UNITED STATES
 
SECURITIES AND EXCHANGE COMMISSION
 
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported)      November 8, 2011
 
Presidential Realty Corporation
(Exact name of registrant as specified in its charter)

DELAWARE
 
1-8594
 
13-1954619
(State or other jurisdiction
 
(Commission
 
(I.R.S. Employer
of incorporation)
 
File Number)
 
Identification Number)
 
180 South Broadway, White Plains, New York
 
10605
(Address of principal executive offices)
 
(Zip Code)
 
Registrant’s telephone number, including area code      (914) 948-1300
 
No change since last Report
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 

 
 
Item 1.01.
Entry into a Material Definitive Agreement
 
General.   As described in this Item 1.01, as well as in Items 1.02, 5.01, 5.02 and 8.01, Presidential Realty Corporation (the “Company”) and PDL Partnership, a New York general partnership (“PDL Partnership”), the general partners of which are Jeffrey F. Joseph (at the time, a director and officer of the Company), Steven Baruch (at the time, a director and former officer of the Company) and Thomas Viertel (at the time, a director and former officer of the Company), entered into a series of strategic transactions (collectively, the “Transactions”) with the investors identified below and Signature Community Investment Group LLC (together with its affiliates, “Signature”).
 
Nickolas W. Jekogian, III is the founder, owner and President of Signature Community Investment Group LLC, a Delaware limited liability company, an integrated real estate company that has an ownership interest in and operates approximately 3,000 apartment units in 17 markets throughout the United States from New York City to Las Vegas.  In or around the latter part of 2010, Mr. Jekogian was introduced to the management of the Company and has continued his contacts with the Company since that time.  Mr. Jekogian may be deemed the promoter of the stock purchase Transactions and the Transactions with Signature described in this Current Report on Form 8-K.
 
The Transactions include, among other matters described in this Current Report on Form 8-K, the following:
 
 
·  
The termination of the Company’s plan of liquidation adopted by the stockholders on January 20, 2011 (the “Plan of Liquidation”);
 
 
·  
The acquisition by BBJ Family Irrevocable Trust (the “Trust” or “Class A Purchaser”) of 177,013 shares (the “Class A Shares”) of Class A common stock, par value $.10 per share, of the Company (the “Class A Common Stock”), representing 40% of the outstanding Class A Common Stock, from PDL Partnership at a purchase price of $1.00 per share, on the terms and subject to the conditions set forth in the Class A Stock Purchase Agreement (the “Class A Stock Purchase Agreement”);
 
 
·  
The acquisition by each of Richard Zorn and Gordon DiPaolo (the “Class B Purchasers”) of 125,000 newly issued shares (the “Class B Shares”) of Class B common stock, par value $.10 per share, of the Company (the “Class B Common Stock”) from the Company at a purchase price of $1.00 per share, on the terms and subject to the conditions set forth in the Class B Stock Purchase Agreement (the “Class B Stock Purchase Agreement”);
 
 
·  
Amendments to the provisions relating to payments upon termination of employment for Steven Baruch, Jeffrey F. Joseph and Thomas Viertel, as set forth in amendments to their employment agreements (the “Baruch Amendment,” the “Joseph Amendment” and the “Viertel Amendment,” respectively, and collectively with the Delgado Amendment, the “Amendments”);
 
 
·  
Amendment to the employment agreement of Elizabeth Delgado to terminate her employment pursuant to the agreement (the “Delgado Amendment”);
 
 
·  
The resignation of Steven Baruch, Thomas Viertel and Mortimer M. Caplin as directors of the Company;
 
 
 
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·  
The appointment of Nickolas W. Jekogian, III, Alexander Ludwig and Jeffrey Rogers as directors of the Company;
 
 
·  
Effective as of immediately following the filing of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011, the resignations of the officers of the Company and the appointment of Messrs. Jekogian and Ludwig as the sole officers of the Company;
 
 
·  
The declaration of a special dividend of $0.35 per share of Class A and Class B Common Stock (the “Special Dividend”);
 
 
·  
The entry by the Company into a property management agreement and an asset management agreement with Signature (the “Property Management Agreement” and the “Asset Management Agreement,” respectively);
 
 
·  
The entry by the Company into executive employment agreements with Nickolas W. Jekogian, III and Alexander Ludwig (the “Jekogian Employment Agreement” and the “Ludwig Employment Agreement,” respectively);
 
 
·  
The grant of non-qualified stock options to acquire 370,000 shares of Class B Common Stock at a price of $1.25 per share to each of Messrs. Jekogian and Ludwig pursuant to stock option agreements (the “Jekogian Option Agreement” and the “Ludwig Option Agreement, respectively); and
 
 
·  
The entry into a Put Agreement between Nickolas W. Jekogian, III and each Class B Purchaser with respect to the Class B Shares acquired by each Class B Purchaser (the “Put Agreement”).
 
Sale of Class B Shares.   On November 8, 2011, the Company sold 125,000 newly issued shares (the “Class B Shares”) of Class B Common Stock at a purchase price of $1.00 per share to each Class B Purchaser pursuant to the Class B Stock Purchase Agreement between the Company and the Class B Purchasers.  The 250,000 Class B Shares represent 7.8% of the outstanding Class B Common Stock and 6.8% of the total outstanding Class A and Class B Common Stock of the Company after taking the sale into account. In the Class B Stock Purchase Agreement, the Company made customary representations and warranties with respect to, among other matters, organization, authorization and issuance of the Class B Shares and the sale thereof, its capitalization, financial statements and liabilities, certain of its filings with the Securities and Exchange Commission (the “SEC”) and its status as a REIT, and the Class B Purchasers made customary representations and warranties with respect to, among other matters, authorization, accredited investor status and investment intention.  Each of the Class B Purchasers has agreed with the Company that he has not purchased the right to the Special Dividend nor is he entitled to the Special Dividend and to take such action as may be necessary to return any Special Dividend payment he or she receives to the Company.
 
The foregoing description of the Class B Stock Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Class B Stock Purchase Agreement, a copy of which is attached as Exhibit 10.1 and incorporated herein by reference.  The Class B Stock Purchase Agreement contains representations, warranties and covenants by the Company solely for the benefit of the Class B Purchaser and for the purposes of the contract.  Moreover, the representations and warranties are made as of a specific date and may not be accurate or complete as of any other specified date.  Investors are cautioned not to rely on these representations, warranties and covenants or any description thereof as characterizations of the actual state of facts of the Company.
 
Each Class B Purchaser was introduced to the Company by Mr. Jekogian.  Mr. Richard Zorn is a Managing Director of Benchmark Capital Advisors, a division of Northeast Securities, Inc.  Mr. Jekogian has a remote family connection by marriage to Mr. Zorn and has known him for more than 15 years.  Mr. Gordon DiPaolo is a Professor of Business at City University of New York.  Mr. DiPaolo’s wife is President of Benchmark Capital Advisors. Mr. Jekogian has known Mrs. DiPaolo for at least five years.  Each Class B Purchaser is an investor in NWJ Signature Fund I, LLC, a Delaware limited liability company organized by Mr. Jekogian to invest in Class B multi-family properties in urban markets. 
 
 
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There is no agreement between the Class B Purchasers or with either Class B Purchaser and Mr. Jekogian as to the shares of Class B Common Stock acquired except that Mr. Jekogian and each Class B Purchaser have entered into a Put Agreement pursuant to which each Class B Purchaser can require Mr. Jekogian to purchase from them the shares of Class B Common Stock acquired under the Class B Purchase Agreement upon the expiration of 30 months following November 8, 2011 at a purchase price per share of $1.21.
 
The foregoing description of the Put Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Put Agreement, a form of which is attached as Exhibit 99.3 and incorporated herein by reference.
 
Property Management Agreement .  On November 8, 2011, the Company and Signature entered into a Property Management Agreement pursuant to which the Company has retained Signature as the exclusive managing and leasing agent for the Company’s Mapletree Industrial Center property in Palmer, Massachusetts (the “Mapletree Property”). Signature shall manage the Mapletree Property in accordance with specific management guidelines and leasing guidelines and shall meet specific reporting requirements and vendor insurance requirements. Signature will receive a compensation of 5% of monthly rental income actually received from tenants at the Mapletree Property. The Company will reimburse Signature for all reasonable expenses incurred by Signature in performance of its duties under the Property Management Agreement that are either in accordance with the annual budget or which have been approved in writing by the Company. Such expense shall include, but not be limited to, Signature’s costs of the salaries, benefits and appropriate and prudent training for Signature’s employees who are engaged solely in management or operation of the Mapletree Property, but excluding certain expenses that will be borne by Signature, as specified in the Property Management Agreement. The Property Management Agreement has a term of one year and will be automatically renewable for one year terms until it is terminated by either party upon written notice.
 
The foregoing description of the Property Management Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Property Management Agreement, a copy of which is attached as Exhibit 10.2 and incorporated herein by reference.
 
Asset Management Agreement .  On November 8, 2011, the Company and Signature entered into an Asset Management Agreement pursuant to which the Company engaged Signature to oversee the Company’s Mapletree Industrial Center property in Palmer, Massachusetts and an office building at Hato Rey, Puerto Rico (the “Properties”).  Signature’s duties include leasing, marketing and advertising, financing, construction and dispositions of the Properties. Signature will receive a construction fee for any major renovations or capital projects, subject to the approval of the Company’s Board of Directors, an asset management fee of 1.5% of the monthly gross rental revenues collected for the Properties (provided that the monthly fee for the Hato Rey property will be accrued and not paid until the receipt of mortgage proceeds on the Mapletree Property), a finance fee of 1% on any debt placement, and a disposition fee of 1% on the sale of any assets, as specified in Schedule B to the Asset Management Agreement. The Asset Management Agreement has a term of one year and will be automatically renewable for one year terms until it is terminated by either party upon written notice.
 
 
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The foregoing description of the Asset Management Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Asset Management Agreement, a copy of which is attached as Exhibit 10.3 and incorporated herein by reference.
 
Jekogian Agreements .  On November 8, 2011, the Company and Mr. Jekogian entered into the Jekogian Employment Agreement pursuant to which the Company employs Mr. Jekogian as a Director, Chairman of the Board of Directors and Chief Executive Officer of the Company. The Jekogian Employment Agreement has a term of eighteen months and may be terminated at any time by the Board of Directors for “cause” or by Mr. Jekogian for “good reason,” each as defined therein. Mr. Jekogian will receive a base salary of $200,000 per annum for the first twelve months and $225,000 per annum for the last six months. Commencing with the fiscal year of the Company beginning January 1, 2012 and for each fiscal year thereafter during the term of the Jekogian Agreement, Mr. Jekogian will have the opportunity to earn a bonus of up to $200,000, with the amount determined by the Company’s Compensation Committee in its absolute discretion. However, the payment of the bonus and base salary will be deferred until a “Capital Event” occurs, which is defined as the receipt by the Company of at least $20,000,000 in cash or property from  capital-raising activities.
 
Mr. Jekogian will not be exclusive to the Company.  He will continue to own and operate Signature.  As a result, Mr. Jekogian may be subject to conflicts of interest.  The independent directors of the Board will review all transactions between the Company and Signature and the activities of Mr. Jekogian.
 
On November 8, 2011 (the “Grant Date”), the Company and Mr. Jekogian also entered into the Jekogian Option Agreement.  Subject to the terms and conditions set forth in the Jekogian Option Agreement, the Company granted to Mr. Jekogian the right and option to purchase 370,000 shares of the Company’s Class B Common Stock at a price of $1.25 per share (the “Option”), of which 74,000 may be purchased six months after the Grant Date, 148,000 may be purchased upon and after the occurrence of the Capital Event, and the rest may be purchased upon and after the consummation of an underwritten registered public offering of the Company’s common stock with gross proceeds of not less than $40,000,000. However, if there is a “Change of Control,” as defined therein, the Option shall automatically become fully vested and exercisable.  The option is not a qualified option within the meaning of the Internal Revenue Code of 1986 nor was it granted pursuant to any stock option plan as the Company does not have a stock option plan in effect.  The Option has a term of ten years.
 
The foregoing descriptions of the Jekogian Employment Agreement and Jekogian Option Agreement do not purport to be complete and are qualified in their entirety by reference to the full texts thereof, copies of which are attached as Exhibits 10.4 and 10.5, respectively, and incorporated herein by reference.
 
 
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Ludwig Agreements .  On November 8, 2011, the Company and Mr. Ludwig entered into the Ludwig Employment Agreement pursuant to which the Company employs Mr. Ludwig as President and Chief Operating Officer of the Company.  The Ludwig Employment Agreement has a term of eighteen months and may be terminated at any time by the Board of Directors for “cause” or by Mr. Ludwig for “good reason,” each as defined therein.  Mr. Ludwig will receive a base salary of $200,000 per annum for the first twelve months and $225,000 per annum for the last six months. Commencing with the fiscal year of the Company beginning January 1, 2012 and for each fiscal year thereafter during the Term, Mr. Ludwig will have the opportunity to earn a bonus of up to $200,000, with the amount determined by the Company’s Compensation Committee in its absolute discretion.
 
Mr. Ludwig will continue to provide consulting services to and receive compensation from Signature.  As a result, Mr. Ludwig may be subject to conflicts of interest.  Mr. Ludwig has agreed to keep the independent directors of the Board advised of his activities for and compensation from Signature.
 
On November 8, 2011, the Company and Mr. Ludwig entered into the Ludwig Option Agreement, which has the same terms as the Jekogian Option Agreement.
 
The foregoing descriptions of the Ludwig Employment Agreement and Ludwig Option Agreement do not purport to be complete and are qualified in their entirety by reference to the full texts thereof, copies of which are attached as Exhibits 10.6 and 10.7, respectively, and incorporated herein by reference.
 
Item 1.02
Termination of a Material Definitive Agreement
 
Termination of Plan of Liquidation .  On January 20, 2011, the Company’s stockholders approved the sale of all or substantially all of the Company’s assets in one or more transactions on such terms and subject to such conditions as the Company’s Board of Directors deemed appropriate, and authorized a plan of liquidation and dissolution of the Company (the “Plan of Liquidation”), subject to the right of the Board of Directors, in its discretion, to terminate the Plan of Liquidation.  In connection with the Transactions and in light of the plans for the Company presented to the Board of Directors by Messrs. Jekogian and Ludwig and a consideration of the alternatives available to the Company and other matters it deemed relevant, including the tax consequences of the Transactions, the Board of Directors determined that the Transactions will be more favorable to the stockholders of the Company than effecting a plan of liquidation and sale of all or substantially all of the assets of the Company, and pursuant to the discretion given to the Board of Directors by the stockholders in the Plan of Liquidation, terminated the Plan of Liquidation.
 
Termination of Employment Agreements. In connection with the Transactions, the Employment Agreements with Steven Baruch, Jeffrey F. Joseph, Thomas Viertel and Elizabeth Delgado were terminated on November 8, 2011 pursuant to the terms and conditions as set forth in the relevant Amendment.  See Item 5.02 of the Current Report on Form 8-K for a description of the Amendments.
 
 
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Item 3.02               Unregistered Sales of Equity Securities
 
See Item 1.01 of this Current Report on Form 8-K for a description of the sale of Class B Shares pursuant to the Class B Stock Purchase Agreement.
 
The Company is relying on an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Act”), pursuant to Section 4(2) of the Act. The transaction did not involve a public offering, no underwriters or agents were involved in the foregoing issuances and we paid no underwriting discounts or commissions.
 
Item 5.01
Changes in Control of Registrant
 
On November 8, 2011, PDL Partnership sold 177,013 shares of Class A Common Stock (the “Class A Shares”) to BBJ Family Irrevocable Trust (the “Class A Purchaser”) at a purchase price of $1.00 per share, on the terms and subject to the conditions set forth in the Class A Stock Purchase Agreement (the “Class A Stock Purchase Agreement”).  The Class A Shares represent 40% of the outstanding shares of Class A Common Stock.  In the Class A Stock Purchase Agreement, PDL Partnership made customary representations and warranties to the Class A Purchaser in respect of its ownership of the Class A Shares and delivery of such Class A Shares to the Class A Purchaser free and clear of all liens as well as a representation that to the best of its knowledge (including the knowledge of its three general partners) the representations and warranties of the Company set forth in the Class B Stock Purchase Agreement were true and correct, and the Class A Purchaser made customary representations and warranties with respect to, among other matters, authorization, sophistication, and investment intention.  The Class A Purchaser did not purchase the right to receive the Special Dividend to be paid on the Class A Shares and agreed to take such action as is necessary to pay over any Special Dividend it receives to PDL Partnership promptly after receipt thereof.  All payments received or to be received by PDL Partnership from the Class A Purchaser in respect of the Class A Shares have and will be used to satisfy the liens on such shares described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 in the section entitled “Security Ownership of Management” on page 53.
 
In the Class A Stock Purchase Agreement, the Trust has agreed to vote its Class A Shares for Mr. Robert Feder and Mr. Richard Brandt, current independent directors of the Company, as directors (subject to their desire to remain as directors) provided that they continue to qualify as independent directors under applicable rules, including the rules of any exchange on which either the Class A Common Stock or Class B Common Stock may then be listed and until the occurrence of a Capital Event.  “Capital Event” has the same meaning in the Class A Stock Purchase Agreement as in the Jekogian and Ludwig Agreements and is defined as the receipt by the Company of at least $20,000,000 in cash or property from capital-raising activities.
 
The BBJ Family Irrevocable Trust was formed in September 2009 by Mr. Jekogian for the benefit of family members including Mr. Jekogian's parents, grandparents, wife, sister, children, nieces and nephews. Mr. Jekogian’s father, Nickolas Jekogian, Jr., is the Trustee of the Trust and Mr. Jekogian remains the protector of the Trust. There is no agreement between Mr. Jekogian and his father as to how the shares of Class A Common Stock acquired by the trust under the Class A Purchase Agreement will be voted or otherwise dealt with.  The source of funds for the purchase of the Class A Shares was Trust assets.
 
 
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The foregoing description of the Class A Stock Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Class A Stock Purchase Agreement, a copy of which is attached as Exhibit 99.1 and incorporated herein by reference.
 
The sale of the Class A Shares, although not a sale of a majority of the outstanding Class A Common Stock, together with the other Transactions described herein, may be considered a change in control of the Company within the meaning of the federal securities laws.  The holders of the Class A Common Stock have the right to elect two-thirds of the members of the Company’s Board of Directors, and the holders of the Class B Common Stock have the right at all times to elect one-third of the members of the Board of Directors.  The Directors elected by the holders of the Class A Common Stock are elected by a plurality of the shares of Class A Common Stock voting at a meeting of stockholders.  The Class A Purchaser will be the largest single holder of Class A Common Stock.  All directors, once elected, have equal authority and responsibility.  On all other matters, the holders of the Class A Common Stock and the holders of the Class B Common Stock have one vote per share for all purposes.  However, no action may be taken that would alter or change the special rights or powers given to either class of Common Stock so as to affect such class adversely, or that would increase or decrease the amount of the authorized stock of such class, or increase or decrease the par value thereof, except upon the affirmative vote of the holders of the majority of the outstanding shares of the class of stock so affected.
 
The disclosure of the sale of the Class A Shares pursuant to this Item 5.01 is not an admission by any of the Company, the Class A Purchaser, the Class B Purchasers or Signature that a change in control of the Company has occurred for any purpose or pursuant to any legal or regulatory requirement.
 
Following the sale to the Class A Purchaser, PDL Partnership distributed the remaining 21,722 shares of Class A Common Stock it held to its three general partners, 8,689 to Mr. Baruch, 4,344 to Mr. Joseph and 8,689 to Mr. Viertel.
 
 
Item 5.02.
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangement of Certain Officers
 
(b)           In connection with the Transactions, Mr. Steven Baruch, Mr. Thomas Viertel and Mr. Mortimer M. Caplin resigned as directors of the Company and Mr. Robert Feder resigned as Chairman of the Board.  Mr. Richard Brandt, Mr. Robert Feder and Mr. Jeffrey F. Joseph remain on the Board.  These resignations were all effected in connection with the Transactions described herein and not as a result of a disagreement with the Company.  In connection with the Transactions, Mr. Joseph also resigned as President and Chief Executive Officer of the Company, and Elizabeth Delgado resigned as Chief Financial Officer, Treasurer and Secretary of the Company effective immediately after the filing of the Form 10-Q for the third quarter of 2011 and the new officers described below were appointed, effective as of the same moment.
 
(c)           In connection with the Transactions, the following officers were appointed by the Company’s Board of Directors, effective as of immediately following the filing of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011:
 
Chairman of the Board and Chief Executive Officer
Nickolas W. Jekogian, III
   
President, Chief Operating Officer, Principal Financial Officer and Secretary
Alexander Ludwig
 
 
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Nickolas W. Jekogian, III .  Mr. Jekogian, 42, is the founder, owner and President of Signature Community Investment Group LLC, a Delaware limited liability company (together with its affiliates, “Signature”). Mr. Jekogian founded Signature in 1991 while in college with the purchase of an apartment building in Center City Philadelphia. Since that time, Mr. Jekogian has obtained extensive experience in the real estate industry focusing Signature primarily on multi family rental properties and at the same time gaining experience in developing commercial properties for third parties. He has built Signature into an integrated real estate company that has an ownership interest in and operates approximately 3,000 apartment units in 17 markets throughout the United States from New York City to Las Vegas. Mr. Jekogian is a licensed real estate broker in New York. He has a business Administration degree from Drexel University and a Masters degree in Management from the University of Pennsylvania. Mr. Jekogian has more than 15 years experience developing commercial projects in the New York and Philadelphia Metropolitan areas for retailers such as CVS Drugs, Commerce Bank and Blockbuster Video. During the last five years, Mr. Jekogian has worked exclusively with Signature.
 
Alexander Ludwig .  Since February 2011 Mr. Ludwig, 41, has provided and will continue to provide consulting services for Signature.  From 2009 to October of 2011 he worked at Urban Real Estate Growth Fund LLC, a real estate development and financing company, where he oversaw new investments.  Prior to joining Urban Real Estate Growth Fund LLC, Mr. Ludwig worked from 2003 to 2008 for ADG Capital LLC, a real estate development and financing company, where he oversaw multiple real estate development projects.  Mr. Ludwig also held various positions in banking, where he structured debt and corporate finance transactions, most recently as a Vice President at Societe Generale, where he was employed from 1997 until 2002.  Previously he worked for First Union National Bank and First Fidelity Bank from 1993 to 1997 underwriting and structuring loan transactions.  Mr. Ludwig holds a BA degree in history from The University of Pennsylvania.
 
(d)           Following the resignations of the directors described in Item 5.02(b) above, the remaining directors, Messrs. Brandt, Feder and Joseph, appointed Nickolas W. Jekogian, III, Alexander Ludwig and Jeffrey Rogers to the Company’s Board of Directors to serve until the next annual meeting of stockholders and until their successors are elected and qualify.  The Board further determined that Jeffrey Rogers, as well as Mr. Brandt and Mr. Feder, satisfy the independence and other requirements of the federal securities laws, including the requirements relating to membership on the Audit Committee.
 
All of the directors of the Company and the new officers of the Company entered into Indemnification Agreements providing for the indemnification of such persons to the full extent of the law.  The form of Indemnification Agreement is attached as Exhibit 10.12.
 
 
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Following the closing of the Transactions, the members of the committees of the Company’s Board of Directors are as follows:
 
Executive Committee
Nickolas W. Jekogian, III
Alexander Ludwig
   
Compensation Committee*
Richard Brandt
Robert Feder
Jeffrey Rogers
   
Audit Committee
Richard Brandt
Robert Feder
Jeffrey Rogers**
   
Nominating Committee
Richard Brandt
Robert Feder
Jeffrey Rogers
 

*
Formerly “Compensation and Pension Committee
 
**
Effective as of immediately following the filing of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011
 
Jeffrey S. Rogers .   Mr. Rogers, 42, has served as President and Chief Operating Officer since February 2005 and as Chief Operating Officer between February 2004 and February 2005 of Integra Realty Resources, Inc., a commercial real estate valuation and counseling firm, where he oversees corporate operations, technology and software initiatives, and all aspects of financial reporting and audit procedures.  Mr. Rogers also serves on the Board of Directors of Integra Realty Resources, Inc. and IRR Residential, LLC, an affiliate of Integra Realty Resources, Inc.  Prior to joining Integra Realty Resources, Inc. in February 2004, Mr. Rogers worked from November 2002 to February 2004 as a consultant for Regeneration, LLC, a management consulting firm. Between September 1999 and November 2002, Mr. Rogers held various positions at ReturnBuy, Inc., a technology and software solutions company, including President of ReturnBuy Ventures, a division of ReturnBuy, Inc., between August 2001 and November 2002, Chief Financial Officer between September 1999 and August 2001 and member of the Board of Directors between September 1999 and August 2001.  In January 2003, ReturnBuy, Inc. filed for Chapter 11 bankruptcy as part of a restructuring transaction in which it was acquired by Jabil Circuit, Inc.  Since March 2009, Mr. Rogers has served as Director of TNP Strategic Retail Trust, Inc., a real estate investment trust that files periodic reports under the Securities Exchange Act of 1934.  Mr. Rogers also serves on TNP’s audit committee and investment committee.  Mr. Rogers has also served on the Finance Committee of the Young Presidents Organization from March 2009 to March 2010 and as Audit Committee Chairman beginning in July 2010.  Mr. Rogers earned a Master of Business Administration degree from The Darden School, University of Virginia in Charlottesville, Virginia, a Juris Doctorate degree from Washington and Lee University School of Law in Lexington, Virginia and a Bachelor of Arts degree in Economics from the Washington and Lee University.
 
 
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(e)            Amendments to Employment Agreements .  In order to induce Signature, the Class A Purchaser and the Class B Purchasers to enter into the Transactions and to provide liquidity to the Company to pay the Special Dividend, each of Mr. Steven Baruch, Mr. Jeffrey F. Joseph and Mr. Thomas Viertel agreed to reduce the overall amount payable to him pursuant to his existing agreements and to defer a portion of the remaining amount.  Mr. Baruch agreed to reduce the Lump Sum Amount (as defined) payable to him from $617,900 to $463,425, of which $308,950 was paid on November 8, 2011, and the balance of $154,475 is payable on the third anniversary thereof.  Mr. Joseph agreed to reduce the Lump Sum Amount payable to him from $1,106,700 to $830,025, of which $553,350 was paid on November 8, 2011, and the balance of $276,675 is payable on the third anniversary thereof.  Mr. Viertel agreed to reduce the Lump Sum Amount payable to him from $650,400 to $487,800 of which $325,200 was paid on November 8, 2011, and the balance of $162,600 is payable on the third anniversary thereof. Payment of these deferred amounts is not contestable by the Company for any reason.  The aggregate amount waived or deferred by Messrs. Baruch, Joseph and Viertel is $1,187,500, of which $593,750 was waived permanently and payment of the balance of $593,750 was deferred for the three-year period.  The amounts waived and deferred were in addition to the $1,941,019 aggregate amount of reductions in the compensation otherwise payable to them upon termination of their employment that were agreed to in August 2010 in connection with the approval by the Board of the Plan of Liquidation.
 
In addition, Ms. Delgado’s employment agreement was amended to provide for termination as of the closing of the Transactions, and 1300 shares of restricted Class B Stock that were granted to her and that were not yet vested were deemed vested by the Company’s Board of Directors.
 
The foregoing descriptions of the amendments to the employment agreements for Messrs. Baruch, Joseph and Viertel and Ms. Delgado do not purport to be complete and are qualified in their entirety by reference to the full texts of the Amendments, copies of which are attached as Exhibits 10.8, 10.9, 10.10 and 10.11, respectively, and incorporated herein by reference.
 
Item 8.01.
Other Events
 
Special Dividend .  On November 7, 2011, the Board declared a special dividend in cash on its Common Stock of $0.35 per share, to stockholders of record on November 18, 2011, payable on November 28, 2011.
 
