Document:

ex10-1.htm

    Exhibit
10.1

    
 

    July 1,
2008

    

    

                                       
Greg Pontes

    27 Beech
Ridge Rd.,

    Gadsden,
AL. 35901

    

                                       
Dear Mr. Pontes:

    

    The
purpose of this letter is to confirm your continuing employment with Lakeland
Industries, Inc. on the following terms and conditions:

    

                                       
1.         THE
PARTIES

    

    This is
an Agreement between Greg Pontes, residing at 27 Beech Ridge Rd., Gadsden, AL.
35901 (hereinafter referred to as “you”), and Lakeland Industries, Inc., a
Delaware corporation, with a principal place of business located at 701-7
Koehler Avenue, Ronkonkoma, NY  11779-7410 (hereinafter the
“Company”).

    

                                       
2.         TERM

    

    
      	
               
      

            	
              The
      term of the Agreement shall be for a 2 year period, from July 1, 2008
      through and including June 30,
2010.

            

    

    

                                       
3.         CAPACITY

    

    You shall
be employed in the capacity of Vice President Global Manufacturing of Lakeland
Industries, Inc. or such other position or positions as may be determined from
time to time by the Company.

    

    You agree
to devote your full time and attention and best efforts to the faithful and
diligent performance of your duties to the Company and shall serve and further
the best interests and enhance the reputation of the Company to the best of your
ability.

    

                                       
4.         COMPENSATION

    

    As full
compensation for your services, you shall receive following from the
Company:

    

    (a)       
A base annual salary of $145,000 payable bi-weekly (the “Base Salary”) to begin
in appropriate pay period in August 2008; and

    

    (b)       
Participation, if and when eligible, in the Company’s pension plan, profit
sharing plan, medical and disability plans, stock appreciation rights plan,
stock option plans and/or ESOP.  401(k) plans when any such plans become
effective; and

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
            	
               
      

            	
              (c)       
      Such benefits as are provided from time to time by the Company to its
      officers and employees; provided however that your annual vacation shall
      be for a period of 3 weeks, with no more than 2 such weeks taken at any
      one time; and

            

    

    

    (d)       
Reimbursement for any dues and expenses incurred by you that are necessary and
proper in the conduct of the Company’s business; and

    

    (e)        
An annual bonus as set forth in Section 5 of this Agreement (the “Annual
Bonus”).

    

    5.        
ANNUAL
BONUS

    

    For FY
2009, you shall be awarded a discretionary bonus which shall be at the
discretion of the CEO and the Compensation Committee, but shall not be less than
$10,000. In FY2010, you shall also be awarded a discretionary bonus based upon
achieving certain goals to be laid out by the CEO.

    

    6.        
NON-COMPETITION/SOLICITATION/CONFIDENTIALITY

    

    During
your employment with the Company and for one year thereafter, you shall not,
either directly or indirectly, as an agent, employee, partner, stockholder,
director, investor or otherwise, engage in any business in competition with the
business activities of the Company within the Company’s market area(s). 
You shall also abide by the Code of Ethics Agreement and other Corporate
Governance Rules.  You shall disclose prior to the execution of this
Agreement (or later on as the case may be) all business relationships you
presently have or contemplate entering into or enter into in the future that
might affect your responsibilities or loyalties to the Company.

    

    During
the term of your employment and for one year thereafter, you shall not, directly
or indirectly, hire, offer to hire or otherwise solicit the employment of any
employee of the Company on behalf of yourself or any other business or entity
that competes with the business activities engaged in by the Company within the
Company’s market area(s).

    

    Except as
may be required to perform your duties on behalf of the Company, you agree that
during your employment and for a period of one year thereafter, you shall not,
directly or indirectly, solicit, service, or accept business from, on your own
behalf or on behalf of any other business or entity, any customers or potential
customers of the Company with whom you had contact during your employment or
about whom you acquired confidential information during your
employment. 

