extent of its
terms until the obligations of the Company to Secured Party under and in
connection with the Credit Agreement have been paid and performed in full and
Secured Party has no further obligation to make any further advances to the
Company under the Credit Agreement.  Secured Party may terminate this
Agreement at any time upon thirty (30) days’ prior written notice to Bank and
the Company.  Bank may terminate this Agreement only upon thirty (30)
days’ prior written notice to the other parties hereto. For a period of thirty
(30) days after termination Bank shall hold any Cheques received for Secured
Party and after such time shall process the same according to Bank’s usual
practices without liability to or on the part of Bank.  Sections 5.3
and 5.4 shall survive termination of this Agreement.

     

    
      	
              6.6

            	
              Notices

            

    

     

    Except as
otherwise provided herein, any notice, demand, request, consent, approval,
declaration or other communication (collectively, “Communication”) to be served,
given or delivered by one party to the other in connection with or under this
Agreement shall be in writing and shall be deemed to have been validly served,
given or delivered the earlier of (i) upon confirmation by the receiving party
of receipt of Communication or (ii) three (3) Business Days after receipt of the
Communication.

     

    
      	
              (a)

            	
              Communications
      with the Company shall be addressed as
follows:

            

    

     

    Lakeland
Protective Real Estate Inc.

     

    59 Bury Court

    Brantford, Ontario

    N3S 0A9

     

    Attention:                                Peter
Brasseur

    Telephone
No.:                       (519)
757-0700

    Fax
No.:                             
     (519) 757-0799

     

    
      	
              (b)

            	
              Communications
      with Bank shall be addressed as
follows:

            

    

     

    The
Toronto-Dominion Bank

    4031
Fairview

    Burlington, Ontario

    L7L 2A4

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Attention:                            Denise
Dickson

    Telephone
No.:                   (905)
681-1050 x250

    Fax
No.:                                (905)
681-1780

     

    
      	
              (c)

            	
              Communications
      with Secured Party shall be addressed as
  follows:

            

    

     

    Wachovia
Bank, National Association

    12 East
49th
Street, 43rd
Floor

    New York,
NY

    10017

     

    Attention:                        
   Denise Dickson

    Telephone
No.:                   (212)
214-4145

    Fax
No.:                                (212)
214-4111

     

    
      	
              6.7

            	
              Governing
      Law

            

    

     

    This
Agreement shall be governed by, and construed and interpreted in accordance
with, the laws of the Province of Ontario and the laws of Canada applicable
therein and the parties hereto irrevocably attorn to the non-exclusive
jurisdiction of the courts of the Province of Ontario in respect of all matters
pertaining to this Agreement.

     

    
      	
              6.8

            	
              Amendments

            

    

     

    This
Agreement may only be amended or modified by written instrument signed by
Secured Party, the Company and Bank.

     

    
      	
              6.9

            	
              Severability

            

    

     

    Any
provision of this Agreement that is or becomes unenforceable shall be
unenforceable to the extent of such unenforceability without invalidating the
remaining provisions hereof.  To the extent permitted by Applicable
Law, each of the parties hereby waives any provision of law that renders any
provision hereof unenforceable in any respect.

     

    
      	
              6.10

            	
              Authorization

            

    

     

    For the
purposes of this Agreement, any attorney, officer, employee or agent of Secured
Party shall be authorized to act, and to give instructions and notice, on behalf
of Secured Party hereunder, and any attorney, officer, manager or agent of Bank
shall be authorized to act and give instructions and notice on behalf of Bank
hereunder.

     

    
      	
              6.11

            	
              Remedies
      Cumulative

            

    

     

    The
rights enumerated in this Agreement are in addition to and not in substitution
for any other rights of Secured Party pursuant to any security held by Secured
Party and except as otherwise contemplated in this Agreement, nothing in this
Agreement is to be interpreted as restricting the rights of Secured Party
pursuant to any security held by Secured Party.

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    6.12           Further
Assurances

     

    The
parties shall at all times do, execute, acknowledge and deliver such acts, deeds
and agreements as may be reasonably necessary or desirable to give effect to the
terms of this Agreement.

