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                                                                Exhibit 10.1


                                    AGREEMENT

         This agreement (the "AGREEMENT") dated as of May 24, 2005, is entered
into by, between and among, Blair Corporation, a Delaware corporation (the
"COMPANY") and Loeb Arbitrage Fund, a New York limited partnership, Loeb
Arbitrage Management, a Delaware corporation, Loeb Partners Corporation, a
Delaware corporation, Loeb Holding Corporation, a Maryland corporation, Loeb
Offshore Fund, Ltd., a Cayman Islands exempted company, Loeb Offshore
Management, LLC, a Delaware limited liability company, Loeb Marathon Fund, a
Delaware limited partnership, Loeb Marathon Offshore Fund, Ltd., a Cayman
Islands exempted company (each a member of, and who shall collectively be
referred to as, "LOEB" and together with the Company, the "PARTIES").



                                    RECITALS


         WHEREAS, it is the Company's present intention to conduct a tender
offer for the purchase of its common stock to commence within approximately 60
days provided it can reach certain agreements with Loeb regarding Loeb's sale of
Company's common stock;

         WHEREAS, the Parties have negotiated to enter in this Agreement to
provide for the orderly disposition of Loeb's holdings of the Company's common
stock and the orderly governance of the Company going forward;

         NOW, THEREFORE, intending to be legally bound, and for, and in
consideration of, the terms, conditions and mutual obligations set forth herein,
including the performance by each of the Parties of their respective mutual and
independent covenants, representations and obligations as set forth herein, and
understanding the meaning and legal effect of entering into this Agreement, the
Parties hereto stipulate, agree, warrant and represent as follows:



SECTION 1.  COMPANY TENDER OFFER AND STOCK DISPOSITION.

    (a)  The Company agrees that it shall conduct a tender offer for the
         purchase of its common stock having an aggregate value of $185 million
         at a per share price of $42.00 to be commenced on or before August 1,
         2005 (the "TENDER OFFER").

    (b)  The Company confirms that it has received a commitment from the Board
         of Directors and senior management of the Company that they will not
         tender more than 25% of their holdings of the Company's common stock in
         the Tender Offer.

    (c)  Loeb agrees that it will, and will ensure that its affiliates or
         associates shall, tender any and all shares of the Company's common
         stock , par value $.01, that it owns, directly or indirectly,
         beneficially or otherwise (the "LOEB'S COMMON STOCK"), in the Tender
         Offer.

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    (d)  Loeb agrees that it shall not dispose of Loeb's Common Stock in a block
         sale(s) (for the purpose of this Agreement "block sale" shall mean, a
         public or private sale, in a single or series of coordinated
         transaction(s), of a block of 100,000 or more shares of Company common
         stock) between the date first written above and the date upon which
         Loeb tenders Loeb's Common Stock in the Tender Offer. Loeb further
         agrees that following the close of the Tender Offer, to the extent it
         has identified, or been presented with, a third party that is willing
         and able to acquire, in a block sale(s), any proportion of, or all of,
         Loeb's Common Stock, the Company shall have a right of first refusal
         with respect thereto.

    (e)  Loeb agrees that it shall not acquire any additional shares of the
         Company's common stock, directly or indirectly, beneficially or
         otherwise, for a period of 5 years commencing as of the date first
         written above (the "RESTRICTION PERIOD").


SECTION 2. STANDSTILL PROVISIONS. Loeb agrees that during the Restriction Period
neither it nor any affiliate nor associate shall:

    (a)  make any statement, proposal or offer, whether written or oral, to the
         Company's Board of Directors or to any director, officer or agent of
         the Company, or make any public announcement, proposal or offer with
         respect to an acquisition, merger (or other business combination),
         sale, transfer of the Company's assets, recapitalization, dividend,
         share repurchase, liquidation or other extraordinary corporate
         transaction with the Company or any other transaction that could result
         in a change of control of the Company; and Loeb commits not to solicit
         or encourage any other person to make such an announcement, statement,
         proposal or offer, or to take any action that might require the Company
         to make a public announcement regarding the possibility of any such
         transaction or similar transaction, and commits not to advise, assist
         or encourage any other person in connection with any of the foregoing.

    (b)  initiate, encourage, participate in or engage in any proxy solicitation
         or contest or otherwise publicly oppose the Board of Directors of the
         Company.

    (c)  initiate, encourage or propose any shareholder proposal regarding the
         Company.

