Document:

Unassociated Document

    
      

    

    EXHIBIT
10.2

    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 Rotunda 100, LLC, a New Jersey
limited liability company (hereinafter “Rotunda 100”).

    

    Preliminary
Statement

    

    WHEREAS,
Grande Rotunda, LLC (the “LLC”) is a Maryland limited Liability Company
consisting of FREIT as the Managing Member and Rotunda 100, as the Limited
Member;

    

    WHEREAS,
FREIT is the owner of 60% of the “Percentage Interests” in the LLC and Rotunda
100 is the owner of 40% of the “Percentage Interests” in the LLC; the term
Percentage Interest being defined in the Operating Agreement of the LLC;
and

    

    WHEREAS,
the LLC is the owner of a mixed use retail complex located in Baltimore,
Maryland known as the “The Rotunda ” (the "Premises”); and

    

    WHEREAS,
the LLC is obligated to Bank of America (the “lender”) pursuant to a Promissory
Note (the "Note") in an amount of Twenty Two Million Five Hundred Thousand
Dollars ($22,500,000.00) (the “loan”), the proceeds of which were used to
acquire the Premises; 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 have been 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 sixty (60%) percent by
FREIT and forty (40%) by Rotunda 100;

    

    NOW
THEREFORE, the parties hereto agree as follows:

     

    
      	
              Section
      1.

            	
              Agreement
      of Indemnity.

            

    

    

    (a)           Rotunda
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 Rotunda 100’s forty percent (40%) share of the Percentage Interest in
the LLC.

    

    
      	
              Section
      2.

            	
              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
      3.

            	
              Nature
      of Obligations.

            

    

    
      
         

      

      
        Page
31

        
          

        

      

      
         

      

    

     

    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
      4.

            	
              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
      5.

            	
              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.

    

    
      	
               
      

            	
              (f)

            	
              Counterparts.

            

    

    
      
         

      

      
        Page
32

        
          

        

      

      
         

      

    

     

    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

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              Rotunda
      100, LLC

            
	 
      	 
      	 
      
	 
      	
              By:

            	
              /s/Robert S. Hekemian,
      Jr.

            
	 
      	 
      	
              Robert
      S. Hekemian, Jr., Managing Manager

            

    

     

     

    Page
33Unassociated Document

    
      

    

    EXHIBIT
10.3.1

    PROMISSORY
NOTE

    

    

    
      	
              $
      506,000.00

            	
              July
      19, 2005

            

    

    

    

    Robert S. Hekemian, Jr.,
having an address of 39 Twinbrooks Road N (herein referred to as the "Borrower"),
for value received, hereby promises to pay to the order of FIRST REAL ESTATE INVESTMENT TRUST of
NEW JERSEY, successors and/or assigns (herein referred to as the "FREIT") at
its offices, 505 Main Street, Hackensack, New Jersey 07601, on or before June
19, 2015 (the "Maturity
Date"), the principal sum of Five hundred and Six Thousand Dollars and no
cents ($
506,000.00) or so much
thereof as shall be outstanding as of the Maturity Date, and to pay interest on
the unpaid principal amount hereunder as hereinafter set forth.

    

    (a)           Interest
on this Note shall be charged at a per annum rate (the “LIBOR
Rate”), equal to two hundred twenty-five (225) basis points in excess of
“LIBOR” (as
defined below), for the corresponding “LIBOR Interest
Period” (being periods of three (3) months).  No LIBOR Interest
Period shall extend beyond the Maturity Date of this Note.  The Libor
Rate should be reset on each November 1, February 1, May 1 and August 1 during
the term.

    

    (b)           (i)           For
the purposes hereof, any interest period to which a LIBOR Rate applies is
referred to as a “LIBOR Interest
Period”, and the loan, or any part thereof, when bearing a LIBOR Rate, is
referred to herein as a A
LIBOR
Loan.

    

    (ii)          The
term "LIBOR" or
“LIBOR
Rate” shall mean, as applicable to any LIBOR Loan, the rate per annum as
determined on the basis of the offered rates for deposits in U.S. dollars, for a
period of time comparable to such LIBOR Loan as reported in the Wall Street Journal on the
business day closest to the day prior to the reset date.

