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EXHIBIT 10.1
INDEMNIFICATION AGREEMENT
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:
This
Agreement is executed by the undersigned in order to induce
FREIT to execute and deliver to the Lender the Guaranty
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