Document:

Unassociated Document

    
      

    

    Execution Copy

       

       

      Exhibit
10.8

      MANAGEMENT
AGREEMENT

      

      This
Management Agreement is made this 13th May,
2008, by and between:

      

      on one
side,

      

       

       1.           Miguel Antonio dos Guimarães
Bastos, Brazilian Citizen, married, businessman, bearer of the
identification Card RG N. 4607520 SSP/BA, enrolled with the Brazilian Taxpayers’
Registry (CPF/MF) under N. 125.891.957-53, resident and domiciled in the City of
Lauro de Freitas, State of Bahia, at Condominio Encontro das Águas, Quadra I,
Lote 39, 42700-000  (“Officer”);

       

      

      and, on
the other side,

      

      2.           Qualytextil S.A., a
corporation organized under the laws of Brazil, with its head office at Rua
Luxemburgo, sem n.o, Loteamento Granjas Rurais, Presidente Vargas, Quadra O,
Lotes, 82 and 83, São Caetano, in the City of Salvador, State of Bahia, enrolled
with the Brazilian Taxpayers' Registry (CNPJ) under No. 04.011.170/0001-22
(“Company”), hereby duly
represented by the undersigned legal representatives;

      

      and, as
intervening parties,

      

      3.           Lakeland Industries, Inc.,
duly organized under the laws of the State of Delaware, United Stated of
America, with offices at 701 Koehler Avenue, suite 7, Ronkonkoma, NY 11779
hereby duly represented by the undersigned representatives (“Lakeland”); and

      

      4.           Lakeland do Brasil Empreendimentos e
Participações Ltda., a limited liability company duly existing and
organized under the laws of Brazil, with its head offices located in the City of
São Paulo, State of São Paulo, at Av. Bernardino de Campos, N. 98, sala 9, CEP
04004-040, enrolled with the Brazilian Taxpayers' Registry (CNPJ) under
No. 09.484.003/0001-12, hereby duly represented by the undersigned legal
representatives,

      

      all
hereinafter jointly or individually referred to as “Party” or “Parties”,

      

      W
I T N E S S E T H:

      

      WHEREAS, the Company is
engaged in the business of the production, manufacture, and sale of personnel
protective equipment (“Business”);
and

      
        
           

        

        
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      WHEREAS, the Company wishes
that the Officer signing this Management Agreement undertakes to work and/or
remain working exclusively as officer of the Company, as well as
to  use his/her best efforts for the development and profitable
performance of the Business, for a minimum period starting on the date hereof
and ending on December 31, 2011, in accordance with the terms and conditions
hereinbelow,

      

      NOW, THEREFORE, the Parties
have agreed to enter into this Management Agreement (“Agreement”), which shall be
governed by the following terms and conditions:

      

      I.   MANAGEMENT
OF THE COMPANY

      

      1.1.
Officer shall remain as Executive Officer of the Company for a period starting
on the date hereof and ending on December 31, 2011.

      

      1.2.
Officer hereby undertakes to manage the Business in the best interests of the
Company, and to use his/her best efforts
for the development and profitable performance of the Company, and, for such
purposes, Officer shall provide for the Company’s proper operation in all
fields, including, but not limited to:

      

      (i) take
office as Chief Financial Officer (Diretor Financeiro) of the
Company and be responsible for managing its financial activities, including
investments analysis, financial risks, financial planning and record keeping and
also managing its IT activities; and

      

      (ii)
representation of the Company before any third parties, private or
public.

      

      1.3.
Officer shall at all times during the Term of this Agreement:

      

      (i)
faithfully and diligently act for the benefit and betterment of the
Business;

      

      (ii) use
his/her best efforts to act in the best interests of the Business;
and

      

      (iii)
keep the Company and Lakeland fully
informed of all material activities carried out in the performance of the
Business.

      

      1.4.
Officer hereby undertakes to comply with all reasonable Lakeland rules, directions and guidelines that
Officer has been given notice in written form and to strive to complete all
Lakeland financial targets, commands and
other business goals regarding the Company and the Business that Officer has
been informed in written form, including the Lakeland Business Ethics and
Anti-Corrupt Practices Guide, and is not authorized to take any action out of
the

      
        
           

        

        
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      ordinary
course of business of the Company, without having received prior written consent
of Lakeland.

      

      1.5.
Officer hereby acknowledges and declares that the relationship undertaken hereby
among Officer, the Company and Lakeland is implemented on a fiduciary basis, and
there shall not exist any kind of labor relationship between Officer, Lakeland
and/or the Company in any manner whatsoever.

      

      2.   REMUNERATION

      

      2.1. In
consideration for the management services of Officer, Officer shall receive a
total annual remuneration in the amount of R$ 346,177.00 (three hundred and
forty six thousand and one hundred and seventy seven Reais), to be paid in
twelve (12) monthly installments of R$ 28,848.08 (twenty eight thousand and
eight hundred and forty eight Reais and eight centavos) (“Remuneration”), payable on the
1st
business day of the subsequent month.

      

      2.1.1.
Each Party shall bear or pay all taxes attributed thereto by Law. In case any
withholdings in the Remuneration need to be made prior to its payment, then the
Remuneration shall be paid to Officer with such withholding amounts
deducted.

      

      2.1.2. On
the date of the first (1st) anniversary of this Agreement, the Remuneration
shall be increased in eighteen per cent (18%) and then shall remain fixed until
the termination of this Agreement.

      

      3.   VACATION

      

      3.1.
Officer shall be entitled to, after each management year in the Business,
counted as of the date hereof, take a twenty-two (22) Business Days of vacation, which period shall
be previously discussed with Lakeland, in order for Lakeland to be able to
take the steps necessary to minimize any adverse effects on the administration
of the Business (“Vacation
Period”).

      
 

      3.2.
During the Vacation Period, Officer shall still be entitled to receive his/her
normal  Remuneration due in that period.

