Exhibit 10.14

LEASE AGREEMENT

MCDOUGALL BURKEY ASSOCIATES

BETWEEN:
SOUTH HEIDELBERG ASSOCIATES

AND:
LAKELAND INDUSTRIES, INC.

FOR:
28,275 SQUARE FEET AT LOT 1C

 
 

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Table of Contents

 
I
 
Leased Premises
 
II
 
Term of Lease
 
III
 
Rent
 
IV
 
Security Deposit
 
V
 
Use of Premises
 
VI
 
Improvements by Lessor
 
VII
 
Signs
 
VIII
 
Alterations by Lessee
 
IX
 
Maintenance of Leased Premises
 
X
 
Maintenance of Common Areas
 
XI
 
Taxes and Other Impositions
 
XII
 
Utilities and Services
 
XIII
 
Insurance and Damage
 
XIV
 
Lessee’s Property
 
XV
 
Access to Lease Premises
 
XVI
 
Quiet Enjoyment
 
XVII
 
Subordination
 
XVIII
 
Default by Lessee
 
XIX
 
Default by Lessor
 
XX
 
Indemnity
 
XXI
 
No Waiver
 
XXII
 
Eminent Domain
 
XXIII
 
Consumer Price Index
 
XIV
 
Estoppel Certificate
 
XXV
 
Option to Renew
 
XXVI
 
Notices
 
XXVII
 
Surrender
 
XXVIII
 
Assignment and Subletting
 
XXIX
 
Relationship of Parties
 
XXX
 
Complete Agreement
 
XXXI
 
Severance
 
XXXII
 
Provisions Binding
 
XXXIII
 
Title Articles
 
XXXIV
 
Miscellaneous
 
Exhibit A
 
Leased Premises
 
Exhibit B
 
Lessor’s Improvements
 
Exhibit C
 
Sign Regulations
 
Exhibit D
 
Occupancy Check-Off Form
 
Exhibit E
  
Estimated Common Charges

 
 

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LEASE AGREEMENT

This Lease Agreement (hereinafter referred to as “Lease”) made on this 14th day
of April, 2010, by and between SOUTH HEIDELBERG PARTNERS, L.P., (hereinafter
referred to as “Lessor”) and LAKELAND INDUSTRIES, INC., a company incorporated
under the laws of the State of Delaware, USA, with its principal office located
at 701 KOEHLER AVENUE, SUITE 7, RONKONKOMA, NY  11779-7410, (hereinafter
referred to as “Lessee”).

INTENDING TO BE LEGALLY BOUND HEREBY, the Lessor and the Lessee hereby agree as
follows:

ARTICLE I - LEASED PREMISES

The Lessor leases to the Lessee in accordance with the provisions of this Lease
and the Lessee leases from the Lessor in accordance with the provisions of this
Lease which portion of the building (hereinafter referred to as “Building”)
located at 5 Dutch Court and situated in South Heidelberg Township, Berks
County, Pennsylvania, which leased premises (hereinafter referred to as “Leased
Premises”) contains approximately 28,275 square feet of floor space and which
Leased Premises is approximately illustrated in a drawing which is marked
“Exhibit A” attached hereto and incorporated herein by reference.

Upon 30 days written notice given to Lessee by Lessor, the 7,250 square feet
marked “excess space” on Exhibit A will be deleted from the Leased Premises, at
which time the Leased Premises will be reduced to 21,025 square feet.  In the
event of such notice, Lessor shall construct a demising wall separating the
excess space from the Leased Premises.  In the event of such notices, Lessor
will retain permanent access to at least one loading dock and the
drive-in.  Lessee will cooperate with Lessor in the construction of the demising
wall and Lessor shall make every reasonable effort to minimize disruption to
Lessee’s operation during construction of the demising wall.  In the event of
such notice, all the terms and conditions of the Lease, including rent, shall
remain unchanged.  Until the receipt of such notice by Lessee, Lessor shall have
full care, custody, control, and use of the excess space.

ARTICLE II - TERM OF LEASE

1.           The term (hereinafter referred to as “Term”) of this Lease shall be
for three (3) years and six (6) months and shall commence the later of August 1,
2010 or upon the date when:

a.           the Lessor has substantially completed all of the improvements
(hereinafter referred to as “Improvements”) required to be constructed pursuant
to Article VI; and,

b.           the Lessor has obtained an occupancy permit for the Leased
Premises.

2.           Immediately upon demand therefore, the Lessee shall deliver to the
Lessor a statement acknowledging the date upon which the Term commenced, which
statement shall be in form and substance satisfactory to the Lessor. Exhibit D
contains a sample statement meeting the requirements of this section.

3.           Except as otherwise set forth in Article XXV of this Lease, in the
event that the Lessee shall continue to occupy the Leased Premises beyond the
Term hereof and the Lessor elects to accept rent therefore, a tenancy at will
from month to month only shall be created and no tenancy for any longer period
of time shall be deemed to exist.

ARTICLE III - RENT

1.           The Lessee shall pay to the Lessor as Minimum Monthly Rent
(hereinafter referred to as “Minimum Monthly Rent”) for the Leased Premises on
the first day of each calendar month during the Term hereof, the following:
 
 
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MINIMUM
 
PERIOD
 
MONTHLY RENT
         
February 1, 2011 to January 31, 2012
  $ 7,183.54  
February 1, 2012 to January 31, 2013
  $ 7,381.09  
February 1, 2013 to January 31, 2014
  $ 7,584.07  

2.           The Lessee shall pay to the Lessor monthly in advance on the first
day of every calendar month during the Term hereof without deduction or setoff
as Additional Rent (hereinafter referred to as “Additional Rent”) one-twelfth
(1/12) of its pro rata share of Common Area Maintenance costs (Article X), Taxes
and other Impositions (Article XI), Utilities (Article XII), Insurance (Article
XIII) and other usual and customary costs (hereinafter referred to as
“Additional Costs”).  Lessor shall prepare annually but no later than March 31
of each calendar year, an estimate of Additional Costs for the current calendar
year and shall notify Lessee of same together with the Additional Rent for that
calendar year. Such estimate shall be substantially in the form of Exhibit E.
Lessee may, upon written request, review Lessor’s books and records pertaining
to the Additional Rent.  The Additional Rent for a calendar year shall be paid
commencing with the payment due in April of that year and will continue through
March of the next succeeding year. At the same time, Lessor shall prepare a list
of actual Additional Costs for the prior calendar year and any difference
between the actual Additional Costs and estimated Additional Costs for the prior
year shall be either billed or  credited to Lessee.  Calculation of Additional
Costs shall not include the excess space and shall be based only on 21, 025
square feet.  All Additional Costs shall be based on Lessor’s direct cost.