Sale of Ivy Consolidated Loan .  As previously disclosed, the Company had a loan outstanding to certain affiliates of Ivy Properties, Ltd. (collectively “Ivy”), which is owned by Messrs. Baruch, Joseph and Viertel (the “Ivy Principals”).  As part of a Settlement Agreement effectuated in November, 1991 between the Company and Ivy, certain of the Company’s outstanding nonrecourse loans to Ivy (most of which had previously been written down to zero) were modified and consolidated into two nonrecourse loans (collectively, the “Ivy Consolidated Loan”), which currently has an aggregate outstanding principal balance of $4,770,050 and a net carrying value of zero. In 1996, the Company and the Ivy Principals agreed to modify the Settlement Agreement to provide that the only payments required under the Ivy Consolidated Loan would be paid by the Ivy Principals in an amount equal to 25% of the operating cash flow (after provision for certain reserves) of Scorpio Entertainment, Inc., a company owned by Messrs. Baruch and Viertel, that acts as a producer of theatrical productions. At September 30, 2011, the total unpaid and unaccrued interest on the Ivy Consolidated Loan was $3,943,693.  In August 2010, in connection with the amendment of the employment agreements with Messrs. Viertel and Baruch and the anticipated liquidation of the Company, the Company approved an agreement with the principals of Scorpio that they could acquire, or cause the acquisition of, the Ivy Consolidated Loan for $100,000.  On November 8, 2011, the Company assigned the Ivy Consolidated Loan to Patricia Daily, an individual employed in the theater industry, for $100,000.
 
 
10

 
 
Press Release.   On November 8, 2011, the Company issued a press release announcing the Transactions described in this Form 8-K, a copy of which is attached as Exhibit 99.2 and incorporated herein by reference.
 
ITEM 9.01.
Financial Statements and Exhibits
 
(d)           Exhibits
 
The following exhibits are filed herewith:
 
Exhibit
 
Description
10.1
 
Class B Stock Purchase Agreement, dated November 8, 2011, between the Company and Richard Zorn and Gordon DiPaulo
     
10.2
 
Property Management Agreement, dated November 8, 2011, between the Company and Signature Community Investment Group LLC
     
10.3
 
Asset Management Agreement, dated November 8, 2011, between the Company and Signature Community Investment Group LLC
     
10.4
 
Executive Employment Agreement, dated November 8, 2011, between the Company and Nickolas W. Jekogian, III
     
10.5
 
Option Agreement, dated November 8, 2011, between the Company and Nickolas W. Jekogian, III
     
10.6
 
Executive Employment Agreement, dated November 8, 2011, between the Company and Alexander Ludwig
     
10.7
 
Option Agreement, dated November 8, 2011, between the Company and Alexander Ludwig
     
10.8
 
Third Amendment to Amended and Restated Employment and Consulting Agreement, dated November 8, 2011, between the Company and Steven H. Baruch.
     
10.9
 
Fourth Amendment to Amended And Restated Employment and Consulting Agreement, dated November 8, 2011, between the Company and Jeffrey F. Joseph
     
10.10
 
Third Amendment to Amended and Restated Employment and Consulting Agreement, dated November 8, 2011, between the Company and Thomas Viertel
     
10.11
 
Eighth Modification to Employment Agreement, dated November 8, 2011, between the Company and Elizabeth Delgado
     
10.12
 
Form of Indemnification Agreement between the Company and each officer and director
     
99.1
 
Class A Stock Purchase Agreement, dated November 8, 2011, between PDL Partnership and BBJ Family Irrevocable Trust
     
99.2
 
Press Release dated November 8, 2011.
     
99.3
 
Form of Put Agreement, dated November 8, 2011, between Nickolas W. Jekogian, III and Richard Zorn and Gordon DiPaolo

 
11

 

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
PRESIDENTIAL REALTY CORPORATION
 
       
Date:  November 9, 2011
By:  
/s/ Jeffrey F. Joseph  
    Name:  Jeffrey F. Joseph  
   
Title: President and CEO
 
 
 
12

 
 
INDEX TO EXHIBITS
 
Exhibit
 
Description
10.1
 
Class B Stock Purchase Agreement, dated November 8, 2011, between the Company and Richard Zorn and Gordon DiPaulo
     
10.2
 
Property Management Agreement, dated November 8, 2011, between the Company and Signature Community Investment Group LLC
     
10.3
 
Asset Management Agreement, dated November 8, 2011, between the Company and Signature Community Investment Group LLC
     
10.4
 
Executive Employment Agreement, dated November 8, 2011, between the Company and Nickolas W. Jekogian, III
     
10.5
 
Option Agreement, dated November 8, 2011, between the Company and Nickolas W. Jekogian, III
     
10.6
 
Executive Employment Agreement, dated November 8, 2011, between the Company and Alexander Ludwig
     
10.7
 
Option Agreement, dated November 8, 2011, between the Company and Alexander Ludwig
     
10.8
 
Third Amendment to Amended and Restated Employment and Consulting Agreement, dated November 8, 2011, between the Company and Steven H. Baruch.
     
10.9
 
Fourth Amendment to Amended And Restated Employment and Consulting Agreement, dated November 8, 2011, between the Company and Jeffrey F. Joseph
     
10.10
 
Third Amendment to Amended and Restated Employment and Consulting Agreement, dated November 8, 2011, between the Company and Thomas Viertel
     
10.11
 
Eighth Modification to Employment Agreement, dated November 8, 2011, between the Company and Elizabeth Delgado
     
10.12
 
Form of Indemnification Agreement between the Company and each officer and director
     
99.1
 
Class A Stock Purchase Agreement, dated November 8, 2011, between PDL Partnership and BBJ Family Irrevocable Trust
     
99.2
 
Press Release dated November 8, 2011.
     
99.3
 
Form of Put Agreement, dated November 8, 2011, between Nickolas W. Jekogian, III and Richard Zorn and Gordon DiPaolo

 
13

 

Exhibit 10.1
CLASS B STOCK PURCHASE AGREEMENT
 
STOCK PURCHASE AGREEMENT (this “ Agreement ”) dated as of November 8, 2011 by and between the purchasers identified on Exhibit A hereto (individually, a “ Class B Purchaser ” and collectively, the “ Class B Purchasers ”) and Presidential Realty Corporation, a Delaware corporation (the “ Company ”).
 
WHEREAS, upon the terms and subject to the conditions set forth in this Agreement, the Class B Purchasers wish to purchase from the Company, and the Company wishes to sell to the Class B Purchasers, an aggregate of 250,000 shares (the “ Class B Shares ”) of Class B common stock, par value U.S. $0.10 per share, of the Company (the “ Class B Common Stock ”);
 
WHEREAS, simultaneously with the execution, delivery and performance hereof, PDL Partnership (the “Seller”), a New York general partnership of which Steven Baruch, Jeffrey F. Joseph and Thomas Viertel are the general partners, is selling an aggregate of 177,013 shares (the “ Class A Shares ”) of Class A common stock, par value U.S. $0.10 per share, of the Company (the “ Class A Common Stock ”), to BBJ Family Irrevocable Trust (the “ Class A Purchaser ”) pursuant to the Class A Stock Purchase Agreement, dated of even date herewith, by and between the Seller and the Class A Purchaser (the “ Class A Stock Purchase Agreement ” and the sale of the Class A Shares pursuant thereto, the “ Class A Sale ”); and
 
WHEREAS, immediately prior to the execution and delivery of this Agreement and the Class A Stock Purchase Agreement, the board of directors of the Company (the “ Company Board ”) declared a special dividend of $0.35 per share with respect to all shares of Class A Common Stock and Class B Common Stock, payable on November 28, 2011 to holders of record on November 18, 2011 (the “ Special Dividend ”), but it is the intention and agreement of the Class B Purchasers and the Company pursuant to this Agreement and of the Class A Purchaser and the Seller pursuant to the Class A Stock Purchase Agreement that no Special Dividend shall be payable in respect of the Class B Shares or the Class A Shares to the Class B Purchaser or the Class A Purchasers, respectively, and that neither the Class B Purchasers nor the Class A Purchaser shall be entitled to the Special Dividend in respect of the Class B Shares or Class A Shares, respectively.
 
NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements contained herein, intending to be legally bound hereby, the parties hereto agree as follows:
 
1.   Sale of Class B Shares .
 
1.1   Sale of Class B Shares, etc .  The Company is issuing and selling to the Class B Purchasers, and the Class B Purchasers are severally purchasing from the Company, the number of Class B Shares set forth opposite such Class B Purchaser’s name on Exhibit A hereto.  Notwithstanding that the Special Dividend is payable after the date hereof, the Company and the Class B Purchasers agree that the Special Dividend is not payable in respect of the Class B Shares and that the Class B Purchasers have no right to payment thereof.
   
 
 

 
 
1.2   Payment .  Simultaneously with the execution and delivery hereof, the Class B Purchasers are paying the applicable purchase price for the Class B Shares of US$1.00 per Share and an aggregate purchase price as set forth opposite such Class B Purchaser’s name on Exhibit A (the “ Purchase Price ”) by wire transfer to the account of the Company set forth in Exhibit A .
 
1.3   Actions; Deliverables .  Not later than simultaneously with payment of the Purchase Price by each Class B Purchaser as described in Section 1.2, the following actions shall have been taken:
 
(a)   Stock Certificates .  The Company shall have issued and delivered to each Class B Purchaser, simultaneous against the delivery by such Class B Purchaser of the applicable Purchase Price as described in Section 1.2, a certificate or certificates representing the Class B Shares acquired hereunder by such Class B Purchaser, which certificate or certificates shall be registered in such Class B Purchaser’s name or such name as such Class B Purchaser designates and shall contain the following legends:
 
“THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THEY MAY NOT BE OFFERED OR TRANSFERRED BY SALE, ASSIGNMENT, PLEDGE OR OTHERWISE UNLESS (I) A REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES ACT OF 1933 IS IN EFFECT OR (II) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, WHICH OPINION IS SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
 
THE ACCUMULATION OF SHARES OF COMMON STOCK BY ANY PERSON, AS DEFINED IN THE COMPANY’S CERTIFICATE OF INCORPORATION, IS RESTRICTED TO 9.2% OF THE NUMBER OF OUTSTANDING SHARES OF COMMON STOCK WITHOUT REGARD TO CLASS.  ANY TRANSFER WHICH CREATES AN ACCUMULATION IN EXCESS OF THAT AMOUNT VIOLATES THE CERTIFICATE OF INCORPORATION AND IS VOID.  IF, NOTWITHSTANDING THE ABOVE, SUCH ACCUMULATION RESULTS, THE SHARES IN EXCESS OF 9.2% ARE SUBJECT TO CERTAIN RESTRICTIONS ON VOTING POWER AND RECEIPT OF DIVIDENDS, AND MAY BE MADE SUBJECT TO PURCHASE BY THE COMPANY.  FURTHER, SUCH PERSON MAY BE REQUIRED TO INDEMNIFY THE COMPANY AGAINST TAXES INCURRED AND OTHER LOSSES RESULTING FROM (1) LOSS OF ITS TAX QUALIFICATION AS A REAL ESTATE INVESTMENT TRUST OR (2) BECOMING A PERSONAL HOLDING COMPANY”
 
 
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(b)   Class A Sale .  It is a condition to the closing of the sale of the Class B Shares hereunder that the Class A Sale shall be consummated simultaneously.
 
1.4   Location of Closing . The issuance, sale and purchase of the Class B Shares, delivery of the documents set forth in Section 1.3 and other related actions, including the Class A Sale, are being consummated on the date hereof at the offices of Morrison & Foerster LLP, 1290 Avenue of the Americas, New York, New York.
 
2.   Representations and Warranties of the Company   The Company represents and warrants to the Class B Purchasers as follows:
 
2.1   Organization, Qualification, and Corporate Power .  The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and is duly qualified to do business and is in good standing in each jurisdiction in which the laws of such jurisdiction require such qualification.  The Company has all power and authority necessary to own or hold its properties, to conduct its business as currently conducted and to execute, deliver, and perform this Agreement, the Amendments, the Asset Management Agreements, the Management Agreements and any other agreement or other document or instrument contemplated to be executed and delivered by the Company pursuant to this Agreement (collectively, the “ Transaction Documents ”).
 
2.2   Authorization of Transaction Documents .  All action on the part of the Company necessary for the authorization, execution and delivery by the Company of this Agreement and the other Transaction Documents, and the performance of all obligations of the Company hereunder and thereunder has been taken on or prior to the date hereof.  This Agreement and the other Transaction Documents executed by the Company have been duly executed by the Company, and constitute the valid and legally binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except that (i) such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
 
2.3   Authorization of the Class B Shares .  The Class B Shares have been duly authorized for issuance and sale pursuant to this Agreement and, when issued and delivered by the Company pursuant to this Agreement, will be validly issued, fully paid and nonassessable, and issued in compliance with federal and state securities laws.
 
2.4   Capitalization and Other Capital Stock Matters .  The authorized, issued and outstanding capital stock of the Company consists of 700,000 shares of Class A Common Stock, of which 442,533 shares are issued and outstanding and 36,407 shares are held in treasury, and 10,000,000 shares of Class B Common Stock, of which 2,963,147 shares are issued and outstanding and 570,400 shares are held in treasury.  All of the issued and outstanding shares of Class A Common Stock and Class B Common Stock have been duly authorized and validly issued, are fully paid and nonassessable and have been issued in compliance with federal and state securities laws.  None of the outstanding shares of Class A and Class B Common Stock were, and none of the Class B Shares will be, issued in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company.  There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Company or any of its subsidiaries.
 
 
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2.5   Non-Contravention .  The Company is not (i) in violation of its certificate of incorporation or bylaws, as in effect on the date hereof; (ii) to the best knowledge of the Company, in violation of any Law applicable to the Company or any subsidiary of the Company; or (iii) except as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 (the “ Form 10-K ”) and Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 (the “ June 2011 Form 10-Q ”), in default (or, with the giving of notice or lapse of time, would be in default) (“ Default ”) under any indenture, mortgage, loan or credit agreement, note, contract, lease or other instrument to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any of its subsidiaries is subject (each, an “ Existing Instrument ”), except, in the case of clauses (ii) and (iii) for such violations or Defaults as would not, individually or in the aggregate, result in a material adverse effect on the consolidated financial position, stockholders’ equity, results of operation, or business of the Company and its subsidiaries taken as a whole (a “ Material Adverse Effect ”).  The Company’s execution, delivery and performance of this Agreement and the other Transaction Documents, the consummation of the transactions contemplated hereby and thereby, the Class A Sale, and the issuance and sale of the Class B Shares will not (x) conflict with or constitute a breach of, or Default under, or result in the creation or imposition of any Lien upon any property or assets of the Company or any subsidiary pursuant to, or require the consent of any other party to, any Existing Instrument, (y) result in any violation of any Law applicable to the Company or any subsidiary or (z) violate the certificate of incorporation or bylaws of the Company as in effect on the date hereof.  No consent, approval, authorization or other order of, or registration or filing with, any Governmental Authority is required for the Company’s execution, delivery and performance of this Agreement and the other Transaction Documents and consummation of the transactions contemplated hereby and thereby except such consent, approval, authorization or other order or registration or filing (including the Form 8-K (as defined herein)) as set forth herein as has been obtained or made by the Company and except where the failure to obtain such consent, approval, authorization or order or to make such filing or registration would not, individually or in the aggregate, result in a Material Adverse Effect or otherwise affect the parties’ ability to consummate the transaction or result in the rescission thereof.  For purposes of this Agreement, (1) “ Law ” shall mean any law, statute, rule, regulation, ordinance, order, code, common law, arbitration award, judgment, decree, order or other legal requirement of any Governmental Authority, and the rules of any stock exchange, as applicable; (2) “ Governmental Authority ” shall mean any federal, state, local or foreign government or any subdivision, authority, department, commission, board, bureau, agency, court or other instrumentality thereof; (3) “ Liens ” shall mean liens, mortgages, pledges, charges, security interests, claims and other encumbrances;  and (4) “ best knowledge of the Company ” shall mean the best knowledge of any of Jeffrey F. Joseph, Steven Baruch and Thomas Viertel, after due inquiry.
 
 
4

 
 
2.6   SEC Filings; Financial Statements .  The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act of 1933, as amended (the “ Securities Act ”), and the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), since January 1, 2010 (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “ SEC Filings ”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Filing prior to the expiration of any such extension.  As of their respective dates, the SEC Filings complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Filings, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.  Some matters discussed in the SEC Filings may be considered “forward looking” statements within the meaning of Section 27(a) of the Securities Act and Section 21(e) of the Exchange Act, which statements each Class B Purchaser acknowledges and agrees are not guarantees of future performance and involve a number of risks and uncertainties, and with respect to which the Company makes no representations or warranties; provided that, to the extent that any forward looking statement is determined by a court in a non-appealable decision to be misleading or made in bad faith in an action filed by a third party, the Company will not be able to rely on this acknowledgement in any action by any Class B Purchaser or the Class A Purchaser.  The financial statements of the Company included in the SEC Filings comply in all material respects with applicable accounting requirements and the rules and regulations of the U.S. Securities Exchange Commission (the “ SEC ”) with respect thereto as in effect at the time of filing.  Such financial statements were prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“ GAAP ”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to customary year-end audit adjustments.
 
2.7   Material Changes; Undisclosed Events, Liabilities or Developments .  Since the date of the latest audited financial statements included within the SEC Filings, except as specifically disclosed in a subsequent SEC Filing filed prior to the date hereof: (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect; (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the SEC; and (iii) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any of its shares (except for the Special Dividend).  The Company does not have pending before the SEC any request for confidential treatment of information or any unresolved comments on any of its SEC Filings.
 
 
5

 
 
2.8   REIT .   The Company qualifies as a real estate investment trust within the meaning of Section 856 of the Internal Revenue Code of 1986, as amended (a “ REIT ”).  The Company has at all times complied with all the requirements and satisfied all the terms and conditions that must be satisfied in order to maintain its status as a REIT.  Neither the execution and delivery of this Agreement, the Class A Stock Purchase Agreement and the other Transaction Documents, nor the consummation of the transactions contemplated hereby and thereby will result in the loss of or otherwise adversely affect the Company’s status as a REIT.  There are no facts and circumstances known to the Company that would reasonably be expected to adversely impact the Company’s status as a REIT or result in the loss of such status.
 
2.9   There is no action, suit, proceeding or investigation pending or to the best knowledge of the Company, currently threatened against the Company or to the best knowledge of the Company pending or currently threatened against the Seller in the Class A Stock Purchase Agreement with respect to the transactions contemplated hereby and by the Class A Stock Purchase Agreement.
 
2.10   No Other Representations .  Except as set forth herein, the Company is not making any representation or warranty of any kind.
 
3.   Representations and Warranties of the Class B Purchasers .  Each Class B Purchaser represents and warrants, severally and not jointly, as follows:
 
3.1   Capacity; Binding Agreement; etc .  The Class B Purchaser has full capacity to execute and deliver this Agreement and to carry out the transactions contemplated hereby.  This Agreement has been duly executed and delivered by the Class B Purchaser.  This Agreement constitutes the valid and binding agreement of the Class B Purchaser, enforceable against the Class B Purchaser in accordance with its terms, except that (i) such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
 
3.2   Purchase for Investment, etc .  The Class B Purchaser (a) is an “accredited investor” as such term is defined under Rule 501 under the Securities Act, and has such knowledge and experience in business and financial matters as to be capable of evaluating the merits and risks of the investment in the Class B Shares; (b) is capable of bearing the economic risks associated with the investment in the Class B Shares; (c) has been provided  the opportunity to ask questions and receive answers concerning the Company and to obtain any additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to verify the accuracy of information furnished to it; (d) is acquiring the Class B Shares for its own account and not with a view toward, or for resale in connection with, the sale or distribution thereof; provided, however , the Class B Purchaser does not agree to hold the Class B Shares for any minimum or other specific term, and reserves the right to dispose the Class B Shares at any time in accordance with or pursuant to an exemption under the Securities Act.  Nothing contained in this Section 3.2 will derogate from the Class B Purchaser’s right to rely on the Company’s representations and warranties included in this Agreement.
 
 
6

 
 
3.3   Reliance on Exemptions .  The Class B Purchaser understands that the Class B Shares are being offered and sold to it in reliance on specific exemptions from the registration requirements of the U.S. federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and the Class B Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Class B Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of the Class B Purchaser to acquire the Class B Shares.
 
3.4   Transfer or Resale .  The Class B Purchaser understands that the Class B Shares have not been and are not being registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless subsequently registered thereunder or sold, assigned or transferred pursuant to an exemption from registration under the Securities Act.
 
3.5   Special Dividend .  For the avoidance of doubt, the Class B Purchaser waives any and all claims or demands with respect to the Special Dividend.  If, notwithstanding Section 1.1 and this Section 3.5, the Class B Purchaser shall receive payment of the Special Dividend in respect of the Class B Shares, the Class B Purchaser shall promptly pay over such Special Dividend to the Company.
 
4.   Public Announcements; Filings; Further Actions .
 
4.1   Set forth as Exhibit B hereto is a form of the Company’s press release with respect to the execution of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby.  The parties shall not issue any other press release or public announcement concerning this Agreement or the transactions contemplated hereby without obtaining the prior written approval of the other parties hereto (which approval will not be unreasonably withheld, delayed or conditioned) unless, in the reasonable judgment of the Company, as applicable, disclosure is otherwise required by Law.
 
4.2   Set forth as Exhibit C hereto is a copy of the Company’s Current Form 8-K (the “ Form 8-K ”) with respect to the execution of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby. The Company shall file the Form 8-K no later than four business days after the Closing.
 
4.3   Further Action .  The Company agrees to take, or cause to be taken, from and after the date hereof, such further reasonable actions to execute, deliver and file, or cause to be executed, delivered and filed, such further documents and instruments as may be necessary in order to fully effectuate the purposes, terms and conditions of this Agreement, and the Company agrees to cooperate fully in any such actions as the Class B Purchasers shall reasonably request.
 
4.4   Special Dividend Reporting . The Company shall exercise best efforts to not to provide the Class B Purchasers with a Form 1099 reporting the Special Dividend.
 
5.   Miscellaneous .
 
5.1   Counterparts .  This Agreement may be executed in one or more counterparts, but all such counterparts shall constitute one and the same instrument.
 
 
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5.2   Communications and Notices .  Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile or email (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) three days after deposit with an internationally recognized overnight delivery service, in each case properly addressed to the party to receive the same.  The addresses, facsimile numbers and email addresses for such communications shall be:
 
If to the Company:
       
   
Mailing Address:
 
180 South Broadway
White Plains, New York 10605
   
Email Address:
 
jjoseph@presrealty.com
   
Fax Number:
 
914-948-1327
         
With a copy to Nilene R. Evans
 
Mailing Address :
 
Morrison & Foerster LLP,
1290 Avenue of the Americas,
New York, New York 10104-0050
   
Email Address:
 
nevans@mofo.com
   
Fax Number:
 
212-468-7900
         
If to the Class B Purchasers:
 
To the addresses set forth on Exhibit A .
   

5.3   Governing Law .  This Agreement shall be construed in accordance with and governed by the laws of the State of Delaware, without regard to the conflicts of laws and rules thereof.
 
5.4   Integration and Severability .  This Agreement embodies the entire agreement and understanding among the parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof.  In case any one or more of the provisions contained in this Agreement or in any instrument contemplated hereby, or any application thereof, shall be invalid, illegal or unenforceable in any respect, under the laws of any jurisdiction, the validity, legality and enforceability of the remaining provisions contained herein and therein, and any other application thereof, shall not in any way be affected or impaired thereby or under the laws of any other jurisdiction.
 
5.5   Headings .  The headings of the articles, sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part of this Agreement.
 
[Signature Page Follows]

 
8

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above stated.
 
 
CLASS B PURCHASERS:
 
     
  /s/ Richard Zorn  
  Richard Zorn  
     
     
  /s/ Gordon DiPaolo  
 
Gordon DiPaolo
 
     
     
 
PRESIDENTIAL REALTY CORPORATION
 
     
  By: 
/s/ Jeffrey F. Joseph
 
   
Jeffrey F. Joseph, President
 
 
 
 
9

 

 
Exhibit A
Class B Purchaser Information
 
Class B Purchaser
 
Shares of Class B Common Stock To Be Sold to Class B Purchaser
   
Purchase Price
 
Address for Notice
 
Richard Zorn
    125,000     $ 125,000      
Gordon DiPaolo
    125,000     $ 125,000      
 
 
Company Wire Instructions
 
 
 

 

Exhibit B
Press Release
 
 
 

 
 
Exhibit C
Form 8-K
 
 
 

 
Exhibit 10.2

PROPERTY MANAGEMENT AGREEMENT

THIS AGREEMENT (this “Agreement”) is made as of the 8th day of November, 2011 by and between Presidential Realty Corporation (“Owner”) and Signature Community Management, LLC, having an address c/o 9 E. 40 th Street, Suite 900, New York, NY  10016 (“Manager").
 
 
W I T N E S S E T H :
 
                                WHEREAS, Owner is the owner of a 400,000 SF industrial park commonly known as Maple Tree Industrial Center located at 21 Wilbraham Street, Palmer, MA  01069 (the “Property”); and
 
WHEREAS, Owner desires to employ Manager as the exclusive managing and leasing agent for the Property.
 
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
 
1.            Employment of Manager .   Owner hereby employs Manager as the exclusive managing and leasing agent for the Property, and Manager hereby accepts said employment on the terms and conditions as hereinafter provided.  
 
2.            Duties and Authority of Manager .
 
(a)           Manager shall use diligent and professional efforts in managing, leasing, operating, maintaining and servicing the Property.  The services of Manager hereunder are to be performed in a faithful and diligent manner, of a scope and quality consistent with prudent property management industry standards and best practices and in the best interest of Owner (the “ Performance Standard ”).  In connection therewith, Manager shall make available to Owner, consistent with industry practices, the full benefit of the judgment, experience and advice of the members of Manager’s organization and staff with respect to the policies to be pursued by Owner in operating the Property.  In performing the services hereunder, Manager shall comply with the Specific Management Guidelines set forth on Exhibit A hereto, as such guidelines may be changed by Owner from time to time.  Manager shall provide maintenance and on-site and district/regional management (collectively, “ Key Personnel ”).  Manager shall consult with Owner prior to making any changes to the Key Personnel.  Without limiting the foregoing, it shall be the duty and responsibility of Manager, at its sole cost and expense unless otherwise provided herein (it being expressly understood that Owner is responsible for all costs for an on-site management and leasing office and reimbursement of Manager’s employment costs in accordance with Section 4(b) below, all pursuant to the Annual Budget, but Manager is responsible for all off-site employees and all off site management costs), to:
 
(i)           Maintain and staff an on-site management and leasing office (which shall be open during customary business hours), meet with and respond to inquiries from tenants and prospective tenants, and report to Owner with respect to the Property on at least a monthly basis on Manager’s findings and activities.  Manager agrees that all staff shall be employees of Manager and Manager shall supervise, and otherwise be responsible in all respects for, all such employees and Owner shall have no liability with respect thereto.  The parties acknowledge all costs with respect to such on-site management and leasing office shall be an Owner expense pursuant to the Approved Budget and that Owner shall reimburse Manager’s employment related costs in accordance with Section 4(b) below. Manager shall comply with all applicable laws and regulations having to do with worker’s compensation, social security, unemployment insurance, hours of labor, wages, working conditions and other employment-employee related subjects.  Manager represents that it is and will continue to be an equal opportunity employer.  Manager and its employees shall be duly licensed, permitted and authorized under applicable federal, state and local laws and regulations to provide Owner with the services provided for in this Agreement. Manager shall, at Owner’s cost, conduct such background, reference, educational, criminal record and other checks in the hiring of its personnel working at a Property as shall be appropriate to the positions for which such personnel are engaged, to the extent permissible by law.
 
 
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(ii)         Lease available space in the Property.  In such regard, Manager shall use its best efforts to keep the Property leased to tenants meeting Owner’s leasing criteria.  All proposed leases and any modification, cancellation, renewal (unless in accordance with an existing lease) or extension of an existing lease shall be in accordance with the leasing guidelines set forth on Exhibit B hereto, as such guidelines may be changed by Owner with respect to its Property from time to time.  Unless otherwise agreed by Owner, all leases shall be substantially on the standard form of lease attached as Exhibit C hereto.
 
(iii)        Secure, as fully as practicable, the compliance of tenants with the terms, covenants and conditions of their respective leases and compliance of the owners of any adjacent Property with any restrictions contained in any recorded declaration affecting the Property of which Manager has knowledge.   Manager shall keep all tenants informed of all rules and regulations governing the use and occupation of space in the Property (which Owner may alter or supplement from time to time) and Manager shall use its best efforts to cause its services hereunder to be consistent with such rules and regulations.  Service requests of tenants, when received shall be considered and handled by Manager and systematic records shall be maintained showing the action taken with respect to each request.  Complaints of a serious nature shall be reported to Owner immediately with all relevant details and Manager shall thereafter investigate the complaint and make appropriate recommendations.
 