      

      4.   REIMBURSEMENT
OF EXPENSES AND FRINGE BENEFITS

      

      4.1.
Officers’ expenses related to trips made and other
expenses incurred by Officer in order to properly exercise his/her
management obligations undertaken herein, shall be reimbursed by the Company,
according to the terms and conditions set forth in this Section IV (“Expenses”).

      
        
           

        

        
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      4.2. For purposes of Section 4.1 above, the
Company shall reimburse any Expenses of the
Officer related to transportation (such as plane tickets, taxis, gas),
travel insurance (including medical insurance), meals, telecommunications and
accommodations (such as hotels fees), and the
Company may, at its sole discretion,
reimburse other expenses made by Officer on his/her trips, provided that they
are undertaken exclusively for purposes of the Company.

      

      5.   EXCLUSIVITY

      

      5.1.
While this Agreement is in force, Officer shall not, in any way, act as officer,
employee, consultant, service provider or in any other manner, in any other
company or legal entity, in Brazil or abroad.

      

      6.   NON-COMPETITION,
NON-SOLICITATION AND CONFIDENTIALITY

      

      6.1. The
Parties acknowledge and agree that: (i) the business contacts, joint ventures,
Chinese, Mexican, Canadian, United Kingdom, EEC, South American, and all of
Lakeland's other U.S. and all international suppliers, independent contractors,
North American and international customers, international and domestic vendors,
joint venture or non-joint venture contractors, patterns, know-how, trade
secrets, marketing techniques and other aspects of the business of Lakeland are
of value to Lakeland and will provide Lakeland with substantial competitive
advantage in the operation of its business; (ii) the business of Lakeland is
national and international in scope, and (iii) Lakeland is entitled to protect
its goodwill and the consideration paid or to be paid under the Share Purchase
Agreement executed on May 2nd, 2008,
which payment is for this goodwill during and after the Term of this
Agreement.

      

      6.2. For
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by Officer, Officer hereby agrees that it shall not, and it shall
cause any of its enterprises, companies, corporations or subsidiaries thereof,
joint ventures, proprietorships, blood relatives, spouses or in-laws, or other
similar affiliates hereinafter referred to as ("affiliates") not to, in any
manner, directly or indirectly: (i) at any time, divulge, transmit or otherwise
disclose, or cause to be divulged, transmitted or otherwise disclosed, to any
person or entity whatsoever, any confidential or proprietary information of
Lakeland, including business contacts, customer lists, supplier lists, domestic
and international vendors, suppliers, joint ventures and assembly contractors,
technology know-how, trade secrets, marketing techniques, marketing plans and
strategies, manufacturing methods, patterns, product development techniques or
plans, patents, laminates, fabrics, contracts or other confidential or
proprietary information of Lakeland (including such matters related to the
business heretofore conducted by Lakeland and by the Company); (ii) at any time
during the period from the date hereof through and including the seventh (7th)
anniversary of any termination date of this

      
        
           

        

        
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      Agreement
hereof (the "Restrictive Period"), anywhere in or out of Brazil, or
internationally render any services to or engage, participate, or have any
interest or be involved in any capacity, whether as an owner, agent,
stockholder, officer, director, manager, partner, joint venturer, employee,
consultant or otherwise, in any business enterprise which is, or shall at any
time during the Restrictive Period be, engaged in any manner in the business of
designing, developing, manufacturing, marketing, selling and/or distributing any
Products (as defined below); (iii) directly or indirectly solicit, request,
cause or induce any person who during the Restrictive Period or eighteen (18)
months prior to the termination of this Agreement had been an employee of or
consultant to Lakeland or the Company, to leave employment or terminate his/her
relationship with Lakeland or the Company, or to employ, hire, engage or be
associated with, or endeavor to entice away from Lakeland or the Company, any
such person; and (iv) induce any customers, vendors, joint venturers or contract
manufacturers of Lakeland or the Company, either domestically or internationally
to discontinue doing business with Lakeland or the Company.

      

      6.2.1. As
used herein, the term "Products" means any and all goods and/or products of the
type heretofore sold or to be sold during the Term of this Agreement by Lakeland
or any of its subsidiaries, divisions or affiliates, including but not limited
to the Products as listed or to be listed in Lakeland's product catalogs,
pricing lists, or other literature and any functionally similar goods and/or
products, already developed by or to be developed by Lakeland and shown in its
catalogs, pricing lists or other literature or to be developed by Lakeland
during the Term of this Agreement.

      

      6.2.2.
For purposes hereof, information shall not be deemed "confidential" or
"proprietary" to the extent that it (i) is a matter of common knowledge or of
public record, or within the public domain (other than as a result of any breach
hereof by Officer); (ii) is generally known throughout the industry or was
otherwise acquired from other legitimate sources; or (iii) is required to be
disclosed by law or by order of any court or governmental
authority.

      

      6.3. ln
consideration of Lakeland purchasing the stock of the Company on the date hereof
and the Supplementary Purchase Price (pursuant to the definition set forth in
the Share Purchase Agreement) to be paid in the future, and the entering into
this Agreement with Officer and the covenants and agreements of Lakeland and the
Company, pursuant to this Agreement, Officer agrees to abide by all of the
covenants herein.

      

      7.   TERM
AND TERMINATION

      

      7.1. This
Agreement shall be valid and in force from the date hereof and until December
31st, 2011
(“Term”), renewable upon agreement in writing by the Parties.

      
        
           

        

        
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      7.2. Upon
termination of this Agreement, Officer shall immediately return any documents
and materials he/she may have in his/her possession or any other documents or
things made available or supplied under this Agreement and all copies thereof,
upon request of Lakeland or the Company and he/she shall immediately cease to
act on behalf of the Company, as well as to represent the Company before
third-parties. Officer further agrees to execute any and all documents required
to achieve such effect.