    

    Except as
required in your duties to the Company, you shall not at any time during or
after your employment, directly or indirectly, use or disclose any confidential
or proprietary information relating to the Company or its business or customers
which is disclosed to you or known by you as a consequence of or through your
employment by the Company and which is not otherwise generally obtainable by the
public at large.

    

    In the
event that any of the provisions in this paragraph 6 shall ever be adjudicated
to exceed limitations permitted by applicable law, you agree that such
provisions shall be modified and enforced to the maximum extent permitted under
applicable law.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    7.        
TERMINATION

    

    You or
the Company may terminate your employment prior to the end of the Term upon
written notice to the other party in accordance with the following
provisions:

    

    
      	
            	
              (a)         
      

            	
              Death.  Your
      employment shall terminate on the date of your death.  Your Base
      Salary (as in effect on the date of death) shall continue through the last
      day of the month in which your death occurs.  Payment of your Base
      Salary shall be made to your estate or your beneficiary as designated in
      writing to the Company.  Your estate or designated beneficiaries as
      applicable shall also receive a pro-rata portion of the Annual Bonus, if
      any, determined for the fiscal year up to and including the date of death
      which shall be determined in good faith by the Compensation Committee of
      the Board of Directors.  Your beneficiaries shall also be entitled to
      all other benefits generally paid by the Company on an employee’s
      death.

            

    

    

    
      	
            	
              (b)         
      

            	
              Disability.  Your
      employment shall terminate if you become totally disabled.  Your
      shall be deemed to be totally disabled in you are unable, for any reason,
      to perform any of your duties to the Company, with or without a reasonable
      accommodation, for a period of 90 consecutive days or for periods
      aggregating 120 days in any period of 180 consecutive
  days.

            

    

    

    
      	
            	
              (c)       
      

            	
              Cause.  The Company
      may terminate your employment for “Cause”, which shall mean termination
      based upon: (i) your failure to substantially perform your duties with the
      Company, after a written demand for such performance is delivered to you
      by the Company, which identifies the manner in which you have not
      performed your duties, (ii) your commission of an act of fraud, theft,
      misappropriation, dishonesty or embezzlement, (iii) your conviction for a
      felony or pleading nolo
      contendere to a felony, (iv) your failure to follow a lawful
      directive of management, or (v) your material breach of any provision of
      this Agreement.  In the event of a termination for Cause, the Company
      shall pay you, within thirty days of such termination, that portion of
      your Base Salary which is accrued but unpaid as of the date of such
      termination and any other benefits accrued prior to the date of
      termination under this Agreement.

            

    

    

    
      	
            	
              (d)       

            	
               Other Termination. 
      Should you decide to leave the Company, you will provide the Company with
      60 days written notice.  Should the Company decide to terminate you
      for any reason other than as set forth above, it shall have the right to
      buy out your contract rights herein for 6 months Base Salary and any bonus
      due you on the date of termination, all concomitant with your execution of
      the Company’s standard severance agreement and
  release.

            

    

    

    8.        
NOTICES

    

    Any
notices required to be given under this Agreement shall, unless otherwise agreed
to by you and the Company, be in writing and by certified mail, return receipt
requested and mailed to the Company at its headquarters at 701 Koehler Avenue,
Suite 7, Ronkonkoma, NY  11779-7410 or to you at your home address at 27
Beech Ridge Rd., Gadsden, AL. 35901.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    9.        
ASSIGNMENT AND
SUCCESSORS

    

    The
rights and obligations of the Company under this Agreement shall inure to the
benefit of and shall be binding upon the successors of the Company.  This
Agreement may not be assigned by the Company unless the assignee or successor
(as the case may be) expressly assumes the Company’s obligations hereunder in
writing.  In the event of a successor to the Company or the assignment of
the Agreement, the term “Company” as used herein shall include any such
successor or assignee.