(iv)        Collect from tenants in the Property all rents and other charges required to be paid by their leases and deposit same into the applicable Property Account (as hereinafter defined).  Manager shall compute and bill tenants for such items of rent.  Manager shall prepare, in consultation with Owner, and submit to the tenants of the Property, such statements as are required by the terms of their leases or as may be reasonably necessary to bill and collect the charges in question.  Manager will, at Owner’s expense, but only after consultation with, and approval by Owner, institute legal actions or other proceedings for the collection of such rent or charges due from tenants or for the eviction of tenants, and such expenses may include the employment of collection agencies and/or the engaging of counsel approved or designated by Owner for such matters; provided that actions for the collection of sums of less than $5,000 shall not require Owner’s prior approval so long as Manager uses such law firms as have been approved by Owner for such purpose.  Manager shall, at the request of Owner and at no additional cost to Owner, cause the appropriate personnel of its organization to testify in any legal actions concerning any tenancies or the Property (provided that such personnel are, at the time testimony is required, still members of Manager’s organization).  Except with respect to disputes concerning $5,000 or less, Manager shall have no authority to settle, compromise or take any other action with respect to litigation relating to the Property or the tenancies of the Property without Owner’s express approval.
 
(v)         Deposit all tenant security deposits in such manner and with such depository institutions as is required by law, or to the extent no legal requirements are in existence for security deposits, then in the Property Account for the Property or as otherwise directed by Owner, with accrued interest to be paid to the related Owner if permitted by law or to a tenant if required under its lease or by law.  Manager shall have no authority to withdraw any sums from said security deposit account.  It is expressly understood and agreed that all disbursements, transfers or refunds of tenant security deposits made by Manager, if authorized by Owner, shall be made by a check drawn on said account or appropriate journal or bookkeeping entries and shall be substantiated by the appropriate records and accounting procedures.  To the extent that applicable law requires that interest be paid to tenants, that statements or other materials or information be provided to tenants with respect to such security deposits, and/or that specified procedures be followed with respect to the retention, investment and disbursement of such security deposits, Manager shall fully comply with same.
 
(vi)        For each calendar year, Manager shall submit an annual budget for the Property to Owner, for Owner’s review and approval.  Thereafter, Manager agrees to work with Owner to refine the budget until the budget is accepted by Owner.  Unless otherwise designated by Owner, the Property shall be operated on a calendar year basis for reporting and budgeting purposes.  Each budget shall show, by category, all anticipated items of income and expenditures, any capital expenditures recommended or anticipated by Manager and any other information which is appropriate for the operation of the Property for such year.  Each budget shall be approved by Owner before it shall become effective (each approved annual budget for the Property is hereinafter referred to collectively as the “Annual Budget” for the Property).  After approval, Manager shall use its best efforts to operate the Property within the constraints of the Annual Budget for the Property and shall not make any expenditure during a budgeted period which is in excess of one hundred five percent (105%) of the budgeted amount for such expenditure for any particular line item, or one hundred two percent (102%) of the aggregate of all budgeted expenditures, except with the express written approval of Owner.  When appropriate, Manager will prepare, for Owner’s consideration and approval, an update of the Annual Budget to reflect actual or anticipated deviations.
 
 
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(vii)       Bond or insure to the equivalent of a fidelity bond for malfeasance all its employees who handle, deal with, or are responsible for Owner’s money in an amount not less than three (3) months of rent and other charges payable by the tenants and licensees of the Property and deliver to Owner a bond or insurance policy (from an insurance company reasonably acceptable to Owner) naming Owner as loss payee under Manager's insurance policy.  The cost of such insurance or bond shall be borne by Manager.
 
(viii)      Subject to the terms of subparagraph (x) below, in accordance with the Owner’s procedures with respect to Owner’s approval of invoices and payment, pay from the applicable Property Account, when due, all taxes, assessments, rents and other levies applicable to the Property, operating expenses, property management fees, leasing commissions, and Manager’s approved expenses, and deliver to the Owner all canceled checks after month-end close.
 
(ix)         Unless otherwise specifically directed by Owner, use its best efforts to comply with all terms of any mortgages, deeds of trust or other documents relating to the Property of which Manager is given copies and pay from the applicable Property Account all amounts due under such documents before such amounts shall become delinquent.
 
(x)          Cause the buildings, appurtenances and grounds of the Property to be maintained, repaired and replaced, at Owner’s expense, in accordance with the quality standards generally applicable to Property of similar class in the geographic area of the applicable Property and according to such further standards as are acceptable to or designated by Owner, including, but not limited to, interior and exterior cleaning, painting, decorating, landscaping, plumbing, alterations, carpentry, and such other normal maintenance, preventive maintenance and repair work (including, but not limited to, structural repair work) as may be necessary.  Except with respect to capital projects or repairs costing in excess of $10,000 (“ Major Capital Projects ”), Manager has the authority to make repairs, replacements, alterations and improvements to the extent same are within the constraints provided for in the Annual Budget, provided that prior to initiating any capital project or repair (including Major Capital Projects and capital projects or repairs contemplated by the Annual Budget), Manager shall submit for Owner’s approval a Capital Repair Request Form (in the form required by Owner).  With respect to Major Capital Projects, Manager shall obtain at least three (3) qualified bids (unless the competitive bid requirement is waived by Owner) for all items comprising such Major Capital Project and provide Owner with all relevant information in connection with such bid process.  In addition, Manager shall obtain Owner’s written approval prior to making any expenditure out of the Property Account with respect to a Major Capital Project and shall furnish Owner with all documentation and information as Owner may require with respect to such expenditure.  Manager shall keep Owner fully and timely informed of its recommendations for repairs, replacements, alterations and improvements necessary to meet the Performance Standard.  Manager shall oversee all maintenance, repair and replacement work performed at the Property.  Manager shall require that all vendors and contractors performing work on the Property to maintain insurance in accordance with the insurance guidelines set forth on Exhibit E attached hereto.
 
 
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(xi)         Negotiate, on behalf of Owner, on the most favorable terms that Manager using its best efforts can then obtain, contracts or arrangements for water, electricity, gas, steam, fuel, oil, telephone, cable, internet, laundry, rubbish removal, vermin extermination, and other necessary services, and for the obtaining of materials and services for the Property, as well as such other contracts as Manager shall deem advisable; provided, however, that Manager may only execute such contracts on behalf of Owner with Owner’s prior written approval and in a manner which discloses Owner’s interest and Manager’s relationship to Owner (Owner reserves the right to execute the contracts directly, without Manager’s agency, unless otherwise specifically directed by Owner in each instance) and, when possible, such contracts shall be for a period not to exceed twelve (12) months, and terminable on not more than thirty (30) days' notice by Owner or Manager without cause or charge.  Manager shall act at all times under the direction of Owner and shall allocate to Owner any rebate, commission or discount obtained as result of such purchases, and any such commissions or rebates are to be remitted to Owner (including Owner's share of any discounts based on purchases made in common with other parties).  
 
(xii)        Maintain, separately for the Property, in a manner and pursuant to a  Yardi computer software system (or other such computer system designated by Owner at a future date), a system of office records, books and accounts with respect to the Property, on a cash basis in accordance with GAAP, which records shall be subject to examination by Owner or its authorized agents and employees at all reasonable hours (including access via telephone lines and modems after business hours), and which records, books and accounts are the property of Owner.  Manager shall, upon request of Owner, make all of said books and records available to Owner and any other parties designated by Owner and shall deliver same to Owner or such designated parties on demand.  Upon the termination of this Agreement, and Owner's request, Manager shall deliver all books and records and computer files to Owner.  Manager shall be responsible, at its sole cost, for keeping its staff fully trained and up-to-date in the use and operation of Owner’s software and accounting systems.  Manager understands that the particular accounting and data systems specified by Owner from time to time for the Property are essential to the uniformity and efficacy of Owner’s overall database and reporting systems, and, accordingly, Manager shall not change or modify any such systems without the express approval of Owner in each instance.
 
(xiii)       At Owner’s expense, prepare and implement such other commercially prudent business strategies, subject to the approval of Owner, so as to increase the profitability and value of the Property, including without limitation, promotional, marketing and expansion plans.  In connection therewith, Manager shall cooperate with Owner in the creation of a promotional website for the Property and, at Owner’s expense, maintain such website in compliance with all applicable laws and in accordance with the standards and procedures promulgated by Owner.  Manager may engage a consultant to perform such services subject to the prior approval of Owner.
 
(xiv)           Subject to the terms of subparagraph (x) above, coordinate and supervise the performance of capital improvements, all turn over and make ready work in connection with preparing vacated space for leasing and any other work performed by landlord or a tenant at the Property.
 
 
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(xv)        Prepare and submit to Owner for the review of Owner the reports indicated on Exhibit D (the “ Property Reports ”) within the time frames designated by Exhibit D (Manager may close the Property's books by the 25 th day of the prior month for purposes of preparing the applicable reports).  In addition to the reports indicated on Exhibit D , Manager shall deliver to Owner an up-to-date rent roll within 48 hours of Owner’s request and copies of the standard management reports generated by the software system used by Manager in connection with the management of the Property as soon as possible following Owner’s request but in any event not later than 24 hours following Owner’s demand.  If requested by Owner, a principal of Manager shall certify the accuracy of any report submitted to Owner.
 
(xvi)       Render reasonable assistance to Owner in connection with any financing, refinancing or sale of the Property, including without limitation, the preparation and submission of information relating to the Property as well as the preparation of any necessary estoppel certificates; and use its best efforts to secure the execution and delivery of such estoppel certificates, subordination and non-disturbance agreements and other required documents.
 
(xvii)      Subject to the Annual Budget or as otherwise approved by Owner in writing, to the extent of its authority, use best efforts to perform or cause to be performed all such acts and things as shall be necessary to effect compliance with all laws, rules, regulations, ordinances, statutes, regulations and requirements of any federal, state or municipal government or any agency thereof having jurisdiction respecting the use or manner of use of the Property or the maintenance or operation thereof; and the requirements of any insurance companies covering any of the risks against which the Property is insured.  Manager will make recommendations to Owner regarding compliance with all notices and, at Owner’s request and expense, shall contract for and supervise the completion of all work necessary to assure such compliance.
 
(xviii)     Participate in Owner’s weekly management meeting conference calls to discuss the status of the Property (as well as any other meetings or conference calls scheduled by Owner).
 
(xix)           Generally perform such other functions as are incidental to or reasonably necessary to effectuate the proper management, upkeep and operation of the Property, and keep Owner advised of all matters having a material bearing on the use and operation thereof.
 
 
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(b)           Subject to applicable Lender requirements, for the Property, Manager shall, on a timely basis, deposit all items of Property income, including without limitation rent and other payments received from tenants, in a local insured interest-bearing account maintained by Owner for such Property, which account shall be in the name of, and at a bank designated by Owner (with all interest accruing to Owner) (collectively, the “Property Account”). Manager shall pay all property expenses set forth in the Annual Budget from the Property Account for such Property. Owner and Manager shall each have signature authority over the Property Account and the funds contained therein, except if Manager is in default under this Agreement or this Agreement has been terminated as to a Property, then Manager shall have no signature authority over the Property Account for such Property. Owner agrees to provide Manager with a monthly accounting of any disbursements made by Owner from the Property Account. All such funds shall at all times be and remain the property of Owner and shall be indicated as such on Manager's records and shall be segregated from the funds of Manager. Upon the execution hereof, Manager and Owner shall agree upon an initial amount to fund the Property Account for the Property. Manager is authorized to issue checks upon the Property Account to pay for all obligations and expenditures incurred by Manager for and on account of Owner in connection with the management and operation of the Property as set forth in the Annual Budget and in accordance with the terms of this Agreement. It is expressly understood and agreed by Manager that all disbursements of funds authorized by Owner to be made by Manager shall be made by a check drawn on the Property Account.  All disbursements of funds shall be substantiated by appropriate records and accounting procedures. Each month, Property expenses shall be paid by Manager from the applicable Property Account in the following order (unless otherwise directed by Owner): (a) first, to payment of any debt service, real estate taxes and insurance premiums for the applicable Property, (b) second to the Manager’s management fee for the prior month and (c) third to all operating expenses set forth in the Annual Budget due and payable by the 25 th day of such month (including payroll expenses set forth on Exhibit F). At the end of each month (or as otherwise directed by Owner), the balance of proceeds in the Property Account shall be distributed to Owner in accordance with instructions furnished by Owner to Manager (subject to any reserves recommended by Manager and approved by Owner).  In the event of an emergency requiring the disbursements of funds, Manager shall use its best efforts to contact Owner, but, if such contact cannot be made, Manager shall be deemed authorized to make the disbursements necessary to remedy the emergency condition.  If the Property Account for the relevant Property at the time of an emergency does not contain funds sufficient to remedy said emergency, Manager may, but shall not be required to, use its own funds to do so, and the related Owner shall promptly reimburse Manager upon presentation of receipts for Manager’s reasonable expenditures made in connection with such emergency.
 
(c)           Manager is hereby authorized to engage attorneys, architects, accountants, engineers or other professional persons subject to Owner's prior written approval, at Owner's expense to the extent provided in the Annual Budget or as otherwise approved by Owner in writing, to assist Manager in the performance of its obligations hereunder.  Owner shall have the right to designate the professionals to be utilized for the foregoing purposes and shall have the further right to engage such professionals directly, without the agency of Manager.
 
(d)           Manager shall deliver promptly to Owner copies of all notices or other communications which relate to this Agreement or the duties to be performed hereunder.
 
(e)           Manager shall notify Owner of all legal requirements, claims or actual or potential problems of which it becomes aware regarding hazardous materials or substances, including, but not limited to any hazardous material or substance which is or becomes defined as a “hazardous waste,” “hazardous substance,” “hazardous material,” pollutant, mold, or contaminant under any federal, state, or local statute, regulation, rule, or ordinance or amendments thereto (as well as asbestos or asbestos-containing materials) including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601), as amended, and/or the Resource Conservation and Recovery Act (42 U.S.C. Section 6901) (collectively, “ Hazardous Materials ”), and agrees to promptly notify Owner if it becomes aware of any violation of any such laws regarding Hazardous Materials.  Manager shall take no action involving the storage, transportation, disposal, abatement, cleanup or removal of Hazardous Materials below, on, under, about or affecting the Property except pursuant to specific written instructions of Owner or an environmental consultant approved by or designated by Owner; provided that in the case of emergency, Manager may take such action as it deems appropriate in its good faith business judgment and will have no liability to Owner, nor shall it be deemed an operator of a Property, by reason of any such emergency action.
 
 
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(f)             Manager shall keep Owner informed of any change in the amount of real or personal property assessments or taxes relating to the Property, and upon request, consult with Owner regarding the contesting of either the validity or the amount thereof; and forward to Owner’s attention, all official receipts evidencing the payment of the foregoing charges. Upon Owner’s request therefor, Manager will cooperate and assist in the preparation of any application for the correction or appeal of any tax or assessment made or to be made in connection with the Property, including, providing supporting testimony at any hearing in connection with such contest or appeal .
 
(g)           Manager shall promptly investigate and timely make a full written report (with the prior written approval of Owner as to the contents of any such report) to the applicable insurance company to which a claim is being made, with a copy to Owner, as to all accidents, claims or damages relating to the ownership, operation and maintenance of the Property, any damage or destruction to the Property and the estimated cost of repair thereof, and shall prepare any and all reports (with the prior written approval of Owner as to the contents thereof) as may be required by the terms of the applicable insurance policy or by any applicable insurance company in connection therewith. Manager shall have no right to settle, compromise or otherwise dispose of any claims, demands or liabilities, whether or not covered by insurance, without the prior written consent of Owner.
 
(h)           Manager shall supervise the moving in and out of tenants and arrange, to the extent possible, the dates thereof so that there shall be a minimum of disturbance to the operation of the Property and inconvenience to other tenants, and render an inspection report thereof (to be submitted into such tenant’s leasing file) with respect to any space which has been vacated including an assessment for damages and the disposition of any deposit held as security for the performance by the tenant under its lease with respect to the space vacated.
 
(i)             Use commercially reasonable efforts to prevent water intrusion into interior spaces and common areas of the Property, cause the removal of water that may have intruded into spaces or resulted from excess humidity, and to prevent mold, bacteria and other contamination at a Property, including implementing protective measures and guidelines as appropriate for the Property, based on its age, type and quality of construction, history of water intrusion, unique or problematic design elements, and local climate and conditions, and as necessary to comply with federal, state and local laws, regulations, ordinances and codes, adopted from time to time, applicable to the management of water intrusion, and complying with any requirements of a Lender or applicable loan documents, relating to the foregoing.
 
 
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3.            Limitations and Authority .  Notwithstanding any other provisions of this Agreement, Manager shall have no authority to take any of the following actions, unless it has received the prior written approval of Owner:
 
(a)           Sell, assign or otherwise transfer or mortgage, pledge, hypothecate, alienate or grant a security interest in the Property or any portion thereof or interest therein or allow due to any act or omission of Manager the placing or suffering of any other encumbrance on the Property or any portion hereof or interest therein except for tenant leases as provided in this Agreement;
 
(b)           Issue any press release or public announcement relating to the Property other than promotional material approved by Owner;
 
(c)           Vary or change any portion of the insurance carried by Owner;
 
(d)           Enter into any contract for any service, materials or the like with a party which is affiliated with Manager or in which any partner, member or shareholder of Manager holds a direct or indirect beneficial interest (with the understanding that, if such contract is approved by Owner, it must be at competitive rates); and
 
(e)           Make any other decision or take any action which by any provision of this Agreement is required to be first approved by Owner.
 
4.            Compensation of Manager .
 
(a)           Base Fee . As compensation for its services, Manager shall, with respect to the Property, receive monthly in arrears an amount equal to five percent (5.0%) of the monthly Rental Income (as defined below) actually received from tenants at such Property from the date hereof to the effective date of termination of this Agreement.
 
(b)           If the effective date of termination is not the last day of a month, the compensation payable pursuant to this Article 4 shall be pro-rated based upon the number of days in such month prior to the effective date of termination.  Such compensation shall be payable on the later of the date which is (i) the 10 th business day of the month and (ii) 10 business days following the submission of the Property Reports required to be submitted as of the end of the prior month as indicated on Exhibit D attached hereto.  “ Rental Income ” means all minimum rents, pet rental fees, late payment fees, laundry and vending machine concessions income, application fees and security deposit forfeitures (except where forfeitures are on account of damage caused by a tenant), but excluding all other receipts or income.
 
 
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(c)            Reimbursable Expenses . Owner shall reimburse Manager for all reasonable expenses incurred by Manager in performance of its duties under this Agreement which are either in accordance with the Annual Budget or which have been approved in writing by Owner.  Such expenses shall include, without limitation, Manager’s costs of the salaries, benefits (including payroll taxes and premiums for medical, life and workers compensation insurance and reasonable administrative costs relating to 401(k) plans if applicable) and appropriate and prudent training (in accordance with the Annual Budget for such Property) for Manager’s employees who are engaged solely in management or operation of the Property (or for the properly apportionable and verified costs of Manager’s employees who are also engaged to provide services to other projects) including any off-site accounting personnel and costs for an on-site management office; provided, however, such expenses shall not include (w) Manager’s general office expenses and administrative overhead or the costs of any off-site office, (x) any corporate training (except such appropriate and prudent training expenses as set forth above in this Section 4(b)),  (y) the insurance premiums described in Section 7 below, or (z) any other costs which are stated in this Agreement to be borne by Manager.
 
(d)            Construction Management .  In connection with the annual budgeting process, Manager shall recommend for Owner’s approval specific capital projects and repairs for which Manager shall provide construction management services.  Manager shall be paid for its services in connection with capital projects for which Owner selected Manager to provide construction management services pursuant to a separate agreement to be negotiated and entered into between Owner and Manager.
 
(e)           Manager shall receive no compensation or reimbursement of any kind or nature except as expressly provided in this Article 4.
 

5.            Term .  Subject to Article 6, the employment of Manager under this Agreement shall commence on the date hereof and shall expire one (1) year from the date hereof (the “ Initial Expiration Date ”).  If neither Owner nor Manager has given to the other party, at least thirty (30) days prior to the Initial Expiration Date, written notice that such party does not wish this Agreement to renew, then the term of this Agreement shall be deemed automatically renewed for an additional period of one (1) year, and so on for further renewal periods of one (1) year unless either party has given to the other written notice of non-renewal at least thirty (30) days prior to the expiration of such extended period.  Notwithstanding any such automatic renewal, this Agreement shall be subject to termination in accordance with the provisions of Article 6 below.
 
6.            Termination .
 
(a)           This Agreement and Manager’s term of employment under this Agreement, for the Property, may be terminated by the Owner after the Initial Expiration Date for any reason, in its sole and absolute discretion, at any time, upon not less than thirty (30) days prior written notice to Manager.  Such termination shall be without payment of any additional fees or penalties, other than accrued management fees payable in accordance with Section 4(a) hereof.
 
 
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(b)           As to the Property, this Agreement and Manager’s term of employment under this Agreement may be terminated by Owner immediately upon the occurrence of any of the following events:
 
(i)           the fraud, gross negligence or malfeasance on the part of Manager under this Agreement;
 
(ii)          the sale of all, or substantially all, of the Property (or of all of the direct or indirect ownership interests therein);
 
(iii)         default by Manager in the performance of a particular obligation under this Agreement (A) which can be reasonably cured in thirty (30) days and which is not cured within thirty (30) days after written notice thereof   or (B) on three (3) occasions during any twelve (12) month period; or
 
(iv)           as required by a Lender (as defined below).
 
(c)           Upon termination of Manager or expiration of this Agreement, all property of Owner in Manager's possession or control, including all security deposits, bank deposits, books of account and records, computer files, leases, correspondence, service contracts, warranties and all invoices (together with copies of all checks in payment thereof) shall be delivered to Owner within three (3) business days after such termination or expiration and Manager's authority to act for Owner shall immediately cease.  All of Manager’s own books of entry, payroll records and other records relating to the Property or the performance of its duties hereunder, and which are not otherwise required to be turned over to Owner, shall be kept by Manager for a period of at least three (3) years following any termination of this Agreement, and shall, upon request, be available for Owner’s inspection and/or copying (at Owner’s cost).
 
(d)           Notwithstanding the foregoing, the assignment for the benefit of creditors, appointment of a receiver, or filing of a voluntary petition in bankruptcy by Manager shall immediately terminate this Agreement with no right to cure.  If a petition in bankruptcy is filed against Manager, Manager shall have ninety (90) days to dismiss such petition before Owner may terminate this Agreement.
 
(e)           Commencing after the Initial Expiration Date, this Agreement and Manager’s term of employment under this Agreement for all but not less than all of the Property may be terminated by the Manager for any reason, in its sole and absolute discretion, at any time, upon not less than sixty (60) days prior written notice to Owner and such termination shall be without payment of any additional fees or penalties, provided, however, at any time, as to the Property, with respect to such Property and such Property only, Manager may terminate this Agreement in the event of a default by Owner which is not cured within thirty (30) days written notice thereof, provided that such default is capable of being cured within a thirty (30) day period. If the default cannot be cured within a thirty (30) day period, the right to cure shall continue for as long as necessary to cure said default, provided that the defaulting party begins to cure within thirty (30) days and continues its efforts in good faith.   .
 
 
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7.            Manager's Insurance Coverage .  With respect to the Property:
 
(a)           Manager shall procure and maintain, at Manager's sole cost and expense, general liability insurance, issued by an insurance company licensed in the state in which the Property is located and acceptable to Owner, with minimum limits of at least $1,000,000 per occurrence for bodily injury and at least $1,000,000 per occurrence for property damage.
 
(b)           Manager shall procure and maintain, at Manager’s sole cost and expense, throughout the term hereof worker's compensation and unemployment compensation in full compliance with all applicable state and federal laws and regulations.
 
(c)           To the extent applicable, Manager shall, at Manager's sole cost and expense, maintain in full force and effect comprehensive automobile liability insurance coverage which has combined single limit coverage of $1,000,000.  The comprehensive automobile liability policy shall include blanket non-owned coverage.
 
(d)           Manager shall, at Manager's sole cost and expense, maintain in full force and effect an "umbrella" liability coverage providing coverage in the amount of $3,000,000 (if such amount can be obtained pursuant to applicable state law) in excess of the coverages to be maintained pursuant to Subparagraphs 7(a), (b), and (c) hereof.
 
(e)           Manager shall, at Manager’s sole cost and expense, maintain in full force and effect employment practices liability insurance coverage, including third party coverage, which has limits of not less than $1,000,000 each wrongful employment act and $1,000,000 aggregate.
 
(f)           Owner shall have the right to require Manager to obtain and maintain, at Manager's sole cost and expense, such other insurance as Owner may from time to time deem reasonably necessary and which insurance is normal and customary for managing agents for buildings similar to and located in the vicinity of the applicable Property.
 
(g)           Manager shall furnish Owner with certificates of insurance (or, if requested by Owner, certified copies of the insurance policies), all in form and substance reasonably satisfactory to Owner, and required to be obtained and maintained by Manager pursuant to the terms of this Agreement.  Owner shall be named as additional insured on the Commercial General Liability Policy, automobile liability and excess liability policies.  Such policies shall provide that they shall not be canceled or otherwise modified without thirty (30) days' prior written notice to Owner.  At least ten (10) days prior to the expiration of any such policy Manager shall furnish Owner with evidence that the insurance policies required hereunder have been renewed.
 
 
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8.            Indemnity .
 
(a)           Owner and any Owner Affiliate hereby agrees to indemnify and hold Manager, its agents and employees harmless from and against any and all liabilities, claims, suits, fines, penalties, damages, judgments, losses, fees, costs and expenses (including reasonable attorneys’ fees and court costs) incurred when Manager is acting in accordance with the terms and provisions of this Agreement and within the scope of authority conferred upon Manager hereunder, or when Manager is acting under the express direction of Owner, except for matters for which Manager indemnifies Owner under subclause (b) below.
 
(b)           Manager hereby agrees to indemnify and hold Owner and its employees, harmless from and against any and all liabilities, claims, suits, fines, liabilities, damages, judgments, losses, fees, costs and expenses (including reasonable attorneys’ fees and court costs) which arise due to Manager’s actions taken outside the scope of (or in default of) this Agreement or due to its gross negligence or willful misconduct.
 
(c)           Owner shall cause Manager to be named as an additional insured, as its interest may appear, with respect to any and all general or public liability insurance coverage with respect to the Property.  Owner shall be responsible, at its expense, for maintaining casualty insurance with respect to the Property.
 
9.            Human Rights .  Manager shall, in its procurement of goods and services, use best efforts to ensure that minority and women-owned business enterprises are given the opportunity to provide such goods and services.  Manager acknowledges that pursuant to certain federal, state and local laws and the rules and regulations promulgated thereunder or pursuant thereto (“ Human Rights Laws ”) applicable to the Property, it is illegal for an owner of property or the property manager acting on behalf of such owner to refuse to lease property or procure goods and services from any person because of personal characteristics, which characteristics may include race, color, religion, national origin, sex, marital status, sexual orientation, age or physical disability, as specified in the Human Rights Laws applicable to the Property.  Owner and Manager each agree to comply with all Human Rights Laws applicable to the Property.
 
10.          Lender Provisions .  All fees payable to Manager shall be subordinate to the payment of all debt service obligations under any loan  or preferred equity investment (any such loan or investment, a “ Loan ”) secured by the Property or an indirect or direct interest  in  the Property, if required by any  mortgage lender (a “ Lender ”).  Manager shall cooperate in executing any additional agreements to document the above if required by  a Lender.  Manager agrees that  a  Lender shall have the right, upon notice to Manager and Owner at any time after the occurrence and during the continuance of an event of default under  a  Loan, to be substituted for Owner under this Agreement and to continue to employ Manager in accordance with the terms of this Agreement.  A Lender shall have the right to terminate this Agreement upon notice to Manager and Owner at any time after the occurrence and during the continuance of an event of default under a Loan.
 
 
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11.          Avoidance of UBTI . Notwithstanding any provision to the contrary, any provision of this Agreement or any action by Manager that might cause a direct or indirect beneficial owner in Owner to recognize “unrelated business taxable income” within the meaning of Internal Revenue Code (“Code”) Sections 511-514 (“UBTI”) as a result of its direct or indirect investment in Owner shall be (i) void and of no effect or (ii) reformed, as necessary, to avoid such potential recognition of UBTI.  Manager shall use its best efforts not to cause UBTI to occur.
 
