Unassociated Document


    
      

    

    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:

    


    
      	
              Section
      1.

            	
              Inducement.

            


    

    


    This
Agreement is executed by the undersigned in order to induce FREIT to execute and
deliver to the Lender the Guaranty Documents.

    


    
      	
              Section
      2.

            	
              Agreement
      of Indemnity.

            


    

    


    (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.


    
      
         


      

      
        Page
28

        
          

        

      

      
         


      

    

     

    
      	
              Section
      3.

            	
              Term.

            


    

    


    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.

    


    
      	
              Section
      4.

            	
              Nature
      of Obligations.

            


    

    


    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.

    


    
      	
              Section
      5.

            	
              Independence
      of Obligations.

            


    

    


    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.

    


    
      	
              Section
      6.

            	
              Miscellaneous.

            


    

    


    
      	
               
      

            	
              (a)

            	
              Modification.

            


    

    


    This
Agreement may be modified only by an instrument in writing signed by the parties
hereto.

    


    
      	
               
      

            	
              (b)

            	
              Governing
      Law.

            


    

    


    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.

    


    
      	
               
      

            	
              (c)

            	
              Descriptive
      Headings, etc.

            


    

    


    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.

    


    
      	
               
      

            	
              (d)

            	
              Benefit
      of Agreement.

            


    

    


    This
Agreement shall be binding upon and inure to the benefit of the Undersigned and
their respective successors, assigns, and distributes.

    


    
      	
               
      

            	
              (e)

            	
              Waivers.

            


    

    


    The
Undersigned hereby waive presentment, demand, protest or notice of any kind in
connection with this Agreement.


    
      
         


      

      
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29

        
          

        

      

      
         


      

    

     

    
      	
               
      

            	
              (f)

            	
              Counterparts.

            


    

    


    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.

    


    
      	 
      	
              FIRST
      REAL ESTATE INVESTMENT

            
	 
      	
              TRUST
      OF NEW JERSEY

            
	 
      	 
      	 
      
	 
      	
              By:

            	
              /s/ Donald
      Barney

            
	 
      	 
      	
              Donald
      Barney, President

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              Damascus
      100, LLC

            
	 
      	 
      	 
      
	 
      	
              By:

            	
              /s/ Robert S.
      Hekemian, Jr.

            
	 
      	 
      	
              Robert
      S. Hekemian, Jr., Managing Manager

            


    

     

    
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