      

      7.3.
Notwithstanding the provisions above, this Agreement may be freely and
immediately terminated for cause by the Company, if so instructed by Lakeland, without any indemnification,
compensation or remuneration to Officer, except for the payment of any
outstanding Remuneration or reimbursement of expenses or fringe benefits, as
well as for the Supplementary Purchase Price, if due in accordance with
provisions set forth in the Share Purchase Agreement, in case of
either:

      

      (i)
violation by Officer of the obligations undertaken in this
Agreement;

      

      (ii) Officer becomes, according to Brazilian Law, when
applicable, mentally or physically incapable to perform his/her duties, as set
forth herein or upon death of
Officer;

      

      (iii)
violation by Officer of the Company’s or Business’ policies or rules, or willful
misconduct by Officer or refusal to follow the lawful and reasonable directives
of Lakeland;

      

      (iv)
commission by Officer of any act, action, or omission attributed directly to
Officer, which gives rise to termination with cause according to the Brazilian
labor laws; and

      

      (v)
commission of any act, action, or omission attributed directly to Officer, which
constitutes a reason for dismissal or liability of executive officers, including
any violation of applicable law or the Company’s Articles of Association, or the
commission of any fraud, dishonesty or other unethical acts.

      

      7.4. The
Parties hereby agree that in the event of termination of this Agreement, the
obligations of the Officer under Section 6 above shall survive.

      

      7.5.
Officer may terminate this Agreement for cause in case the Company is in breach
of its obligation to pay the Remuneration in accordance with Section 2.1 above
and fails to cure such breach within thirty (30) days of the receipt of written
notice from Officer demanding that such breach to be cured.

      

      8.   PENALTIES

      
        
           

        

        
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      8.1. Each
of the Parties further agrees that, in the event of a breach of or a default by
Officer of obligations set forth in Section 6, the Company shall be entitled to
(i) specific performance to enjoin any breach, or the continuation of any
breach, of the provisions of Section 6 and (ii) a punitive penalty (multa punitiva
não-compensatória) for each violation individually considered in the
amount of R$500,000.00 (five hundred thousand Reais).

      

      8.2. In
case of termination of this Agreement by the Company without cause, Officer
shall be entitled to receive an amount equivalent to the sum of the Remuneration
he/she would have received had this Agreement not been terminated early by the
Company and Section 2.06, “b” of the Share Purchase Agreement executed on May
2nd,
2008 shall apply as the case may be.

      

      9.   NOTICES

      

      9.1. All
notices or communications between the Parties as resulting from this Agreement
shall be sent in writing, by express international mail, fax or e-mail with
acknowledgement of receipt, to the following addresses and addressees, and shall
be deemed duly given upon receipt by the addressee, as proved by the
sender:

      

      If to
Lakeland and the Company:

      

      707-7
Koehler Avenue, Ronkonkoma, N.Y. 11779, USA

      Attention
to: Mr. Christopher J. Ryan and Gary Pokrassa

      Fax:
631-981-9751

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

      

      If to
Officer:

      

      Condominio Encontro das Águas, Quadra
I, Lote 39, 42700-000

      Lauro de
Freitas, BA, Brazil

      Attention
to Mr. Miguel Antonio dos Guimarães Bastos

      Fax: 55
71 3390-3001

      E-mail:
mgb@qualytextil.com.br

       

      10.
GENERAL PROVISIONS

      

      10.1. It
is acknowledged, understood and agreed that the restrictions contained in this
Agreement are (a) made for good, valuable and adequate consideration received by
Officer and (b) are reasonable and necessary, in terms of the time, geographic
scope and nature of the restrictions, for the protection of Lakeland and the
Company’s business and goodwill thereof. It is intended that said provisions be
fully severable and that, in the event that any of

      
        
           

        

        
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      the
foregoing restrictions, or any portion of the foregoing restrictions, shall be
deemed contrary to law, invalid or unenforceable in any respect by any court or
tribunal of competent jurisdiction, then such restrictions shall be deemed to be
amended, modified and reduced in scope and effect, as to duration, geographic
area or in any other relevant respect, only to that extent necessary to render
same valid and enforceable, and any other of the foregoing restrictions shall be
unaffected and shall remain in full force and effect.

      

      10.2.
This Agreement shall be binding upon, and shall inure to the benefit of each of
the Parties and their respective successors and assignees.

      

      10.3. No
modification or waiver of any provision of this Agreement shall be valid unless
it is in writing and signed by the party against whom it is sought to be
enforced.  No waiver at any time of any provision of this Agreement
shall be deemed a waiver of any other provision of this Agreement at that time
or a waiver of that or any other provision at any other time.

      

      10.4.
This Agreement, its rights and obligations hereunder may not be assigned or
transferred in whole or in part to any party without the prior and express
written authorization of the Company or Lakeland. Officer may not subcontract
any of the managing powers, services and attributions given to Officer to any
party without the prior and express written authorization of the Company and
Lakeland.

      

      10.5. The
captions and paragraph headings used in this Agreement are for convenience only,
and shall not affect the construction or interpretation of this Agreement or any
of the provisions hereof.

      

      11.    APPLICABLE
LAW AND ARBITRATION

      

      11.1. Any
dispute arising between the Parties in connection with this Agreement, its
interpretation, validity, performance, enforceability, breach or termination,
shall be settled in an amicable way by the Parties by direct negotiations held
in good faith for a term not exceeding 30 (thirty) calendar days. If, upon
expiration of the 30-days period, the Parties have not reached an amicable
settlement, the dispute must be submitted to the decision of an arbitration
panel and shall be finally settled under the rules of Arbitration of the Chamber
of Commerce Brasil-Canadá (“CCBC”) by 3 (three) arbitrators appointed in
accordance with said rules. Language of the proceeding shall be English. Place
of arbitration and the issuance of the award shall be the City of São Paulo,
State of São Paulo, Brazil. The claims and disputes taken before the arbitration
proceeds shall be governed by Brazilian law, which will also be applicable to
solve any controversy regarding this arbitration Article. Notwithstanding the
arbitration provisions above, the Parties hereto shall have the right to go to
court in the County of São

      
        
           

        

        
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      Paulo in
order to (i) obtain injunctive relief or (ii) to enforce the submission of the
other Party to the arbitration proceeding.