    

    10.      
WAIVER OR
MODIFICATION

    

    No waiver
or modification in whole or in part of this Agreement or any term or condition
hereof shall be effective against any party unless in writing and duly signed by
the party sought to be bound.  Any waiver of any breach of any provision
hereof or right or power by any party on one occasion shall not be construed as
a waiver of or a bar to the exercise of such right or power on any other
occasion or as a waiver of any subsequent breach.

    

    11.      
SEPARABILITY

    

    Any
provision of this Agreement which is unenforceable or invalid in any respect in
any jurisdiction shall be ineffective in such jurisdiction to the extent that it
is unenforceable or invalid without effecting the remaining provisions hereof,
which shall continue in full force and effect.  The unenforceability or
invalidity of any provision of the Agreement in one jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.

    

    12.      
GOVERNING LAW AND
ARBITRATION

    

    This
Agreement shall be interpreted and construed in accordance with the laws of the
State of New York without regard to its choice of law principles.  Any
dispute, controversy or claim of any kind arising under, in connection with, or
relating to this Agreement or your employment with the Company shall be resolved
exclusively by binding arbitration.  Such arbitration shall be conducted in
New York City in accordance with the rules of the American Arbitration
Association (“AAA”) then in effect.  The costs of the arbitration (fees to
the AAA and for the arbitrator(s)) shall be shared equally by the parties,
subject to apportionment or shifting in the arbitration award.  In
addition, the prevailing party in arbitration shall be entitled to reimbursement
by the other party for its reasonable attorney’s fees incurred.  Judgment
may be entered on the arbitration award in any court of competent
jurisdiction.

    

    13.      
HEADINGS

    

    The
headings contained in this Agreement are for convenience only and shall not
effect, restrict or modify the interpretation of this
Agreement.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

      
        	 
      	
                LAKELAND
      INDUSTRIES, INC.

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/ Eric O.
      Hallman

              
	 
      	 
      	
                Eric
      O. Hallman

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                AGREED
      AND ACCEPTED:

              	
                By

              	
                /s/: John J.
      Collins

              
	 
      	 
      	
                John
      J. Collins

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	
                /s/ Gregory D.
      Pontes

              	
                By:

              	
                /s/ A. John
      Kreft

              
	
                Gregory
      D. Pontes

              	 
      	
                A.
      John Kreft

              
	
                Vice
      President, Global Manufacturing

              	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/ Michael
      Cirenza

              
	 
      	 
      	
                Michael
      Cirenza

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	
                /s/ Stephen
      Bachelder

              
	 
      	 
      	
                Stephen
      Bachelder

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	
                Board
      of Directors

              
	 
      	 
      	
                Compensation
      Committeeex10-1.htm

    

      EXHIBIT
10.1

      

      AGENCY
AGREEMENT

      

      This
Agency Agreement made as of this 13th day of
August, 2008 by and between DAMASCUS CENTER, LLC
(hereinafter referred to as the “Owner”) and HEKEMIAN DEVELOPMENT RESOURCES,
LLC (hereinafter the “Agent”) both having an address at 505 Main Street,
Hackensack, New Jersey 07601;

      

      WHEREAS,
The Owner is the owner of Damascus Center, a shopping center located in
Damascus, Maryland (the “Center”); and

      

      WHEREAS,
the Owner is about to or has commenced the redevelopment of the Center in
accordance with the Approved Plans, which upon completion will consist of
approximately 140,000 square feet of retail area; and

      

      WHEREAS,
Owner wishes to retain the Agent to advise it in all phases of the development
of the “Improvements” (as defined below) and to act on behalf of the Owner, as
Owner shall so direct, in connection with the Architect, Engineer, and
Contractors hereinafter defined; and

      

      WHEREAS,
Agent is willing to undertake such responsibilities as are hereinafter set forth
in accordance with the terms and conditions contained in this Agreement;
and

      

      NOW
THEREFORE, for One ($1.00) Dollar and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, to the terms contained
herein the Owner and Agent agree as follows:

      

      
        	
                 
      

              	
                1.