    (d)  disclose to any third party, or make any filing under the Securities
         Exchange Act of 1934, as amended, (the "EXCHANGE ACT") including,
         without limitation, under Section 13(d) thereof, disclosing, any
         intention, plan or arrangement inconsistent with any term or provision
         of this Agreement.

    (e)  join, or in any way participate, in a "group" as that term is defined
         in the Exchange Act in connection with any action, plan, arrangement or
         objective prohibited by or inconsistent with any term or provision of
         this Agreement.

    (f)  seek to control the management, policies, affairs, actions, or business
         of the Company, including, without limitation, by taking any action to
         seek to obtain representation on the Company's Board of Directors.

    (g)  have any communications with any of the Company's other shareholders,
         directors, officers, associates, employees, customers or suppliers
         regarding matters relating to


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         the Company that could reasonably be expected to, or with an intention
         to, interfere with or otherwise adversely affect the operation of the
         Company and/or the Company's relationship with any of the
         aforementioned constituents of the Company.


SECTION 3. VOTING. Loeb agrees that it shall vote any and all shares of Loeb's
Common Stock in favor of the position advocated by a majority of the Company's
Board of Directors until such time as Loeb has completed the disposition of
Loeb's Common Stock in accordance with the terms and provisions of this
Agreement.


SECTION 4.  REPRESENTATIONS, WARRANTIES AND COVENANTS.

    (a)  Representations of the Company. The Company represents, warrants and
         covenants to Loeb that: (i) the Company has full legal right, power and
         authority to enter into and perform this Agreement; (ii) the execution
         and delivery of this Agreement by the Company and the consummation by
         it of the transactions, terms and conditions contemplated by this
         Agreement have been duly authorized by the Company; (iii) this
         Agreement constitutes a valid, binding and enforceable agreement of the
         Company; and (iv) the Company will use its best efforts to commence the
         Tender Offer within 60 days of the date first written above.

    (b)  Representations of Loeb. Each member of Loeb, jointly and severally,
         represents, warrants and covenants to the Company that: (i) it has the
         full legal right, power and authority to enter into and perform this
         Agreement; (ii) the execution and delivery of this Agreement and the
         consummation of the transactions, terms, conditions, restrictions and
         limitations contemplated by this Agreement have been duly authorized by
         each member of Loeb; (iii) this Agreement constitutes a valid, binding
         and enforceable Agreement of each member of Loeb; (iv) Loeb owns,
         directly or indirectly, beneficially or otherwise, all of the Loeb's
         Common Stock, and except as otherwise indicated to the Company, none of
         Loeb, any member of Loeb or any affiliate or associate thereof owns any
         other Company common stock, directly or indirectly, beneficially or
         otherwise, or any rights or interests in any Company common stock; (v)
         no member of Loeb has any agreement, arrangement or understanding with
         any person including, without limitation, any possible shareholder
         proposal with respect to the Company, with respect to any possible
         solicitation of proxies for any matter with respect to the Company or
         with respect to any matter prohibited by Sections 1, 2 or 3 of this
         Agreement; (vi) it shall, and shall ensure that any and all affiliates,
         associates, directors, officers, partners (general or limited), members
         and principles of each member of Loeb, comply with and fulfill all of
         the obligations and restrictions that apply to Loeb pursuant to this
         Agreement; (vii) it will not request, directly or indirectly, a waiver
         or modification of any provision of this Agreement; and (viii) each
         member of Loeb hereby waives and releases any and all claims against
         the Company, its directors, officers and agents arising under this
         Agreement or otherwise, including, without limitation, any claim to
         terminate or suspend performance of this Agreement other than in
         accordance with Section 5.


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SECTION 5. NULLIFICATION. Either of the Parties to this Agreement may terminate
this Agreement rendering it null, void and of no force or effect, if the Company
fails for any reason to commence the Tender Offer. Notwithstanding the previous
sentence, the Company may not terminate this Agreement, unless it has made a
good faith effort to obtain the necessary financing and make the appropriate
regulatory filings to commence the Tender Offer pursuant to the terms of this
Agreement.

SECTION 6.  MISCELLANEOUS.

    (a)  Specific Performance. The Company and each member of Loeb acknowledge
         and agree that irreparable damage would occur in the event that any
         provision, term, condition, representation, warranty, covenant or
         restriction were not performed or complied with in accordance with
         their specific terms or were otherwise breached. It is accordingly
         agreed that the parties shall be entitled to an injunction or
         injunctions to prevent or cure breaches of the provisions of this
         Agreement and to enforce specifically the terms and provisions hereof,
         this being in addition to any other remedy to which they may be
         entitled by law or equity.