      

      IN WITNESS WHEREOF, the
Parties have caused this Agreement to be executed, in two (2) copies of equal
meaning and form, in the presence of two (2) witnesses.

      

      São
Paulo,13th  May,
2008.

       

       

      
      

      
        	 
      	 
      	 
      
	
                Qualytextil
      S.A.

              	 
      
	
                By:

              	
                /s/ Miguel Antonio dos
      Guimarães Bastos

              	 
      
	
                Name:

              	
                Miguel
      Antonio dos Guimarães Bastos

              	 
      
	
                Title:

              	
                CFO

              	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                Lakeland
      Industries, Inc.

              	 
      
	
                By:

              	
                /s/
      Gary A. Pokrassa

              	 
      
	
                Name:

              	
                Gary
      A. Pokrassa

              	 
      
	
                Title:

              	
                CFO

              	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                Lakeland
      do Brasil Empreendimentos e Participações Ltda.

              	 
      
	
                By:

              	
                /s/
      Jose Tavares Lucena

              	 
      
	
                Name:

              	
                Jose
      Tavares Lucena

              	 
      
	
                Title:

              	
                Administrator

              	 
      

      

      

      WITNESSES:

      

      
        	
                 1.

              	 
      	 
      	
                2.

              	 
      
	 
      	
                Name:

              	 
      	 
      	
                Name:

              
	 
      	
                ID:

              	 
      	 
      	
                ID:

              
	 
      	
                CPF/MF:

              	 
      	 
      	
                CPF/MF:

              

      

      
 

    

    9Unassociated Document

    
      

    

    
      Exhibit
10.9

      

      SECOND
AMENDED AND RESTATED PROMISSORY NOTE

      

      

      $30,000,000.00

      May 13,
2008

      

      Lakeland
Industries, Inc.

      Attn:
Christopher J. Ryan, Chief Executive Officer and

      Gary
Pokrassa, Chief Financial Officer

      701-07
Koehler Avenue

      Ronkonkoma,
New York  11779

      (Hereinafter
referred to as "Borrower")

      

      Wachovia
Bank, National Association

      12 East
49th
Street, 43rd Floor

      New York,
New York  10017

      (Hereinafter
referred to as “Bank")

      

      Borrower
promises to pay to the order of Bank, in lawful money of the United States of
America, at its office indicated above or wherever else Bank may specify, the
sum of Thirty Million and No/100 Dollars ($30,000,000.00) or such sum as may be
advanced and outstanding from time to time, with interest on the unpaid
principal balance at the rate and on the terms provided in this Promissory Note
(including all renewals, extensions or modifications hereof, this
"Note").

      

      AMENDMENT AND
RESTATEMENT.  This Note amends and restates that certain
Promissory Note dated July 7, 2005 by Borrower in favor of Bank in the original
principal amount of up to $25,000,000.00 (the “Original Note”), as amended by
that certain Amended and Restated Promissory Note dated September 1, 2005 by
Borrower in favor of Bank in the original principal amount of up to
$25,000,000.00 (collectively with the Original Note, the “Replaced Note), as
amended by a Modification To Note and Loan Agreement and Reaffirmation of
Guaranty (the “First Modification Agreement”) dated September 1,
2005,  as further modified by a Second Modification To Note and Loan
Agreement and Reaffirmation of Guaranty dated December 7, 2007 (the “Second
Modification Agreement”), and as further modified by a Third Modification To
Note and Loan Agreement and Reaffirmation of Guaranty of even date herewith
(“Third Modification Agreement” and collectively with the First Modification and
the Second Modification, the “Modification Agreements”).  Borrower
intends, and Bank, by its acceptance of this Note agrees, that the indebtedness
previously evidenced by the Replaced Note remains outstanding, but such
indebtedness shall henceforth be evidenced by this Note, and the terms and
conditions concerning Borrower's obligation to repay said indebtedness and
interest thereon shall be governed by the provisions of this
Note.  Neither the execution, delivery and acceptance of this Note nor
any of the terms and provisions set forth in this Note shall be deemed or
construed to effect a novation or to cause all or any part of the aforesaid
indebtedness, or the liability of any person with respect thereto or any
security therefor, to be, or to be deemed to have been, paid, satisfied or
discharged.  This Note is the Note, as referenced in the Loan
Agreement by and between Bank and Borrower dated July 7, 2005, as modified
by the Modification Agreements, and in all other Loan Documents, as that term is
defined in such Loan Agreement.

      

      LOAN
AGREEMENT.  This Note is subject to the provisions of that
certain Loan Agreement between Bank and Borrower dated July 7, 2005, as modified
from time to time (the “Loan Agreement”).

      

      LINE OF
CREDIT.  Borrower may borrow, repay
and reborrow, and, upon the request of Borrower, Bank shall advance and
readvance under this
Note from time to time
until the maturity hereof (each an "Advance" and together the "Advances"), so
long as the total principal balance outstanding under this

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      Note at
any one time does not exceed the principal amount stated on the face of
this Note,
subject to the limitations described in any loan agreement to which this Note is
subject.  Bank's obligation to make Advances under this Note
shall terminate if Borrower is in Default. As of the date of each proposed
Advance, Borrower shall be deemed to represent that each representation made in
the Loan Documents is true as of such date.

      

      If
Borrower subscribes to Bank's cash management services and such services are
applicable to this line of credit, the terms of such service shall control the
manner in which funds are transferred between the applicable demand deposit
account and the line of credit for credit or debit to the line of
credit.

      

      USE OF
PROCEEDS.  Borrower shall use the proceeds of the loan(s)
evidenced by this Note for the commercial purposes of Borrower, as
follows:  for general corporate purposes including but not limited to
Borrower's working capital requirements.

      

      SECURITY.  Borrower has
granted Bank a security interest in the collateral described in the Loan
Documents, including, but not limited to, personal property collateral described
in that certain Security Agreement of even date herewith.

      

      INTEREST
RATE DEFINITIONS.