     

    
      	
              6.13

            	
              No
      Fiduciary Obligations

            

    

     

    Nothing
in this Agreement shall constitute any party to this Agreement a fiduciary in
relation to any other party to this Agreement.

     

    
      	
              6.14

            	
              Successors
      and Assigns

            

    

     

    This
Agreement shall be binding upon and enure to the benefit of the parties hereto
and their respective successors and assigns; provided that this Agreement may
not be assigned by any of the parties hereto without the prior written consent
of Bank.

     

    
      	
              6.15

            	
              Counterparts

            

    

     

    This
Agreement may be executed in counterparts and by facsimile, each of which shall
be deemed an original, but all of which together shall constitute one and the
same instrument.

     

    [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    The
parties have executed this Agreement.

     

    
      
        
          	 	
                  THE
      TORONTO-DOMINION BANK

                   

                   

                   

                
	 	
                  By:

                	
                  /s/
      Denise Dickson

                
	 	 
      	
                  Name:   Denise
      Dickson

                
	 	 
      	
                  Title:

                

        

      

    

    

     

    
      
        
          	 	
                  WACHOVIA
      BANK, NATIONAL ASSOCIATION

                   

                   

                   

                
	 	
                  By:

                	
                  /s/
      Daniel O’Donnell

                
	 	 
      	
                  Name: Daniel
      O’Donnell

                
	 	 
      	
                  Title:   Senior
      Vice President

                

        

      

    

    

     

    
      
        
          	 	
                  LAKELAND
      PROTECTIVE REAL ESTATE INC.

                   

                   

                   

                
	 	
                  By:

                	
                  /s/
      Christopher J. Ryan

                
	 	 
      	
                  Name:  Christopher
      J. Ryan

                
	 	 
      	
                  Title:    Vice
      President

                

        

      

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
A

     

    ACCOUNTS

     

    

     

    Part
1 – Blocked Accounts

     

    None

     

    Part
2 – Disbursement Accounts

     

    (a)           Business
Chequing Account  #5206945

     

    Part
3 – Collection Accounts

     

    (a)           DDA
#2000018590584

     

    

     

    

     

    

     

    

     

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    SCHEDULE
B

     

    ACTIVATION
NOTICE

     

    To:          THE TORONTO-DOMINION BANK
(“Bank”)

     

    
      	
              Re:

            	
              Blocked
      Accounts Agreement dated l,
      20l
      among Lakeland Protective Real Estate Inc., as Company, Wachovia Bank,
      National Association, as Secured Party, and
      The Toronto-Dominion Bank (as amended, restated, supplemented or otherwise
      modified from time to time, the “Blocked Accounts
      Agreement”).

            

    

     

    Terms
with initial capital letters in this notice and not otherwise defined herein
shall have the meanings given to them in the Blocked Accounts
Agreement.

     

    The
Secured Party hereby notifies Bank that January 27, 2009, shall be the
Activation Date (which date shall be not later than the third (3rd)
Business Day following receipt by Bank of this notice) such that, pursuant to
Section 4 of the Blocked Accounts Agreement, on the Activation Date and on each
Business Day thereafter, Bank shall transfer, prior to the end of each such
Business Day, all funds on deposit in Blocked Accounts as provided for in the
Blocked Accounts Agreement.

     

    Dated
l, 20
l.

     

    
      
        
          
            	 	
                    WACHOVIA
      BANK, NATIONAL ASSOCIATION

                     

                     

                  
	 	
                    By:

                  	
                    /s/
      Daniel O’Donnell

                  
	 	 
      	
                    Name:   Daniel
      O’Donnell

                  
	 	 
      	
                    Title:     Senior
      Vice President

                  

          

        

      

    

     

     

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

       

      EXHIBIT
10.7

       

      OFFICER’S
CERTIFICATE

      

      
        	
                TO:

              	
                WACHOVIA
      BANK, NATIONAL ASSOCIATION (the “Bank”)

                 

              
	
                AND
      TO:

              	
                FASKEN
      MARTINEAU DUMOULIN LLP (“Faskens”)

                 

              
	
                AND
      TO:

              	
                SUSMAN,
      DUFFY & SEGALOFF P.C. (“Susman”)