12.          REIT Protection .
 
(a)           While the Manager shall not be required independently to determine whether any transaction or arrangement would adversely affect the ability of any “Owner Affiliate” (as defined below) to qualify as a REIT or would result in the Owner holding any assets other than “real estate assets” as defined in Section 856(c)(5)(B) of the Code (“ Non-REIT Assets ”) or generating income which would not qualify under Section 856(c)(3) and 856(d) of the Code (“ Non-REIT Income ”) if such income were earned by any Owner Affiliate directly, if the Manager has actual knowledge, or is otherwise informed by any Owner Affiliate in the exercise of such Owner Affiliate’s reasonable judgment, that a transaction or arrangement could have an adverse effect on Owner Affiliate’s ability to qualify as a REIT or could result in the Owner holding Non-REIT Assets or generating Non-REIT Income, the Manager shall take such actions (or refrain from taking such actions) as are reasonably required to protect the Owner Affiliate’s REIT status or to avoid the Owner’s receipt of such Non-REIT Income and/or Non-REIT assets (as the case may be); provided, however, that the terms of this paragraph shall not limit any of the specific restrictions on the authority of the Manager set forth elsewhere in this Agreement.
 
(b)           For purposes of this Section 12, “ Owner Affiliate ” shall mean, when used with reference to the Owner, (a) any Person (as defined below) that directly or indirectly through one or more intermediate controls or is controlled by or is under common control with the Owner, and (b) any Person which directly or indirectly is the beneficial owner of ten percent (10%) or more of any class of equity securities, partnership interests or other ownership interests in the Owner or of which the specified Person is directly or indirectly the owner of ten percent (10%) or more of any class of equity securities, partnership interests or other ownership interests.  For the purposes of this definition, “control” means the power to direct the management and policies of such Person, directly or through one or more intermediaries, whether through the ownership of voting securities, by agreement or otherwise, and the term “controlled” has the meaning correlative to the foregoing.  “Person” shall mean any corporation, trust, business trust, or association and the assigns thereof, where the context so requires.
 
13.          General Provisions .
 
(a)            Notice .  All notices hereunder to Owner or Manager shall be sent by certified or registered mail, return receipt requested, or may be sent by Federal Express or other nationally recognized overnight courier which obtain signature upon delivery.
 
 
   
OWNER:
 Presidential Realty Corporation
 
9 E. 40 th Street, Suite 900
 
New York, NY 10016
 
Attn: Alex Ludwig
   
MANAGER:
Signature Community Management, LLC
 
9 E. 40 th Street, 9 th Floor
 
New York, NY  10016
 
Attn: David H. McLain, Esq.
   
   
 
Notices shall be deemed served three (3) days after mailing, and in the case of overnight courier on the date actually delivered to the intended recipient, except for notice(s) which advise the other party of a change of address of the party sending such notice, which notice shall not be deemed served until actually received by the party to whom such notice is addressed or delivered if refused by such party.

(b)            Limitation of Liability .  Notwithstanding any provision contained herein to the contrary, the liability of the Owner arising under or in connection with this Agreement is strictly limited to and shall be enforceable only out of the Property and the income and rents therefrom and in no event shall any Owner have any personal liability hereunder.
 
(c)            Severability .  If any term or provision of this Agreement or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law.
 
(d)            No Partnership .  Owner shall not and by this Agreement does not in any way or for any purpose become a partner of Manager in the conduct of its business, or otherwise, or a joint venture of or a member of a joint enterprise with Manager or vice versa.  It is agreed by the parties that either party may engage in any other business or investment, including the ownership or investment in real estate and the operation and management of property similar to the Project, and that the other party hereto shall have no rights in and to any such business or investment or the income or profit derived therefrom.
 
(e)            Modifications .  No change or modification of this Agreement shall be valid or binding upon the parties hereto, nor shall there by any waiver of any term or conditions in the future, unless such change or modification or waiver shall be in writing and signed by both parties.
 
(f)            Binding Effect .  Subject to the provisions hereof, this Agreement shall inure to the benefit of and be binding upon the parties hereto, their legal representatives, transferees, successors and assigns.
 
 
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(g)            Waiver of Liens .  To the extent permitted by law, Manager, for itself and its agents and contractors, hereby waives all right to assert a lien against the Property under any mechanic’s lien law or similar law in the state in which the Property is located.
 
(h)            Captions and Definitions .  The captions to the paragraphs in this Agreement are included for convenience only and are not intended and shall not be deemed to modify or explain any of the terms of this Agreement.
 
(i)            Counterparts .  This Agreement may be executed in separate counterparts, each of which shall be an original of this Agreement and all of which, taken together, will constitute the entire Agreement between the parties hereto.
 
(j)            Applicable Law . This Agreement is made under, and shall be construed and enforced in accordance with, the laws of the State of New York applicable to agreements made and to be performed solely therein, without giving effect to principles of conflicts of law.  Each party irrevocably and unconditionally agrees to (i) submit itself to the personal jurisdiction of the courts of New York County, New York and the United States federal courts and (ii) waive any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in the United States District Court for the State of New York or the state courts of the State of New York sitting in New York County and hereby irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in such court has been brought in an inconvenient forum.
 
(k)            Assignment .  Manager may not assign this Agreement or delegate any of its duties hereunder without the prior written consent of Owner in each instance, which consent Owner may withhold in its sole discretion.  Owner may assign this Agreement to any purchaser of a Property (with respect to such Property) or any other person or entity without the consent of Manager.
 
(l)            Attorneys’ Fees .  If any party obtains a judgment against any other party by reason of breach of this Agreement, a reasonable attorneys’ fee as fixed by the court shall be included in such judgment.
 
(m)            Confidentiality .  Manager agrees, for itself and all persons retained or employed by Manager in performing its services hereunder, to hold in confidence and not to use or disclose to others any information relating to the Property which Owner designates as confidential or proprietary, except where Owner specifically authorizes Manager to disclose such information to others, or where such disclosure reasonably results from the performance of Manager’s duties or is required to be disclosed by law or pursuant to litigation.
 
(n)            Special Provisions .  This Agreement incorporates the special provisions, if any, set forth on Exhibit “F” hereto.
 

[SIGNATURES ON NEXT PAGE]

 
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                 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first above written.
 
  OWNER:  
 
PRESIDENTIAL REALTY CORPORATION
 
       
 
By:
/s/ Jeffery F. Joseph
 
   
Name: Jeffery F. Joseph
 
   
Title:  President
 
       
                                    
 
 
 
MANAGER:
 
 
SIGNATURE COMMUNITY MANAGEMENT, LLC
 
       
 
By:
/s/ David McLain
 
   
Name: David McLain
 
   
Title:  CEO
 
       
 
 
 

 
 
EXHIBIT A
 
                                SPECIFIC MANAGEMENT GUIDELINES

1.            The Manager shall walk the Property no less than once per week.
 
2.            To the extent of received funds, a deposit shall be made to the bank no less than every other day (daily between the 1st and 5th).
 
3.            Manager shall use its best efforts to cause the delinquencies at month end to be no more than a 1/2 percent of the monthly income.
 
4.            To the extent permitted by law and the applicable lease, rent shall be late on the 2nd day of the month and a late fee should be assessed each day thereafter.
 
5.            Notice to regain possession under applicable law shall be served no later than the tenth day of the month, or such later date as may be required by applicable law.
 
6.            Regional Manager shall spot audit NSF'S, delinquents, applications and leases monthly.
 
7.            Regional Manager and Manager shall report monthly (or more frequently if so required by this Agreement) on any potential liabilities, such as any health and safety issues, fair housing and environmental concerns.
 
8.            Manager shall conduct semi-annual inspection of the Property.
 
9.            All O&M plans shall be present at the Property and reviewed and implemented accordingly.

 
 

 
EXHIBIT B

LEASING GUIDELINES

1.            Manager will undertake an active marketing campaign and will investigate all appropriate prospective tenants to maximize the occupancy of the Property.
 
2.           All leasing shall be for such rental rates, and on such other terms and conditions, as established by Owner from time to time.
 
3.           It is specifically understood and agreed by Manager that this Agreement does not apply to, encompass or relate to a sale of all or any part of the Property, and that Manager shall be entitled to no fee or commission with respect to any such sale.
 
 
 

 
EXHIBIT C

FORM LEASE

TO BE AGREED BY THE PARTIES AFTER THE DATE HEREOF

 
 

 

EXHIBIT D

REPORTING REQUIREMENTS

Manager shall submit the following reports to Owner in accordance with the schedule outlined below.  All reports shall be submitted via data base upload:

            By the 7 th Day of the Month
 
 
1.
A copy of the computer Data Base from the system of Property Management Records and (closed for the previous month) GL/AP Records.

            By the 10th Day of the Month           

 
1.
A copy of the computer Data Base from the system of Property Management Records and (closed for the previous month) GL/AP Records.

            By the 10th Day of the Month

 
1.
Balance Sheet

 
2.
Cash Journal

 
3.
A/P Check Register

 
4.
Year-to-Date General Ledger

 
5.
Budget Comparison Report

 
6.
Delinquency Aging Report

 
7.
Rent Roll

 
8.
Statement Reconciliation Report & Bank Statements

 
9.
Narrative Report on Management and Leasing, including an analysis of the variances presented on the Budget Variance Report and the Periodic Inspection Checklist

 
10.
Capital Projects Report #1 and Capital Projects Report #2 (in form approved by Owner)

 
11.
Twelve month trailing operating statement

            By the end of each Calendar Quarter
          
 
1.
Quarterly Budget Variance Report

 
2.
Quarterly Reforecast Net Cash Flow Summary
 
Annually
 
 
1.
IRS Form 1099 Filings

 
 

 

EXHIBIT E

VENDOR INSURANCE REQUIREMENTS

TO BE AGREED BY THE PARTIES AFTER THE DATE HEREOF

 
 

 
EXHIBIT F

SPECIAL PROVISIONS


 
1.
Manager shall have the right to hire third party commissioned based brokers to lease space and charge back the cost of these people to the property.

 
 

 

Exhibit 10.3
 
ASSET MANAGEMENT AGREEMENT
 
This Asset Management Agreement (“Agreement”) dated as of November 8, 2011 (the “ Effective Date ”) by and between Signature Community Investment Group, LLC or any affiliate thereof (collectively, “ Asset Manager ”), and Presidential Realty Corporation (“ Owner ”).
 
B A C K G R O U N D :
 
WHEREAS, Owner, directly or through its subsidiaries, is the owner and/or asset manager of various properties as more fully described on Schedule A attached hereto (the “ Properties ”);
 
WHEREAS, Asset Manager is in the business of handling all aspects of the day-to-day management of commercial properties in markets throughout the United States including, but not limited to, the following areas: leasing, construction, acquisitions, dispositions, financing, accounting, tenant relations, real estate taxes, work order management, expense management, rental rate maximization, processing timely tenant turnovers, and energy management (“ Signature Asset Management Business ”); and
 
WHEREAS, Owner desires to engage Asset Manager, and Asset Manager desires to be engaged by Owner to manage Owner’s Properties in accordance with the Signature Asset Management Business.
 
IN CONSIDERATION of the Background and the mutual agreements contained herein, and intending to be legally bound hereby, the parties agree as follows:
 
1.            Engagement of Asset Manager .  Subject to the terms and conditions of this Agreement, the Owner hereby engages Asset Manager, to manage Owner’s Properties consistent with the Signature Asset Management Business and provide such services of the Signature Asset Management Business as Owner shall request from time to time (the “ Asset Management Services ”).
 
2.            Principal Duties .      During the term (as hereafter defined) of this Agreement, Asset Manager shall use its best efforts to manage the Properties in accordance with the Signature Asset Management Business and perform the Asset Management Services as directed by Owner.  Without limiting the foregoing, Asset Manager’s duties include the following:
 
 
A.
Leasing:
 
 
(i)
Oversee property management and company’s leasing progress
 
 
(ii)
Train personnel on proper leasing techniques
 
 
 

 
 
 
B.
Marketing & Advertising:
 
 
(i)
Create and place all print ads, internet ads and property website
 
 
(ii)
Develop property brochure
 
 
(iii)
Develop property flyers
 
 
(iv)
Develop property promotional materials
 
 
C.
Financing:
 
 
(i)
Negotiate with current lender and/or new financing sources
 
 
D.
Construction:
 
 
(i)
Establish scope of job
 
 
(ii)
Bid out project
 
 
(iii)
Review bids
 
 
(iv)
Award work
 
 
(v)
Monitor work completion
 
 
E.
Dispositions:
 
 
(i)
Analyze asking price for property
 
 
(ii)
Select broker
 
 
(iii)
Work with broker on the marketing plans
 
 
(iv)
Evaluate any offers received
 
 
(v)
Negotiate offers and agreements of sale
 
 
(vi)
Work with title company on affecting the closing
 
 
 
F.
Commercial lease negotiations:
 
 
(i)
Evaluate market and determine asking rent
 
 
(ii)
Select broker
 
 
(iii)
Work with broker on the marketing plans
 
 
(iv)
Evaluate any offers received
 
 
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(v)
Negotiate the offers and lease document
 
 
(vi)
Assist tenant with any required permits and approvals.
 
 
(vii)
Coordinate any required construction
 
 
G.
Accounting:
 
 
(i)
Review monthly operating statements for inaccuracies, trends, issues, and opportunities
 
 
(ii)
Review statements prepared for lenders and Owner
 
 
H.
Tax Returns:
 
 
(i)
Review tax returns
 
 
(ii)
Consider ways to minimize tax obligations
 
 
I.
Cash flow management:
 
 
(i)
Work with property management firms to make sure they have ample cash to operate property.   Specifically, monitor cash balances, forecast future cash balances and requirements.
 
 
J.
Budgeting:
 
 
(i)
Supervise property management firms in developing annual operating and capital budgets and underlying assumptions.
 
 
K.
Strategic Plan:
 
 
(i)
Develop long term strategic plan for each building and market
 
 
L.
Real Estate Taxes:
 
 
(i)
Manage outside consultant to review and appeal where necessary the tax assessments
 
 
M.
Expense Management:
 
 
(i)
Compare all expenses to established industry benchmarks
 
 
(ii)
Look for opportunities to reduce costs through scope refinement, bidding contracts, outsourcing or doing work in-house
 
 
(iii)
Implement both water and energy saving initiatives
 
 
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(iv)
Obtain volume pricing with utility companies and track usage for potential misbillings
 
 
(v)
Handle insurance for every location and ensure proper coverage and lowest possible premiums.
 
 
N.
Rental rate maximization:
 
 
(i)
Perform regular market rent analysis
 
 
(ii)
Compare the result to Property’s rental rates and determine if adjustments are required
 
 
O.
Tenant turnovers:  Supervise property management firms in completing timely tenant turnovers
 
 
P.
Delinquencies:  Supervise property management firms in ensuring timely collection of all tenant amounts due
 
 
Q.
Community relations: maintain relations with local officials and handle any major issues or concerns
 
 
R.
Quality Assurance: Maintain the quality of the location through the following:
 
 
(i)
Review quality of leasing personnel
 
 
(ii)
Safety audits of each building
 
3.            Compensation .  In exchange for all of the Asset Management Services to be performed by Asset Manager hereunder, Asset Manager shall be paid the consideration set forth and described on Schedule B attached hereto.
 
4.            Term and Termination .  The employment of Asset Manager under this Agreement shall commence on the date hereof and shall expire one (1) year from the date hereof (the “Initial Expiration Date”).  If neither Owner nor Asset Manager has given to the other party, at least thirty (30) days prior to the Initial Expiration Date, written notice that such party does not wish this Agreement to renew, then the term of this Agreement shall be deemed automatically renewed for an additional period of one (1) year, and so on for further renewal periods of one (1) year unless either party has given to the other written notice of non-renewal at least thirty (30) days prior to the expiration of such extended period.
 
(a)           This Agreement and Asset Manager’s term of employment under this Agreement may be terminated by Owner immediately upon the occurrence of any of the following events:
 
(i)           the fraud, gross negligence or malfeasance on the part of Asset Manager under this Agreement;
 
 
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(ii)           the sale of all, or substantially all, of the Properties (or of all of the direct or indirect ownership interests therein);
 
(iii)           default by Asset Manager in the performance of a particular obligation under this Agreement (A) which can be reasonably cured in thirty (30) days and which is not cured within thirty (30) days after written notice thereof   or (B) on three (3) occasions during any twelve (12) month period; or
 
5.           as required by a lender.   Supersedes Other Agreements .  This Agreement supersedes all prior agreements and understandings between Asset Manager and the Owner regarding the subject matter hereof.
 
6.            Indemnification .                  (a)     Owner hereby agrees to indemnify and hold Asset Manager, its agents and employees harmless from and against any and all liabilities, claims, suits, fines, penalties, damages, judgments, losses, fees, costs and expenses (including attorneys’ fees and court costs) incurred when Asset Manager is acting in accordance with the terms and provisions of this Agreement and within the scope of authority conferred upon Asset Manager hereunder, or when Asset Manager is acting under the express direction of Owner, except for matters for which Asset Manager indemnifies Owner under subclause (b) below.
 
(b)           Asset Manager hereby agrees to indemnify and hold Owner and its employees, harmless from and against any and all liabilities, claims, suits, fines, liabilities, damages, judgments, losses, fees, costs and expenses (including attorneys’ fees and court costs) which arise due to Asset Manager’s actions taken outside the scope of this Agreement, Asset Manager’s failure to comply with the material terms, obligations, covenants and requirements of this Agreement or Asset Manager’s gross negligence.   
 
7.            Relationship .  Asset Manager shall perform its duties hereunder as an independent contractor to Owner and nothing herein shall constitute the Asset Manager or any of its employees or agents as an employee or agent of Owner.  Asset Manager shall not be deemed to have been granted any right or authority to assume or create any obligation or responsibility on behalf of or in the name of Owner.  Nothing in this Agreement is intended nor shall it be deemed to create a joint venture, partnership, tenancy in common or joint tenancy relationship between Asset Manager and Owner nor to grant Asset Manager any interest in the Properties.
 
8.            No Waivers .  No waiver with respect to this Agreement shall be enforceable unless in writing and signed by the party against whom enforcement is sought.  Except as otherwise expressly provided herein, no failure to exercise, delay in exercising, or single or partial exercise of any right, power or remedy by any party, and no course of dealing between or among any of the parties, shall constitute a waiver of, or shall preclude any other or further exercise of the same or any other right, power or remedy.
 
9.            Governing Law .    This Agreement and any claims arising out of this Agreement (or any other claims arising out of the relationship between the parties) shall be governed by and construed in accordance with the laws of the State of New York and shall in all respects be interpreted, enforced and governed under the internal and domestic laws of such state, without giving effect to the principles of conflicts of laws of such state; provided, however, that to the extent required the laws of Puerto Rico, the laws of Puerto Rico shall apply.
 
 
5

 
 
10.            Headings .  The headings of the Sections of this Agreement have been inserted for convenience of reference only and do not constitute a part of this Agreement.
 
11.            Counterparts . This Agreement may be executed in two or more counterparts and each of such counterparts, for all purposes, shall be deemed to be an original but all of such counterparts together shall constitute but one and the same instrument, binding upon all parties hereto, notwithstanding that all of such parties may not have executed the same counterpart.
 
12.            Severability .  If any provision of this Agreement s determined by a court of competent jurisdiction to be invalid or unenforceable, such determination will not effect the remaining provisions of this Agreement, all of which will remain in full force and effect.
 
13.            Attorneys’ Fees .   If either party institutes a legal proceeding against the other party in connection with this Agreement, the losing party in such proceeding shall reimburse the prevailing party all reasonable attorneys’ fees paid by the prevailing party in connection with such proceeding.
 
14.            Notices .   All notices hereunder shall be sent by certified or registered mail, return receipt requested, or may be sent by Federal Express or other overnight courier which obtains a signature upon delivery to such party at the address of such party set forth below or at such other address as such party shall designate from time to time by notice:
 
Asset Manager:
 
Signature Community Investment Group, LLC
9 E. 40 th Street, Suite 900
New York, NY 10016
Attention:  David H. McLain, Esq.
 
Owner :
 
Presidential Realty Corporation
 
Notices shall be deemed served three (3) days after mailing, and in the case of overnight courier on the date actually delivered to or rejected by the intended recipient, except for notice(s) which advise the other party of a change of address of the party sending such notice or of such party's attorney, which notice shall not be deemed served until actually received by the party to whom such notice is addressed or delivery is refused by such party.  Notices on behalf of the respective parties may be given by their attorneys and such notices shall have the same effect as if in fact subscribed by the party on whose behalf it is given.
 
15.            Further Assurances .   The parties each agree to do such other and further acts and things, and to execute and deliver such instruments and documents (not creating any obligations additional to those otherwise imposed by this Agreement), as either may reasonably request from time to time,, in furtherance of the purposes of this Agreement.
 
 
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16.            Assignment .  This Agreement shall not be assigned by any party hereto, whether by operation of law or otherwise without the consent of the other party, and any such assignment without the other party’s consent shall be null and void.
 
[Signature Page to Follow]
 
 
7

 
 
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.
 
 
PRESIDENTIAL REALTY CORPORATION
 
       
 
By: 
/s/ Jeffery F. Joseph
 
   
Name: Jeffery F. Joseph
 
   
Title:  President
 
       
       
  SIGNATURE COMMUNITY INVESTMENT GROUP, LLC  
       
 
By: 
/s/ Nickolas W. Jekogian, III
 
   
Name: Nickolas W. Jekogian, III
 
   
Title:  President
 
 
 
8

 
 
SCHEDULE A
 
Properties
 
1.
Maple Tree Industrial Center:  400,000 SF industrial park commonly known as Maple Tree Industrial Center located at 21 Wilbraham Street, Palmer, MA  01069   

2.
Hato Rey Office Building:  100,000 SF class A- office space in central business district located at Home Mortgage Plaza, 268 Ponce de Leon Ave., Hato Rey, Puerto Rico 00918

 
 

 
 
SCHEDULE B
 
Asset Management Fees
 
Asset Management Fee:
 
Owner shall pay Asset Manager an asset management fees (the “ Asset Management Fee ”) equal to one and one-half percent (1.5%) of the Properties’ monthly gross rental revenues collected for the Properties (to be paid monthly).  Asset Manager shall bill and be paid on a case by case basis for all out of pocket expenses incurred in rendering the Asset Management Services and additional charges as shall be agreed between Owner and Asset Manager when such services are requested by Owner.  Notwithstanding the foregoing, the monthly fee will be accrued and not paid until the receipt of mortgage proceeds on the Maple Tree Industrial Center.
 
 Without limiting the foregoing, additional fees shall be charged for the following services:
 
Finance Fee – 1% fee on any debt placement
 
Construction Fee:  for any major renovations or capital projects, fee subject to Board approval
 
Disposition Fee – 1% on sale of any assets
 
 
 

 
Exhibit 10.4
 
EXECUTIVE EMPLOYMENT AGREEMENT

AGREEMENT made as of November 8, 2011, by and between PRESIDENTIAL REALTY CORPORATION, a Delaware corporation (the "Corporation"), and NICKOLAS W. JEKOGIAN, III ("Executive").
 
WITNESSETH :

WHEREAS, the Corporation desires to employ Executive and Executive is willing to undertake such employment on the terms and subject to the conditions hereinafter set forth.
 
NOW, THEREFORE , in consideration of the premises and mutual covenants hereinafter contained, the parties hereto agree as follows:
 
1.            Employment; Duties .  The Corporation hereby employs Executive as an executive of the Corporation to perform duties as a Director, Chairman of the Board of Directors and Chief Executive Officer of the Corporation and such other duties on behalf of the Corporation and its affiliates, commensurate with his office, as the Board of Directors of the Corporation may from time to time determine.
 
2.            Acceptance and Loyalty .  Executive hereby accepts such employment and agrees that throughout the period of his employment hereunder he will devote his knowledge and skills, faithfully, diligently and to the best of his ability, in furtherance of the business of the Corporation and will perform the duties assigned to him pursuant to Section 1 hereof.  Executive will not be exclusive to the Corporation but he will devote such amount of time and attention as is necessary to the performance of the duties assigned to him pursuant to Section 1 hereof.  Executive shall perform all duties and responsibilities in a professional manner consistent with the skill, competence and efficiency expected of an executive employee performing the duties assigned to Executive, subject to the direction and control of the Board of Directors of the Corporation.  Executive will do such traveling as may be reasonably required of him in the performance of his obligations hereunder.  Executive shall at all times be subject to, observe and carry out such rules, regulations, policies, directions and restrictions as the Corporation shall from time to time establish; provided, however, that nothing contained herein or in any of the Corporation’s rules, regulations, policies, directions and restrictions shall be deemed to prohibit or restrict Executive from  directly or indirectly, continuing to own, operate, manage and control Signature Community Group, LLC and its affiliates.  During Executive's employment hereunder, Executive shall not be entitled to additional compensation for serving in any office, including as a director, of the Corporation or any of its subsidiaries or affiliates to which he may be elected.
 
3.            Term .  The term of Executive's employment hereunder shall commence on the date hereof and terminate on the eighteen (18) month anniversary thereof (the "Term").
 
 
 

 
 
4.            Compensation and Benefits .
 
4.1            Base Salary .  Subject to Section 4.4, the Corporation shall pay to Executive as compensation for his services and agreements hereunder an initial base salary at the rate of $ 200,000 per annum, for the first twelve (12) months of the Term and at the rate of $225,000 per annum for the last six (6) months of the Term, or such greater amount as the Board of Directors of the Corporation shall from time to time determine.  Base salary shall be payable in equal installments in accordance with the Corporation's normal payroll policy, subject to payroll taxes and withholding requirements.
 
4.2            Stock Options .  The Corporation shall grant to Executive an option (the “Option”) to purchase 370,000 shares of Class B Common Stock, par value $0.10 per share, of the Corporation as further described in the Stock Option Agreement in the form of Exhibit A annexed hereto. The grant of the Option is pursuant to the approval of the Corporation’s Compensation Committee.
 
4.3            Annual Bonus . Commencing with the fiscal year of the Corporation beginning January 1, 2012, and for each fiscal year thereafter during the Term, Executive shall have the opportunity to earn a bonus ("Annual Bonus") in such amount as the Corporation’s Compensation Committee shall determine in its absolute discretion, such bonus not to exceed $200,000.
 
4.4            Payment of Bonus and Base Salary to be Deferred .  Notwithstanding the foregoing, Executive hereby agrees to defer receipt of the payment of base salary and any Annual Bonus, and the Corporation shall have no obligation to pay Executive his base salary and Annual Bonus unless and until a Capital Event shall have occurred.  Any deferred base salary and Annual Bonus shall be paid concurrently with or within three business days following a Capital Event.  For purposes of this Agreement and the Option, “Capital Event” means the receipt by the Corporation of at least $20,000,000 in cash or property from a capital raising activity including the following:  (a) the sale for cash of shares of the Corporation’s Class A or Class B Common Stock or securities convertible into shares of the Corporation’s Class A or Class B Common Stock; (b) the exchange of shares of Class A or Class B Common Stock for real estate assets consistent with the Corporation’s status as a REIT; (c) the sale of unsecured subordinated debt instruments of the Corporation, the proceeds of which may be used to acquire real estate assets which are consistent with the Corporation’s status as a REIT.  For the avoidance of doubt, the proceeds of any refinancing of any of the Corporation’s properties or any working capital line of credit shall not be included in a Capital Event.  The valuation of any property shall be supported by independent appraisals of such property.
 
4.5            Long Term Incentive Program . Commencing with the fiscal year of the Corporation beginning January 1, 2013, and for each fiscal year thereafter during the Term, Executive shall have the opportunity to participate in a long-term performance based incentive program that may be established by the Compensation Committee. The determination as to the amounts of long-term incentive compensation available to Executive under this program and the performance criteria shall be reviewed periodically by the Compensation Committee with a view to adjusting the amounts and criteria in accordance with such factors as the Compensation Committee may deem appropriate, including the competitive marketplace for comparable executives.
 
4.6            Other Benefits .  Executive shall be entitled to participate, to the extent he is eligible under the terms and conditions thereof, in any bonus, pension, retirement, disability, hospitalization, insurance, medical service, or other employee benefit plan which is generally available to executive employees of the Corporation and which may be in effect from time to time during the period of his employment hereunder.  The Corporation shall be under no obligation to institute or continue the existence of any such employee benefit plan.
 