3.           In the event that the Term of the Lease shall commence or end on a
day other that the first day of the month, the Lessee shall pay for such time
period an amount equal to one-thirtieth (1/30) of the sum of the Minimum Monthly
Rent plus the Additional Rent multiplied by the number of rental days in such
fractional month.

4.           Lessee may terminate this Lease on July 31, 2013, provided written
notice of Lessee’s election to terminate is received by Lessor no later than
January 31, 2013; said written notice to be accompanied by a payment of $75,000
as a termination fee.

ARTICLE IV- SECURITY DEPOSIT

1.           Concurrently with the execution of this Lease, the Lessee shall
deposit with the Lessor the sum of ten thousand five hundred sixty-five and
06/100 dollars ($10,565.06) as security for the full, timely and faithful
observance and performance by the Lessee of the provisions of this Lease on the
part of the Lessee to be observed or performed. The said security deposit
(hereinafter referred to as “Security Deposit”) shall be held by the Lessor
throughout the Term hereof and the Lessee shall not be entitled to interest
thereon.

2.           If at any time during the Term, a Default by the Lessee
(hereinafter referred to as “Default by Lessee”) shall occur by reason of the
failure of the Lessee to make a prompt payment due of  Monthly Minimum Rent or
Additional Rent or any other sum owing by the Lessee to the Lessor, the Lessor
may appropriate and apply any portion of the Security Deposit as may be
necessary to the payment of the overdue Monthly Minimum Rent, Additional Rent or
any other sum owing by the Lessee to the Lessor.

3.           If on the termination of the tenancy of the Lessee for any reason,
the Lessee does not leave the Leased Premises in the same condition in which it
existed at the beginning of the Term, reasonable wear and tear, or damage caused
by Lessor excepted, then, in addition to any and all other rights and remedies
of which the Lessor may be possessed, the Lessor may appropriate and apply any
portion of the Security Deposit as may be reasonably necessary to return the
Leased Premises to such condition.

4.           In the event that the Lessee shall make full and timely observance
and performance of all the provisions of this Lease which the Lessee is required
to observe or perform and no Default by Lessee shall have occurred and be
continuing, then within thirty (30) days after the end of the Term the Lessor
shall return the Security Deposit or such portion thereof as shall not have been
otherwise utilized by the Lessor in accordance with the Lease without interest
to the Lessee.
 
 
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5.           The Lessee acknowledges that the Security Deposit is not to be
considered as the final Minimum Monthly Rent.
 
ARTICLE V - USE OF PREMISES

1.           The Leased Premises shall be occupied and used solely for the
purpose of office, manufacturing, and warehouse and not for any other purpose,
unless otherwise agreed to in writing by the Lessor, such agreement not to be
unreasonably withheld.

2.            The Lessee covenants and warrants to the Lessor:

a.          Not to use the Leased Premises or permit the Leased Premises to be
used for any unlawful purpose or any purpose not specifically permitted by this
Lease, unless otherwise agreed to in writing by the Lessor, such agreement not
to be unreasonably withheld.

b.          Not to use or occupy or suffer or permit the Leased Premises or any
part thereof to be used or occupied in any manner so as to increase the cost of
fire or other casualty insurance over and above the normal cost of such
insurance for the type and location of the Building or contrary to this Lease,
unless insurance can be purchased to insure said uses and Lessee and Lessor have
agreed to adjust the Additional Rent to account for any increase in insurance
cost due to said uses, such agreement not to be unreasonably withheld.

c.          Not to display any merchandise or other items outside the Leased
Premises or in anyway obstruct the sidewalks adjacent thereto, if any.

d.          Not to place garbage, rubbish, trash or containers thereof outside
the Leased Premises except in such containers, if any, which the Lessee shall
have provided for such purpose with the approval of the Lessor, such approval
not to be unreasonably withheld.

e.          To keep the Leased Premises in a good, safe, clean and proper
condition.

f.          To keep the sidewalks adjacent to the Leased Premises, if any, free
of debris.

g.          To prevent the Leased Premises from being used in any way which
shall injure or damage the same or the Building or which may be or result in a
nuisance, annoyance, inconvenience or damage to the other Lessees of the
Building including without limitation noise by the playing of any musical
instrument, radio, or television or the use of a microphone, loud speaker,
electrical equipment or other equipment.

h.          To abide by all reasonable rules and regulation established by
Lessor, from time to time, with respect to the building.

3.           Nothing contained in this Lease or otherwise shall constitute a
representation or warranty that the Leased Premises may lawfully be used or
occupied for any particular purpose, including without limitation the use
referred to in Section 1 of this Article.

ARTICLE VI – IMPROVEMENTS BY LESSOR

1.           The Lessor shall construct the Improvements to the Leased Premises
in accordance with the specifications set forth on Exhibit B and Exhibit B-1
which are attached hereto and incorporated herein by reference.