              	
                DEFINITIONS:

              

      

       

      (a)         Approved
Plans: The plans and specifications prepared by the Design Team as same may be
modified from time to time with the prior approval of the Owner with respect to
material changes to the site plan and to gross leasable area of any
building.

      

      (b)         Architect:
Mushinsky Voelzke Associates.

      

      (c)         Architect’s
Agreement: The Proposal dated _________________, addressed to [Hekemian &
Co., Inc. on behalf of] Owner and attached hereto as Exhibit A.

      

      (d)         Buildings:  The
buildings identified on the Approved Plans.

      

      (e)         Engineer:
Site Solutions, Inc.

      

      (f)          Engineer’s
Agreement: The letter proposal from Engineer addressed to Hekemian & Co.,
Inc. on behalf of Owner referencing Contract #1289 and attached hereto as Exhibit B.

      

      (g)         Contractor:
A Contractor is defined to include all site Contractors, building
contractors, subcontractors and suppliers retained by the Owner in
connection with the Project.

      

      (h)       
 Design Team: The Architect and Engineer(s).

      
 

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (i)            Development
Costs: Development Costs are defined to mean the aggregate
amount expended by Owner for the Project, but excluding therefrom, acquisition
costs for the Center and improvements located thereon prior to the commencement
of the Project, but including all “Soft Costs” expended in connection with the
Project, but in no case shall the Development Costs exceed Seventeen Million
Three Hundred Twenty Three Hundred Twenty Eight Thousand and 00/100 Dollars
($17,328,000.00), unless the Owner has approved a change, in the scope of the
Project, in which case Development Costs shall be deemed increased or decreased
to the extent of the resulting change in Project costs.  The term
“Development Costs” shall be utilized for the determination of Agent’s Fee and
not the ultimate cost of the Project.

      

      (j)           Improvements:
All site work and Buildings as depicted on the Approved Plans.

      

      (k)           Lender:
Bank of America or other lender as designated by Owner, in its sole
discretion.

      

      (l)           Owner’s
Representative: Donald Barney.  If Donald Barney is not available, the
Owner’s Representative shall be Ronald Artinian or any other party that Owner
designates as the Owner’s Representative.

      

      (m)          Project:
Project is defined as all approvals and redevelopment of the Center including
the construction of all Improvements, in accordance with the Approved Plans and
the Site Plan.

      

      (n)           Project
Personnel: Project Personnel shall be deemed to be all architectural and
engineering firms (in addition to the Architect and Engineer), surveyors,
traffic consultants, environmental consultants, security personnel, marketing
and public relations specialists and lobbyists and any other personnel as are
determined by the Agent to be reasonably necessary for the timely completion of
the Project, so long as retaining such personnel is consistent with this
Agreement and any other written agreement approved by the Owner.

      

      (o)           Soft
Costs: Soft Costs are all fees and expenses paid for architectural, engineering
and other professional fees, but excluding any fees paid to accountants and
attorneys.

      

      (p)           Site
Plan:  The plan prepared by Site Solutions, Inc. approved by the
Montgomery County Planning Department as the same may be modified from time to
time with the prior approval of the Owner with respect to material changes to
the building layout.

      

      2.           PROJECT
SCOPE: The
Agent on behalf of Owner shall undertake the following
(the “Project Scope”) in accordance with this Agreement and Owner’s instructions
based on the Approved Plans:

      

      (A)           Research
development options through studying various conceptual plans, existing zoning
and comprehensive zoning. The parties hereto acknowledge that Agent has already
completed this task.

      

      (B)           Recommend
to the Owner a Project plan (the “Project Plan”), a copy of which is attached
hereto as Exhibit C,
that increases the use of the property and enhances its value. The parties
hereto acknowledge that Agent has already completed this task.

      

      (C)           Obtaining
of all approvals for the Project.