    (b)  Joint and Several Liability. Each member of Loeb shall be jointly and
         severally liable for any breach of this Agreement by any other member
         of Loeb.

    (c)  Non-Disclosure. The Company agrees promptly to issue a press release
         announcing, among other things, the execution of this Agreement and the
         material non-public information contained herein. Except for the
         issuance of such press release, the Company and Loeb agree not to make
         (and Loeb agrees to ensure that its affiliates, associates, directors,
         officers, partners (general or limited), members and principals do not
         make) any disclosure with respect to this Agreement, the performance
         hereof or any matter covered hereby; provided that, neither the Company
         nor Loeb shall be restricted from making such disclosure if and to the
         extent it shall be advised by independent legal counsel that such
         disclosure is required by law or administrative regulation or by the
         regulations of the American Stock Exchange; provided however, that
         prior to such a disclosure, the disclosing party shall provide notice
         to the other party of such intention to disclose and the notice shall
         provide a reasoned legal analysis as to why such disclosure is required
         by law, administrative regulation or regulation of the American Stock
         Exchange.

    (d)  Severability. If any term, provision, covenant or restriction of this
         Agreement is held by a court of competent jurisdiction to be invalid,
         void or unenforceable, the remainder of the terms, provisions,
         covenants and restrictions of this Agreement shall remain in full force
         and effect.

    (e)  Counterparts. This Agreement may be executed in two or more
         counterparts, each of which shall be deemed an original but all of
         which together shall constitute one and the same instrument. This
         Agreement may be executed by facsimile signatures.

    (f)  Governing Law. This Agreement shall be governed by and construed in
         accordance with the internal laws of the State of Delaware without
         regard to conflicts of laws


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         principally that would require the application of any other law. Any
         action or proceeding seeking to enforce any provision of, or based on
         any claims for equitable relief arising out of this Agreement may be
         brought against any of the Parties only in the federal or state courts
         of Delaware and each of the Parties consents to the jurisdiction of
         such courts (and of the appropriate appellate courts) in any such
         action or proceeding and waives any objection to venue laid therein.
         Process in any action or proceeding referred to in the preceding
         sentence may be served on any party anywhere in the world.

    (g)  Entire Agreement. This Agreement contains the entire understanding of
         the Parties with respect to the matters covered hereby and this
         Agreement may be amended only by an agreement in writing executed by
         the Parties hereto.

    (h)  Notices. Any notice or other communication required or permitted to be
         given hereunder shall be in writing and be effective (a) when
         personally delivered on a business day during normal business hours at
         the address designated below; or (b)on the business day following the
         date of mailing by overnight courier, fully prepaid, addressed to such
         address.


            i.   Notice to the Company:

                           220 Hickory Street
                           Warren, Pennsylvania 16366-0001
                           Attention:

            ii.  Notice to Loeb:

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         IN WITNESS, WHEREOF, the Parties hereto have executed this Agreement as
of the date first written above.

BLAIR CORPORATION

By:  /s/ CRAIG N. JOHNSON
     ---------------------------------------------------------
Name:  Craig N. Johnson
Title: Board Chairman

LOEB ARBITRAGE FUND

By:  /s/ GIDEON J. KING
     ---------------------------------------------------------
Name: Gideon J. King
Title: President, General Partner

LOEB ARBITRAGE MANAGEMENT

By:  /s/ GIDEON J. KING
     ---------------------------------------------------------
Name: Gideon J. King
Title: President

LOEB PARTNERS CORPORATION

By:  /s/ GIDEON J. KING
     ---------------------------------------------------------
Name: Gideon J. King
Title: Executive Vice President

LOEB HOLDING CORPORATION

By:  /s/ GIDEON J. KING
     ---------------------------------------------------------
Name: Gideon J. King
Title: Officer

LOEB OFFSHORE FUND, LIMITED

By:  /s/ GIDEON J. KING
     ---------------------------------------------------------
Name: Gideon J. King
Title: Director

LOEB OFFSHORE MANAGEMENT, LLC

By:  /s/ GIDEON J. KING
     ---------------------------------------------------------
Name: Gideon J. King
Title: President


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LOEB MARATHON FUND

By:  /s/ GIDEON J. KING
     ---------------------------------------------------------
Name: Gideon J. King
Title: President, General Partner

LOEB MARATHON OFFSHORE FUND, LIMITED

By:  /s/ GIDEON J. KING
     ---------------------------------------------------------
Name: Gideon J. King
Title: Director