2.           In the event that the Lessor shall be unable for any reason
whatsoever to complete the Improvements, the Lessor shall not be liable to the
Lessee for any damage caused thereby, but in such event the Lessee shall not be
liable for any Minimum Monthly Rent, Additional Rent or other amount herein
reserved until such time as the conditions set forth in Article II, paragraph 1
are met.  If the Improvements have not been completed within six months of the
signing of this Lease, Lessee may terminate this Lease and have its Security
Deposit refunded.
 
 
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ARTICLE VII – SIGNS

Subject to the provisions hereof, the Lessee shall have the right to erect a
sign (hereinafter referred to as “Sign”) on the exterior portion of the
Building. The design for and size of the Sign together with the location thereof
shall be submitted to the Lessor and the Lessor shall have the right to
determine whether the design, size, and location of the Sign are acceptable to
it. Lessor’s approval shall not be withheld or delayed unreasonably. Lessee
shall obtain any required municipal approvals.  In the event that the Lessee
shall elect to erect a Sign, the Lessee shall maintain the same in a good state
of repair.  Upon vacating the Leased Premises and if requested by the Lessor,
the Lessee shall remove the Sign and repair all damage caused by such removal,
otherwise the Sign shall be left in place and shall become the property of the
Lessor.  See Exhibit C for sign specifications and regulations.

ARTICLE VIII – ALTERATIONS BY LESSEE

1.           The Lessee shall not make or permit to be made any alterations,
improvements or additions (hereinafter referred to as “Alterations”) for a value
totaling more than $10,000, to the Leased Premises or any part thereof without
first obtaining the consent in writing of the Lessor, which shall not be
unreasonably withheld, conditioned, or delayed.  All Alterations to the Leased
Premises shall be made in accordance with all applicable laws and governmental
rules and regulations and, if remaining upon termination of  this Lease, shall
become the property of the Lessor and shall remain for the benefit of the
Lessor; provided, however, that if upon the termination of this Lease, the
Lessor so directs by notice to the Lessee that the same be removed, the Lessee
shall at its costs and expense promptly remove such of the Alterations which
were placed on the Leased Premises by the Lessee and which are designated in
said notice and repair any damage occasioned by such removal to the reasonable
satisfaction of the Lessor and in default thereof the Lessor may effect said
removals and repairs at the Lessee’s cost and expense and the Lessee shall pay
the cost and expense thereof to the Lessor upon demands Additional Rent.  In the
event of the making of such Alterations as herein provided, the Lessee shall
indemnify and save the Lessor harmless of and from any and all loss, damage,
cost, and expense incurred by the Lessor arising out of or resulting from the
undertaking or making of said Alterations the removal thereof or the repairs to
the Leased Premises occasioned by such removal.

2.           In the event that the Lessee shall make any Alterations to the
Leased Premises pursuant to Section 1 of this Article, the Lessee shall promptly
pay when due all contractors and material men who shall have supplied labor,
work or materials to the Lessee. In addition, the Lessee shall take all
reasonable steps, including without limitation the timely filing or stipulations
or waivers, permitted or provided by applicable law in order to avoid the
imposition of any Mechanic’s, laborer’s or materialman’s charge or lien upon the
Leased Premises (hereinafter referred to as “Mechanic’s Lien”). In the event
that any Mechanic’s Lien shall be filed with respect to the Leased Premises for
work performed by or on behalf of the Lessee, the Lessee shall bond against or
cause the same to be discharged within thirty (30) days after the Mechanic’s
Lien has been filed or formal notice of said lien has been issued, whichever
shall first occur, regardless of the validity of such Mechanic’s Lien.  Nothing
contained in this Lease or otherwise is intended to authorize the Lessee to do
or cause any work or labor to be done or any materials to be supplied for the
account of the Lessor, all of the same being solely for the Lessee’s account and
at the Lessee’s sole risk, cost and expense.

ARTICLE IX – MAINTENANCE OF LEASED PREMISES

1.           The Lessor, at its sole cost and expense, shall keep and maintain
the roof and structure of the Building, the plumbing systems and equipment not
exclusively serving or contained within the Leased Premises, in good condition
and shall make all structural repairs to the building, except for any damage
thereto caused by any act of negligence or misconduct of Lessee, its employees,
agents, customer’s invites, licenses or contractors.  Damage caused by any act
of negligence or misconduct of Lessee, its employees, agents, customer’s
invites, licenses or contractors shall be promptly repaired to the Lessor’s
reasonable satisfaction at the sole cost and expense of the Lessee provided,
however, that the Lessor shall have no duty to make any repair otherwise
required by this Section unless and until the Lessor shall have received notice
of the need therefor from the Lessee. In the event Lessor refuses or neglects to
commence or complete repairs required under this paragraph, the Lessee may, but
shall not be required to, make or complete said repairs and the Lessor shall pay
the cost and expense thereof to the Lessee.  Other than as herein provided, the
Lessor shall not be responsible to make any other improvements or repairs of any
kind in or upon the Leased Premises or to the Building.
 
 
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2.           The Lessee shall keep and maintain in good order, condition and
repair the Leased Premises, and each and every part thereof, except as set forth
in Section 1 of this Article, except any damage thereto by any gross negligence
or intentional act of Lessor, its employees, agents, customers, invitees,
licenses, or contractors, including without limitation the exterior and interior
portions of all doors, door frames, windows, windows frames, glass, electrical
equipment, light, light fixtures, interior walls, floors, ceiling, air filters
and all air conditioning, heating, ventilation, plumbing and mechanical systems
exclusively serving the Leased Premises. In the event that the Lessee refuses or
neglects to commence or complete repairs promptly and adequately after
reasonable notice to the Lessee by the Lessor, the Lessor may, but shall not be
required to, make or complete said repairs and the Lessee shall pay the cost and
expense thereof to the Lessor upon demand as Additional Rent.

3.           The Lessee and Lessor shall comply with all laws and governmental
rules and regulations and hold each other harmless against any and all claims
for damages and any and all fines imposed because of failure to comply with such
laws, rules or regulations.