      

      (D)           Phased
demolition of the Project, in accordance with the Project Plan.

      

      (E)           Three
Phased construction of the Improvements, in accordance with the Project Plan,
the Approved Plans and the Site Plan.

      

      (F)           Oversight
of existing and new lease negotiations with tenants and any
brokers.

      

      (G)           Coordination
of existing tenant relocations within the Center.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (H)           Review
all bidding of contracts for the Improvements and recommendations to the Owner
for the hiring of Contractors.

      

      (I)           Negotiation
of all requisite contracts for the Improvements subject to the approval of Owner
and Owner’s legal counsel, for all contracts which exceed the dollar amount set
forth in Section 3A(15).

      

      (J)           Liaison
between Contractor(s) and Design Team

      

      (1)           Review
progress and scheduling

      (2)           Review
change orders subject to approval of the Owner and Design Team

      (3)           Coordinate
requests for information with the Design Team

      (4)           Coordinate
requests for clarifications with the Design Team

      (5)           Oversee
approvals of submittals and Shop drawings with the Design Team

      (6)           Oversee
construction scheduling as Owner’s representative

      (7)           Oversee
Project closeout with the Design Team

      

      (K)           Coordination
with Owner’s Lender:

      

      (1)           Process
draw requests to Lender pursuant to a written draw request, provided that the
Architect has previously approved such draw.

      

      (L)           Exclusions:  The
following are excluded from Agent’s scope of services:

      

      (1)           Means
and Methods of Construction.

      

      (2)           Defects
or deficiencies in the work of the Contractors or delays in any of the work
performed.

      

      (3)           Errors
and/or omissions of the Design Team.

      

      (4)           Cost
overruns.

      

      (5)           Oversight
of various trades subcontractors.

      

      
        	
                 
      

              	
                (7)

              	
                Arbitration
      or litigation preparation and arbitration or court appearances on behalf
      of Owner.

              
	 	 	 

      

      
        	
                 
      

              	
                (8)

              	
                Brokerage
      Services

              

      

      

      

      3.           SCOPE OF
SERVICES:

      

      A.           So
long as Agent’s actions are consistent with this Agreement and any other written
agreement that the Owner has formally approved, the Agent shall, on behalf of
Owner and at Owner’s expense:

      

      (1)           Engage
the Design Team, a general contractor, consultants, and such other personnel as
Agent deems commercially reasonable and necessary in order to complete the
Project;

      

      (2)           Recommend
to Owner the hiring of Project Personnel as the Agent deems appropriate for the
Project;

       

      (3)           Undertake
the necessary actions to implement the Project Scope;

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      (4)           Use
commercially reasonable efforts to assist in negotiating fair and complete
agreements with Contractors and material suppliers and to obtain satisfactory
performance from each of the Project Personnel, subject to Owner’s approval and
the approval of Owner’s legal counsel.

      

      (5)           Monitor
construction costs and provide the Owner with reports on actual costs for the
Project and estimates for the Project completion as the same are adjusted from
time to time based upon changes in the Development Costs;

      

      (6)           Administer
the contracts of the Project for compliance with the terms and conditions of
each contract;

       

      (7)           At
the direction of the Design Team, require additional inspections and testing of
the work, and reject work which does not conform to the requirements of the
Approved Plans and the Site Plan;

      

      (8)           Solicit
bids from all respective General Contractors, Contractors and material suppliers
and assist the Owner in the determination of the most qualified and cost
efficient Contractors and material suppliers;

       

      (9)           Coordinate
with the Design Team to obtain final approvals for the Project and verify that
interim inspections are performed in order to obtain such certificates of
occupancies as may be required by applicable governmental authorities having
jurisdiction over the Project and or the Center;

      

      (10)           Maintain
a copy of all plans, specifications, contracts, invoices and financial matters
related to the Project and supply a copy thereof to Owner and upon the
completion of the Project, Agent shall provide a complete copy of the foregoing
to the Owner upon Owner’s request.