    

    (c)           LIBOR
shall be adjusted each November 1, February 1, May 1 and August 1 during the
term of this Note  (such day being referred to herein as a “Reset
Date”) (but if any day is not a Business Day, then the first succeeding
day that is a Business Day shall instead apply.

    

    (d)          The
Borrower shall have the right to repay Loan without penalty.

    

    (e)           In
the event Borrower's employment by Hekemian & Co., Inc. shall terminate for
any reason, then this Note shall be repaid within 90 days of demand therefor by
FREIT.

    

    1.            
The Borrower shall pay to FREIT interest upon any unpaid balance on this Note,
which interest shall be due and payable to FREIT on November 1, February 1, May
1, and August 1 during the term in arrears, on the outstanding principal
balance, commencing on November 1, February 1, May 1, and August 1 during the
term of the month.  Interest will be charged on all sums due to FREIT
even after a default or judgment.  Each payment made to FREIT, when
paid, shall be applied first to the payment of all interest, charges and fees
accrued and unpaid, and the balance thereof to payment on account of
principal.  Interest shall be calculated on the basis of a 365-day
year

     

    
      
        
        

      

      
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34

        
          

        

      

      
        
        

      

    

     

    and the
actual number of days elapsed.  Notwithstanding anything hereinabove
to the contrary, any interest accrued from the date of the Note through October
31, 2006 shall be due and payable on November 30, 2006.  Pursuant to
the Pledge and Security Agreement entered into between Borrower and FREIT, all
refinancing proceeds, distributions, and other cash flow paid to FREIT as
assignee of Borrower’s Membership Interest in Rotunda 100, LLC, shall be applied
first to accrued and unpaid interest, charges and fees, and then to any
outstanding principal.

    

    2.          
 On the Maturity Date there shall be due and payable all unpaid principal
together with all accrued and unpaid interest, charges, and fees and all other
sums computed in accordance with this Note or otherwise payable pursuant to the
Loan Documents.  If the Maturity Date is not a business day, this
final payment shall be due and payable on the preceding business
day.

    

    3.          
 In the event any payment of interest or principal is received by FREIT
more than ten (10) days after the date due, the Borrower shall, to the extent
permitted by law, pay FREIT a late charge of five (5%) percent of the overdue
payment.

    

    4.          
 To the extent permitted by law, upon the occurrence of an Event of
Default, as defined herein the rate of interest on the unpaid principal balance
shall, at the option of FREIT be five  (5%) percent in excess of the
rate of interest provided herein (the "Default
Rate").  The Borrower acknowledges that:  (i) such
additional rate is a material inducement to FREIT to make the loan; (ii) FREIT
would not make the loan in the absence of the agreement of the Borrower to pay
such additional rate; (iii) such additional rate represents compensation for
increased risk to FREIT that the loan will not be repaid; and (iv) such rate is
not a penalty and represents a reasonable estimate of (a) the cost to FREIT in
allocating its resources (both personnel and financial) to the ongoing review,
monitoring, administration and collection of the loan and (b) compensation to
FREIT for losses that are difficult to ascertain.

    

    5.          
 Any one or more of the following shall constitute an event of default
under this Note (each an “Event of
Default”” and collectively “Events of
Default”“):

    

    
      	
               
      

            	
              (a)

            	
              If
      default shall be made in the payment of any amount payable under this Note
      when and as the same shall become due and
  payable.

            

    

    

    
      	
               
      

            	
              (b)

            	
              If
      an Event of Default as defined in the Pledge and Security Agreement
      hereinafter defined shall occur.