4.           The Lessee shall place throughout the Leased Premises such fire
extinguishers as are necessary in order to comply with all applicable laws and
shall maintain the same in good working order and repair.

ARTICLE X – MAINTENANCE OF COMMON AREAS

1.           The Lessor shall maintain approaches, exits, entrances, roadway and
parking areas for the non-exclusive use of the Lessee, its employees, customers,
invitees, licenses, contractors and agents. Subject to the other provisions of
this Lease, the Lessor shall maintain such approaches, exits, entrances,
roadways and parking areas, and all lawns and other exterior areas under the
control of the Lessor (all of the foregoing being hereinafter referred to as
“Common Areas”) in good condition and repair, and with respect to such
approaches, exits, entrances, roadways and parking areas as aforesaid reasonably
clear of snow.

2.           The Lessee shall pay to the Lessor as Additional Rent the Lessee’s
proportionate share of the maintenance of the Common Areas including outside
security lighting, such proportionate share to be calculated in a commercially
reasonable manner by the Lessor.

3.           The Lessee and its employees, customers, invitees, licensees,
contractors and agents shall park only in such places as provided and designated
by the Lessor for such non-exclusive parking.

ARTICLE XI – TAXES AND OTHER IMPOSITIONS

1.           Lessee shall pay in each Tax year during the Term, as Additional
Rent, a proportionate share of all real estate taxes, assessments, general and
special assessments, or any other tax imposed upon or levied against real estate
or upon owners of real estate as such paid or payable with respect to or
allocable to the Leased Premises, referred to herein as
“Taxes”.  Notwithstanding the foregoing, in no event shall the term “taxes”
include any income taxes, profit taxes, franchise taxes, estate, succession,
inheritance or transfer taxes or interest imposed by any taxing authority. For
the Tax year in which the Term commences or terminates, the provisions of the
Section shall apply, but Lessee’s liability for its proportionate share of any
taxes for such year shall be subject to a pro rata adjustment based upon the
number of days of such Tax Year falling within the Term.

2.           Lessee’s proportionate share of Taxes shall be paid by Lessee in
equal monthly installments as Additional Rent.
 
 
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3.           The term “Tax Year” shall mean the fiscal period identified on the
tax bill, assessment notice, etc.

4.           The Lessor and/or the Lessee shall each have the right, but not the
duty, to contest the validity or amount of any Taxes or to recover payments made
on account thereof, and shall cooperate fully with respect to such proceedings
to the extent reasonably necessary.

ARTICLE XII – UTILITIES AND SERVICES

The Lessee shall pay for the cost and expense of all utilities and other
services rendered or furnished to the Leased Premises during the Term, including
without limitation water services, sewer service, gas (including gas for heat),
electricity, telephone and data service and trash disposal service together with
all taxes levied or assessed thereon and all other charges on such utilities or
services. In no event, except for negligence or intentional acts of Lessor,
shall the Lessor be liable for the quality, quantity, failure or interruption or
such utilities or services to the Leased Premises. Lessor will make all
reasonable efforts to make such utilities and services separately metered for
the Lessee.  Notwithstanding the foregoing, in the event that such utilities or
services are not separately metered for the Lessee, then the Lessee shall pay as
Additional Costs the Lessee’s pro rata share of the cost and expenses of such
utilities and other services, such proportionate share to be calculated in a
commercially reasonable manner by the Lessor.

ARTICLE XIII – INSURANCE AND DAMAGE

1.           Lessor shall maintain and keep in effect throughout the term hereof
with policies from an insurer, insurance against loss or damage to the building
containing the Leased Premises and all other improvements now or hereafter
located thereon by fire and such other casualties as may be included in the
broadest form of all-risk insurance from time to time available, in an amount
equal to the full insurable value of the building, the policy to have attached
thereto replacement cost and agreed amount endorsement or comparable form of
coverage, plus a minimum of One Million and 00/100 Dollars ($1,000,000.00) in
general public liability insurance.

2.           At its sole costs and expense, the Lessee shall maintain and keep
in effect throughout the Term hereof with policies from an insurer:

a.           Insurance against loss or damage to Lessee’s personal property and
leasehold improvements within the Leased Premises by fire and such other
casualties as may be included in the broadest form of all-risk insurance, in an
amount equal to the full insurable value of Lessee’s personal property within
the Leased Premises and all improvement thereon, the policy to have attached
thereto replacement cost endorsement;

b.           Commercial General Liability insurance shall be provided on a
claims made form of policy, in an amount of Two Million and 00/100 Dollars
($2,000,000.00) per occurrence for injury or death or damage to property.

3.           The policies of insurance described in Subsections (a) and (b) of
Section 2 of this Article shall add the Lessor as a loss payee.

4.           Each policy of insurance described in section 2 of this Article
shall provide that it shall not be cancelled without at least thirty (30) days
prior notice to the Lessor and to any mortgagee named in any endorsement
thereto.

5.           At least ten (10) days prior to the date of occupancy of the Leased
Premises by the Lessee, a certificate of insurance shall be delivered to the
Lessor by the Lessee. The Lessee may carry any insurance required by this
Article under a blanket policy, applicable to the Leased Premises, in which
event the Lessee shall deliver the insurer’s certificates thereof, showing all
of the terms of such coverage applicable to the Leased Premises and showing the
insured parties as aforesaid. In the event that the Lessee shall fail, refuse or
neglect to obtain or to maintain any insurance which it is required to provide,
pursuant to the provisions of this Lease, or to furnish the Lessor with
reasonable evidence of coverage within the time required the Lessor shall have
the right, but not the duty, to purchase such insurance. All payment for such
insurance made by the Lessor shall be recoverable by the Lessor from the Lessee,
together with interest thereon, as Additional Rent promptly upon being billed
therefor.
 