      

      (11)           Use
commercially reasonable efforts to secure lien waivers from Contractors and
material suppliers.

       

      (12)           Submit
to Owner, for Owner’s prior approval, any change order whose the cost may
reasonably be anticipated to exceed Fifty Thousand ($50,000) Dollars to the
Owner.

      

      (13)           When
the aggregate cost of all change orders for any phase of the Project exceeds
Seven (7%) Percent of the Development Costs allocated to such phase, Agent shall
report all change Orders to Owner’s Representative and thereafter, provide
Owner’s Representative with a monthly status report relative to the construction
of the Project.

      

      (14)           Submit
to Owner, for Owner’s prior approval, any individual contract whose cost may
reasonably be anticipated to exceed One Hundred Thousand ($100,000)
Dollars.

       

      

      4.           OWNERS
RESPONSIBILITIES:  In
order for Agent to undertake its duties pursuant to this Agreement, the Owner
shall be responsible to perform the following, in a timely manner:

      

      A.           Respond
to all inquiries and or requests by Agent so that the progress of the Project is
not hindered or delayed;

      

      B.           Based
upon the reasonable recommendations of the Agent, to purchase and provide
written evidence of insurance, including, but not limited to builders all risk
insurance for the Project pursuant to which the Agent is named as an additional
insured;

      

      C.           Following
the approval of work by the Architect, the Design Team and the Lender where
applicable of the requisition for such work, Owner shall pay all Project bills
and invoices necessary to comply with contract obligations for all Contractors,
Project Personnel and in accordance with Lender’s requirements, timely payment
all Fees due Agent;

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      D.           Pay
for sufficient copies of plans and specifications for the benefit of all Project
Personnel;

      

      E.           The
Owner acknowledges that it has approved the Architect’s Agreement and the
Engineer’s Agreement and modifications thereto as of the date
hereof.

      

      5.           AGENT
FEES.  Owner shall pay
Agent a fee in an amount equal to seven percent (7%) of Development Costs (the
“Fee”) in the following manner:

      

      A.           10%
of the Fee, upon execution of this Agreement.

      

      B.           40%
of the Fee upon the issuance of the first building permit for the
Project.

      

      C.           50%
of the Fee paid in monthly installments based upon the percentage of completion
of the Project as reflected in the General Contractor’s requisition and approved
by the Architect for each phase. The Owner and the Agent acknowledge that the
Project consists of three (3) phases and the portion of the Fee paid to Agent
pursuant to this Subsection C shall be calculated for each phase by allocating
the square footage of building(s) developed in each phase as a percentage the
total approved square footage in accordance with the schedule
below:

      
        	
                 

              	 	
                

                  Sq.
      Ftg.

                

              	 	 	 
      

                % of
      Total

              	 
	
                Building
      A

              	 	 	21770	 	 	 	14.78	%
	
                Building
      A-I Addition

              	 	 	14,226	 	 	 	9.66	%
	
                Building
      B, C, D

              	 	 	23,796	 	 	 	16.16	%
	
                Safeway

              	 	 	57,860	 	 	 	39.29	%
	
                Building
      E

              	 	 	16,434	 	 	 	1.16	%
	
                Building
      F

              	 	 	13,174	 	 	 	8 95	%
	
                Total

              	 	 	147,260	 	 	 	100.00	%

      

      

      By way of
example, if Phase I includes Building A and Building F add 14.78% and 8.95%
which equals 23.75% times 50% of the Fee. This dollar amount will be the amount
to be paid in the phase based on the percentage of construction completed within
the phase as depicted on the Contractor’s requisition and certified by the
Architect.

