INDEMNIFICATION AGREEMENT
EXHIBIT
10.1
This
Indemnification Agreement (“the Agreement”) dated as of February 8, 2008 made by
and between First Real Estate Investment Trust of New Jersey, a New Jersey real
estate business trust (hereinafter “FREIT”), and Damascus 100, LLC, a New Jersey
limited liability company (hereinafter “Damascus 100”).
Preliminary
Statement
WHEREAS,
Damascus Second, LLC (the “LLC”) is a Maryland limited liability company
consisting of FREIT as the Managing Member and Damascus 100, as the Limited
Member;
WHEREAS,
FREIT is the owner of 70% of the “Percentage Interests” in the LLC and Damascus
100 is the owner of 30% of the “Percentage Interests” in the LLC; the term
Percentage Interest being defined in the Operating Agreement of the LLC;
and
WHEREAS,
Damascus Centre, L.L.C. ("Centre") is the owner of a mixed use retail complex
located in Damascus, Maryland known as the “Damascus Centre” (the "Premises”);
and
WHEREAS,
the LLC is obligated to Bank of America (the “lender”) pursuant to a Promissory
Note (the "Note") in an amount up to Twenty-Seven Million Two Hundred
Ninety-Eight Thousand Dollars ($27,298,000.00) (the “loan”), the proceeds of
which are being used to reconstruct the Premises; and
WHEREAS, Centre has granted an
Indemnity Deed of Trust on the Premises to secure its Indemnity Guaranty of the
Loan in favor of the Lender; and
WHEREAS,
as a condition precedent of the granting of the Loan, the Lender required FREIT
to execute certain guarantees and indemnifications related to the Loan as
evidenced by the Note, and a certain Guaranty Agreement of even date (all of the
foregoing being, collectively referred to herein as the “Guaranty Documents”);
and
WHEREAS,
the Guaranty Documents are being executed and delivered to Lender by FREIT with
FREIT’s understanding that any loss or other costs incurred pursuant to the
terms of the Guaranty Agreement will be borne seventy (70%) by FREIT and thirty
(30%) percent by Damascus 100;
NOW
THEREFORE, the parties hereto agree as follows:
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Section
1.
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Inducement.
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This
Agreement is executed by the undersigned in order to induce FREIT to execute and
deliver to the Lender the Guaranty Documents.
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Section
2.
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Agreement
of Indemnity.
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(a) Damascus
100 hereby, irrevocably and unconditionally agrees to jointly and severally
defend, indemnify and hold FREIT harmless from and against any and all claims,
demands, causes of action, liabilities, losses, costs incurred by FREIT as a
result of any and all action and enforcement of the Guaranty Documents to the
extent of Damascus 100’s thirty percent (30%) share of the Percentage Interest
in the LLC.
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28
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Section
3.
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Term.
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This
Agreement shall remain in full force and effect so long as any of the parties
hereto or their successors and assigns shall be liable to Lender under the
Guaranty Documents.
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Section
4.
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Nature
of Obligations.
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The
obligations of the Undersigned hereunder are primary obligations and such
obligations shall be absolute and unconditional irrespective of any illegality,
invalidity or unenforceability of or defect in any provision of the loan
documents prepared in connection with the Loan or of any obligations of the LLC
thereunder, the absence of any action to enforce the same, seek execution
thereof (or the lack thereof), or any other circumstance affecting the LLC
(whether or not within the control of the LLC or the Undersigned) which might
otherwise constitute a defense available to, or discharge of, the warrantor or
surety of any type. This Agreement is a continuing one and all
liabilities that apply or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon.
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Section
5.
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Independence
of Obligations.
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This
Agreement and the obligations of the Undersigned hereunder may be enforced in
full irrespective of the existence of the obligations (direct or
contingent) of the Undersigned or any other person (including, without
limitation, the LLC any other indemnitor or surety) under any other instrument
or agreement in favor of Lender, as the case may be with respect to the
obligations under the Loan or any other obligation. No payment by the
Undersigned or any other person under any other agreement shall under any
circumstance diminish, or constitute a defense to, the Undersigned obligations
hereunder until all obligations have been indefeasibly paid in
full.
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Section
6.
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Miscellaneous.
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(a)
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Modification.
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This
Agreement may be modified only by an instrument in writing signed by the parties
hereto.
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(b)
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Governing
Law.
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This
Agreement and the rights and obligations of the parties hereunder shall be
construed in accordance with, and be governed by, the laws of the State of New
Jersey.
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(c)
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Descriptive
Headings, etc.
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The
descriptive headings used in this Agreement are for convenience only and shall
not be deemed to affect the meaning of construction of any provision
hereof.
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(d)
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Benefit
of Agreement.
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This
Agreement shall be binding upon and inure to the benefit of the Undersigned and
their respective successors, assigns, and distributes.
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(e)
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Waivers.
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The
Undersigned hereby waive presentment, demand, protest or notice of any kind in
connection with this Agreement.
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29
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(f)
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Counterparts.
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This
Agreement may be executed in two or more counterparts, each of which shall be an
original, but which together constitutes one and same instrument.
IN
WITNESS WHEREOF, the Undersigned has caused this Agreement to be duly executed
and executed as of the date first above written.
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FIRST
REAL ESTATE INVESTMENT
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TRUST
OF NEW JERSEY
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By:
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/s/ Xxxxxx
Xxxxxx
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Xxxxxx
Xxxxxx, President
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Damascus
100, LLC
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By:
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/s/ Xxxxxx X.
Xxxxxxxx, Xx.
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Xxxxxx
X. Xxxxxxxx, Xx., Managing Manager
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