 
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5.            Business Expenses .  The Corporation shall reimburse Executive for all authorized expenses reasonably incurred by him in accordance with the Corporation's "Travel and Entertainment Policy and Procedure," and any amendments thereof and any other business expenses reasonably incurred by Executive in his service to the Corporation in accordance with policies that the Corporation may adopt during the Term hereof.
 
6.            Vacation .  Executive shall be entitled to four weeks paid vacation during the first twelve (12) months of the Term and two (2) weeks paid vacation during the last six (6) months of the Term.  Any such vacations are to be taken at times mutually agreeable to Executive and the Board of the Corporation.
 
7.            Key-Man Life Insurance .  The Corporation may purchase and maintain life insurance covering the life of Executive ("Key-man Insurance") in an amount determined by the Corporation.   The Corporation shall be the sole owner and beneficiary of the Key-man Insurance and may apply to the payment of premiums thereunder any dividends declared and paid thereon.  Executive shall submit himself to such physical examinations as the Corporation may deem necessary or desirable in connection with the purchase and maintenance of the Key-man Insurance.
 
8.            Indemnification .  Concurrently herewith, Executive and the Corporation are entering into an indemnification agreement in the form of Exhibit B annexed hereto.
 
9.            Confidentiality Agreement .
 
9.1           As used herein, the term "Confidential Information" shall mean any and all information of the Corporation and of its affiliates (for purposes of this paragraph, the Corporation's affiliates shall be deemed included within the meaning of  "Corporation"), including, but not limited to, all data, compilations, programs, devices, strategies, or methods concerning or related to (i) the Corporation's finances, financial condition, results of operations, employee relations, amounts of compensation paid to officers and employees and any other data or information relating to the internal affairs of the Corporation and its operations; (ii) the terms and conditions (including prices) of sales and offers of sales of the Corporation's assets; (iii) the terms, conditions and current status of the Corporation's agreements and relationship with any customer or supplier or lender or tenant; (iv) the customer and supplier lists and the identities and business preferences of the Corporation's actual and prospective customers and suppliers or any employee or agent thereof with whom the Corporation communicates; (v) the trade secrets, and operating techniques, price data, costs, methods, systems, plans, procedures, hardware, software, machines, inventions, designs, drawings, artwork, blueprints, specifications, tools, skills, ideas, and strategic plans possessed, developed, accumulated or acquired by the Corporation; (vi) any communications between the Corporation, its officers, directors, stockholders, or employees, and any attorney retained by the Corporation for any purpose, or any person retained or employed by such attorney for the purpose of assisting such attorney in his or  his representation of the Corporation; (vii) any other information and knowledge with respect to all products developed or in any stage of development by the Corporation; (viii) the abilities and specialized training or experience of others who as employees or consultants of the Corporation during the Term hereof have engaged in the design or development of any such products; and (ix) any other matter or thing, whether or not recorded on any medium, (a) by which the Corporation derives actual or potential economic value from such matter or thing being not generally known to other persons or entities who might obtain economic value from its disclosure or use, or (b) which gives the Corporation an opportunity to obtain an advantage over its competitors who do not know or use the same.
 
 
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9.2           Executive acknowledges and agrees that the Corporation is engaged in highly competitive businesses and has expended, or will expend, significant sums of money and has invested, or will invest, a substantial amount of time to develop and maintain the secrecy of the Confidential Information. The Corporation has thus obtained, or will obtain, a valuable economic asset which has enabled, or will enable, it to develop an extensive reputation and to establish long-term business relationships with its suppliers and customers.  If such Confidential Information were disclosed to another person or entity or used for the benefit of anyone other than the Corporation, the Corporation would suffer irreparable harm, loss and damage.  Accordingly, Executive acknowledges and agrees that, unless the Confidential Information becomes publicly known through legitimate origins not involving an act or omission by Executive:
 
 
(i)
the Confidential Information is, and at all times hereafter shall remain, the sole property of the Corporation;
 
 
(ii)
Executive shall use his reasonable best efforts and diligence to guard and protect the Confidential Information from disclosure to any competitor, customer or supplier of the Corporation or any other person, firm, corporation or other entity;
 
 
(iii)
unless the Corporation gives Executive prior express written permission, during his employment and thereafter, Executive shall not use for his own benefit, or divulge to any competitor or customer or any other person, firm, corporation, or other entity, any of the Confidential Information which Executive may obtain, learn about, develop or be entrusted with as a result of Executive's employment by the Corporation; and
 
 
(iv)
except in the ordinary course of the Corporation's business, Executive shall not seek or accept any Confidential Information from any former, present or future employee of the Corporation.
 
9.3           Executive also acknowledges and agrees that all documentary and tangible Confidential Information including, without limitation, such Confidential Information as Executive has committed to memory, is supplied or made available by the Corporation to Executive solely to assist his in performing his services under this Agreement.  Executive further agrees that after his employment with the Corporation is terminated for any reason:
 
 
(i)
Executive shall not remove from the property of the Corporation and shall immediately return to the Corporation, all documentary or tangible Confidential Information in his possession, custody, or control and not make or keep any copies, notes, abstracts, summaries, tapes or other record of any type of Confidential Information; and
 
 
(ii)
Executive shall immediately return to the Corporation any and all other property of the Corporation in his possession, custody or control, including, without limitation, any and all keys, security cards, passes, credit cards and marketing literature.
 
 
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10.            Remedies .  Executive acknowledges and agrees that the business of the Corporation is highly competitive and that violation of any of the covenants provided for in Section 9 of this Agreement would cause immediate, immeasurable and irreparable harm, loss and damage to the Corporation not adequately compensable by a monetary award.  Accordingly, Executive agrees, without limiting any of the other remedies available to the Corporation, that any violation of said covenants, or any one of them, may be enjoined or restrained by any court of competent jurisdiction, and that any temporary restraining order or emergency, preliminary or final injunctions may be issued by any court of competent jurisdiction, without notice and without bond.
 
11.           Change of Control .
 
11.1           If at any time during the Term, (a) individuals who presently constitute the Board of Directors of the Corporation, or who have been recommended for election to the Board by a majority of the Board consisting of individuals who are either presently on the Board or such recommended successors cease for any reason to constitute at least a majority of such Board or (b) a sale of all or substantially all of the Corporation’s assets (such events in clauses (a) and (b) being hereafter referred to as a "Change of Control") and Executive gives written notice to the Corporation within 30 days after such Change of Control of his election to terminate his employment hereunder, the Corporation shall pay to Executive within 15 days after Executive's delivery of such notice, as severance pay and liquidated damages, in lieu of any other rights or remedies which might otherwise be available to him under this Agreement, and without mitigation of any kind or amount, whether or not Executive shall seek or accept other employment, a lump sum payment equal in amount to three (3) months base salary.
 
11.2           If it shall be determined that any amount payable under Section 11.1 by the Corporation to or for the benefit of Executive (a "Base Payment") would be subject to the excise tax (the "Excise Tax") imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), then Executive shall only be entitled to receive such amounts that would not be subject to the Excise Tax.
 
12.           Termination for Cause and for Good Reason .
 
12.1           Executive’s employment and the Term may be terminated at any time by the Board for “cause” as defined below.  If Executive’s employment is terminated by the Board for “cause”, as defined below, he shall only be entitled to payment of his base salary and fringe benefits through the date of termination.  For purposes of this Agreement, “cause” means (a) the conviction of Executive of any crime constituting a felony or any other crime involving moral turpitude, (b) Executive’s repeated refusal to follow a reasonable directions of the Board of Directors of the Corporation after written notice that such continued refusal shall result in termination of his employment for cause and Executive is given an opportunity to defend his refusal to the Board; or (c) Executive’s failure to fulfill his employment duties hereunder after written notice that such continued failure shall result in termination of his employment for cause and Executive is given an opportunity to defend his actions to the Board.
 
 
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12.2           Executive’s employment and the Term may be terminated at any time by Executive for “good reason” as defined below upon at least thirty (30) days prior written notice given by Executive to the Corporation.  If Executive’s employment is terminated by Executive for “good reason”, as defined below, he shall be entitled to payment of his base salary and fringe benefits through the end of the Term.  For purposes of this Agreement, “good reason” means (i) the assignment to Executive by the Corporation of any duties inconsistent in any material respect with his position (including offices, titles and reporting requirement), authority, duties or responsibilities or any other action which results in a significant and material diminution in such position, authority, duties or responsibilities (ii) any failure by the Corporation to pay Executive the compensation set forth in this Agreement; (iii) a reduction in Executive's base salary as in effect immediately prior to such reduction or any material reduction in any other material benefit provided Executive hereunder; (iv) requiring Executive to relocate outside the New York metropolitan area; or (v) failure by the Corporation to maintain directors and officers liability insurance providing for coverage of equal to or greater coverage than provided as of the date hereof.
 
13.            Entire Agreement .  This Agreement constitutes the entire agreement of the parties hereto with respect to Executive's employment with the Corporation and no amendment or modification hereof shall be valid or binding unless made in writing and signed by the party against whom enforcement thereof is sought.
 
14.            Notices .  Any notice required, permitted or desired to be given pursuant to any of the provisions of this Agreement shall be deemed to have been sufficiently given or served for all purposes if delivered in person or sent by telephone facsimile or sent by certified mail, return receipt requested, or sent by responsible overnight delivery service, postage and fees prepaid, to the parties hereto at their respective addresses set forth below.  Either of the parties hereto may at any time and from time to time change the address to which notice shall be sent hereunder by notice to the other party given under this Section 14.  The date of the giving of any notice sent by mail shall be three business days following the date of the posting of the mail, if delivered in person, the date delivered in person, if sent by overnight delivery service, the next business day following delivery to an overnight delivery service or if sent by telephone facsimile, the date sent by telephone facsimile.
 
If to Corporation:
180 South Broadway
White Plains, New York 10605
Email: jjoseph@presrealty.com
Fax: 914-948-1327
   
If to Executive::
c/o Signature Community Investment Group LLC
9 West 40 th Street
New York, New York 10016
Email: njekogian@scig.co
   
With a copy to Pamela E. Flaherty
Blank Rome LLP
405 Lexington Avenue
New York, New York 10174
 
Email: pflaherty@blankrome.com
 
Fax:  917-332-3733
 
 
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15.            No Assignment .  Neither this Agreement nor the right to receive any payments hereunder may be assigned by Executive.  This Agreement shall be binding upon Executive, his heirs, executors and administrators and upon the Corporation, its successors and assigns.
 
16.            No Waiver .  No course of dealing or any delay on the part of the Corporation in exercising any rights hereunder shall operate as a waiver of any such rights.  No waiver of any default or breach of this Agreement shall be deemed a continuing waiver or a waiver of any other breach or default.
 
17.            Governing Law .  This Agreement shall be governed, interpreted and construed in accordance with the substantive laws of the State of New York applicable to agreements entered into and to be performed entirely therein.
 
18.            Severability .  If any clause, paragraph, section or part of this Agreement shall be held or declared to be void, invalid or illegal, for any reason, by any arbitrator or court of competent jurisdiction, such provision shall be ineffective but shall not in any way invalidate or affect any other clause, paragraph, section or part of this Agreement.  The parties intend that all clauses, paragraphs, sections or parts of this Agreement shall be enforceable to the fullest extent permitted by law.
 
19.            Affiliate . As used in this Agreement, "affiliate" means any person or entity controlled by or under common control with the Corporation.
 
20.            Counterparts .  This Agreement may be executed in one or more counterparts, each of which counterparts, when taken together, shall constitute but one and the same agreement.
 
21.            Attorney’s Fees . The Corporation will reimburse Executive for Executive’s   actual documented out-of-pocket expenses reasonably incurred in connection with the drafting, negotiation and execution of this Agreement, including the fees of Executive’s attorney; provided, however, that the Corporation will not be required to pay more than $2,500 pursuant to this Section.
 
[Signature Page Follows]
 
 
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IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be duly executed on the day and year first above written.
 
 
PRESIDENTIAL REALTY CORPORATION
 
       
 
By:  
/s/ Jeffery F. Joseph  
   
Name: Jeffery F. Joseph
 
   
Title:  President
 
       
       
   
/s/ Nickolas W. Jekogian, III
 
   
Nickolas W. Jekogian, III
 
       
 
 
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Exhibit 10.5

STOCK OPTION AGREEMENT

 
AGREEMENT made as of November 8, 2011 (the “Grant Date”), between Presidential Realty Corporation, a Delaware corporation (the “Corporation”), and Nickolas W. Jekogian, III (the “Grantee”).
 
WHEREAS , the Corporation has entered into an Employment Agreement (the “Employment Agreement”) of even date herewith with the Grantee; and
 
WHEREAS , pursuant to the terms of the Employment Agreement, the Corporation has undertaken to grant to the Grantee the option granted hereunder and the Grantee has agreed to accept such grant.
 
NOW, THEREFORE , in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows:
 
1.            Grant of Option .  The Corporation hereby grants to the Grantee the right and option (the “Option”) to purchase 370,000 shares of the Corporation’s Class B Common Stock, par value $.10 per share (the “Class B Shares”), on the terms and conditions and subject to all the limitations set forth herein. The Option is intended to qualify as a non-qualified stock option and not as an Incentive Stock Option as defined in Section 422 of the Internal Revenue Code.  Notwithstanding any other provision of this Agreement, the Corporation shall make or provide for such adjustments to the number and class of shares issuable hereunder as shall be appropriate to prevent dilution or enlargement of rights, including adjustments in the event of changes in the outstanding capital stock of the Corporation by reason of stock dividends, split-ups, recapitalizations, mergers, consolidations, combinations or exchanges of shares, separations, reorganizations, liquidations and the like.  In the event of any offer to holders of the capital stock of the Corporation generally relating to the acquisition of their shares, the Corporation shall make such adjustment as shall be equitable in respect of the outstanding Option and rights hereunder, including revision of the outstanding Option and rights so that the holder of the Option may exercise the Option and participate in the acquisition transaction on the same terms as other stockholders.
 
2.            Purchase Price .  The purchase price of the Shares covered by the Option shall be $1.25 per Class B Share (the “Purchase Price”), which exceeds the closing price of a Class B Share on the date hereof.
 
3.            Exercise of Option .  The Option granted hereby shall vest and become immediately exercisable based on the following vesting schedule:
 
(a)           74,000 of the Class B Shares covered by the Option may be purchased at any time after the expiration of six months from the Grant Date;
 
 
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(b)           148,000 of the Class B Shares covered by the Option may be purchased from and after the occurrence of a Capital Event.  For purposes of this Agreement, a Capital Event means the receipt by the Corporation of at least $20,000,000 in cash or property from a capital raising activity including the following:  (a) the sale for cash of shares of the Corporation’s Class A or Class B Common Stock or securities convertible into shares of the Corporation’s Class A or Class B Common Stock; (b) the exchange of shares of Class A or Class B Common Stock for real estate assets consistent with the Corporation’s status as a REIT; (c) the sale of unsecured subordinated debt instruments of the Corporation, the proceeds of which may be used to acquire real estate assets which are consistent with the Corporation’s status as a REIT.  For the avoidance of doubt, the proceeds of any refinancing of any of the Corporation’s properties or any working capital line of credit shall not be included in a Capital Event.  The valuation of any property shall be supported by independent appraisals of such property.
 
(c)           148,000 of the Class B Shares covered by the Option may be purchased from and after the consummation of an underwritten registered public offering of equity securities of the Corporation with gross proceeds of not less than $40,000,000.
 
(d)           Notwithstanding the foregoing the Option shall automatically become fully vested and exercisable upon a Change of Control (as such term is defined in the Employment Agreement).
 
The date on which any of the events set forth in sub clauses (a), (b), (c) or (d) above occurs is hereinafter referred to as a “Vesting Date”.
 
 
4.            Term of Option .  The Option shall terminate at 11:59 P.M. on the day before the tenth anniversary of the Grant Date.
 
5.            Transferability .  Any attempted transfer, assignment, pledge, hypothecation or other disposition of the Option or of any rights granted hereunder contrary to the provisions of this Section 5, or the levy of any attachment or similar process upon the Option or any such right, shall be null and void.  The Grantee shall comply with any policies adopted by the Corporation’s Board of Directors with respect to timing of sales of its capital stock.
 
6.            Exercise of Option and Issuance of Shares .  The Option may be exercised in whole or in part (to the extent that it is exercisable in accordance with its terms) by giving written Notice of Exercise (in the form of Exhibit A annexed hereto) to the Corporation, together with the tender of the purchase price of the Class B Shares with respect to which the Option is being exercised, payable by certified or bank check.  Such written notice shall be signed by the Grantee, shall state the number of Class B Shares with respect to which the Option is being exercised, shall contain any warranty required by Section 8 below and shall otherwise comply with the terms and conditions of this Agreement.  The Grantee shall pay all original issue taxes, if any, with respect to the issue of the Shares purchased pursuant hereto and the Corporation shall pay all other fees and expenses necessarily incurred by the Corporation in connection herewith.  The issuance of the Class B Shares is conditional upon the submission by the Grantee to the Board of Directors of the Corporation a duly executed and acknowledged counterpart of this Agreement, together with such other instrument or instruments reasonably requested by the Corporation.
 
 
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7.            Representations and Warranties of the Corporation .  The Corporation represents, warrants and agrees as follows:
 
(a)           The Corporation has the authority to enter into this Agreement.  All action on the part of the Corporation necessary for the authorization, execution and delivery of this Agreement and the performance of all obligations of the Corporation hereunder and thereunder has been taken on or prior to the date hereof.  This Agreement has been duly executed and delivered by the Corporation and constitutes the valid and binding agreement of the Corporation, enforceable against the Corporation in accordance with their terms, except that (i) such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
 
(b)           The Class B Shares, when issued upon exercise of the Option and payment of the Purchase Price will be duly authorized and validly issued, fully paid and nonassessable and, subject to the representations and warranties of the Grantee in Section 8 herein being true and correct, will have been issued in compliance with federal and state securities Laws.
 
8.            Representations and Warranties of the Grantee . The Grantee represents, warrants and agrees as follows:
 
(a)           The Grantee (i) has such knowledge and experience in business and financial matters as to be capable of evaluating the merits and risks of the investment in the Class B Shares; (ii) is capable of bearing the economic risks associated with the investment in the Class B Shares; (ii) has been provided  the opportunity to ask questions and receive answers concerning the Corporation and to obtain any additional information which the Corporation possesses or can acquire without unreasonable effort or expense that is necessary to verify the accuracy of information furnished to it; and (iv)  will acquire the Class B Stock for its own account and not with a view toward, or for resale in connection with, the sale or distribution thereof.
 
(b)           The Grantee understands that the Option and the Class B Shares issuable upon exercise thereof are being offered and sold to it in reliance on specific exemptions from the registration requirements of the U.S. federal and state securities laws and that the Corporation is relying in part upon the truth and accuracy of, and the Grantee’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Grantee set forth herein in order to determine the availability of such exemptions and the eligibility of the Grantee to be granted the Options and acquire the Class B Shares.
 
(c)           The Grantee understands that neither the Option nor the Class B Shares have been or are being registered under the Securities Act of 1933, as amended (the “Securities Act”) or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless subsequently registered thereunder or sold, assigned or transferred pursuant to an exemption from registration under the Securities Act. Except as provided in Section 13 herein, the Corporation is under no obligation to register the Shares or to comply with any exemption available for sale of the Shares without registration.
 
 
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(d)           The certificate or certificates representing the Class B Shares to be acquired upon exercise of the Option shall contain the following legend in addition to any other legends required by the Corporation’s Certificate of Incorporation:
 
“THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THEY MAY NOT BE OFFERED OR TRANSFERRED BY SALE, ASSIGNMENT, PLEDGE OR OTHERWISE UNLESS (I) A REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES ACT OF 1933 IS IN EFFECT OR (II) THE CORPORATION HAS RECEIVED AN OPINION OF COUNSEL, WHICH OPINION IS SATISFACTORY TO THE CORPORATION, TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
 
THE ACCUMULATION OF SHARES OF COMMON STOCK BY ANY PERSON, AS DEFINED IN THE COMPANY’S CERTIFICATE OF INCORPORATION, IS RESTRICTED TO 9.2% OF THE NUMBER OF OUTSTANDING SHARES OF COMMON STOCK WITHOUT REGARD TO CLASS.  ANY TRANSFER WHICH CREATES AN ACCUMULATION IN EXCESS OF THAT AMOUNT VIOLATES THE CERTIFICATE OF INCORPORATION AND IS VOID.  IF, NOTWITHSTANDING THE ABOVE, SUCH ACCUMULATION RESULTS, THE SHARES IN EXCESS OF 9.2% ARE SUBJECT TO CERTAIN RESTRICTIONS ON VOTING POWER AND RECEIPT OF DIVIDENDS, AND MAY BE MADE SUBJECT TO PURCHASE BY THE COMPANY.  FURTHER, SUCH PERSON MAY BE REQUIRED TO INDEMNIFY THE COMPANY AGAINST TAXES INCURRED AND OTHER LOSSES RESULTING FROM (1) LOSS OF ITS TAX QUALIFICATION AS A REAL ESTATE INVESTMENT TRUST OR (2) BECOMING A PERSONAL HOLDING COMPANY”
 
(e)           The Grantee has reviewed with his own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement and is relying solely on such advisors and not on any statements or representations of the Corporation or any of its employees or agents.
 
 
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(f)           The Grantee understands that the Grantee (and not the Corporation) shall be responsible for his own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.
 
9.            Liquidation; Change in Control . In the event of a liquidation or proposed liquidation of the Corporation, including (but not limited to) a transfer of assets followed by a liquidation of the Corporation, or in the event of a Change in Control or proposed Change in Control, the Corporation shall have the right to require the Grantee to exercise the Option upon 30 days prior written notice to the Grantee to the extent it is then exercisable.  In the event the Option is not exercised by the Grantee within the 30-day period set forth in such written notice, the Option shall terminate on the last day of such 30-day period, notwithstanding anything to the contrary contained in the Option.
 
10.            Notices .  Any notices required or permitted by the terms of this Agreement shall be given by personal delivery, registered or certified mail, postage prepaid, return receipt requested, overnight courier of national reputation, facsimile or other electronic means as follows:
 
To the Corporation:   
180 South Broadway
 
 
White Plains, New York 10605
 
 
Facsimile No.: 914-948-1327
     
     
To the Grantee:
 
Nickolas W. Jekogian, III
   
c/o Signature Community Investment Group
   
9 West 42nd Street
   
New York, New York 10016
   
njekogian@scig.co
     
 
or to such other address or addresses of which notice in the same manner has previously been given.  Any such notice shall be deemed to have been duly given or made as of the date delivered if delivered personally, or on the next business day if sent by overnight courier or when received if mailed by registered or certified mail, postage prepaid, return receipt requested, or on confirmation if by facsimile or other electronic means, in accordance with the foregoing provisions.  Either party hereto may change the address to which notices hereunder may be given by providing the other party hereto with written notice of such change.

11.            Section 409A .  To the extent applicable, this Agreement shall be interpreted in accordance with Section 409A of the Internal Revenue Code (the “Code”) and Department of Treasury regulations and other interpretive guidance issued thereunder.  Notwithstanding any provision of this Agreement to the contrary, in the event that the Corporation determines that this Option may be subject to Section 409A of the Code, the Corporation may adopt such amendments to this Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions that the Corporation determines are necessary or appropriate to (a) exempt the Option from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Option, or (b) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance and thereby avoid the application of penalty taxes under such Section 409A.
 
 
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12.            No Effect on Employment . Nothing herein shall modify the Grantee’s status as an employee, officer and/or director of the Corporation or any of its affiliates.  This Option shall terminate automatically if the Corporation terminates the Grantee's employment for cause, as defined in the Employment Agreement or Grantee terminates his employment without good reason as defined in the Employment Agreement.  If Grantee terminates his employment for good reason, as defined in the Employment Agreement, this Option shall be exercisable for a period equal to the lesser of two years from the date of termination or the expiration date.  Further, nothing herein guarantees the Grantee’s employment for any specified period of time.  In no event may this Option be exercised after the expiration date set in Section 4.
 
13.            Registration . The Corporation shall use reasonable efforts at its expense to register the resale by the Grantee of the Class B Shares purchased upon the exercise of the Option.  The timing of such registration shall be coordinated with the Corporation’s certified financial statements so as not to create an undo financial hardship on the Corporation and the Corporation shall only be required to register such shares on a short form registration statement such as a Form S-3 or S-8.  The Corporation shall not be required to register the resale of such Class B Shares on a Form S-1.
 
14.            Governing Law; Arbitration .
 
(a)           This Agreement shall be construed in accordance with and governed by the Laws of the State of Delaware, without regard to the conflicts of Laws and rules thereof.
 
(b)           Any dispute or disagreement between the Grantee and the Corporation with respect to any portion of this Agreement (excluding Exhibit A hereto) or its validity, construction, meaning, and the performance of the Grantee’s rights hereunder shall, unless the Corporation in its sole discretion determines otherwise, be settled by arbitration, at a location designated by the Corporation, in accordance with the Commercial Arbitration Rules of the American Arbitration Association or its successor, as amended from time to time.  However, prior to submission to arbitration the parties will attempt to resolve any disputes or disagreements with the Corporation over this Agreement amicably and informally, in good faith, for a period not to exceed two weeks.  Thereafter, the dispute or disagreement will be submitted to arbitration.  At any time prior to a decision from the arbitrator(s) being rendered, the Grantee and the Corporation may resolve the dispute by settlement.  The Grantee and the Corporation shall equally share the costs charged by the American Arbitration Association or its successor, but the Grantee and the Corporation shall otherwise be solely responsible for their own respective counsel fees and expenses.  The decision of the arbitrator(s) shall be made in writing, setting forth the award, the reasons for the decision and award and shall be binding and conclusive on the Grantee and the Corporation.  Further, neither the Grantee nor the Corporation shall appeal any such award.  Judgment of a court of competent jurisdiction may be entered upon the award and may be enforced as such in accordance with the provisions of the award.
 
 
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15.            Integration and Severability .  This Agreement embodies the entire agreement and understanding among the parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof.  In case any one or more of the provisions contained in this Agreement or in any instrument contemplated hereby, or any application thereof, shall be invalid, illegal or unenforceable in any respect, under the laws of any jurisdiction, the validity, legality and enforceability of the remaining provisions contained herein and therein, and any other application thereof, shall not in any way be affected or impaired thereby or under the Laws of any other jurisdiction.
 
16.            Headings .  The headings of the articles, sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part of this Agreement.
 
17.            Benefit of Agreement .  This Agreement shall be for the benefit of and shall be binding upon the heirs, executors, administrators and successors and permitted assigns of the parties hereto.
 

 
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IN WITNESS WHEREOF , the parties have caused this Agreement to be executed as of the day and year first above written.
 
 
PRESIDENTIAL REALTY CORPORATION
 
       
 
By:
/s/ Jeffery F. Joseph
 
   
Name: Jeffery F. Joseph
 
   
Title:  President
 
       
       
   
/s/ Nickolas W. Jekogian, III
 
   
Nickolas W. Jekogian, III
 
 
 
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EXHIBIT A

NOTICE OF EXERCISE OF STOCK OPTION
TO PURCHASE SHARES OF CLASS B COMMON STOCK OF
PRESIDENTIAL REALTY CORPORATION
 
Name                                                                      
Address                                                           
 
   
Attn:                                                                
     
Date                                                                
     
       
       
Presidential Realty Corporation
     
180 South Broadway
     
White Plains, New York 10605
     
       
Attention:  Chairman of the Board
     
       
Re:            Exercise of Stock Option
     
 
Gentlemen:

Pursuant to the provisions of the Stock Option Agreement (“Option Agreement”) dated as of ____________, 2011, between Presidential Realty Corporation (“Corporation”) and the Undersigned, the Undersigned hereby elects to exercise options granted to the Undersigned to purchase ________ shares of Class B Common Stock, par value $0.10 per shares of the Corporation (the “Class B Stock”).
 
Enclosed is a certified check (or bank cashier's check) for $________________ for the full purchase price, payable to the order of the Corporation.
 
As soon as the Stock Certificate is registered in the name of the Undersigned, please deliver it to the Undersigned at the above address.
 