 
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6.           Each of the parties hereto herby release the other, to the extent
of the releasing party’s insurance coverage, from any and all liability for any
loss or damage covered by such insurance which may be inflicted upon the
property of such party even if such loss or damage shall be brought about by the
fault or negligence of the other party, its employee or agents; provided
however, that this release shall be effective only with respect to loss or
damage occurring during such time as the appropriate policy of insurance shall
contain a clause to the effect that this release shall not affect said policy or
the right of the insured to recover thereunder. If any policy does not permit
such a waiver, and if the party to benefit therefrom requests that such a waiver
be obtained, the other party shall obtain an endorsement to its insurance policy
permitting such waiver of subrogation if such waiver is under        such policy
then available. If an additional premium is charged for such waiver, the party
benefiting therefrom shall pay the amount of such additional premium promptly
upon being billed therefor.

7.           In the event that the Leased Premises shall be damaged or destroyed
by fire or other casualty, the Lessee shall promptly notify the Lessor and the
Lessor, subject to any applicable mortgagee’s consent and subject to the
provisions of this Article, shall repair, rebuild or replace such damage or
destruction and restore the Leased Premises to substantially the same condition
in which it was immediately prior to such damage or destruction provided,
however, that the Lessor shall only be obligated to repair, rebuild or replace
such damage which is covered by the fire and other extended coverage insurance
policies referred to in this Article The work with respect to such repair,
rebuilding or replacement shall be commended promptly and completed with
reasonable diligence, taking into account the time required by the Lessor to
effect a settlement with, and procure insurance proceeds from, any applicable
insurer and for delays beyond the reasonable control of the Lessor. In the event
such repairs have not been completed within six (6) months following such
casualty, Lessee shall have the right to terminate this Lease upon written
notice to Lessor.

8.           The Lessor’s obligation or election to restore the Leased Premises
under this Article shall not include the repair, restoration or replacement of
the fixtures, improvements, alterations, furniture, or any other property owned,
installed, made by or in the possession of the Lessee.

9.           The Lessee shall pay to the Lessor as Additional Rent the Lessee’s
proportionate share of the cost of the insurance referred to in Section 1 of
this Article, such proportionate share to be calculated in a commercially
reasonable manner by the Lessor.

ARTICLE XIV – LESSEE’S PROPERTY

Lessor shall not be liable for any damage to Lessee’s personal property of every
kind or description which may at any time be in the Leased Premises, or loss
suffered by the business or occupation of the Lessee caused by water from any
source whatsoever or from the bursting, overflowing or leaking of sewer or steam
pipes or from the sprinkler system or from the heating or plumbing fixtures or
from electric wires or from gas or odors caused in any manner whatsoever except
as may result and be caused by the negligence of Lessor.

ARTICLE XV – ACCESS TO LEASED PREMISES

1.           The Lessee shall permit the Lessor and the Lessor’s agents to
inspect and examine the Leased Premises at a mutually agreeable time (except in
case of emergency), to permit the Lessor to make necessary repairs, alterations,
or improvements in the Leased Premises or to the Building that the Lessor and
Lessee agree necessary and that are not expected to cause loss or interruption
of the business of Lessee unless otherwise approved by Lessee in writing.

2.           The Lessor shall also have the right to enter upon the Leased
Premises at a mutually agreeable time for a period commencing one hundred eighty
(180) days prior to the termination of the Term of this lease for the purpose of
exhibiting the same to prospective Lessees or purchasers. During said period the
Lessor may place signs outside the building to indicate that same are for rent
or sale, which signs shall not be removed, obliterated, or hidden by Lessee.
 
 
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ARTICLE XVI – QUIET ENJOYMENT

In the event that the Lessee shall pay the Minimum Monthly Rent and other sums
owing hereunder and shall perform and observe all of the covenants and duties
and obligation herein required to be performed or observed on the Lessee’s part,
the Lessee shall, at all times during the Term, have the peaceable and quiet
enjoyment and possession of the Leased Premises without any manner of hindrance
from the Lessor or any persons lawfully claiming through the Lessor.

ARTICLE XVII – SUBORDINATION

This Lease and the tenancy of the Lessee hereunder is and shall remain
subordinate to any mortgage of record as the date of this Lease, and to any
mortgage lien of record arising out of or pertaining to any new financing
secured by the Leased Premises, and to all advances made upon the security
thereof. Upon demand by Lessor, Lessee shall execute and deliver to Lessor such
instruments and assurances as Lessee has available and that Lessor shall
reasonably require in order to evidence such subordination.  Lessor, upon
request, will request that its lender provide Lessee with an acceptable
non-disturbance agreement.

In the event (i) any proceedings are commenced for the foreclosure, (ii) of the
exercise of the power of sale under any mortgage granted by Lessor with respect
to the Leased Premises, or in the event (a) of a conveyance by deed in lieu of
foreclosure or (b) Lessor sells, conveys or otherwise transfers the Leased
Premises, this Lease shall remain in full force and effect and Lessee hereby
attorns to and covenants and agrees to execute an instrument reasonably
satisfactory to the mortgagee or new owner, as the case may be whereby Lessee
attorns to such successor-in-interest and recognizes such successor as Lessor
under this Lease; provided, however, that no mortgagee or successor-in-interest
shall be bound by any payment of rent for more than one month in advance of any
amendment or modification of this Lease made without the written consent of any
mortgage or record at the time of such amendment.

ARTICLE XVIII – DEFAULT BY LESSEE

1.           The failure or refusal by the Lessee to perform and observe the
non-monetary provisions of this Lease which the Lessee is required to perform or
observe and the failure of the Lessee to cure the same within thirty (30) days
following receipt by the Lessee of notice from the Lessor with respect thereto
shall constitute a default (hereinafter referred to as “Default by Lessee”)
hereunder.

2.           In the event of a Default by Lessee, the Lessor shall have any and
all rights and remedies at law, in equity or by statue permitted or provided.

