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, subcontractorsand 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 ExhibitC,
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
      TotalBuilding
      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 Agreementwhich 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, thenOwner must
notify Agent in writing of its desire to suspend theProject.  If Owner suspends
construction of theProjectfor 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) permitAgentto terminate the agreement without
additional compensation.  For the purposes of this Agreement, the
period of suspension shall commence on the date whenOwner gives notice to theAgentthat 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
              
              AGENTDAMASCUS
      CENTER, LLC
              
              HEKEMIAN
      DEVELOPMENTBy:
              First
      Real Estate investment Trust
              
              RESOURCES,  LLCof
      New Jersey, Managing MemberBy:
              /s/
      Donald Barney
              
              By:
              /s/
      Bryan HekemianDonald
      Barney, President
              
              
              Bryan Hekemian, Managing
      Member