                 

              
	
                AND
      TO:

              	
                SCARFONE
      HAWKINS LLP (“Scarfone”)

                 

              
	
                FROM:

              	
                LAKELAND
      PROTECTIVE WEAR INC. (the “Corporation”)

                 

              
	
                RE:

              	
                General
      Security Agreement dated as of January 27th, 2009 (the “Security Agreement”) by
      the Corporation in favour of the Bank

                 

              

      

       

      I,
CHRISTOPHER J. RYAN, certify in my capacity as Assistant Secretary of the
Corporation, and not in my personal capacity, as follows:

       

      1.                      I
am the duly appointed Assistant Secretary of the Corporation and I am familiar
with the transactions contemplated by the Security Agreement and all loan
documentation contemplated in connection therewith (the “Documents”).

       

      2.                      I
have made or caused to be made such examinations or investigations as are, in my
opinion, necessary to fully inform myself of the matters addressed in this
Certificate and to make the statements below, and I have furnished this
Certificate with the intent that it may be relied upon by the Bank as a basis
for the consummation of the transactions contemplated by the Documents in
connection therewith and by Faskens, Susman and Scarfone in rendering legal
opinions to the Bank in respect thereof.

       

      3.                      A
true and complete copy of the articles of incorporation of the Corporation
(collectively, the “Articles”) is attached to this
Certificate and marked as Schedule A.  The Articles are in full
force and effect and have not been amended as of or prior to the date hereof and
no proceedings have been taken or are pending to amend, supplement, surrender or
cancel the Articles.

       

      4.                      A
true and complete copy of the By-laws of the Corporation (the “By-laws”) is attached to this
Certificate and marked as Schedule B.  The By-laws are in full
force and effect, unamended on the date hereof and no proceedings have been
taken or are pending to amend, supplement, revoke or repeal the
By-laws.

       

      5.                      A
true and complete copy of a board of directors resolution of the Corporation
approving the execution and delivery of, among other things, the Documents and
the consummation of the transactions contemplated thereby (the “Board of Directors Resolution”) is
attached to this Certificate and marked as Schedule C.  The Board
of Directors Resolution is in

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      full
force and effect, unamended on the date hereof and no proceedings have been
taken or are pending to amend, supplement, revoke or repeal the Board of
Directors Resolution.

       

      6.                      Each
person listed in Schedule D is at the date hereof a duly elected or appointed
director or officer of the Corporation, such person holds the position(s)
indicated opposite his or her name, and the specimen or facsimile signature
appearing opposite the name of that person is the true signature of such
person.

       

      7.                      Each
person listed below is at the date hereof a duly elected director of the
Corporation and there are no other directors of the Corporation:

      

      Peter
Brasseur

      Christopher
J. Ryan

       

      8.                      There
is no unanimous shareholder declaration or agreement in effect pertaining to the
Corporation that restricts in whole or in part the powers of the directors to
manage or supervise the management of the business and affairs of the
Corporation.

       

      9.                      The
Corporation is not aware of any proceedings having been taken by any person,
firm, corporation, government or governmental authority which may result in the
winding-up, liquidation, dissolution, bankruptcy or receivership of the
Corporation or the cancellation of the Corporation’s charter.  No
resolution has been passed and no application has been made on behalf of the
Corporation to wind-up, dissolve or liquidate the Corporation or to seek the
protection of any bankruptcy or insolvency law or otherwise threaten the
existence of the Corporation.

       

      10.                      The
chief executive office and only place of business of the Corporation is located
in the Province of Ontario.

       

      [REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      DATED
as of this 27th
day of January, 2009.

      

      
        	 
      	 
      	 
      
	 
      	 
      	 
      	
                /s/
      Christopher J. Ryan

              
	 
      	 
      	 
      	
                Name:
      Christopher J. Ryan

                Title:  Assistant
      Secretary

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

       

      SCHEDULE A

       

      (See
Attached)

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      SCHEDULE B

       

      (See
Attached)

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      SCHEDULE C

       

      (See Attached)

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      RESOLUTION
OF THE BOARD OF DIRECTORS

      OF

      LAKELAND
PROTECTIVE WEAR INC.