      

      LIBOR-Based
Rate.  “LIBOR-Based Rate” means each of 1-month LIBOR plus the
Applicable Margin, as defined below, 3-month LIBOR plus the Applicable Margin,
as defined below, and 6-month LIBOR plus the Applicable Margin, as defined
below.

      

      LIBOR.  "LIBOR"
means, with respect to each Interest Period, the rate for U.S. dollar deposits
with a maturity equal to the number of months specified above, as reported on
Telerate page 3750 as of 11:00 a.m., London time, on the second London business
day before such Interest Period begins (or if not so reported,
then as determined by Bank from another recognized source or interbank
quotation).

      

      LIBOR Market Index-Based
Rate.  LIBOR Market Index Rate plus the Applicable Margin, as
defined below, as LIBOR Market Index Rate may change from day to
day.

      

      LIBOR Market Index
Rate.  "LIBOR Market Index Rate", for any day, means the rate
for 1 month U.S. dollar deposits as reported on Telerate page 3750 as of 11:00
a.m., London time, on such day, or if such day is not a London business day,
then the immediately preceding London business day (or if not so reported, then
as determined by Bank from another recognized source or interbank
quotation).

      

      Interest
Period.  “Interest Period” means, in respect of each
LIBOR-Based Rate Advance, each period commencing on the last day of the
immediately preceding Interest Period and ending on the same day of the month
that interest in respect of such Advance is due 1 month, 3 months or 6 months
thereafter, as appropriate for the then applicable interest rate; provided (i)
the first Interest Period shall commence on the date of such Advance and end on
the first day thereafter that interest in respect of such Advance is due, (ii)
any Interest Period that ends in a month for which there is no day which
numerically corresponds to the last day of the immediately preceding Interest
Period shall end on the last day of the month and (iii) any Interest Period that
would otherwise extend past the maturity date of this Note shall end on the
maturity date of this Note.

      

      Applicable
Margin.  "Applicable Margin” shall mean the applicable
percentage as set forth in the table below, based on Borrower’s Funded Debt to
EBITDA Ratio, as that covenant is defined in the Loan Agreement.  The
Applicable Margin shall be determined and adjusted quarterly on the date (each a
“Calculation Date”) 10 business days after the date on which Bank receives
Borrower’s periodic and annual financial statements, as required by the Loan
Agreement. The initial Applicable Margin shall be based on Pricing Level
1, as set forth in the table below, and shall remain at Pricing Level 1 until
the first Calculation Date occurring after the date hereof, and thereafter the
Pricing Level shall be determined by reference to Borrower’s Funded Debt to
EBITDA Ratio of
Borrower as of the last day of the most recently ended fiscal year or quarterly
period of Borrower preceding the applicable Calculation
Date.  If Borrower

      
        
           

        

        
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      fails to
provide interim or annual financial statements beyond any applicable cure period
as required by the Loan Agreement for the most recently ended period preceding
the applicable Calculation Date, the Applicable Margin from such Calculation
Date shall be based on Pricing Level 4 or, at Bank=s
option, this Note shall bear interest at the Default Rate until such time as
that and all other Defaults are cured to Bank=s
satisfaction.  Each adjustment in the Applicable Margin shall apply to
all then outstanding principal under this Note, until the next adjustment of the
Applicable Margin.

      

      
        	
                Pricing
      Levels

              	
                Ratio
      of Funded Debt to EBITDA

              	
                Applicable
      Margin

              
	
                Pricing
      Level 1

              	
                Less
      than 1.00:1.00

              	
                0.60%

              
	
                Pricing
      Level 2

              	
                Less
      than 2.00:1.00 but greater than 1.00:1.00

              	
                0.70%

              
	
                Pricing
      Level 3

              	
                Less
      than 2.50:1:00 but greater than 2:00:1.00

              	
                0.80%

              
	
                Pricing
      Level 4

              	
                Equal
      to or greater than 2.50:1.00

              	
                1.00%

              

      

      

      INTEREST
RATE SELECTION AND ADJUSTMENT.

      

      Interest Rate
Options.  Interest shall accrue on the unpaid principal balance
of each Advance from the date of such Advance at a rate per annum equal to
a LIBOR-Based Rate or the LIBOR Market Index-Based Rate, as selected by Borrower
in accordance herewith (each, an "Interest Rate").  Interest for each
Interest Period shall accrue each day during such Interest Period, commencing on
and including the first day to but excluding the last day.  There
shall be no more than one Interest Rate for an Advance in effect at any
time.

      

      Indemnification.  Borrower
shall indemnify Bank against Bank's loss or expense as a consequence of (a)
Borrower's failure to make any payment when due on a loan or Advance bearing
interest at a LIBOR-Based Rate, (b) any payment, prepayment or conversion of any
loan or Advance bearing interest at a LIBOR-Based Rate on a day other than the
last day of the Interest Period, or (c) any failure to make a borrowing or
conversion after giving notice thereof ("Indemnified Loss or
Expense").  The amount of such Indemnified Loss or Expense shall be
determined by Bank based upon the assumption that Bank funded 100% of that
portion of the loan in the London interbank market.

      

      Default Rate.  In
addition to all other rights contained in this Note, if a Default occurs, and as
long as a Default continues, (a) Borrower shall no longer have the option
to request a LIBOR-Based Rate or the LIBOR Market Index-Based Rate and
(b) all outstanding Obligations, other than Obligations under any swap
agreements (as defined in 11 U.S.C. § 101, as in effect from time to time)
between Borrower and Bank or its affiliates, shall bear interest at the Interest
Rate (as in effect on the date of Default) plus 3% ("Default
Rate").  The Default Rate shall also apply from acceleration until the
Obligations or any judgment thereon is paid in full.