 
 
 
Very truly yours,
 
   
__________________________
 
 
 
 

 
 
       
AGREED TO AND ACCEPTED BY:
     
       
PRESIDENTIAL REALTY CORPORATION
     
       
By:____________________________
     
       
Name: _________________________
     
       
Title:___________________________
     
       
Number of Shares
     
Exercised:____________
     
       
Number of Shares
     
Remaining: ___________
     
 
 
 

 
 
Exhibit 10.6

EXECUTIVE EMPLOYMENT AGREEMENT
 
AGREEMENT made as of November 8, 2011, by and between PRESIDENTIAL REALTY CORPORATION, a Delaware corporation (the "Corporation"), and ALEXANDER LUDWIG ("Executive").
 
WITNESSETH :

WHEREAS, the Corporation desires to employ Executive and Executive is willing to undertake such employment on the terms and subject to the conditions hereinafter set forth.
 
NOW, THEREFORE , in consideration of the premises and mutual covenants hereinafter contained, the parties hereto agree as follows:
 
1.   Employment; Duties . The Corporation hereby employs Executive as an executive of the Corporation to perform duties as President and Chief Operating Officer of the Corporation and such other duties on behalf of the Corporation and its affiliates, commensurate with his office, as the Chairman or the Board of Directors of the Corporation may from time to time determine.
 
2.   Acceptance and Loyalty . Executive hereby accepts such employment and agrees that throughout the period of his employment hereunder, and subject to the last sentence of this Section 2, he will devote his knowledge and skills, faithfully, diligently and to the best of his ability, in furtherance of the business of the Corporation and will perform the duties assigned to him pursuant to Section 1 hereof. Executive shall perform all duties and responsibilities in a professional manner consistent with the skill, competence and efficiency expected of an executive employee performing the duties assigned to Executive and subject to the direction and control of the Chairman and the Board of Directors of the Corporation. Executive will do such traveling as may be reasonably required of him in the performance of his obligations hereunder. Executive shall at all times be subject to, observe and carry out such rules, regulations, policies, directions and restrictions as the Corporation shall from time to time establish. During his employment hereunder, Executive shall spend such time and attention as necessary to perform his duties hereunder. During Executive's employment hereunder, Executive shall not be entitled to additional compensation for serving in any office, including as a director, of the Corporation or any of its subsidiaries or affiliates to which he may be elected. Notwithstanding the foregoing, during the Term and at any time thereafter, Executive shall be permitted to provide services to, receive compensation for such services from and participate in any investment of or with Signature Community Group, LLC and any of its affiliates provided such services do not interfere with his obligations to the Company and he discloses to the Board of Directors any such services and compensation received or to be received by him for such services.
 
3.   Term . The term of Executive's employment hereunder shall commence on the date hereof and terminate on the eighteen month anniversary thereof (the "Term").
 
 
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4.   Compensation and Benefits .
 
4.1   Base Salary . The Corporation shall pay to Executive as compensation for his services and agreements hereunder an initial base salary at the rate of $ 200,000 per annum, for the first twelve (12) months of the Term and at the rate of $225,000 per annum for the last six (6) months of the Term, or such greater amount as the Board of Directors of the Corporation shall from time to time determine. Base salary shall be payable in equal installments in accordance with the Corporation's normal payroll policy, subject to payroll taxes and withholding requirements.
 
4.2   Stock Options . The Corporation shall grant to Executive an option (the “Option”) to purchase 370,000 shares of Class B Common Stock, par value $0.10 of the Corporation as further described in the Stock Option Agreement in the form of Exhibit A annexed hereto. The grant of the Option is pursuant to the approval of the Corporation’s Compensation Committee.
 
4.3   Annual Bonus . Commencing with the fiscal year of the Corporation beginning January 1, 2012, and for each fiscal year thereafter during the Term, Executive shall have the opportunity to earn a bonus ("Annual Bonus") in such amount as the Corporation’s Compensation Committee shall determine in its absolute discretion, such bonus not to exceed $200,000.
 
4.4   Long Term Incentive Program . Commencing with the fiscal year of the Corporation beginning January 1, 2013, and for each fiscal year thereafter during the Term, Executive shall have the opportunity to participate in a long-term performance based incentive program that may be established by the Compensation Committee. The determination as to the amounts of long-term incentive compensation available to Executive under this program and the performance criteria shall be reviewed periodically by the Compensation Committee with a view to adjusting the amounts and criteria in accordance with such factors as the Compensation Committee may deem appropriate, including the competitive marketplace for comparable executives.
 
4.5   Other Benefits . Executive shall be entitled to participate, to the extent he is eligible under the terms and conditions thereof, in any bonus, pension, retirement, disability, hospitalization, insurance, medical service, or other employee benefit plan which is generally available to executive employees of the Corporation and which may be in effect from time to time during the period of his employment hereunder. The Corporation shall be under no obligation to institute or continue the existence of any such employee benefit plan.
 
5.   Business Expenses . The Corporation shall reimburse Executive for all authorized expenses reasonably incurred by him in accordance with the Corporation's "Travel and Entertainment Policy and Procedure," and any amendments thereof and any other business expenses reasonably incurred by Executive in his service to the Corporation in accordance with policies that the Corporation may adopt from time to time.
 
6.   Vacation . Executive shall be entitled to four weeks paid vacation during the first twelve (12) months of the Term and to two weeks paid vacation during the last six months of the Term. Any such vacations are to be taken at times mutually agreeable to Executive and the Chairman of the Corporation.
 
 
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7.   Key-Man Life Insurance . The Corporation may purchase and maintain life insurance covering the life of Executive ("Key-man Insurance") in an amount determined by the Corporation. The Corporation shall be the sole owner and beneficiary of the Key-man Insurance and may apply to the payment of premiums thereunder any dividends declared and paid thereon. Executive shall submit himself to such physical examinations as the Chairman of the Corporation may deem necessary or desirable in connection with the purchase and maintenance of the Key-man Insurance.
 
8.   Indemnification . Concurrently herewith, Executive and the Corporation are entering into an indemnification agreement in the form of Exhibit B annexed hereto.
 
9.   Confidentiality Agreement .
 
9.1   As used herein, the term "Confidential Information" shall mean any and all information of the Corporation and of its affiliates (for purposes of this paragraph, the Corporation's affiliates shall be deemed included within the meaning of "Corporation"), including, but not limited to, all data, compilations, programs, devices, strategies, or methods concerning or related to (i) the Corporation's finances, financial condition, results of operations, employee relations, amounts of compensation paid to officers and employees and any other data or information relating to the internal affairs of the Corporation and its operations; (ii) the terms and conditions (including prices) of sales and offers of sales of the Corporation's assets; (iii) the terms, conditions and current status of the Corporation's agreements and relationship with any customer or supplier or lender or tenant; (iv) the customer and supplier lists and the identities and business preferences of the Corporation's actual and prospective customers and suppliers or any employee or agent thereof with whom the Corporation communicates; (v) the trade secrets, and operating techniques, price data, costs, methods, systems, plans, procedures, hardware, software, machines, inventions, designs, drawings, artwork, blueprints, specifications, tools, skills, ideas, and strategic plans possessed, developed, accumulated or acquired by the Corporation; (vi) any communications between the Corporation, its officers, directors, stockholders, or employees, and any attorney retained by the Corporation for any purpose, or any person retained or employed by such attorney for the purpose of assisting such attorney in his or his representation of the Corporation; (vii) any other information and knowledge with respect to all products developed or in any stage of development by the Corporation; (viii) the abilities and specialized training or experience of others who as employees or consultants of the Corporation during the Term hereof have engaged in the design or development of any such products; and (ix) any other matter or thing, whether or not recorded on any medium, (a) by which the Corporation derives actual or potential economic value from such matter or thing being not generally known to other persons or entities who might obtain economic value from its disclosure or use, or (b) which gives the Corporation an opportunity to obtain an advantage over its competitors who do not know or use the same.
 
 
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9.2   Executive acknowledges and agrees that the Corporation is engaged in highly competitive businesses and has expended, or will expend, significant sums of money and has invested, or will invest, a substantial amount of time to develop and maintain the secrecy of the Confidential Information. The Corporation has thus obtained, or will obtain, a valuable economic asset which has enabled, or will enable, it to develop an extensive reputation and to establish long-term business relationships with its suppliers and customers. If such Confidential Information were disclosed to another person or entity or used for the benefit of anyone other than the Corporation, the Corporation would suffer irreparable harm, loss and damage. Accordingly, Executive acknowledges and agrees that, unless the Confidential Information becomes publicly known through legitimate origins not involving an act or omission by Executive:
 
 
(i) 
the Confidential Information is, and at all times hereafter shall remain, the sole property of the Corporation;
 
 
(ii) 
Executive shall use his reasonable best efforts and diligence to guard and protect the Confidential Information from disclosure to any competitor, customer or supplier of the Corporation or any other person, firm, corporation or other entity;
 
 
(iii) 
unless the Corporation gives Executive prior express written permission, during his employment and thereafter, Executive shall not use for his own benefit, or divulge to any competitor or customer or any other person, firm, corporation, or other entity, any of the Confidential Information which Executive may obtain, learn about, develop or be entrusted with as a result of Executive's employment by the Corporation; and
 
 
(iv) 
except in the ordinary course of the Corporation's business, Executive shall not seek or accept any Confidential Information from any former, present or future employee of the Corporation.
 
9.3   Executive also acknowledges and agrees that all documentary and tangible Confidential Information including, without limitation, such Confidential Information as Executive has committed to memory, is supplied or made available by the Corporation to Executive solely to assist his in performing his services under this Agreement. Executive further agrees that after his employment with the Corporation is terminated for any reason:
 
 
(i) 
Executive shall not remove from the property of the Corporation and shall immediately return to the Corporation, all documentary or tangible Confidential Information in his possession, custody, or control and not make or keep any copies, notes, abstracts, summaries, tapes or other record of any type of Confidential Information; and
 
 
(ii) 
Executive shall immediately return to the Corporation any and all other property of the Corporation in his possession, custody or control, including, without limitation, any and all keys, security cards, passes, credit cards and marketing literature.
 
10.   Remedies . Executive acknowledges and agrees that the business of the Corporation is highly competitive and that violation of any of the covenants provided for in Section 9 of this Agreement would cause immediate, immeasurable and irreparable harm, loss and damage to the Corporation not adequately compensable by a monetary award. Accordingly, Executive agrees, without limiting any of the other remedies available to the Corporation, that any violation of said covenants, or any one of them, may be enjoined or restrained by any court of competent jurisdiction, and that any temporary restraining order or emergency, preliminary or final injunctions may be issued by any court of competent jurisdiction, without notice and without bond.
 
 
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11.   Change of Control .
 
11.1   If at any time during the Term, (a) individuals who presently constitute the Board of Directors of the Corporation, or who have been recommended for election to the Board by a majority of the Board consisting of individuals who are either presently on the Board or such recommended successors cease for any reason to constitute at least a majority of such Board or (b) a sale of all or substantially all of the Corporation’s assets (such events in clauses (a) and (b) being hereafter referred to as a "Change of Control") and Executive gives written notice to the Corporation within 30 days after such Change of Control of his election to terminate his employment hereunder, the Corporation shall pay to Executive within 15 days after Executive's delivery of such notice, as severance pay and liquidated damages, in lieu of any other rights or remedies which might otherwise be available to him under this Agreement, and without mitigation of any kind or amount, whether or not Executive shall seek or accept other employment, a lump sum payment equal in amount to three (3) months base salary.
 
11.2   If it shall be determined that any amount payable under Section 11.1 by the Corporation to or for the benefit of Executive (a "Base Payment") would be subject to the excise tax (the "Excise Tax") imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), then Executive shall only be entitled to receive such amounts that would not be subject to the Excise Tax.
 
12.   Termination for Cause and for Good Reason .
 
12.1   Executive’s employment and the Term may be terminated at any time by the Board for “cause” as defined below. If Executive’s employment is terminated by the Board for “cause”, as defined below, he shall only be entitled to payment of his base salary and fringe benefits through the date of termination. For purposes of this Agreement, “cause” means (a) the conviction of Executive of any crime constituting a felony or any other crime involving moral turpitude, (b) Executive’s repeated refusal to follow a reasonable direction of the Board of Directors of the Corporation after written notice that such continued refusal shall result in termination of his employment for cause and Executive is given an opportunity to defend his refusal to the Board; or (c) Executive’s failure to fulfill his employment duties hereunder after written notice that such continued failure shall result in termination of his employment for cause and Executive is given an opportunity to defend his actions to the Board.
 
12.2   Executive’s employment and the Term may be terminated at any time by Executive for “good reason” as defined below, upon at least thirty (30) days prior written notice given by Executive to the Corporation. If Executive’s employment is terminated by Executive for “good reason”, as defined below, he shall be entitled to payment of his base salary and fringe benefits through the end of the Term. For purposes of this Agreement, “good reason” means (i) the assignment to Executive by the Corporation of any duties inconsistent in any material respect with his position (including offices, titles and reporting requirement), authority, duties or responsibilities or any other action which results in a significant and material diminution in such position, authority, duties or responsibilities (ii) any failure by the Corporation to pay Executive the compensation set forth in this Agreement; (iii) a reduction in Executive's base salary as in effect immediately prior to such reduction or any material reduction in any other material benefit provided Executive hereunder; (iv) requiring Executive to relocate outside the New York metropolitan area; or (v) failure by the Corporation to maintain directors and officers liability insurance providing for coverage of equal to or greater than the coverage provided as of the date hereof.
 
 
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13.   Entire Agreement . This Agreement constitutes the entire agreement of the parties hereto with respect to Executive's employment with the Corporation and no amendment or modification hereof shall be valid or binding unless made in writing and signed by the party against whom enforcement thereof is sought.
 
14.   Notices . Any notice required, permitted or desired to be given pursuant to any of the provisions of this Agreement shall be deemed to have been sufficiently given or served for all purposes if delivered in person or sent by telephone facsimile or sent by certified mail, return receipt requested, or sent by responsible overnight delivery service, postage and fees prepaid, to the parties hereto at their respective addresses set forth below. Either of the parties hereto may at any time and from time to time change the address to which notice shall be sent hereunder by notice to the other party given under this Section 14. The date of the giving of any notice sent by mail shall be three business days following the date of the posting of the mail, if delivered in person, the date delivered in person, if sent by overnight delivery service, the next business day following delivery to an overnight delivery service or if sent by telephone facsimile, the date sent by telephone facsimile.
 
If to Corporation:
180 South Broadway
White Plains, New York 10605
Email: jjoseph@presrealty.com
Fax: 914-948-1327
 
If to Executive::
c/o Signature Community Investment Group LLC
9 West 40 th Street
New York, New York 10016
Email: aludwig@scig.co
   
With a copy to Pamela E. Flaherty
Blank Rome LLP
405 Lexington Avenue
New York, New York 10174
 
Email: pflaherty@blankrome.com
 
 
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15.   No Assignment . Neither this Agreement nor the right to receive any payments hereunder may be assigned by Executive. This Agreement shall be binding upon Executive, his heirs, executors and administrators and upon the Corporation, its successors and assigns.
 
16.   No Waiver . No course of dealing or any delay on the part of the Corporation in exercising any rights hereunder shall operate as a waiver of any such rights. No waiver of any default or breach of this Agreement shall be deemed a continuing waiver or a waiver of any other breach or default.
 
17.   Governing Law . This Agreement shall be governed, interpreted and construed in accordance with the substantive laws of the State of New York applicable to agreements entered into and to be performed entirely therein.
 
18.   Severability . If any clause, paragraph, section or part of this Agreement shall be held or declared to be void, invalid or illegal, for any reason, by any arbitrator or court of competent jurisdiction, such provision shall be ineffective but shall not in any way invalidate or affect any other clause, paragraph, section or part of this Agreement. The parties intend that all clauses, paragraphs, sections or parts of this Agreement shall be enforceable to the fullest extent permitted by law.
 
19.   Affiliate . As used in this Agreement, "affiliate" means any person or entity controlled by or under common control with the Corporation.
 
20.   Counterparts . This Agreement may be executed in one or more counterparts, each of which counterparts, when taken together, shall constitute but one and the same agreement.
 
21.   Attorney’s Fees . The Corporation will reimburse Executive for Executive’s   actual documented out-of-pocket expenses reasonably incurred in connection with the drafting, negotiation and execution of this Agreement, including the fees of Executive’s attorney; provided, however, that the Corporation will not be required to pay more than $2,500 pursuant to this Section.
 
 
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IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be duly executed on the day and year first above written.
 
 
PRESIDENTIAL REALTY CORPORATION
 
       
 
By: 
/s/ Jeffery F. Joseph  
    Name: Jeffery F. Joseph  
    Title: President  
       
   
/s/ Alexander Ludwig
 
    Alexander Ludwig   
 
 
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Exhibit 10.7

STOCK OPTION AGREEMENT
 
AGREEMENT made as of November 8, 2011 (the “Grant Date”), between Presidential Realty Corporation, a Delaware corporation (the “Corporation”), and Alexander Ludwig (the “Grantee”).
 
WHEREAS , the Corporation has entered into an Employment Agreement (the “Employment Agreement”) of even date herewith with the Grantee; and
 
WHEREAS , pursuant to the terms of the Employment Agreement, the Corporation has undertaken to grant to the Grantee the option granted hereunder and the Grantee has agreed to accept such grant.
 
NOW, THEREFORE , in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree as follows:
 
1.   Grant of Option . The Corporation hereby grants to the Grantee the right and option (the “Option”) to purchase 370,000 shares of the Corporation’s Class B Common Stock, par value $.10 per share (the “Class B Shares”), on the terms and conditions and subject to all the limitations set forth herein. The Option is intended to qualify as a non-qualified stock option and not as an Incentive Stock Option as defined in Section 422 of the Internal Revenue Code. Notwithstanding any other provision of this Agreement, the Corporation shall make or provide for such adjustments to the number and class of shares issuable hereunder as shall be appropriate to prevent dilution or enlargement of rights, including adjustments in the event of changes in the outstanding capital stock of the Corporation by reason of stock dividends, split-ups, recapitalizations, mergers, consolidations, combinations or exchanges of shares, separations, reorganizations, liquidations and the like. In the event of any offer to holders of the capital stock of the Corporation generally relating to the acquisition of their shares, the Corporation shall make such adjustment as shall be equitable in respect of the outstanding Option and rights hereunder, including revision of the outstanding Option and rights so that the holder of the Option may exercise the Option and participate in the acquisition transaction on the same terms as other stockholders.
 
2.   Purchase Price . The purchase price of the Shares covered by the Option shall be $1.25 per Class B Share (the “Purchase Price”), which exceeds the closing price of a Class B Share on the date hereof.
 
3.   Exercise of Option . The Option granted hereby shall vest and become immediately exercisable based on the following vesting schedule:
 
(a)   74,000 of the Class B Shares covered by the Option may be purchased at any time after the expiration of six months from the Grant Date;
 
 
 

 
 
(b)   148,000 of the Class B Shares covered by the Option may be purchased from and after the occurrence of a Capital Event. For purposes of this Agreement, a Capital Event means the receipt by the Corporation of at least $20,000,000 in cash or property from a capital raising activity including the following: (a) the sale for cash of shares of the Corporation’s Class A or Class B Common Stock or securities convertible into shares of the Corporation’s Class A or Class B Common Stock; (b) the exchange of shares of Class A or Class B Common Stock for real estate assets consistent with the Corporation’s status as a REIT; (c) the sale of unsecured subordinated debt instruments of the Corporation, the proceeds of which may be used to acquire real estate assets which are consistent with the Corporation’s status as a REIT. For the avoidance of doubt, the proceeds of any refinancing of any of the Corporation’s properties or any working capital line of credit shall not be included in a Capital Event. The valuation of any property shall be supported by independent appraisals of such property.
 
(c)   148,000 of the Class B Shares covered by the Option may be purchased from and after the consummation of an underwritten registered public offering of equity securities of the Corporation with gross proceeds of not less than $40,000,000.
 
(d)   Notwithstanding the foregoing the Option shall automatically become fully vested and exercisable upon a Change of Control (as such term is defined in the Employment Agreement).
 
The date on which any of the events set forth in sub clauses (a), (b), (c) or (d) above occurs is hereinafter referred to as a “Vesting Date”.
 
4.   Term of Option . The Option shall terminate at 11:59 P.M. on the day before the tenth anniversary of the Grant Date.
 
5.   Transferability . Any attempted transfer, assignment, pledge, hypothecation or other disposition of the Option or of any rights granted hereunder contrary to the provisions of this Section 5, or the levy of any attachment or similar process upon the Option or any such right, shall be null and void. The Grantee shall comply with any policies adopted by the Corporation’s Board of Directors with respect to timing of sales of its capital stock.
 
6.   Exercise of Option and Issuance of Shares . The Option may be exercised in whole or in part (to the extent that it is exercisable in accordance with its terms) by giving written Notice of Exercise (in the form of Exhibit A annexed hereto) to the Corporation, together with the tender of the purchase price of the Class B Shares with respect to which the Option is being exercised, payable by certified or bank check. Such written notice shall be signed by the Grantee, shall state the number of Class B Shares with respect to which the Option is being exercised, shall contain any warranty required by Section 8 below and shall otherwise comply with the terms and conditions of this Agreement. The Grantee shall pay all original issue taxes, if any, with respect to the issue of the Shares purchased pursuant hereto and the Corporation shall pay all other fees and expenses necessarily incurred by the Corporation in connection herewith. The issuance of the Class B Shares is conditional upon the submission by the Grantee to the Board of Directors of the Corporation a duly executed and acknowledged counterpart of this Agreement, together with such other instrument or instruments reasonably requested by the Corporation.
 
 
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7.   Representations and Warranties of the Corporation . The Corporation represents, warrants and agrees as follows:
 
(a)   The Corporation has the authority to enter into this Agreement. All action on the part of the Corporation necessary for the authorization, execution and delivery of this Agreement and the performance of all obligations of the Corporation hereunder and thereunder has been taken on or prior to the date hereof. This Agreement has been duly executed and delivered by the Corporation and constitutes the valid and binding agreement of the Corporation, enforceable against the Corporation in accordance with their terms, except that (i) such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
 
(b)   The Class B Shares, when issued upon exercise of the Option and payment of the Purchase Price will be duly authorized and validly issued, fully paid and nonassessable and, subject to the representations and warranties of the Grantee in Section 8 herein being true and correct, will have been issued in compliance with federal and state securities Laws.
 
8.   Representations and Warranties of the Grantee . The Grantee represents, warrants and agrees as follows:
 
(a)   The Grantee (i) has such knowledge and experience in business and financial matters as to be capable of evaluating the merits and risks of the investment in the Class B Shares; (ii) is capable of bearing the economic risks associated with the investment in the Class B Shares; (ii) has been provided the opportunity to ask questions and receive answers concerning the Corporation and to obtain any additional information which the Corporation possesses or can acquire without unreasonable effort or expense that is necessary to verify the accuracy of information furnished to it; and (iv) will acquire the Class B Stock for its own account and not with a view toward, or for resale in connection with, the sale or distribution thereof.
 
(b)   The Grantee understands that the Option and the Class B Shares issuable upon exercise thereof are being offered and sold to it in reliance on specific exemptions from the registration requirements of the U.S. federal and state securities laws and that the Corporation is relying in part upon the truth and accuracy of, and the Grantee’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Grantee set forth herein in order to determine the availability of such exemptions and the eligibility of the Grantee to be granted the Options and acquire the Class B Shares.
 
(c)   The Grantee understands that neither the Option nor the Class B Shares have been or are being registered under the Securities Act of 1933, as amended (the “Securities Act”) or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless subsequently registered thereunder or sold, assigned or transferred pursuant to an exemption from registration under the Securities Act. Except as provided in Section 13 herein, the Corporation is under no obligation to register the Shares or to comply with any exemption available for sale of the Shares without registration.
 
 
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(d)   The certificate or certificates representing the Class B Shares to be acquired upon exercise of the Option shall contain the following legend in addition to any other legends required by the Corporation’s Certificate of Incorporation:
 
“THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE OFFERED OR TRANSFERRED BY SALE, ASSIGNMENT, PLEDGE OR OTHERWISE UNLESS (I) A REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES ACT OF 1933 IS IN EFFECT OR (II) THE CORPORATION HAS RECEIVED AN OPINION OF COUNSEL, WHICH OPINION IS SATISFACTORY TO THE CORPORATION, TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
 
THE ACCUMULATION OF SHARES OF COMMON STOCK BY ANY PERSON, AS DEFINED IN THE COMPANY’S CERTIFICATE OF INCORPORATION, IS RESTRICTED TO 9.2% OF THE NUMBER OF OUTSTANDING SHARES OF COMMON STOCK WITHOUT REGARD TO CLASS. ANY TRANSFER WHICH CREATES AN ACCUMULATION IN EXCESS OF THAT AMOUNT VIOLATES THE CERTIFICATE OF INCORPORATION AND IS VOID. IF, NOTWITHSTANDING THE ABOVE, SUCH ACCUMULATION RESULTS, THE SHARES IN EXCESS OF 9.2% ARE SUBJECT TO CERTAIN RESTRICTIONS ON VOTING POWER AND RECEIPT OF DIVIDENDS, AND MAY BE MADE SUBJECT TO PURCHASE BY THE COMPANY. FURTHER, SUCH PERSON MAY BE REQUIRED TO INDEMNIFY THE COMPANY AGAINST TAXES INCURRED AND OTHER LOSSES RESULTING FROM (1) LOSS OF ITS TAX QUALIFICATION AS A REAL ESTATE INVESTMENT TRUST OR (2) BECOMING A PERSONAL HOLDING COMPANY”
 
(e)   The Grantee has reviewed with his own tax advisors the federal, state, local and foreign tax consequences of this investment and the transactions contemplated by this Agreement and is relying solely on such advisors and not on any statements or representations of the Corporation or any of its employees or agents.
 
 
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(f)   The Grantee understands that the Grantee (and not the Corporation) shall be responsible for his own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.
 
9.   Liquidation; Change in Control . In the event of a liquidation or proposed liquidation of the Corporation, including (but not limited to) a transfer of assets followed by a liquidation of the Corporation, or in the event of a Change in Control or proposed Change in Control, the Corporation shall have the right to require the Grantee to exercise the Option upon 30 days prior written notice to the Grantee to the extent it is then exercisable. In the event the Option is not exercised by the Grantee within the 30-day period set forth in such written notice, the Option shall terminate on the last day of such 30-day period, notwithstanding anything to the contrary contained in the Option.
 
10.   Notices . Any notices required or permitted by the terms of this Agreement shall be given by personal delivery, registered or certified mail, postage prepaid, return receipt requested, overnight courier of national reputation, facsimile or other electronic means as follows:
 
To the Corporation:
180 South Broadway
 
White Plains, New York 10605
 
Facsimile No.: 914-948-1327
   
To the Grantee:
Alexander Ludwig
 
c/o Signature Community Investment Group
 
9 West 42nd Street
 
New York, New York 10016
 
Aludwig@scig.co
 
or to such other address or addresses of which notice in the same manner has previously been given. Any such notice shall be deemed to have been duly given or made as of the date delivered if delivered personally, or on the next business day if sent by overnight courier or when received if mailed by registered or certified mail, postage prepaid, return receipt requested, or on confirmation if by facsimile or other electronic means, in accordance with the foregoing provisions. Either party hereto may change the address to which notices hereunder may be given by providing the other party hereto with written notice of such change.

11.   Section 409A . To the extent applicable, this Agreement shall be interpreted in accordance with Section 409A of the Internal Revenue Code (the “Code”) and Department of Treasury regulations and other interpretive guidance issued thereunder. Notwithstanding any provision of this Agreement to the contrary, in the event that the Corporation determines that this Option may be subject to Section 409A of the Code, the Corporation may adopt such amendments to this Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions that the Corporation determines are necessary or appropriate to (a) exempt the Option from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Option, or (b) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance and thereby avoid the application of penalty taxes under such Section 409A.
 
 
- 5 -

 
 
12.   No Effect on Employment . Nothing herein shall modify the Grantee’s status as an employee, officer and/or director of the Corporation or any of its affiliates. This Option shall terminate automatically if the Corporation terminates the Grantee's employment for cause, as defined in the Employment Agreement or Grantee terminates his employment without good reason as defined in the Employment Agreement. If Grantee terminates his employment for good reason, as defined in the Employment Agreement, this Option shall be exercisable for a period equal to the lesser of two years from the date of termination or the expiration date. Further, nothing herein guarantees the Grantee’s employment for any specified period of time. In no event may this Option be exercised after the expiration date set in Section 4.
 