3.           The occurrence of any of the following events shall constitute an
event of default by the Lessee (herein referred to as “Default by Lessee”) under
this Lease:

a.           The failure or refusal by the Lessee to pay within ten (10) days of
when due to the Lessor any Minimum Monthly Rent, Additional Rent or any other
amount owing under this Lease.

b.           The failure or refusal by the Lessee to make full and timely
performance and observance of the non-monetary provisions of this Lease which
the Lessee is required to perform or observe, within thirty (30) days after
written notice from Lessor with respect thereto, with the exception of monetary
obligations.

c.           If the Lessee is a partnership or corporation, the filing or
commencement of any application or proceeding by or against the Lessee for
dissolution or liquidation.
 
 
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d.           The entry of a decree or order for relief by a court having
jurisdiction in respect of the Lessee or in an involuntary case under the
federal bankruptcy, insolvency or similar law or for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator or other
similar official with respect to Lessee or an of its assets.

e.           The commencement by the Lessee of a voluntary case under the
federal bankruptcy laws as now or hereafter constituted, or any other applicable
federal or state bankruptcy, insolvency or other similar law or the consent of
the Lessee to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official for the
Lessee or any of its assets.

4.           In the event of a Default by Lessee, the Lessor shall have any and
all of the following rights and remedies:

a.           To charge a late payment penalty (five percent [5%]) of any amount
owed to the Lessor pursuant to this Lease which is not paid within ten (10) days
of the date which is set forth in the Lease if a date is specified, or, if a
date is not specified, within thirty (30) days of the certified mail delivery of
a bill therefor by the Lessor. In the event that the Lessor incurs a penalty in
connection with any payment which the Lessee has failed to make within the time
required in this lease, the Lessee shall pay to the Lessor, in addition to all
other sums owing hereunder, the full amount of such penalty incurred by the
Lessor.

b.           To setoff against the Security Deposit any amounts owing by the
Lessee to the Lessor, including without limitation Minimum Monthly Rent and
Additional Rent.

c.           To terminate this Lease and be entitled to unpaid accrued Minimum
Monthly Rent, and any other amounts owing pursuant to this Lease, and damages,
including reasonable damages equal to the difference between the balance of the
Minimum Monthly Rent, and other amount owing pursuant to this Lease for the
balance of the Term and the then fair rental value of the Leased Premises for
the remainder of the Term.

d.           Without terminating this Lease, to re-enter and re-let the Leased
Premises to another tenant, the Lessee remaining liable for the loss of Minimum
Monthly Rent, Additional Costs and other sums owing pursuant to this Lease for
the balance of the Term, the Lessor being released from any and all liability
for such re-entry, provided, however, that Lessor shall make a good faith effort
to re-let the Leased Premises to another Tenant and to credit any rent received
by Lessor from any subsequent Lessees of the Leased Premises toward any sums
otherwise due and owing from Lessee to Lessor.

e.           To exercise any and all other rights and remedies by this Lease, at
law, in equity or by statute permitted or provided.

5.           All rights and remedies of the Lessor and the Lessee provided in
this Lease or by law, in equity or statute permitted or provided are cumulative
and may to the extent permitted by law be exercised concurrently or separately.
The exercise of any one right or remedy shall not be deemed to be an exclusive
election of such right or remedy or to preclude the exercise of any other right
or remedy.  No failure on the part of the Lessor or the Lessee to exercise, and
no delay in exercising, any right or remedy hereunder, shall operate as a waiver
thereof, nor any singular or partial exercise by the Lessor or the Lessee of any
right or remedy hereunder preclude any other or future exercise thereof or the
exercise of any other right or remedy.

6.           In the event of a Default by Lessee, the Lessee shall pay, in
addition to any and all other amounts owing hereunder, and without setoff or
deduction, immediately upon demand thereof, all costs and expenses including
reasonable attorney’s fees, incurred by the Lessor in enforcing any of its
rights or remedies hereunder or by law, equity or statute permitted or provided.

 
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7.           In the event that the Lessee shall fail to pay when due any Minimum
Monthly Rent, or any other amount owing by the Lessee, then if allowed by
applicable law, and in addition to any and all other rights and remedies of
which the Lessor may be possessed, and without waiving any such right or remedy,
after 30 days beyond date of certified receipt by Lessee of notice of failure to
pay from Lessor, the Lessor shall have the right to assess against the Lessee a
service charge to be determined by multiplying the amount of Minimum Monthly
Rent, Additional Costs and other amounts owing by the Lessee which are
delinquent by one percent (1 %) for each month, or part thereof, during which
any such sum is delinquent.

ARTICLE XIX – DEFAULT BY LESSOR

1.           The failure or refusal by the Lessor to perform and observe the
provisions of this Lease which the Lessor is required to perform or observe and
the failure of the Lessor to cure the same within thirty (30) days following
receipt by the Lessor of notice from the Lessee with respect thereto shall
constitute a default (hereinafter referred to as “Default by Lessor”) hereunder.

2.           In the event of a Default by Lessor, the Lessee shall have any and
all rights and remedies at law, in equity or by statue permitted or provided.

ARTICLE XX – INDEMNITY

The Lessee covenants to the Lessor that it shall protect and save the Lessor
harmless against and from any penalty or damage or charges imposed for any
violation of any law or ordinance, whether occasioned by the neglect or
misconduct of the Lessee or those holding under the Lessee including without
limitation the Lessee’s employees, agents, invitees, licenses or contractors,
and that the Lessee shall at all times, indemnify and save harmless Lessor
against and from all claims, loss, cost, damage and expense arising out of or
form any accident or other occurrence on or about the Leased Premises or any
property in the custody or control of the Lessee or those holding under the
Lessee including without limitation the Lessee’s employees, agents, invitees,
licensees or contractors causing injury to any person or property whomsoever or
whatsoever, and shall indemnify and keep harmless the Lessor against and from
any and all claims and against and from any and all loss, cost, damage or
expense arising out of any failure of the Lessee in any respect to comply with
and perform all the requirements and provisions of this Lease or to comply with
any government law, rule or regulation.