      

      

      6.           INDEMNIFICATION:        (a)        The
parties acknowledge that Agent is acting in an agency capacity on behalf of the
Owner in accordance with this Agreement and in such capacity Agent shall have
the right to undertake such action on behalf of the Owner, but only in strict
accordance with this Agreement, subject, however, to modification of such
authority by written Agreement between the Owner and the Agent. In connection
with such agency, the Owner covenants and agrees that it shall indemnify, defend
and hold harmless the Agent as well as the Agent’s officers, employees, agents,
attorneys and members (hereinafter referred to collectively as the “Agent
Indemnified Parties” and individually as an “Agent Indemnified Party”) from and
against any and all losses, damages, expenses or liabilities of any kind or
nature and from any suits, claims, or demands, including reasonable counsel fees
incurred in investigating or defending such claim, suffered by any of them if
caused by, relating to, arising out of, resulting from, or in any way connected
with the Agent’s actions contemplated herein; provided, however, the Owner shall
not be obligated to indemnify, defend and hold harmless an Agent Indemnified
Party, if the loss, damage, expense or liability was caused by or resulted from
an Agent Indemnified Party’s: (1) own gross negligence;  (2) willful
misconduct; (3) a material breach of the terms of this Agreement; and (4) any
act or omission which exceeds the authority granted to the Agent by the terms of this Agreement which results in monetary loss to the
Owner. In case any action shall be brought against an Agent Indemnified Party
based upon any of the above and in respect to which indemnity may be sought
against the Owner, the Agent Indemnified Party against whom such action shall be
brought, shall promptly notify the Owner in writing, and the Owner shall assume
the defense thereof, including the retainer of counsel selected by the Owner and
reasonably satisfactory to said Agent Indemnified Party, and the payment of all
costs incurred in connection therewith.  Owner shall retain the
exclusive right to negotiate and consent to any settlement.

      
 

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      (b)           The
Agent covenants and agrees that it shall indemnify, defend and hold harmless the
Owner as well as the Owner’s officers, employees, agents, attorneys and members
(hereinafter referred to collectively as the “Owner Indemnified Parties” and
individually as an “Owner Indemnified Party”) from and against any and all
losses, damages, expenses or liabilities of any kind or nature and from any
suits, claims, or demands, including reasonable counsel fees incurred in
investigating or defending such claim, suffered by any of them if caused by,
relating to, arising out of, resulting from, or in any way connected with the
Agent’s material breach of the terms and conditions of this Agreement, its gross
negligence or willful misconduct, or any act or omission which exceeds the
authority granted to the Agent by the terms
of this agreement which results in monetary loss to the Owner, however, the Agent shall not be obligated to
indemnify, defend and hold harmless an Owner Indemnified Party’s (1) own
negligence, (2) willful misconduct, (3) material breach of the terms of this
Agreement, and (4) any act or omission arising out of the Owner’s obligations
hereunder.  In case any action shall be brought against an
Owner Indemnified Party based upon any of the above and in respect to which
indemnity may he sought against the Agent, the Owner Indemnified Party against
whom such action shall be brought, shall promptly notify the Agent in writing,
and the Agent shall assume the defense thereof, including the retainer of
counsel selected by the Agent and reasonably satisfactory to the Owner, and the
payment of all costs incurred in connection therewith.  Agent shall retain the exclusive right to
negotiate and consent to any settlement, wherein Agent is paying the settlement
amount.

      

      7.           TERMINATION
BY THE OWNER FOR CAUSE:  Should
the Agent fail in the performance of its duties hereunder, excepting delays
occasioned by strikes, floods, fires, accidents and not caused by the negligence
of the Owner and other natural disasters which are beyond the control of the
Agent, the Owner shall notify the Agent in writing of the Owner’s intent to
declare the Agent in default under this Agreement.  Within twenty (20)
days from the date Owner sends this notice to Agent, Agent shall cure the
default or, if such default cannot reasonably be cured during such twenty (20)
day period, Agent shall commence curing and diligently prosecute curing the
default until such default is cured.  Failure by the Agent to cure or
diligently prosecute curing the default within such twenty (20) day period shall
constitute a material breach of this Agreement on the part of the
Agent.  In such event, the Owner shall have the right to terminate
this Agreement. In such case, the Owner shall pay the Agent the unpaid balance
of the amount due Agent to be paid under this Agreement as of the date of
termination hereof and neither party shall be further obligated to the other and
there should be no obligation or Liability going forward.