13.   Registration . The Corporation shall use reasonable efforts at its expense to register the resale by the Grantee of the Class B Shares purchased upon the exercise of the Option. The timing of such registration shall be coordinated with the Corporation’s certified financial statements so as not to create an undo financial hardship on the Corporation and the Corporation shall only be required to register such shares on a short form registration statement such as a Form S-3 or S-8. The Corporation shall not be required to register the resale of such Class B Shares on a Form S-1.
 
14.   Governing Law; Arbitration .
 
(a)   This Agreement shall be construed in accordance with and governed by the Laws of the State of Delaware, without regard to the conflicts of Laws and rules thereof.
 
(b)   Any dispute or disagreement between the Grantee and the Corporation with respect to any portion of this Agreement (excluding Exhibit A hereto) or its validity, construction, meaning, and the performance of the Grantee’s rights hereunder shall, unless the Corporation in its sole discretion determines otherwise, be settled by arbitration, at a location designated by the Corporation, in accordance with the Commercial Arbitration Rules of the American Arbitration Association or its successor, as amended from time to time. However, prior to submission to arbitration the parties will attempt to resolve any disputes or disagreements with the Corporation over this Agreement amicably and informally, in good faith, for a period not to exceed two weeks. Thereafter, the dispute or disagreement will be submitted to arbitration. At any time prior to a decision from the arbitrator(s) being rendered, the Grantee and the Corporation may resolve the dispute by settlement. The Grantee and the Corporation shall equally share the costs charged by the American Arbitration Association or its successor, but the Grantee and the Corporation shall otherwise be solely responsible for their own respective counsel fees and expenses. The decision of the arbitrator(s) shall be made in writing, setting forth the award, the reasons for the decision and award and shall be binding and conclusive on the Grantee and the Corporation. Further, neither the Grantee nor the Corporation shall appeal any such award. Judgment of a court of competent jurisdiction may be entered upon the award and may be enforced as such in accordance with the provisions of the award.
 
15.   Integration and Severability . This Agreement embodies the entire agreement and understanding among the parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof. In case any one or more of the provisions contained in this Agreement or in any instrument contemplated hereby, or any application thereof, shall be invalid, illegal or unenforceable in any respect, under the laws of any jurisdiction, the validity, legality and enforceability of the remaining provisions contained herein and therein, and any other application thereof, shall not in any way be affected or impaired thereby or under the Laws of any other jurisdiction.
 
 
- 6 -

 
 
16.   Headings . The headings of the articles, sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part of this Agreement.
 
17.     Benefit of Agreement . This Agreement shall be for the benefit of and shall be binding upon the heirs, executors, administrators and successors and permitted assigns of the parties hereto.
 
IN WITNESS WHEREOF , the parties have caused this Agreement to be executed as of the day and year first above written.
 
  PRESIDENTIAL REALTY CORPORATION  
       
 
By:
/s/ Jeffery F. Joseph
 
   
Name: Jeffery F. Joseph
 
    Title: President  
       
   
/s/ Alexander Ludwig
 
   
Alexander Ludwig
 
 
 
- 7 -

 

EXHIBIT A

NOTICE OF EXERCISE OF STOCK OPTION
TO PURCHASE SHARES OF CLASS B COMMON STOCK OF
PRESIDENTIAL REALTY CORPORATION
 
Name
   
Address
   
     
Attn:
   
Date
   
                                                       
Presidential Realty Corporation
180 South Broadway
White Plains, New York 10605

Attention: Chairman of the Board

Re:            Exercise of Stock Option

Gentlemen:

Pursuant to the provisions of the Stock Option Agreement (“Option Agreement”) dated as of ____________, 2011, between Presidential Realty Corporation (“Corporation”) and the Undersigned, the Undersigned hereby elects to exercise options granted to the Undersigned to purchase ________ shares of Class B Common Stock, par value $0.10 per shares of the Corporation (the “Class B Stock”).
 
Enclosed is a certified check (or bank cashier's check) for $________________ for the full purchase price, payable to the order of the Corporation.
 
As soon as the Stock Certificate is registered in the name of the Undersigned, please deliver it to the Undersigned at the above address.
 
Very truly yours,

__________________________

AGREED TO AND ACCEPTED BY:

PRESIDENTIAL REALTY CORPORATION

By:____________________________

Name: _________________________

Title:___________________________
 
Number of Shares
Exercised:____________

Number of Shares
Remaining: ___________
 
 
 

 
Exhibit 10.8

 
THIRD AMENDMENT TO AMENDED AND RESTATED
EMPLOYMENT AND CONSULTING AGREEMENT
 
THIS THIRD AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AND CONSULTING AGREEMENT (this “Third Amendment”) is made as of November 8, 2011 by and between STEVEN H. BARUCH, residing at [Address] (“Executive”), and PRESIDENTIAL REALTY CORPORATION , a Delaware corporation having offices at 180 South Broadway, White Plains, New York 10605 (the “Company”).
 
WITNESSETH:
 
WHEREAS , Executive and the Company entered into that certain Employment and Consulting Agreement, made January 31, 2005, as of January 1, 2004, which agreement was modified by a First Amendment dated January 3, 2006, then amended and restated as of December 12, 2007 and, as so amended and restated, modified by a letter agreement dated October 13, 2008, and a Second Amendment to Amended and Restated Employment Agreement dated August 25, 2010 (collectively, the “Agreement”); and
 
WHEREAS , the Company terminated the employment of Executive under the Agreement as of December 31, 2010 (the “Termination Date”);
 
WHEREAS , PDL Partnership, a New York general partnership of which Executive is a general partner (the “Seller”) owns 198,735 shares of  Class A Common Stock, par value $0.10 per share of the Company (the “Class A Common Stock”), and is entering, simultaneously with the execution and delivery of this Third Amendment, into a Class A Stock Purchase Agreement with BBJ Family Irrevocable Trust (the “Class A Purchaser”), pursuant to which the Seller will sell to the Class A Purchaser and the Class A Purchaser will purchase from the Seller 177,013 shares of Class A Common Stock (the “Class A Sale”);
 
WHEREAS , the Class A Purchaser has conditioned its execution and delivery of the Class A Stock Purchase Agreement and the consummation of the Class A Sale, upon the Company and Executive amending the Agreement as set forth herein; and
 
WHEREAS , the parties desire to modify the terms of the Agreement as set forth herein.
 
NOW, THEREFORE , for good and valuable consideration receipt of which is hereby acknowledged, it is agreed by the parties as follows:
 
1.            All capitalized terms used in this Third Amendment and not otherwise defined shall have the meaning ascribed thereto in the Agreement.
 
2.            To the extent not previously resigned, Executive hereby resigns from any and all positions held at any of the Released Parties (as defined below).
 
 
 

 
 
3.            The Company’s obligations with respect to the Lump Sum Amount as set forth in Paragraph 4 (b) of the Second Amendment are amended as follows:
 
 
(a)
The Lump Sum Amount is reduced to $463,425.
 
 
(b)
The Lump Sum Amount as so reduced will be paid as follows:
 
 
(i)
$308,950 on the date hereof, receipt of which is acknowledged; and
 
 
(ii)
$154,475 (the “Deferred Amount”) in one lump sum payment on the third anniversary hereof
 
 
(iii)
less in each case appropriate tax withholdings.
 
 
(c)
Payment of the Deferred Amount is not contestable by the Company for any reason whatsoever
 
4.            Notwithstanding anything in Section 9 of the Second Amendment to the contrary, Executive shall not be required to provide any consulting services to the Company subsequent to the Termination Date.
 
5.            The parties acknowledge that (i) the Plan has been terminated and the proceeds thereof distributed to the participants therein in accordance with their respective allocable share thereof, and (ii) the Company has transferred to Executive ownership of the automobile used by Executive as set forth in Paragraph 4(b) of the Second Amendment in its then “as is” condition..
 
 
2

 
 
6.            Except as specifically set forth herein, neither the Company nor the Executive shall have any further rights or obligations under the Agreement.  Executive acknowledges that, except for the Lump Sum Amount, there are no further sums or other consideration due and owing to him by the Company on account of his prior employment by the Company or for any other reason.  Executive reaffirms that as of the Termination Date, Executive has no further right to any compensation, fee or benefit from the Company, including but not limited to any salary, bonus, retirement payment, consulting payment, paid vacation, paid sick leave, fringe benefit, pension contribution, insurance (including insurance proceeds related to the use of the vehicle transferred as described in Section 5 herein), or the use of an automobile, or any other compensation to which Executive would otherwise be entitled.  Upon Executive’s execution of this Third Amendment, and in consideration for the payments described in Section 3 above and the Class A Purchaser executing the Class A Stock Purchase Agreement and the consummation of the Class A Sale, Executive hereby unconditionally releases and completely and forever discharges the Company, on behalf of and for the benefit of itself and all related corporate entities and partnerships, its and their members, officers, directors, managers, partners, shareholders, agents, attorneys, employees, successors and assigns (“Released Parties”) from any and all rights and claims, losses, damages, causes of action, complaints, lawsuits, obligations, demands and liabilities of any kind, whether known or unknown, suspected or unsuspected, arising directly or indirectly out of or in connection with any act, omission, or event related to his employment with the Company or the termination of that employment for any and all reasons and occurring prior to the date of this Third Amendment.  This Third Amendment and such release of claims specifically include any and all claims for attorney’s fees, expenses and costs which are incurred by Executive for any reason.  Executive specifically releases the Released Parties, to the maximum extent permitted by law, from any and all claims that he had, has, or may have against the Released Parties arising out of or relating to any conduct, matter, event or omission existing or occurring before the date of this Third Amendment, including, but not limited to, the following:
 
 
(a)
any rights or claims which Executive may have to any equity or equity-type interest in the Company beyond such rights or claims as a stockholder of the Company;
 
 
(b)
any rights or claims for unpaid or withheld wages, severance, benefits, bonuses, commissions and/or compensation of any kind;
 
 
(c)
any rights or claims for reimbursement of expenses of any kind;
 
 
(d)
any rights or claims which Executive may have based upon the Age Discrimination in Employment Act or the Older Workers Benefit Protection Act, which prohibit age discrimination in employment; Title VII of the Civil Rights Act of 1964, as amended, which prohibits discrimination in employment based on race, color, creed, national origin or sex; the Equal Pay Act, which prohibits paying men and women unequal pay for equal work; the Americans with Disabilities Act of 1990, which prohibits discrimination against disabled persons; the Employee Retirement Income Security Act, which regulates employment benefits or any other federal, state or local laws or regulations prohibiting employment discrimination or which otherwise regulate employment terms and conditions; or any rights or claims for retaliation under any of the foregoing laws;
 
 
(e)
any rights or claims under the National Labor Relations Act;
 
 
(f)
any rights or claims for violation of public policy;
 
 
(g)
any other rights or claims for retaliation and/or any whistleblower claims;
 
 
(h)
any rights or claims for emotional distress or pain and suffering; and/or
 
 
(i)
any other statutory or common law rights or claims, now existing or hereinafter recognized, known or unknown, asserted or unasserted, but not limited to breach of express or implied contract, wrongful discharge, unfair treatment, libel, slander, intentional infliction of emotional distress, invasion of privacy, fraud, wrongful discharge, promissory estoppel, equitable estoppel and misrepresentation.
 
 
3

 
 
In consideration of the reductions in the compensation payable to Executive provided in this Third Amendment and the other obligations of Executive hereunder, to the extent permitted by law and to the extent any such release would not adversely affect the rights of the Released Parties under any indemnification policy now or hereafter in effect, the Released Parties hereby unconditionally release and completely and forever discharge Executive, his heirs, executives and assigns, from any and all rights and claims, losses, damages, causes of action, complaints, lawsuits, obligations, demands and liabilities of any kind, whether known or unknown, suspected or unsuspected, arising directly or indirectly out of or in connection with any act, omission, or event related to his employment with the Company or the termination of that employment for any and all reasons and occurring prior to the date of this Third Amendment.

7.            Notwithstanding the provisions of Section 6 herein, Executive does not waive any right to seek indemnity from the Company for those acts or omissions for which a director or an officer of the Company would be entitled pursuant to the Company’s Certificate of Incorporation and/or bylaws or any indemnification agreement between the Company and Executive or pursuant to any indemnification agreement maintained by the Company for the benefit of Executive,
 
8.            In conjunction with the execution of this Third Amendment and for the consideration received herein, Executive further agrees as follows:
 
 
(a)
To take no action and make no statement which is inconsistent with his obligations contained in this Third Amendment;
 
 
(b)
To return or confirm that he no longer has any material or property (whether tangible or intangible) belonging to the Company or obtained or prepared by or for Executive or used by Executive in the course of Executive’s employment with the Company, including but not limited to, any credit cards, cell phones and the associated phone numbers, keys or computer files, documents, data, records, software, customer information, scientific or other data stored in electronic form, or financial information; and
 
 
(c)
To cooperate fully with any reasonable request of the Company or any other Released Party to provide truthful information and/or materials to them or to otherwise provide reasonable assistance to any of them in matters relating to the performance of his former duties.
 
 
4

 
 
9.            Executive will not divulge, furnish or make available to any person any knowledge or information with respect to the business or affairs of any Company or its subsidiaries which is confidential, including, without limitation, “know-how,” trade secrets, customer and supplier lists, pricing policies, operational methods, marketing plans or strategies, business acquisition or disposition plans, new personnel employment plans, methods, technical processes, designs and design projects, inventions and research projects and financial budgets and forecasts of the Group except (1) information which at the time is available to others in the business or generally known to the public other than as a result of disclosure by Executive not permitted hereunder, and (2) when required to do so by a court of competent jurisdiction, by any governmental agency or by any administrative body or legislative body (including a committee thereof) with purported or apparent jurisdiction to order Executive to divulge, disclose or make accessible such information.  All memoranda, notes, lists, records, electronically stored data, recordings or videotapes and other documents (and all copies thereof) made or compiled by Executive or made available to the Executive (whether during his employment by the Company or by any predecessor thereof) concerning the business of the Company or any predecessor thereof shall be the property of the Company.
 
10.            Executive will not, in any communication with any person or entity, including, without limitation, any actual or potential customer, client, investor, vendor, or business partner of Company, or any third-party media outlet, make any derogatory, disparaging or critical negative statements, orally, written or otherwise, against Company or any other Released Party.  Nothing herein shall prevent Executive from testifying truthfully in connection with any litigation, arbitration or administrative proceeding when compelled by subpoena, regulation or court order to do so.
 
11.            By entering into this Third Amendment, the Company and the Released Parties do not admit and expressly deny that they have violated any contract, rule, law or regulation, including, but not limited to, any federal, state or local law or regulation relating to employment or employment discrimination.
 
12.            The parties mutually agree that neither party will make any public announcements regarding the separation contemplated by this Third Amendment or disclose any of the terms of this Third Amendment without the prior written consent of the other party.
 
[ Signature Page Follows
 
 
5

 
 
IN WITNESS WHEREOF , the parties have executed this Third Amendment as of the day and year first above written.
 
 
PRESIDENTIAL REALTY CORPORATION
 
       
 
By:  
/s/ Robert Feder
 
   
Robert Feder
 
   
Chairman of the Board of Directors
 
       
  /s/ Steven H. Baruch  
  Steven H. Baruch  
 
 
6

 

Exhibit 10.9

 
FOURTH AMENDMENT TO AMENDED AND RESTATED
 
EMPLOYMENT AND CONSULTING AGREEMENT
 
THIS FOURTH AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AND CONSULTING AGREEMENT (this “Fourth Amendment”) is made as of the November 8, 2011 by and between JEFFREY F. JOSEPH, residing at 19 Stillman Lane, Pleasantville, New York 10570 (“Executive”), and PRESIDENTIAL REALTY CORPORATION , a Delaware corporation having offices at 180 South Broadway, White Plains, New York 10605 (the “Company”).
 
WITNESSETH:
 
WHEREAS , Executive and the Company entered into that certain Employment and Consulting Agreement, made January 31, 2005, as of January 1, 2004, which agreement was modified by a First Amendment dated January 3, 2006, then amended and restated as of December 12, 2007 and, as so amended and restated, modified by a First Amendment to Amended and Restated Employment Agreement, dated December 12, 2007, a letter agreement dated October 13, 2008, and a Third Amendment to Amended and Restated Employment Agreement dated August 25, 2010 (collectively, the “Agreement”);
 
WHEREAS , PDL Partnership, a New York general partnership of which Executive is a general partner (the “Seller”) owns 198,735 shares of Class A Common Stock, par value $0.10 per share of the Company (the “Class A Common Stock”), and is entering, simultaneously with the execution and delivery of this Fourth Amendment, into a Class A Stock Purchase Agreement with BBJ Family Irrevocable Trust (the “Class A Purchaser”), pursuant to which the Seller will sell to the Class A Purchaser and the Class A Purchaser will purchase from the Seller 177,013 shares of Class A Common Stock (the “Class A Sale”);
 
WHEREAS , the Class A Purchaser has conditioned its execution and delivery of the Class A Stock Purchase Agreement and the consummation of the Class A Sale, by the Company and Executive amending the Agreement as set forth herein; and
 
WHEREAS , the Company desires to terminate the employment of Executive as of the date of this Fourth Amendment and Executive agrees to such termination subject to the terms and conditions contained herein.
 
NOW, THEREFORE , for good and valuable consideration receipt of which is hereby acknowledged, it is agreed by the parties as follows:
 
1.            All capitalized terms used in this Fourth Amendment and not otherwise defined shall have the meaning ascribed thereto in the Agreement.
 
2.            The date hereof shall be deemed to be the Termination Date described in Section 2 of the aforesaid Third Amendment to Amended and Restated Employment Agreement dated August 25, 2010 (the “Third Amendment”) as if the Company had heretofore timely given to Executive the Termination Notice, Executive hereby waiving the requirement that the Company give such Termination Notice. Furthermore, as of the Termination Date, Executive resigns from any and all positions held at any of the Released Parties (as defined below), except that Executive will not be required to resign as a director of the Company.
 
 
 

 
 
3.            The Company’s obligations with respect to the Lump Sum Amount as set forth in Paragraph 4(b) of the Third Amendment are amended as follows:
 
 
(a)
The Lump Sum Amount is reduced to $830,025.00.
 
 
(b)
The Lump Sum Amount as so reduced will be paid as follows:
 
 
(i)
$553,350.00 on the date hereof, receipt of which is acknowledged; and
 
 
(ii)
$276,675.00 (the “Deferred Amount”) in one lump sum payment on the third anniversary hereof;
 
 
(c)
less in each case appropriate tax withholdings.
 
 
(d)
Payment of the Deferred Amount is not contestable by the Company for any reason whatsoever.
 
4.            The Company shall transfer to Executive ownership of the automobile used by Executive as set forth in Paragraph 4(b) of the Third Amendment in its “as is” condition.
 
5.            Notwithstanding anything in Section 9 of the Third Amendment to the contrary, Executive shall not be required to provide any consulting services to the Company subsequent to the Termination Date.
 
6.            The parties acknowledge that the Plan has been terminated and the proceeds thereof distributed to the participants therein in accordance with their respective allocable share thereof.
 
 
2

 
 
7.            Except as specifically set forth herein, neither the Company nor Executive shall have any further rights or obligations under the Agreement.  Executive acknowledges that, except for the Lump Sum Amount and compensation to which he may be entitled for services rendered after the termination date as a non-employee director as may be agreed between the Company and Executive, there are no further sums or other consideration due and owing to him by the Company on account of his prior employment by the Company or for any other reason.  Executive reaffirms that as of the Termination Date, Executive shall have no further right to any compensation, fee or benefit from the Company, including but not limited to any salary, bonus, retirement payment, consulting payment, paid vacation, paid sick leave, fringe benefit, pension contribution, insurance (including insurance proceeds related to the use of the vehicle transferred pursuant to Section 4 herein), or the use of an automobile, or any other compensation to which Executive would otherwise be entitled.  Upon Executive’s execution of this Fourth Amendment, and in consideration for the payments described in Section 3 above and the Class A Purchaser executing the Class A Stock Purchase Agreement and the consummation of the Class A Sale, Executive hereby unconditionally releases and completely and forever discharges the Company, on behalf of and for the benefit of itself and all related corporate entities and partnerships, its and their members, officers, directors, managers, partners, shareholders, agents, attorneys, employees, successors and assigns (“Released Parties”) from any and all rights and claims, losses, damages, causes of action, complaints, lawsuits, obligations, demands and liabilities of any kind, whether known or unknown, suspected or unsuspected, arising directly or indirectly out of or in connection with any act, omission, or event related to his employment with the Company or the termination of his employment for any and all reasons.  This Fourth Amendment and such release of claims specifically include any and all claims for attorney’s fees, expenses and costs which are incurred by Executive for any reason.  Executive specifically releases the Released Parties, to the maximum extent permitted by law, from any and all claims that he had, has, or may have against the Released Parties arising out of or relating to any conduct, matter, event or omission existing or occurring before the date of this Fourth Amendment, including, but not limited to, the following:
 
 
(a)
any rights or claims which Executive may have to any equity or equity-type interest in the Company beyond such rights or claims as a stockholder of the Company;
 
 
(b)
any rights or claims for unpaid or withheld wages, severance, benefits, bonuses, commissions and/or compensation of any kind;
 
 
(c)
any rights or claims for reimbursement of expenses of any kind;
 
 
(d)
any rights or claims which Executive may have based upon the Age Discrimination in Employment Act or the Older Workers Benefit Protection Act, which prohibit age discrimination in employment; Title VII of the Civil Rights Act of 1964, as amended, which prohibits discrimination in employment based on race, color, creed, national origin or sex; the Equal Pay Act, which prohibits paying men and women unequal pay for equal work; the Americans with Disabilities Act of 1990, which prohibits discrimination against disabled persons; the Employee Retirement Income Security Act, which regulates employment benefits or any other federal, state or local laws or regulations prohibiting employment discrimination or which otherwise regulate employment terms and conditions; or any rights or claims for retaliation under any of the foregoing laws;
 
 
(e)
any rights or claims under the National Labor Relations Act;
 
 
(f)
any rights or claims for violation of public policy;
 
 
(g)
any other rights or claims for retaliation and/or any whistleblower claims;
 
 
(h)
any rights or claims for emotional distress or pain and suffering; and/or
 
 
(i)
any other statutory or common law rights or claims, now existing or hereinafter recognized, known or unknown, asserted or unasserted, but not limited to breach of express or implied contract, wrongful discharge, unfair treatment, libel, slander, intentional infliction of emotional distress, invasion of privacy, fraud, wrongful discharge, promissory estoppel, equitable estoppel and misrepresentation.
 
 
3

 
 
In consideration of the reductions in the compensation payable to Executive provided in this Third Amendment and the other obligations of Executive hereunder, to the extent permitted by law and to the extent any such release would not adversely affect the rights of the Released Parties under any indemnification policy now or hereafter in effect, the Released Parties hereby unconditionally release and completely and forever discharge Executive, his heirs, executives and assigns, from any and all rights and claims, losses, damages, causes of action, complaints, lawsuits, obligations, demands and liabilities of any kind, whether known or unknown, suspected or unsuspected, arising directly or indirectly out of or in connection with any act, omission, or event related to his employment with the Company or the termination of that employment for any and all reasons and occurring prior to the date of this Third Amendment.
 
8.            Notwithstanding the provisions of Section 7 herein, Executive does not waive any right to seek indemnity from the Company for those acts or omissions for which a director or an officer of the Company would be entitled pursuant to the Company’s Certificate of Incorporation and/or bylaws and any indemnification agreement between the Company and Executive or pursuant to any indemnification policy maintained by the Company for the benefit of Executive.
 
9.            In conjunction with the execution of this Fourth Amendment and for the consideration received herein, Executive further agrees as follows:
 
 
(a)
To take no action and make no statement which is inconsistent with his obligations contained in this Fourth Amendment; and
 
 
(b)
To cooperate fully with any reasonable request of the Company or any other Released Party to provide truthful information and/or materials to them or to otherwise provide reasonable assistance to any of them in matters relating to the performance of his former duties.
 
10.          Executive will not divulge, furnish or make available to any person any knowledge or information with respect to the business or affairs of any Company or its subsidiaries which is confidential, including, without limitation, "know-how," trade secrets, customer and supplier lists, pricing policies, operational methods, marketing plans or strategies, business acquisition or disposition plans, new personnel employment plans, methods, technical processes, designs and design projects, inventions and research projects and financial budgets and forecasts of the Released Parties except (1) information which at the time is available to others in the business or generally known to the public other than as a result of disclosure by Executive not permitted hereunder, and (2) when required to do so by a court of competent jurisdiction, by any governmental agency or by any administrative body or legislative body (including a committee thereof) with purported or apparent jurisdiction to order Executive to divulge, disclose or make accessible such information.  All memoranda, notes, lists, records, electronically stored data, recordings or videotapes and other documents (and all copies thereof) made or compiled by Executive or made available to Executive (whether during his employment by the Company or by any predecessor thereof) concerning the business of the Company or any predecessor thereof shall be the property of the Company.
 
 
4

 
 
11.         Executive will not, in any communication with any person or entity, including, without limitation, any actual or potential customer, client, investor, vendor, or business partner of Company, or any third-party media outlet, make any derogatory, disparaging or critical negative statements, orally, written or otherwise, against Company or any other Released Party.  Nothing herein shall prevent Executive from testifying truthfully in connection with any litigation, arbitration or administrative proceeding when compelled by subpoena, regulation or court order to do so.  
 
12.         By entering into this Fourth Amendment, the Company and the Released Parties do not admit and expressly deny that they have violated any contract, rule, law or regulation, including, but not limited to, any federal, state or local law or regulation relating to employment or employment discrimination.
 
13.         The parties mutually agree that neither party will make any public announcements regarding the separation contemplated by this Fourth Amendment or disclose any of the terms of this Fourth Amendment without the prior written consent of the other party; provided, however, that the Company may disclose the terms of this Fourth Amendment as required by applicable law, including pursuant to the Securities Act of 1933, as amended or the Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder.
 
[ Signature Page Follows ]

 
5

 

IN WITNESS WHEREOF , the parties have executed this Fourth Amendment as of the day and year first above written.
 
 
PRESIDENTIAL REALTY CORPORATION
 
       
 
By:  
/s/ Robert Feder
 
   
Robert Feder
 
   
Chairman of the Board of Directors
 
       
 
/s/ Jeffrey F. Joseph
 
 
Jeffrey F. Joseph
 

 
6

 

Exhibit 10.10
THIRD AMENDMENT TO AMENDED AND RESTATED
EMPLOYMENT AND CONSULTING AGREEMENT
 
THIS THIRD AMENDMENT TO AMENDED AND RESTATED EMPLOYMENT AND CONSULTING AGREEMENT (this “Third Amendment”) is made as of November 8, 2011 by and between THOMAS VIERTEL, residing at [Address] (“Executive”), and PRESIDENTIAL REALTY CORPORATION , a Delaware corporation having offices at 180 South Broadway, White Plains, New York 10605 (the “Company”).
 
WITNESSETH:
 
WHEREAS , Executive and the Company entered into that certain Employment and Consulting Agreement, made January 31, 2005, as of January 1, 2004, which agreement was modified by a First Amendment dated January 3, 2006, then amended and restated as of December 12, 2007 and, as so amended and restated, modified by a letter agreement dated October 13, 2008, and a Second Amendment to Amended and Restated Employment Agreement dated August 25, 2010 (collectively, the “Agreement”);
 
WHEREAS , the Company terminated the employment of Executive under the Agreement as of December 31, 2010 (the “Termination Date”);
 
WHEREAS, PDL Partnership, a New York general partnership of which Executive is a general partner (the “Seller”) owns 198,735 shares of  Class A Common Stock, par value $0.10 per share of the Company (the “Class A Common Stock”), and is entering, simultaneously with the execution and delivery of this Third Amendment, into a Class A Stock Purchase Agreement with BBJ Family Irrevocable Trust (the “Class A Purchaser”), pursuant to which the Seller will sell to the Class A Purchaser and the Class A Purchaser will purchase from the Seller 177,013 shares of Class A Common Stock (the “Class A Sale”);
 
WHEREAS, the Class A Purchaser has conditioned its execution and delivery of the Class A Stock Purchase Agreement and the consummation of the Class A Sale, upon the Company and Executive amending the Agreement as set forth herein; and
 
WHEREAS, the parties desire to modify the terms of the Agreement as set forth herein.
 