The Lessor covenants to the Lessee that it shall protect and save the Lessee
harmless against and from any penalty or damage or charges imposed for any
violation of any law or ordinance, whether occasioned by the neglect or
misconduct of the Lessor or those holding under the Lessor including without
limitation the Lessor’s employees, agents, invitees, licenses or contractors,
and that the Lessor shall at all times, indemnify and save harmless Lessee
against and from all claims, loss, cost, damage and expense arising out of or
form any accident or other occurrence on or about the Leased Premises or any
property in the custody or control of the Lessor or those holding under the
Lessor including without limitation the Lessor’s employees, agents, invitees,
licensees or contractors causing injury to any person or property whomsoever or
whatsoever, and shall indemnify and keep harmless the Lessee against and from
any and all claims and against and from any and all loss, cost, damage or
expense arising out of any failure of the Lessor in any respect to comply with
and perform all the requirements and provisions of this Lease or to comply with
any government law, rule or regulation.

ARTICLE XXI – NO WAIVER

No failure on the part of the Lessor or Lessee to exercise, and no delay in
exercising, any right or remedy of which it may be possess shall operate as a
waiver thereof, not shall any single or partial exercise by the Lessor or Lessee
of any right or remedy of which it may be possessed preclude any other or future
exercise thereof or the exercise of any other right or remedy.
 
 
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ARTICLE XXII – EMINENT DOMAIN

1.           In the event the Leased Premises or any part thereof shall be taken
or condemned either permanently or temporarily for any public or quasi public
use or purpose by any competent authority in appropriate proceeding or by any
right of eminent domain the Lessor will immediately notify Lessee of the details
of the entire condemnation award for both leasehold and reversion. The Lessee
shall be entitled to claim, prove and receive in such condemnation proceedings
such award as may be allowed for Lessee’s Property, Improvements, fixtures and
other equipment installed by it but only if such award shall be in addition to
the award for the Building.

2.           Lessor shall utilize its best efforts to notify Lessee of future
hearings or proceedings expected to involve the subject of eminent domain or
other taking or condemning of the Leased Premises, for the purpose of enabling
the Lessee to attend and/or pursue such hearings or proceedings for Lessee’s
benefit.

3.            If the entire Leased Premises shall be taken as aforesaid, then
this Lease shall terminate and shall become null and void from the time
possession thereof is required for public use and from that date, the parties
hereto shall be released from further obligation hereunder but in the event a
portion only of the Leased Premises itself shall be so taken or condemned then
the Lessor, if requested by Lessee, at Lessor’s own expense, shall repair and
restore the portion not affected by the taking and thereafter the minimum rental
to be paid by the Lessee shall be diminished proportionately.

ARTICLE XXIII – CONSUMER PRICE INDEX

Intentionally left blank.
 
ARTICLE XXIV – ESTOPPEL CERTIFICATE

The Lessee shall at any time within fifteen (15) business days after the
Lessee’s receipt of the Lessor’s request to execute, acknowledge and deliver to
the Lessor a statement certifying that this Lease is unmodified and in full
force and effect (or, if there have been modifications, that the same is in full
force and effect as modified and stating the modifications), and the dates to
which the Minimum Monthly Rent, Additional Costs and other amounts owing
hereunder have been paid in advance, if any, it being intended that any such
statement delivered pursuant to this Article may be relied upon by any
prospective purchase or mortgagee of the Leased Premises.

ARTICLE XXV – OPTION TO RENEW

The Lessee is hereby granted an option to extend this Lease for two (2)
additional periods of three (3) years and upon the exercise of any such option,
all terms and conditions contained in this Lease shall be applicable to the
option period to the same extent as they are to the Term hereof.  The Lessee
shall notify the Lessor in writing not less than one hundred and eighty (180)
days prior to the expiration of the then current Term of its intention not to
extend said Lease, otherwise the extension shall be automatic.  During any
option period, the Minimum Monthly Rent shall increase each year by 2.75%.  The
option to extend this Lease may not be exercised by an assignee or sublessee of
the Lessee, and such assignee or sublessee shall vacate the Leased Premises at
the then current period.  All powers granted to the Lessor by this Lease may be
exercised and all obligations imposed upon the Lessee by this Lease shall be
performed by the Lessee as well during any extension of the original Term of
this Lease as during the original Term itself.
 
ARTICLE XXVI - NOTICES

All notices and statements to be given under this Lease shall be in writing and
given in person, by recognized overnight delivery service, or by registered or
certified mail, return receipt requested, postage prepaid, addressed to the
proper party at the following address:

 
(a)
If to Lessor:
Mr. Richard J. McDougall

 
McDougall Burkey Associates

 
506 Morgantown Road.

 
Reading, PA 19611

 
 
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(b)
If to Lessee:

ARTICLE XXVII – SURRENDER

1.           The Lessee covenants to Lessor to deliver up and surrender to the
Lessor possession of the    Leased Premises upon expiration of this Lease or its
earlier termination as herein provided, broom clean and in as good condition and
repair as the same shall be at the commencement of the Term of this Lease, or
may have been put by the Lessor during the continuance thereof, ordinary wear
and tear, or damage caused by Lessor excepted.  Acceptance of delivery of the
Leased Premises or opening same for business shall be deemed conclusive evidence
that the Leased Premises were in good condition and repair at the commencement
of the Term of this Lease, excepting items noted as per Exhibit D.