            

    

    

    6.         
   If any Event of Default shall have occurred, FREIT
may:

    

    (a)           declare
the entire unpaid principal balance, together with all accrued and unpaid
interest, charges, fees and all other sums under this Note to be due and
payable, whereupon this Note shall become forthwith due and payable as to
principal, interest, charges, fees and all other sums due hereunder, without
presentment, demand, protest, or other notice of any kind, all of which are
hereby expressly waived, anything contained herein notwithstanding;

    

    
      
        
           

        

        
          Page
35

          
            

          

        

        
           

        

      

    

    

    (b)           collect
interest on any overdue principal, interest, charges, fees and other sums owing
under this Note at the highest rate set forth in this Note or at the Default
Rate, whichever is higher;

    

    (c)           sell
all or part of any collateral given to secure this Note at public or private
sale, with such notice, if any, as may be required by law, all such notice being
hereby waived to the extent permitted by law;

    

    (d)           institute
proceedings for the complete or partial foreclosure of any property securing the
within Note; and/or

    

    (e)           commence
any other proceedings or steps to protect or enforce its rights in any sequence
determined by FREIT.

    

    7.            The
Borrower hereby grants to FREIT, a continuing lien, security interest and right
of setoff as security for all liabilities and obligations to FREIT, whether now
existing or hereafter arising, upon and against the Borrowers Membership
Interest in Rotunda 100, LLC, and as set forth in a certain Pledge and Security
Agreement of even date herewith given by Borrower to FREIT.  At any
time without demand or notice (any such notice being expressly waived by the
Borrower), FREIT may set off the same or any part thereof and apply the same to
any liability or obligation of the Borrower even though unmatured regardless of
the adequacy of any other collateral securing this Note.  ANY AND ALL
RIGHTS TO REQUIRE FREIT TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY
COLLATERAL WHICH SECURES THIS NOTE OR OTHER PROPERTY OF THE BORROWER ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

    

    8.            No
right or remedy herein conferred upon or reserved to FREIT is intended to be
exclusive of any other remedy or remedies, and each and every such remedy shall
be cumulative, and shall be in addition to every other remedy given hereunder or
now or hereafter existing at law or in equity or by statute.  No delay
or omission of FREIT to exercise any right or power accruing upon any Event of
Default shall impair any such right or power, or shall be construed to be a
waiver of any such Event of Default or an acquiescence therein; and every power
and remedy given by this Note may be exercised from time to time and as often as
may be deemed expedient by FREIT.  Nothing in this Note contained
shall affect the obligation of the Borrower or any guarantor or endorser to pay
the principal of and interest on this Note in the manner and at the time and
place herein expressed.

    

    9.            FREIT
may, without notice to or consent of any party liable for the payment hereof as
guarantor, endorser, surety or in any capacity whatsoever, and without impairing
or affecting the liability of such party to FREIT, (a) extend the time for
payment of this Note; (b) alter any other term of this Note by agreement with
the Borrower; (c) release, settle or compromise with any other party liable for
the payment hereof; and/or (d) release, or substitute for, any collateral held
by FREIT as security for the payment of any sum owing to FREIT by any party
hereto; and any renewal and/or modification document required by FREIT and
executed by the Borrower shall be deemed consented to by all such parties
without any requirement that any such party execute any such
document.  The Borrower and all guarantors, endorsers, sureties, and
others liable hereunder in any capacity

     

    
      
        
        

      

      
        Page
36

        
          

        

      

      
        
        

      

    

     

    whatsoever
hereby jointly and severally waive presentment for payment, demand, notice of
non-payment, notice of protest, protest of this Note, and all other notice of
any kind.

    

    10.           Should
the indebtedness represented by this Note or any part hereof be collected in any
proceeding, or this Note be placed in the hands of attorneys for collection
after default, the Borrower agrees to pay, in addition to the principal and
interest due and payable hereon, all costs of collecting this Note, including
reasonable attorneys' fees in addition to expenses.

    

    11.           This
Note is binding on the Borrower, any guarantors, endorsers, sureties, and all
others liable hereon and their heirs, administrators, executors,
representatives, successors and assigns, and shall inure to the benefit of
FREIT, its successors and assigns.

    

    12.           This
Note and the rights and obligations of all parties hereto shall be subject to
and governed by the laws of the State of New Jersey and irrespective of any
conflicts of laws.

    

    13.           In
case any one or more of the provisions herein or in any note, document,
instrument, agreement or writing executed in conjunction herewith shall be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision hereof, and
this Note shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein or therein.