      

      8.           TERMINATION
BY AGENT:  The Agent may
terminate this Agreement only if the Owner shall fail to pay the fee in
accordance with the terms of this Agreement, or as
set forth in Section 9 below.

      

      9.           SUSPENSION
OF WORK:   Should Owner desire to suspend the
project, then Owner must
notify Agent in writing of its desire to suspend the Project.  If Owner suspends
construction of the Project for a period of ninety (90)
consecutive days, Agent
may upon written notice to the Owner state that it is seeking additional
compensation for expenses caused by such suspension.  Within 15 days
of receipt of such notice Owner may at its option either (a) agree to accept a
claim for additional compensation or (b) permit Agent to terminate the agreement without
additional compensation.  For the purposes of this Agreement, the
period of suspension shall commence on the date when Owner gives notice to the Agent that suspension has
commenced.  In
the event the Project is suspended for any reason by the Owner, then the Owner
only shall be liable for any claims by Contractors and the Design Team for
suspension of the Project and the Owner shall indemnify the Agent for all claims
made by the foregoing pursuant to Section 6 of this Agreement.

      

      10.           ENTIRE
AGREEMENT.  This Agreement
contains the final and entire agreement between the parties hereto and each
shall not be bound by any terms, conditions, statements, warranties or
representations, oral or written, not contained herein. All understandings and
agreements heretofore made between the parties are merged in this Agreement,
which alone fully and completely expresses the agreement of the parties and
which may not be changed, modified or terminated except by a written instrument
signed by the parties or their respective counsel.

      

      11.           CHOICE
OF LAW. This
Agreement shall be interpreted in accordance with the laws and enforced in the
Courts of the State of New Jersey without regard to principles of conflicts of
laws. Any disputes shall be litigated in the Superior Court of New Jersey,
Bergen County.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      12.           COUNTERPARTS. This Agreement may be executed
in any number of counterparts, each of which counterparts shall be deemed to be
an original and all of which counterparts shall constitute the same Agreement,
at such time as each party shall have executed and delivered to the other at
least one (1) copy of this Agreement.

      

      13           BINDING
EFFECT.  This Agreement
shall be binding upon and shall inure to the benefit of Owner and Agent and
their respective successors and permitted assigns.

      

      14           NOTICES.  All notices, requests,
consents and other communications hereunder shall be in writing and shall he
either: (i) mailed in a United States Post Office depository by certified mail,
return receipt requested, postage prepaid; or (ii) delivered by an overnight
courier delivery service, with a receipt provided therefor and charges prepaid,
addressed to the parties at the address set forth above and notices shall be
deemed given on the date of receipt or refusal.

      

      15           PREPARATION
OF AGREEMENT.  This Agreement
shall not be construed more strongly against either party regardless of who is
responsible for its preparation.

      

      In
witness whereof, the parties have executed this Agreement as of the date set
forth above.

       

      
        	
                OWNER

              	 
      	
                AGENT

              
	 
      	 
      	 
      	 
      	 
      
	
                DAMASCUS
      CENTER, LLC

              	 
      	
                HEKEMIAN
      DEVELOPMENT

              
	
                By:

              	
                First
      Real Estate investment Trust

              	 
      	
                RESOURCES,  LLC

              
	 
      	
                of
      New Jersey, Managing Member

              	 
      	 
      	 
      
	 	 	 	 	 
	
                By:

              	
                /s/
      Donald Barney

              	 
      	
                By:

              	
                /s/
      Bryan Hekemian

              
	 
      	
                Donald
      Barney, President

              	 
      	 
      	
                Bryan Hekemian, Managing
      Member

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