      

      Notice and Manner of Borrowing and
Rate Conversion.  Borrower shall give Bank irrevocable
telephonic notice of each proposed Advance or rate conversion not later
than 11:00 a.m. local time at the office of Bank first shown above (a) on the
same business day as each proposed Advance at or rate conversion to the
LIBOR Market Index-Based Rate and (b) at least 2 business days before each
proposed Advance at or rate conversion to a LIBOR-Based Rate.  Each
such notice shall specify (i) the date of such Advance or rate conversion, which
shall be a business day and, in the case of a conversion from a LIBOR-Based
Rate Advance, shall be the last day of an Interest Period, (ii) the amount of
each Advance or the amount to be converted, (iii) the
Interest Rate selected by Borrower, and (iv) except for the LIBOR Market
Index-Based Rate, the Interest Period applicable thereto, which period must
correspond to one of the Interest Rate options.  Notices received
after 11:00 a.m. local time at the office of Bank first shown above shall be
deemed received on the next business day.

      
        
           

        

        
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3

          
            

          

        

        
           

        

      

      INTEREST AND FEE(S) COMPUTATION
(ACTUAL/360).  Interest and fees, if any, shall be computed on
the basis of a 360-day year for the actual number of days in the applicable
period ("Actual/360 Computation").  The Actual/360 Computation
determines the annual effective yield by taking the stated (nominal) rate for a
year's period and then dividing said rate by 360 to determine the daily periodic
rate to be applied for each day in the applicable period.  Application
of the Actual/360 Computation produces an annualized effective interest rate
exceeding the nominal rate.

      

      REPAYMENT
TERMS.  This Note shall be due and payable in consecutive
monthly payments of accrued interest only, commencing on June 2, 2008, and
continuing on the same day of each month thereafter until fully
paid.  In any event, all principal and accrued interest shall be due
and payable on July 7, 2010.  This Note may be prepaid at any time
without the payment of any prepayment fee, except (i) as set forth in the
paragraph above entitled “INDEMNIFICATION” and (ii) with respect to any fees,
expenses or other obligations under any swap agreements (as defined in 11 U.S.C.
§ 101, as in effect from time to time).

      

      AUTOMATIC DEBIT OF CHECKING ACCOUNT
FOR LOAN PAYMENT.  Borrower authorizes Bank to debit demand
deposit account number 2000018590584 or any other account with Bank (routing number
031201467) designated in writing by Borrower, beginning June 2, 2008 for any
payments due under this Note.  Borrower further certifies that
Borrower holds legitimate ownership of this account and preauthorizes this
periodic debit as part of its right under said ownership.

      

      AVAILABILITY FEE. 
Borrower shall pay to Bank quarterly an availability fee equal to 0.10%
per annum on the difference between (i) (a) the face amount of the Replaced Note
prior to the date hereof, and (b) the face amount of this Note commencing with
the date hereof, and (ii) the outstanding principal balance of the Replaced Note
or this Note, as the case may be, for each day during the preceding calendar
quarter or portion thereof, commencing on June 1, 2008 and
continuing on the same day of each quarter thereafter, with a final payment due
and payable on the date that all principal and accrued interest is paid in
full. 

      

      APPLICATION OF
PAYMENTS.  Monies received by Bank from any source for
application toward payment of the Obligations shall be applied to accrued
interest and then to principal.  If a Default occurs, monies may be
applied to the Obligations in any manner or order deemed appropriate by
Bank.

      

      If any
payment received by Bank under this Note or other Loan Documents is rescinded,
avoided or for any reason returned by Bank because of any adverse claim or
threatened action, the returned payment shall remain payable as an obligation of
all persons liable under this Note or other Loan Documents as though such
payment had not been made.

      

      DEFINITIONS.  Loan
Documents.  The term "Loan Documents", as used in this Note and
the other Loan Documents, refers to all documents executed in connection with or
related to the loan evidenced by this Note and any prior notes which evidence
all or any portion of the loan evidenced by this Note, and any letters of credit
issued pursuant to any loan agreement to which this Note is subject, any
applications for such letters of credit and any other documents executed in
connection therewith or related thereto, and may include,
without limitation, a commitment letter that survives closing, a loan agreement,
this Note, guaranty agreements, security agreements, security instruments,
financing statements, mortgage instruments, any renewals or modifications,
whenever any of the foregoing are executed, but does not include swap agreements
(as defined in 11 U.S.C. § 101, as in effect from time to
time).  Obligations.  The
term "Obligations", as used in this Note and the other Loan Documents, refers to
any and all indebtedness and other obligations under this Note, all other
obligations under any other Loan Document(s), and all obligations under any swap
agreements (as defined in 11 U.S.C. § 101, as in effect from time to
time) between Borrower and Bank, or its affiliates, whenever
executed.  Certain
Other Terms.  All terms that are used but not otherwise defined
in any of the Loan Documents shall have the definitions provided in the Uniform
Commercial Code.

      

      LATE CHARGE.  If any
payments are not timely made, Borrower shall also pay to Bank a late charge
equal to 5% of each payment past due for 10 or more days.  This late
charge shall not apply to payments

      
        
           

        

        
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      due at
maturity or by acceleration hereof, unless such late payment is in an amount not
greater than the highest periodic payment due hereunder.

      

      Acceptance
by Bank of any late payment without an accompanying late charge shall not be
deemed a waiver of Bank's right to collect such late charge or to collect a late
charge for any subsequent late payment received.

      

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

      

      USURY.  If at any
time the effective interest rate under this Note would, but for this paragraph,
exceed the maximum lawful rate, the effective interest rate under this Note
shall be the maximum lawful rate, and any amount received by Bank in excess of
such rate shall be applied to principal and then to fees and expenses, or, if no
such amounts are owing, returned to Borrower.