2.           The Lessee shall at Lessee’s expense remove all alterations,
additions and improvements as to which the Lessor shall have made the election
hereinbefore provided, repair all damage to the Leased Premises caused by such
removal and restore the Leased Premises to the condition in which they were
prior to the installation of the articles so removed, normal wear and tear
excepted. Any property not so removed and as to which the Lessor shall have not
made said election, shall be deemed to have been abandoned by the Lessee and may
be retained or disposed of by the Lessor, as the Lessor shall desire. The
Lessee’s obligation to observe or perform this covenant shall survive the
expiration of the Term of this Lease.  It is expressly understood that this
paragraph does not include the initial Improvements, which need not be removed
upon termination of this Lease.

3.           An Assignment for the benefit of creditors or by operation of law
shall not be effective to transfer any rights to assignee without the written
consent of Lessor first having been obtained, such consent not to be
unreasonably withheld.

4.           In the event that Lessee shall fail or refuse to vacate the Leased
Premises at the end of the Term, unless doing so within the option to renew
pursuant to Article XXV, the Minimum Monthly Rent shall be 150% of the Minimum
Monthly Rent from the immediately preceding year.  All powers granted to the
Lessor by this Lease may be exercised and all obligations imposed upon the
Lessee by this Lease shall be performed by the Lessee as well during any
extension of the original Term of this Lease as during the original Term itself.

ARTICLE XXVIII- ASSIGNMENT AND SUBLETTING

1.           The Lessee covenants not to assign this Lease or to sublet the
whole or any part of the Leased Premises or to permit any other person to occupy
same without the written consent of the Lessor first hand, which consent shall
not unreasonably be withheld, conditioned, or delayed, references elsewhere
herein to assignees notwithstanding. Any such assignment or subletting, even
with the consent of the Lessor, shall not relieve the Lessee from liability for
payment of Minimum Monthly Rent, Additional Costs or any other sum herein to
provided or from the obligation to keep and be bound by the terms, conditions
and covenants of this Lease. The acceptance of Minimum Monthly Rent or
Additional Costs or any other sums herein provided from any other person shall
not be deemed to be a waiver of any of the provisions of his Lease or to be
consent to the assignment of this Lease or subletting of the Leased Premises or
the release of the Lessee from the duties and obligations imposed upon the
Lessee pursuant to the provisions of this Lease. In addition, the lessee shall
not mortgage, pledge or grant any security interest in this Lease or any right,
title or interest therein.

2.           Notwithstanding the preceding paragraph hereof, the Lessee shall
have the absolute right at any time and from time to time to sublet, assign, or
otherwise transfer its rights or interest in the Lease to any subsidiary or
affiliate corporation of the Lessee or to a corporation with which the Lessee
and/or its subsidiary may merge, amalgamate, or consolidate or to any
corporation or legal entity which purchases all or substantially all of the
Lessee’s assets, provided, however, that it being understood that the Lessee
shall remain jointly and severally responsible with any such permitted assignee,
without the benefit of division or discussion, for the payment of the rent and
the performance of all of the other obligations of the Lessee under this Lease..
 
 
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3.           An Assignment for the benefit of creditors or by operation of law
shall not be effective to transfer any rights to assignee without the written
consent of Lessor first having been obtained, such consent not to be
unreasonably withheld.

ARTICLE XXIX – RELATIONSHIP OF PARTIES

Nothing contained in this Lease shall be deemed or construed by the parties
hereto or by any third party to create the relationship of principal and agent
or of partnership or of joint venture or of any association whatsoever between
the Lessor and the Lessee, it being expressly understood that neither this Lease
nor any act or acts of the parties hereto shall be deemed to create any
relationship between the Lessor and the Lessee other than the relationship of
Lessor and Lessee.

ARTICLE XXX – COMPLETE AGREEMENT

This writing contains the entire agreement between the parties hereto, and no
agent, representative, salesman or officer of the Lessor or the Lessee hereto
has authority to make or has made any statement, agreement or representation,
either oral or written, in connection herewith, modifying, adding or changing
the terms and conditions herein set forth.  No dealings between the parties
shall be permitted to contradict or modify the terms hereof. No modification of
this Lease shall be binding unless such modification shall be in writing and
signed by the parties hereto.

ARTICLE XXXI – SEVERANCE

If any provision of this Lease or application thereof to any person or
circumstance shall to any extent, be invalid or unenforceable, the remainder of
this Lease, or the application of such provision to other persons or
circumstances shall not be affected thereby, and shall be enforced to the
fullest extent permitted by law and accordingly this Lease is declared to be
severable.

ARTICLE XXXII – PROVISIONS BINDING

This Lease shall be binding upon and inure to the benefit of the parties hereto
and their respective heirs, representatives, successors, and to the extent
permitted hereunder, assigns.

ARTICLE XXXIII – TITLES OF ARTICLES

The titles of the Articles throughout this Lease are for convenience and
reference only, and such titles shall in no way be held to explain, modify,
amplify or aid in the interpretation, construction or meaning of the provisions
of this instrument.

ARTICLE XXXIV – MISCELLANEOUS

1.           Time is of the essence of this lease.

2.           In the event that there shall be more that one (1) person or entity
comprising the Lessee, each such person and entity comprising the Lessee shall
be jointly or severally liable hereunder.

3.           This Lease shall be governed by the laws of the Commonwealth of
Pennsylvania.
 
 
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4.           Lessor covenants that it shall not do a press release of any kind
regarding the fact that Lessor and Lessee have consummated this Lease or that
Lessee is renting space from Lessor.

IN WITNESS WHEREOF, AND INTENDING TO BE LEGALLY BOUND HEREBY, the parties hereto
have caused this Lease to be duly executed on the day and year first above.

   
LESSOR: SOUTH HEIDELBERG PARTNERS, L.P.
     
Dated:
  April 14, 2010  
By:
  /s/ Rick B. Burkey

 
Printed Name:
  Rick B. Burkey

 
Witness:  
 

   
LESSEE: LAKELAND INDUSTRIES, INC.
     
Dated:
  April 14, 2010  
By:
  /s/ Paul C. Smith

 
Printed Name:
  Paul C. Smith

 
Witness:  
 

 
 
 
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