    

    14.           In
consideration of the agreements contained herein, the Borrower hereby waives any
provisions applicable in connection with any voluntary or involuntary
insolvency, bankruptcy, reorganization, fraudulent conveyance or similar
proceeding involving the Borrower under any state or federal law regarding
creditors=
rights or debtors=
obligations imposing against the Borrower, or otherwise providing for, an
automatic stay under Section 362(a) of the Bankruptcy Code or any other
prohibition against FREIT=s
commencing, maintaining or completing any proceedings in connection with or the
exercise or enforcement of any of FREIT=s
rights hereunder or any applicable law.  In furtherance thereof, the
Borrower agrees that, in the event of the imposition of any such stay or other
prohibition, (a) not to contest any motion made by FREIT for the lifting thereof
or for exemption therefrom; and (b) to cooperate with FREIT, in any manner
requested by FREIT, in its efforts to obtain relief from any such stay or other
prohibition.

    

    15.           Upon
receipt of an affidavit of an officer of FREIT as to the loss, theft,
destruction or mutilation of this Note or any other loan document which is not
of public record, and, in the case of any such loss, theft, destruction or
mutilation, upon surrender and cancellation of such Note or other document, the
Borrower will issue, in lieu thereof, a replacement note or other document in
the same principal amount thereof and otherwise of like tenor.

    

    16.           This
Note is intended by the parties as the final, complete and exclusive statement
of the transactions evidenced by this Note.  All prior or
contemporaneous promises, agreements and understandings, whether oral or
written, are deemed to be superceded by this Note, and no party is relying on
any promise, agreement or understanding not set forth in this
Note.  This Note may not be amended or modified except by a written
instrument describing such amendment or modification executed by Borrower and
FREIT.

    

    17.           FREIT
shall have the unrestricted right at any time or from time to time, and without
Borrower’s or any Guarantor’s consent, to assign all or any portion of its
rights and obligations hereunder to one or more and person (each, an “Assignee”),
and Borrower and each Guarantor agrees

     

    
      
        
        

      

      
        Page
37

        
          

        

      

      
        
        

      

    

     

    that it
shall execute or cause to be executed, such documents, including without
limitation, amendments to this Note and to any other documents, instruments and
agreements executed in connection herewith as shall be reasonably
necessary  to effect the foregoing, provided same do not change the
Borrower’s rights and obligations.  The loan evidence by this Note has
been made by FREIT to the Borrower as an accommodation to Borrower as and
employee of Hekemian & Co., Inc. to make an investment in Rotunda 100, LLC,
which is a limited Member of Grande Rotunda, LLC,  the owner of
certain property in Baltimore, Maryland (the “Property”) in which FREIT is the
Managing Member.  Notwithstanding anything else herein provided, any
monies to which Borrower is entitled as a member of Rotunda 100, LLC resulting
from a refinancing of the Property shall be first applied to the outstanding
principal balance and accrued interest, if any, to the extent
thereof.

    

    THE
BORROWER AND EVERY OTHER PARTY LIABLE HEREON AS GUARANTOR, ENDORSER, SURETY OR
IN ANY CAPACITY WHATSOEVER EXPRESSLY WAIVE THE RIGHT TO A JURY TRIAL ON ALL
ISSUES SO TRIABLE, CONSENT TO AND CONFER PERSONAL JURISDICTION OVER THE BORROWER
AND SUCH OTHER PARTY ON THE COURTS OF THE STATE OF NEW JERSEY, EXPRESSLY WAIVE
ANY OBJECTIONS AS TO VENUE IN ANY OF SUCH STATE COURTS, AND EXPRESSLY WAIVE ANY
RIGHT OF REMOVAL FROM SUCH STATE COURTS.

    

    [Signature
lines on next page]

    

    
      
        
           

        

        
          Page
38

          
            

          

        

        
           

        

      

    

    

    IN
WITNESS WHEREOF, the Borrower has caused these presents to be properly executed
by their duly authorized corporate officers, the day and year first above
written.

    

    

    
      	
              WITNESS:

            	 
      
	 
      	
              /s/ Robert S.
      Hekemian, Jr.

            
	 
      	
              Robert
      S. Hekemian, Jr.

            
	 
      	 
      
	
              /s/ Allan
      Tubin

            	 
      

    

    

     

    Page 39

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