      

      DEFAULT.  If any of
the following occurs, a default ("Default") under this Note shall
exist:  Nonpayment.  The
failure of timely payment of the Obligations or Default with respect to any
financial covenant set forth in the Loan Agreement.  Nonperformance.  The
failure of timely performance of the Obligations or Default under this Note or
any other Loan Documents for more than thirty (30) days after Borrower has
actual or constructive notice of such failure of timely performance or Default;
provided that such thirty (30) day period shall not apply with respect to the
failure of timely payment of the Obligations or Default with respect to any
financial covenant as set forth above.  False Warranty.  A
warranty or representation made or deemed made in the Loan Documents or
furnished Bank in connection with the loan evidenced by this Note proves
materially false, or if of a continuing nature, becomes materially
false.  Cross
Default.  At Bank's option, any default in payment in excess of
$100,000.00 or performance of any obligation under any other loans, contracts or
agreements of Borrower, any Subsidiary or Affiliate of Borrower, any general
partner of or the holder(s) of the majority ownership interests of Borrower with
Bank or its affiliates ("Affiliate" shall have the meaning as defined in 11
U.S.C. § 101, as in effect from time to time, except that the term "Borrower"
shall be substituted for the term "Debtor" therein; "Subsidiary" shall mean any
business in which Borrower holds, directly or indirectly, a controlling
interest).  Cessation;
Bankruptcy.  The death of, appointment of a guardian for,
dissolution of, termination of existence of, appointment of a receiver for,
assignment for the benefit of creditors of, or commencement of any bankruptcy or
insolvency proceeding by or against Borrower, its Subsidiaries or Affiliates, if
any, or any general partner of or the holder(s) of the majority ownership
interests of Borrower, or any party to the Loan Documents.  Material Capital
Structure or Business Alteration.  Except as set forth in the
Loan Agreement with respect to Permitted Acquisitions, as that term is defined
therein, without prior written consent of Bank, which consent shall not be
unreasonably withheld, (i) a material alteration in the kind or type of
Borrower's business or that of Borrower's Subsidiaries or Affiliates, if any;
(ii) the sale of substantially all of the business or assets of Borrower, any of
Borrower's Subsidiaries or Affiliates or any guarantor, or a material portion
(10% or more) of such business or assets if such a sale is outside the ordinary
course of business of Borrower, or any of Borrower's Subsidiaries or Affiliates
or any guarantor, or more than 50% of the outstanding stock or voting power of
or in any such entity in a single transaction or a series of transactions; (iii)
the acquisition of substantially all of the business or assets or more than 50%
of the outstanding stock or voting power of any other entity; or (iv) should any
Borrower or any of Borrower's Subsidiaries or Affiliates or any guarantor enter
into any merger or consolidation.  Material Adverse
Change.  Bank determines in good faith, in its sole discretion,
that the prospects for payment or performance of the Obligations are impaired or
there has occurred a material adverse change in the business or prospects of
Borrower, financial or otherwise.

      

      REMEDIES UPON
DEFAULT.  If a Default occurs under this Note or any Loan
Documents, Bank may at any time thereafter, take the following actions: 
Bank
Lien.  Foreclose its security interest or lien against
Borrower's accounts without notice.  Acceleration Upon
Default.  Accelerate the maturity of this Note and, at Bank’s
option, any or all other Obligations, other than Obligations under any swap
agreements (as

      
        
           

        

        
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      defined
in 11 U.S.C. § 101, as in effect from time to time) between Borrower and Bank,
or its affiliates, which shall be due in accordance with and governed by the
provisions of said swap agreements; whereupon this Note and the accelerated
Obligations shall be immediately due and payable; provided, however, if the
Default is based upon a bankruptcy or insolvency proceeding commenced by or
against Borrower or any guarantor or endorser of this Note, all Obligations
(other than Obligations under any swap agreement as referenced above) shall
automatically and immediately be due and payable.  Cumulative.  Exercise
any rights and remedies as provided under the Note and other Loan Documents, or
as provided by law or equity.

      

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

      

      WAIVERS AND
AMENDMENTS.  No waivers, amendments or modifications of this
Note and other Loan Documents shall be valid unless in writing and signed by an
officer of Bank.  No waiver by Bank of any Default shall operate as a
waiver of any other Default or the same Default on a future
occasion.  Neither the failure nor any delay on the part of Bank in
exercising any right, power, or remedy under this Note and other Loan Documents
shall operate as a waiver thereof, nor shall a single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or remedy.

      

      Except to
the extent otherwise provided by the Loan Documents or prohibited by law, each
Borrower and each other person liable under this Note waives presentment,
protest, notice of dishonor, demand for payment, notice of intention to
accelerate maturity, notice of acceleration of maturity, and notice of
sale.  Further, each agrees that Bank may (i) extend, modify or renew
this Note or make a novation of the loan evidenced by this Note, and/or (ii)
grant releases, compromises or indulgences with respect to any collateral
securing this Note, or with respect to any Borrower or other person liable under
this Note or any other Loan Documents, all without notice to or consent of each
Borrower and other such person, and without affecting the liability of each
Borrower and other such person; provided, Bank may not extend, modify or renew
this Note or make a novation of the loan evidenced by this Note without the
consent of the Borrower, or if there is more than one Borrower, without the
consent of at least one Borrower; and further provided, if there is more than
one Borrower, Bank may not enter into a modification of this Note which
increases the burdens of a Borrower without the consent of that
Borrower.

      

      MISCELLANEOUS
PROVISIONS.  Assignment.  This Note and the other
Loan Documents shall inure to the benefit of and be binding upon the parties and
their respective heirs, legal representatives, successors and
assigns.  Bank's interests in and rights under this Note and the other
Loan Documents are freely assignable, in whole or in part, by
Bank.  In addition, nothing in this Note or any of the other Loan
Documents shall prohibit Bank from pledging or assigning this Note or any of the
other Loan Documents or any interest therein to any Federal Reserve
Bank.  Borrower shall not assign its rights and interest hereunder
without the prior written consent of Bank, and any attempt by Borrower to assign
without Bank's prior written consent is null and void.  Any assignment
shall not release Borrower from the Obligations.  Applicable Law; Conflict Between
Documents.  This Note and, unless otherwise provided in any
other Loan Document, the other Loan Documents shall be governed by and construed
under the laws of the state named in Bank's address on the first page hereof
without regard to that state's conflict of laws principles.  If the
terms of this Note should conflict with the terms of any loan agreement or any
commitment letter that survives closing, the terms of this Note shall
control.  Borrower's
Accounts.  Except as prohibited by law, Borrower grants Bank a
security interest in all of Borrower's accounts with Bank and any of its
affiliates. Swap
Agreements.  All swap agreements (as defined in 11 U.S.C. §
101, as in effect from time to time), if any, between Borrower and Bank or its
affiliates are independent agreements governed by the written provisions of said
swap agreements, which will remain in full force and effect, unaffected by any
repayment, prepayment, acceleration, reduction, increase or change in the terms
of this Note, except as otherwise expressly provided in said written swap
agreements, and any payoff statement from Bank relating to this Note shall not
apply to said swap agreements unless expressly referred to in such payoff
statement.  Jurisdiction.  Borrower
irrevocably agrees to non-exclusive personal jurisdiction in the state named in
Bank's address on the first page hereof.  Severability.  If
any provision of this Note or of the other Loan Documents shall be prohibited or
invalid