      

      WHEREAS
the Board of Directors of the Corporation is authorized from time to time to
charge, mortgage, hypothecate or pledge all or any currently owned or
subsequently acquired real or personal property of the Corporation to secure any
obligations or any money borrowed and it is in the interest of the Corporation
that the Board of Directors exercise such authority;

      

      AND
WHEREAS it is further expedient and in the interests of the Corporation to give
security to WACHOVIA BANK, NATIONAL ASSOCIATION ("WACHOVIA”) to secure the
present and future indebtedness and liability of the Corporation to WACHOVIA
whether direct or indirect, and whether arising out of guarantees or
otherwise.

      

      NOW
THEREFORE BE IT RESOLVED THAT:

      

      

      
        	
                1.

              	
                The
      Corporation create and issue the General Security Agreement dated the 27th
      day of January, 2009 (the "General Security Agreement"),  in
      substantially the terms as contained in the specimen which has been
      submitted to the meeting, in favour of WACHOVIA containing the security
      interests provided in the General Security Agreement to secure the due
      payment of all present and future indebtedness and liability of the
      Corporation to WACHOVIA whether direct or indirect, and whether arising
      out of guarantees or otherwise;

              

      

      

      
        	
                2.

              	
                The
      Corporation enter into the Blocked Account Agreement with The
      Toronto-Dominion Bank (“TD”) and WACHOVIA regarding the Corporation’s
      account(s) with TD dated the 27th day of January, 2009 (the "Blocked
      Account Agreement"), in substantially the form of and with terms as
      contained in the specimen which has been submitted to the
      meeting;

              

      

      

      
        	
                3.

              	
                The
      Corporation enter into a Subordination Agreement  with Business
      Development Bank of Canada and WACHOVIA dated the 27th day of January,
      2009 (the "BDC Subordination Agreement"), in substantially the form of and
      with terms as contained in the specimen which has been submitted to the
      meeting;

              

      

      

      
        	
                4.

              	
                That
      the President, Peter Brasseur, and the Assistant Secretary, Christopher J.
      Ryan, are hereby authorized for and on behalf of the Corporation to
      execute under its corporate seal or otherwise and deliver the General
      Security Agreement, the Blocked Account Agreement  and
      the  BDC Subordination Agreement to WACHOVIA, TD and BDC, as the
      case may be, with such alterations, additions, amendments and deletions as
      may be approved by them, whose signatures shall be conclusive evidence of
      such approval; and

              

      

      

      
        	
                5.

              	
                Any
      one of the persons designated in paragraph 4 is hereby authorized for and
      in the name of the Corporation to execute and deliver under the corporate
      seal or otherwise all such other documents and to do all such other acts
      and things as may be necessary
or

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                desirable
      to give effect to this resolution or as may be reasonably required by
      WACHOVIA.

              

      

      

      CERTIFIED
to be a true copy of a Special Resolution passed by the board of directors of
Lakeland Protective Wear Inc. the 27th day of January, 2009, as set forth and
recorded in the minute book of the Corporation, which Resolution is now in full
force and effect.

      

      DATED this 27th day of January,
2009.

      

      

      /s/ Peter Brasseur

      Peter Brasseur,
President

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      SCHEDULE D

      Incumbency

       

      

      
        
          	
                  Name

                	
                  Position(s)

                	
                  Specimen
      Signature

                
	
                  PETER
      BRASSEUR

                	
                  PRESIDENT

                	
                   

                  /s/
      Peter Brasseur

                
	
                  NORM
      BROWN

                	
                  SECRETARY

                	
                   

                  /s/
      Norm Brown

                
	
                  CHRISTOPHER
      J. RYAN

                	
                  VICE
      PRESIDENT

                	
                   

                  /s/
      Christopher J. Ryan

                
	
                   

                  GARY
      POKROSSA

                	
                  CHIEF
      FINANCIAL OFFICER

                	
                  /s/
      Gary Pokrassa

                
	
                   

                  ZOEY
      GREENE

                	
                  INTERNATIONAL
      CONTROLLER

                	
                  /s/
      Zoey Greene

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