      
        
           

        

        
          Page
6

          
            

          

        

        
           

        

      

      under
applicable law, such provision shall be ineffective but only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Note or other such
document.  Notices.  Any
notices to Borrower shall be sufficiently given, if in writing and mailed or
delivered to the Borrower's address shown above or such other address as
provided hereunder, and to Bank, if in writing and mailed or delivered to
Wachovia Bank, National Association, Mail Code VA7628, P. O. Box 13327, Roanoke,
VA  24040 or Wachovia Bank, National Association, Mail Code VA7628, 10
South Jefferson Street, Roanoke, VA  24011 or such other address as
Bank may specify in writing from time to time.  Notices to Bank must
include the mail code.  In the event that Borrower changes Borrower's
address at any time prior to the date the Obligations are paid in full, Borrower
agrees to promptly give written notice of said change of address by registered
or certified mail, return receipt requested, all charges
prepaid.  Plural;
Captions.  All references in the Loan Documents to Borrower,
guarantor, person, document or other nouns of reference mean both the singular
and plural form, as the case may be, and the term "person" shall mean any
individual, person or entity.  The captions contained in the Loan
Documents are inserted for convenience only and shall not affect the meaning or
interpretation of the Loan Documents.  Advances.  Bank may,
in its sole discretion, make other advances which shall be deemed to be
advances under this Note, even though the stated principal amount of this
Note may be exceeded as a result thereof.  Posting of
Payments.  All payments received during normal banking hours
after 2:00 p.m. local time at the office of Bank first shown above shall be
deemed received at the opening of the next banking day.  Joint and Several
Obligations. If there is more than one Borrower, each is jointly and
severally obligated.  Fees and
Taxes.  Borrower shall promptly pay all documentary, intangible
recordation and/or similar taxes on this transaction whether assessed at closing
or arising from time to time.  LIMITATION ON LIABILITY; WAIVER OF
PUNITIVE DAMAGES. EACH OF THE PARTIES HERETO, INCLUDING BANK BY
ACCEPTANCE HEREOF, AGREES THAT IN ANY JUDICIAL, MEDIATION OR ARBITRATION
PROCEEDING OR ANY CLAIM OR CONTROVERSY BETWEEN OR AMONG THEM THAT MAY ARISE OUT
OF OR BE IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY
OTHER AGREEMENT OR DOCUMENT BETWEEN OR AMONG THEM OR THE OBLIGATIONS EVIDENCED
HEREBY OR RELATED HERETO, IN NO EVENT SHALL ANY PARTY HAVE A REMEDY OF, OR BE
LIABLE TO THE OTHER FOR, (1) INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR (2)
PUNITIVE OR EXEMPLARY DAMAGES.   EACH OF THE PARTIES HEREBY
EXPRESSLY WAIVES ANY RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY MAY
HAVE OR WHICH MAY ARISE IN THE FUTURE IN CONNECTION WITH ANY SUCH PROCEEDING,
CLAIM OR CONTROVERSY, WHETHER THE SAME IS RESOLVED BY ARBITRATION, MEDIATION,
JUDICIALLY OR OTHERWISE.  Patriot Act
Notice.  To help fight the funding of terrorism and money
laundering activities, Federal law requires all financial institutions to
obtain, verify, and record information that identifies each person who opens an
account.  For purposes of this section, account shall be understood to
include loan accounts.  FINAL
AGREEMENT.  This Note and the other
Loan Documents represent the final agreement between the parties and may not be
contradicted by evidence of prior, contemporaneous or subsequent oral agreements
of the parties.  There are no unwritten oral agreements between the
parties.

      

      WAIVER OF JURY
TRIAL.  TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF BORROWER BY EXECUTION HEREOF AND
BANK BY ACCEPTANCE HEREOF, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHT EACH MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE, THE LOAN DOCUMENTS OR ANY
AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION WITH THIS NOTE, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
ANY PARTY WITH RESPECT HERETO.  THIS PROVISION IS A MATERIAL
INDUCEMENT TO BANK TO ACCEPT THIS NOTE.  EACH OF THE PARTIES AGREES
THAT THE TERMS HEREOF SHALL SUPERSEDE AND REPLACE ANY PRIOR AGREEMENT RELATED TO
ARBITRATION OF DISPUTES BETWEEN THE PARTIES CONTAINED IN ANY LOAN DOCUMENT OR
ANY OTHER DOCUMENT OR AGREEMENT HERETOFORE EXECUTED IN CONNECTION WITH, RELATED
TO OR BEING REPLACED, SUPPLEMENTED, EXTENDED OR MODIFIED BY, THIS
NOTE.

      

      IN WITNESS WHEREOF, Borrower,
on the day and year first above written, has caused this Note to be executed
under seal.

       

      
        
           

        

        
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7

          
            

          

        

        
           

        

      

       

      
        	 
      	Lakeland
      Industries, Inc.
	 
      	 	 
      
	 
      	 	 
      
	 
      	 	 
      
	 
      	 By:	
                /s/ Gary A.
      Pokrassa

              
	 
      	 	
                Gary A. Pokrassa,
      Chief Financial Officer

              

      

      
 

    

    Page 8

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