NOW, THEREFORE , for good and valuable consideration receipt of which is hereby acknowledged, it is agreed by the parties as follows:
 
1.           All capitalized terms used in this Third Amendment and not otherwise defined shall have the meaning ascribed thereto in the Agreement.
 
2.           To the extent not previously resigned, Executive hereby resigns from any and all positions held at any of the Released Parties (as defined below).
 
 
 

 
 
3.           The Company’s obligations with respect to the Lump Sum Amount as set forth in Paragraph 4 (b) of the Second Amendment are amended as follows:
 
 
(a)
The Lump Sum Amount is reduced to $487,800.
 
 
(b)
The Lump Sum Amount as so reduced will be paid as follows:
 
 
(i)
$325,200 on the date hereof, receipt of which is acknowledged; and
 
 
(ii)
$162,600 (the “Deferred Amount”), in one lump sum payment on the third anniversary hereof;
 
 
(iii)
less in each case appropriate tax withholdings.
 
 
(c)
Payment of the Deferred Amount is not contestable by the Company for any reason whatsoever.
 
4.           Notwithstanding anything in Section 9 of the Second Amendment to the contrary, Executive shall not be required to provide any consulting services to the Company subsequent to the Termination Date.
 
5.           The parties acknowledge that (i) the Plan has been terminated and the proceeds thereof distributed to the participants therein in accordance with their respective allocable share thereof, and (ii) the Company has transferred to Executive ownership of the automobile used by Executive as set forth in Paragraph 4(b) of the Second Amendment in its then “as is” condition.
 
 
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6.           Except as specifically set forth herein, neither the Company nor the Executive shall have any further rights or obligations under the Agreement.  Executive acknowledges that, except for the Lump Sum Amount, there are no further sums or other consideration due and owing to him by the Company on account of his prior employment by the Company or for any other reason.  Executive reaffirms that as of the Termination Date, Executive has no further right to any compensation, fee or benefit from the Company, including but not limited to any salary, bonus, retirement payment, consulting payment, paid vacation, paid sick leave, fringe benefit, pension contribution, insurance (including insurance proceeds related to the use of the vehicle transferred as described in Section 5 herein), or the use of an automobile, or any other compensation to which Executive would otherwise be entitled.  Upon Executive’s execution of this Third Amendment, and in consideration for the payments described in Section 3 above and the Class A Purchaser executing the Class A Stock Purchase Agreement and the consummation of the Class A Sale, Executive hereby unconditionally releases and completely and forever discharges the Company, on behalf of and for the benefit of itself and all related corporate entities and partnerships, its and their members, officers, directors, managers, partners, shareholders, agents, attorneys, employees, successors and assigns (“Released Parties”) from any and all rights and claims, losses, damages, causes of action, complaints, lawsuits, obligations, demands and liabilities of any kind, whether known or unknown, suspected or unsuspected, arising directly or indirectly out of or in connection with any act, omission, or event related to his employment with the Company or the termination of that employment for any and all reasons and occurring prior to the date of this Third Amendment.  This Third Amendment and such release of claims specifically include any and all claims for attorney’s fees, expenses and costs which are incurred by Executive for any reason.  Executive specifically releases the Released Parties, to the maximum extent permitted by law, from any and all claims that he had, has, or may have against the Released Parties arising out of or relating to any conduct, matter, event or omission existing or occurring before the date of this Third Amendment, including, but not limited to, the following:
 
 
(a)
any rights or claims which Executive may have to any equity or equity-type interest in the Company beyond such rights or claims as a stockholder of the Company;
 
 
(b)
any rights or claims for unpaid or withheld wages, severance, benefits, bonuses, commissions and/or compensation of any kind;
 
 
(c)
any rights or claims for reimbursement of expenses of any kind;
 
 
(d)
any rights or claims which Executive may have based upon the Age Discrimination in Employment Act or the Older Workers Benefit Protection Act, which prohibit age discrimination in employment; Title VII of the Civil Rights Act of 1964, as amended, which prohibits discrimination in employment based on race, color, creed, national origin or sex; the Equal Pay Act, which prohibits paying men and women unequal pay for equal work; the Americans with Disabilities Act of 1990, which prohibits discrimination against disabled persons; the Employee Retirement Income Security Act, which regulates employment benefits or any other federal, state or local laws or regulations prohibiting employment discrimination or which otherwise regulate employment terms and conditions; or any rights or claims for retaliation under any of the foregoing laws;
 
 
(e)
any rights or claims under the National Labor Relations Act;
 
 
(f)
any rights or claims for violation of public policy;
 
 
(g)
any other rights or claims for retaliation and/or any whistleblower claims;
 
 
(h)
any rights or claims for emotional distress or pain and suffering; and/or
 
 
(i)
any other statutory or common law rights or claims, now existing or hereinafter recognized, known or unknown, asserted or unasserted, but not limited to breach of express or implied contract, wrongful discharge, unfair treatment, libel, slander, intentional infliction of emotional distress, invasion of privacy, fraud, wrongful discharge, promissory estoppel, equitable estoppel and misrepresentation.
 
 
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In consideration of the reductions in the compensation payable to Executive provided in this Third Amendment and the other obligations of Executive hereunder, to the extent permitted by law and to the extent any such release would not adversely affect the rights of the Released Parties under any indemnification policy now or hereafter in effect, the Released Parties hereby unconditionally release and completely and forever discharge Executive, his heirs, executives and assigns, from any and all rights and claims, losses, damages, causes of action, complaints, lawsuits, obligations, demands and liabilities of any kind, whether known or unknown, suspected or unsuspected, arising directly or indirectly out of or in connection with any act, omission, or event related to his employment with the Company or the termination of that employment for any and all reasons and occurring prior to the date of this Third Amendment.
 
7.           Notwithstanding the provisions of Section 6 herein, Executive does not waive any right to seek indemnity from the Company for those acts or omissions for which a director or an officer of the Company would be entitled pursuant to the Company’s Certificate of Incorporation and/or bylaws or any indemnification agreement between the Company and Executive or pursuant to any indemnification policy maintained by the Company for the benefit of Executive.
 
8.           In conjunction with the execution of this Third Amendment and for the consideration received herein, Executive further agrees as follows:
 
 
(a)
To take no action and make no statement which is inconsistent with his obligations contained in this Third Amendment;
 
 
(b)
To return or confirm that he no longer has any material or property (whether tangible or intangible) belonging to the Company or obtained or prepared by or for Executive or used by Executive in the course of Executive’s employment with the Company, including but not limited to, any credit cards, cell phones and the associated phone numbers, keys or computer files, documents, data, records, software, customer information, scientific or other data stored in electronic form, or financial information; and
 
 
(c)
To cooperate fully with any reasonable request of the Company or any other Released Party to provide truthful information and/or materials to them or to otherwise provide reasonable assistance to any of them in matters relating to the performance of his former duties.
 
 
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9.           Executive will not divulge, furnish or make available to any person any knowledge or information with respect to the business or affairs of any Company or its subsidiaries which is confidential, including, without limitation, “know-how,” trade secrets, customer and supplier lists, pricing policies, operational methods, marketing plans or strategies, business acquisition or disposition plans, new personnel employment plans, methods, technical processes, designs and design projects, inventions and research projects and financial budgets and forecasts of the Group except (1) information which at the time is available to others in the business or generally known to the public other than as a result of disclosure by Executive not permitted hereunder, and (2) when required to do so by a court of competent jurisdiction, by any governmental agency or by any administrative body or legislative body (including a committee thereof) with purported or apparent jurisdiction to order Executive to divulge, disclose or make accessible such information.  All memoranda, notes, lists, records, electronically stored data, recordings or videotapes and other documents (and all copies thereof) made or compiled by Executive or made available to the Executive (whether during his employment by the Company or by any predecessor thereof) concerning the business of the Company or any predecessor thereof shall be the property of the Company.
 
10.           Executive will not, in any communication with any person or entity, including, without limitation, any actual or potential customer, client, investor, vendor, or business partner of Company, or any third-party media outlet, make any derogatory, disparaging or critical negative statements, orally, written or otherwise, against Company or any other Released Party.  Nothing herein shall prevent Executive from testifying truthfully in connection with any litigation, arbitration or administrative proceeding when compelled by subpoena, regulation or court order to do so.
 
11.           By entering into this Third Amendment, the Company and the Released Parties do not admit and expressly deny that they have violated any contract, rule, law or regulation, including, but not limited to, any federal, state or local law or regulation relating to employment or employment discrimination.
 
12.           The parties mutually agree that neither party will make any public announcements regarding the separation contemplated by this Third Amendment or disclose any of the terms of this Third Amendment without the prior written consent of the other party.
 
 
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IN WITNESS WHEREOF , the parties have executed this Third Amendment as of the day and year first above written.
 
 
PRESIDENTIAL REALTY CORPORATION
 
       
 
By:  
/s/ Robert Feder
 
   
Robert Feder
 
   
Chairman of the Board of Directors
 
       
 
/s/ Thomas Viertel
 
 
Thomas Viertel
 

 
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Exhibit 10.11

 
EIGHTH MODIFICATION OF EMPLOYMENT AGREEMENT
 
AGREEMENT (the “Agreement”)   made as of November 8, 2011 by and between PRESIDENTIAL REALTY CORPORATION , a Delaware corporation having offices at 180 South Broadway, White Plains, New York 10605 (the “Company”), and ELIZABETH DELGADO , residing at [Address] (“Employee”).
 
WITNESSETH:
 
WHEREAS , the Company and Employee have entered into an Employment Contract dated as of January 1, 1989 (the “Employment Agreement”), which Employment Agreement was modified by a First Modification Agreement dated January 1, 1992, a Second Modification Agreement dated January 1, 1995, a Third Modification Agreement dated January 1, 1998, a Fourth Modification Agreement dated January 1, 2000, a Fifth Modification Agreement dated January 1, 2003, a Sixth Modification Agreement dated January 1, 2006, and a Seventh Modification Agreement dated January 1, 2009 (collectively, the “Employment Agreement”); and
 
WHEREAS , the Company and the Employee desire to terminate the Employment Agreement on the terms and conditions herein set forth.
 
NOW, THEREFORE , in consideration of the mutual promises contained herein and for other good and valuable consideration, the parties hereto agree as follows:
 
1.            The Company has, simultaneously with the execution of this Agreement, paid Employee the sum of $175,000, the receipt of which is hereby acknowledged by Employee.
 
2.            Employee and the Company agree that the Employment Agreement is hereby terminated as of the date hereof (the “Termination Date”). Furthermore, as of the Termination Date, Employee resigns from any and all positions held at any of the Released Parties (as defined below).
 
 
 

 
 
3.            Except as specifically set forth herein, neither the Company nor Employee shall have any further rights or obligations under the Employment Agreement and Employee shall not have any rights in connection with her employment or engagement with the Company.  Employee acknowledges that except for any compensation to which she may be entitled for services rendered to the Company after the termination date as may be agreed between the Company and Employee, there are no further sums or other consideration due and owing to him by the Company on account of her prior employment by the Company or for any other reason.  Employee  reaffirms that as of the Termination Date, Employee shall have no further right to any compensation, fee or benefit from the Company, including but not limited to any salary, bonus, retirement payment, consulting payment, paid vacation, paid sick leave, fringe benefit, pension contribution, insurance, use of an automobile, or any other compensation to which Employee would otherwise be entitled.  Upon Employee’s execution of this Agreement, and in consideration for the payments described in Section 1 above, Employee hereby unconditionally releases and completely and forever discharges the Company, on behalf of and for the benefit of itself and all related corporate entities and partnerships, its and their members, officers, directors, managers, partners, shareholders, agents, attorneys, employees, successors and assigns (“Released Parties”) from any and all rights and claims, losses, damages, causes of action, complaints, lawsuits, obligations, demands and liabilities of any kind, whether known or unknown, suspected or unsuspected, arising directly or indirectly out of or in connection with any act, omission, or event related to her employment with the Company or the termination of her employment for any and all reasons.  This Agreement and such release of claims specifically includes any and all claims for attorney’s fees, expenses and costs which are incurred by Employee for any reason.  Employee specifically releases the Released Parties, to the maximum extent permitted by law, from any and all claims that she had, has, or may have against the Released Parties arising out of or relating to any conduct, matter, event or omission existing or occurring before the date of this Agreement, including, but not limited to, the following:
 
 
(a)
any rights or claims which Employee may have to any equity or equity-type interest in the Company beyond such rights or claims as a stockholder of the Company;
 
 
(b)
any rights or claims for unpaid or withheld wages, severance, benefits, bonuses, commissions and/or compensation of any kind;
 
 
(c)
any rights or claims for reimbursement of expenses of any kind;
 
 
(d)
any rights or claims which Employee may have based upon the Age Discrimination in Employment Act or the Older Workers Benefit Protection Act, which prohibit age discrimination in employment; Title VII of the Civil Rights Act of 1964, as amended, which prohibits discrimination in employment based on race, color, creed, national origin or sex; the Equal Pay Act, which prohibits paying men and women unequal pay for equal work; the Americans with Disabilities Act of 1990, which prohibits discrimination against disabled persons; the Employee Retirement Income Security Act, which regulates employment benefits or any other federal, state or local laws or regulations prohibiting employment discrimination or which otherwise regulate employment terms and conditions; or any rights or claims for retaliation under any of the foregoing laws;
 
 
(e)
any rights or claims under the National Labor Relations Act;
 
 
(f)
any rights or claims for violation of public policy;
 
 
(g)
any other rights or claims for retaliation and/or any whistleblower claims;
 
 
(h)
any rights or claims for emotional distress or pain and suffering; and/or
 
 
(i)
any other statutory or common law rights or claims, now existing or hereinafter recognized, known or unknown, asserted or unasserted, but not limited to breach of express or implied contract, wrongful discharge, unfair treatment, libel, slander, intentional infliction of emotional distress, invasion of privacy, fraud, wrongful discharge, promissory estoppel, equitable estoppel and misrepresentation.
 
 
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In consideration of the reductions in the compensation payable to Employee provided in this Third Amendment and the other obligations of Employee hereunder, to the extent permitted by law and to the extent any such release would not adversely affect the rights of the Released Parties under any indemnification policy now or hereafter in effect, the Released Parties hereby unconditionally release and completely and forever discharge Employee, his heirs, Employees and assigns, from any and all rights and claims, losses, damages, causes of action, complaints, lawsuits, obligations, demands and liabilities of any kind, whether known or unknown, suspected or unsuspected, arising directly or indirectly out of or in connection with any act, omission, or event related to his employment with the Company or the termination of that employment for any and all reasons and occurring prior to the date of this Third Amendment.
 
4.            Notwithstanding the provisions of Section 3 herein, Employee does not waive any right to seek indemnity from the Company for those acts or omissions for which an officer of the Company would be entitled pursuant to the Company’s Certificate of Incorporation and/or bylaws, or any indemnification agreement or pursuant to any indemnification policy maintained by the Company for the benefit of Employee
 
5.            In conjunction with the execution of this Agreement and for the consideration received herein, Employee further agrees as follows:
 
 
(a)
To take no action and make no statement which is inconsistent with her obligations contained in this Agreement; and
 
 
(b)
To cooperate fully with any reasonable request of the Company or any other Released Party to provide truthful information and/or materials to them or to otherwise provide reasonable assistance to any of them in matters relating to the performance of her former duties.
 
6.            Employee will not divulge, furnish or make available to any person any knowledge or information with respect to the business or affairs of any Company or its subsidiaries which is confidential, including, without limitation, "know-how," trade secrets, customer and supplier lists, pricing policies, operational methods, marketing plans or strategies, business acquisition or disposition plans, new personnel employment plans, methods, technical processes, designs and design projects, inventions and research projects and financial budgets and forecasts of the Released Parties except (1) information which at the time is available to others in the business or generally known to the public other than as a result of disclosure by Employee not permitted hereunder, and (2) when required to do so by a court of competent jurisdiction, by any governmental agency or by any administrative body or legislative body (including a committee thereof) with purported or apparent jurisdiction to order Employee to divulge, disclose or make accessible such information.  All memoranda, notes, lists, records, electronically stored data, recordings or videotapes and other documents (and all copies thereof) made or compiled by Employee or made available to Employee (whether during her employment by the Company or by any predecessor thereof) concerning the business of the Company or any predecessor thereof shall be the property of the Company.
 
 
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7.            Employee will not, in any communication with any person or entity, including, without limitation, any actual or potential customer, client, investor, vendor, or business partner of Company, or any third-party media outlet, make any derogatory, disparaging or critical negative statements, orally, written or otherwise, against Company or any other Released Party.  Nothing herein shall prevent Employee from testifying truthfully in connection with any litigation, arbitration or administrative proceeding when compelled by subpoena, regulation or court order to do so.
 
8.            By entering into this Agreement, the Company and the Released Parties do not admit and expressly deny that they have violated any contract, rule, law or regulation, including, but not limited to, any federal, state or local law or regulation relating to employment or employment discrimination.
 
9.            The parties mutually agree that neither party will make any public announcements regarding the separation contemplated by this Agreement or disclose any of the terms of this Agreement without the prior written consent of the other party; provided, however, that the Company may disclose the terms of this Agreement as required by applicable law, including pursuant to the Securities Act of 1933, as amended or the Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder.
 
[Signature Page Follows[

 
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IN WITNESS WHEREOF , the parties have executed this Agreement as of the day and year first above written.
 
 
PRESIDENTIAL REALTY CORPORATION
 
       
 
By:  
/s/ Robert Feder
 
   
Robert Feder
 
   
Chairman of the Board of Directors
 
       
 
/s/ Elizabeth Delgado
 
 
Elizabeth Delgado
 

 
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Exhibit 10.12

INDEMNIFICATION AGREEMENT
 
This Indemnification Agreement (the “ Agreement ”) is effective as of November __, 2011 by and between Presidential Realty Corporation, a Delaware corporation (the “ Company ”), and [                ], a natural person (the “ Indemnitee ”).
 
WHEREAS , the Board of Directors of the Company (the “ Board ”) has determined that the ability to attract and retain qualified persons as directors, officers and/or in other capacities is essential and in the best interests of the Company's stockholders and that the Company should act to assure such persons that there shall be adequate certainty of protection through insurance and indemnification against claims and actions against them arising out of their service to and activities on behalf of the Company;
 
WHEREAS, the uncertainties relating to such insurance and to indemnification have increased the difficulty of attracting and retaining such persons as they have become more reluctant to serve corporations such as the Company as directors, officers and/or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to, and activities on behalf of, the Company;
 
WHEREAS , the Board has determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company’s stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future;
 
WHEREAS , the Company has adopted provisions in its Governing Documents (as herein defined) providing for indemnification and advancement of expenses to its directors and officers to the fullest extent authorized by the General Corporation Law of the State of Delaware (the " DGCL "), and the Company wishes to clarify and enhance the rights and obligations of the Company and the Indemnitee with respect to indemnification and advancement of expenses;
 
WHEREAS , Indemnitee does not regard the protection available under the Governing Documents and the Company’s insurance coverage as adequate in the present circumstances, and may not be willing to serve as a director or officer without adequate protection;
 
WHEREAS , it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by the DGCL and other applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;
 
WHEREAS , in order to induce and encourage highly experienced and capable persons such as the Indemnitee to serve and continue to serve as directors or officers of the Company and in any other capacity as the Company may request, and to otherwise provide specific contractual assurances that certain costs, judgments, penalties, fines, liabilities, and expenses incurred by them in their defense of litigation and claims made against them in connection with the good faith performance of their duties to the Company are to be borne by the Company and that they shall receive the maximum protection against such risks and liabilities as may be afforded by applicable law, the Board has determined that the following Agreement is reasonable and prudent to promote and ensure the best interests of the Company and its stockholders;
 
 
 

 
 
WHEREAS , this Agreement is a supplement to and in furtherance of the indemnification provided by the Governing Documents and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; and
 
NOW, THEREFORE , in consideration of Indemnitee's service or continued service to the Company in an Official Capacity (as herein defined) and the promises and agreements made in this Agreement, and for other good and valuable consideration, receipt of which is hereby acknowledged, the Company and Indemnitee, intending to be legally bound, hereby agree as follows:
 
1.            Certain Definitions . For purposes of this Agreement, the following definitions shall apply to the referenced words or terms:
 
(a)           " Arbitration " in the context of a Proceeding (as defined herein) shall mean any alternative dispute resolution procedure or process.
 
(b)           " D&O Insurance " means directors’ and officers’ liability insurance.
 
(c)           “ Disinterested Director " means a director of the Company who is not or was not a party to the Proceeding in respect of which indemnification is being sought by the Indemnitee.
 
(d)           " Expenses " shall include, without limitation, all direct and indirect costs including attorneys' fees and expenses, court costs, transcript costs, fees and expenses of experts, witness fees and expenses, fees and expenses of accountants, fees and expenses of public relations consultants and other advisors, travel expenses, printing and binding costs, telephone charges, delivery service fees, the premium, security for, and other costs relating to any bond (including cost bonds, appeal bonds, or their equivalents), and all other disbursements or expenses of the types customarily incurred in connection with (i) the investigation, prosecution, defense, appeal or settlement of a Proceeding, (ii) serving as an actual or prospective witness, or preparing to be a witness in a Proceeding, or other participation in, or other preparation for, any Proceeding arising out of, or in any way related to, Indemnitee's Official Capacity, (iii) any voluntary or required interviews or depositions related to a Proceeding, (iv) responding to, or objecting to, a request to provide discovery in any Proceeding, and (v) any Permitted Action (as defined herein) brought against the Company by Indemnitee directly, or by means of impleader, cross-complaint, counterclaim or other proceeding.
 
(e)           " Governing Documents " shall mean the Certificate of Incorporation and Bylaws of the Company, as amended from time to time.
 
(f)           " Indemnitee's Affiliates " shall mean Indemnitee's spouse, members of Indemnitee's immediate family, and Indemnitee's representative(s), guardian(s), conservator(s) estate, executor(s), administrator(s), and trustee(s), as the case may be, as understood in, or relevant to, the context of a particular provision of this Agreement.
 
(g)           " Liabilities " shall include judgments, amounts paid in settlement (if such settlement is approved in advance by the Company, which approval shall not be unreasonably withheld), fines, damages, whether compensatory, punitive or exemplary, ERISA or IRS or other excise taxes or penalties, any federal, state or local taxes imposed on an Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, and all other liabilities of any kind or nature incurred by Indemnitee as a result of, or in connection with, a Proceeding.
 
 
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(h)           " Official Capacity " means Indemnitee's service as an officer and/or director (including serving as a member of any committee of the board of directors) of the Company and/or, at the request of the Company, any Other Enterprise, and in such capacity shall include service as a trustee, fiduciary, agent or similar status (including, without limitation, a manager of a limited liability company) with respect to the Company and any Other Enterprise. For the purposes of this Agreement, Indemnitee's service in Indemnitee's Official Capacity to any Other Enterprise shall be presumed to be service “at the request of the Company," unless it is conclusively determined to the contrary by a court of competent jurisdiction. With respect to such presumption, it shall not be necessary for Indemnitee to show any actual or prior request by the Company or its Board for such service to such Other Enterprise.
 
(i)           " Other Enterprise " shall include without limitation any other corporation, partnership, limited liability company, joint venture, trust, employee benefit plan, or other entity or association of any kind or nature which is controlled by, or affiliated with, the Company, or of which the Company is a creditor, or sole or partial owner.
 
(j)           " Permitted Action " includes (i) any Proceeding against the Company brought by Indemnitee, alone or with others, in connection with, or related to, the defense by Indemnitee of any Proceeding brought against Indemnitee by a third party, the Company, or any Other Enterprise (or brought on behalf of the Company, including by means of a derivative action), whether by a separately initiated Proceeding, or impleader, cross-claim, counterclaim, or otherwise; (ii) a Proceeding brought by Indemnitee or Indemnitee's Affiliates to establish or enforce a right of indemnity under this Agreement, an applicable D&O Insurance policy, the Governing Documents, or any other agreement or law pertaining to indemnification of Indemnitee, or to recover Expenses or a Liability of Indemnitee resulting from a Proceeding against Indemnitee; (iii) a Proceeding against the Company or any Other Enterprise brought by Indemnitee which is approved in advance by a majority of the Company's independent directors, excluding Indemnitee; and (iv) a Proceeding brought by Indemnitee which is required under any applicable law; and with respect to (i) through (iv) above, any of the identified actions shall be considered a Permitted Action regardless of whether Indemnitee is ultimately determined to be entitled to the relief sought.
 
(k)           " Proceeding " shall include any threatened, pending, actual or completed inquiry, interview, investigation, action, suit, arbitration, alternative dispute mechanism, or other proceeding, whether of a civil, administrative, criminal, investigative, legislative or any other nature, including an appellate action of any kind, brought by (i) the Company (or brought on behalf of the Company, including a derivative action) against or involving Indemnitee or Indemnitee's Affiliates by reason of, or in any way related to, Indemnitee's Official Capacity; (ii) Indemnitee, against or involving the Company or any Other Enterprise by reason of, or in any way related to, Indemnitee's Official Capacity or rights Indemnitee has against the Company or any Other Enterprise under this Agreement, the Governing Documents, or any other agreement or applicable law (but only with respect to a Permitted Action); (iii) any third party against or involving Indemnitee or Indemnitee's Affiliates by reason of, or in any way related to, Indemnitee's Official Capacity, directly or by impleader, cross-claim, counterclaim, or other means; or (iv) Indemnitee against any third party, other than the Company, by reason of, or in any way related to, Indemnitee's Official Capacity, directly or by impleader, cross claim, counterclaim or other means.
 
 
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(l)           References to the Company and its subsidiaries shall include any corporation, limited liability company, partnership, joint venture, trust or other entity or enterprise that before or after the date hereof is party to a merger or consolidation with the Company or any such subsidiary or that is a successor to the Company as contemplated by Section 17(j) whether or not such successor has executed and delivered the written agreement contemplated by Section 17(j).
 
2.            Indemnification.
 
(a)           Subject to the limitations set forth in Sections 6, 7, 11 and 14 of this Agreement, the Company shall hold harmless and indemnify Indemnitee, to the fullest extent permitted by the DGCL, the Governing Documents and this Agreement, as the DGCL and the Governing Documents may be hereafter amended, modified or interpreted subsequent to the execution of this Agreement (but only to the extent that such amendment, modification or interpretation permits the Company to provide broader indemnification rights than the DGCL and the Governing Documents permitted prior to adoption of such amendment or modification or the issuance of such interpretation), if Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding, by reason of, or in any way related to the fact that Indemnitee is or was serving in an Official Capacity, or by reason of, or in any way related to, any action or inaction on the part of Indemnitee while serving in an Official Capacity, against any and all Liabilities and Expenses actually and reasonably incurred by or on behalf of Indemnitee by reason of, or in any way related to, such Proceeding, or any claim, issue or matter therein, in each case whether or not Indemnitee is acting or serving in any Official Capacity at the time any Liability or Expense is incurred for which indemnification can be provided under this Agreement.
 
(b)           If a Proceeding against Indemnitee includes a claim against (i) one or more of Indemnitee's Affiliates, or (ii) a property interest of one or more of Indemnitee's Affiliates, and such Proceeding against Indemnitee is by reason of, or in any way related to, Indemnitee's Official Capacity with the Company or any Other Enterprise, this Agreement shall also include indemnification of Indemnitee's Affiliates with respect to their Expenses and Liabilities, assuming that Indemnitee would have been entitled to indemnification under Section 2(a) if the Proceeding had been brought directly against Indemnitee. The Expenses of such Indemnitee Affiliate shall be advanced pursuant to Section 6 to the extent Indemnitee would have been entitled to advancement of Expenses had the Proceeding been brought directly against Indemnitee.
 
(c)           Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful, on the merits or otherwise, in whole or in part, in any Proceeding in any way connected with, resulting from or relating to Indemnitee’s Official Capacity, or in any claim, issue, or matter therein, including without limitation, the dismissal of any action without prejudice, Indemnitee shall be indemnified to the maximum extent permitted by applicable law, as such may be amended from time to time, against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.
 
(d)           If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the Expenses or Liabilities actually or reasonably incurred by or on behalf of Indemnitee in connection with any Proceeding, but not, however, for the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such Expenses or Liabilities to which Indemnitee is entitled.
 
 
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3.            Contribution.
 
(a)           Whether or not the indemnification provided in Section 2 hereof is available, in respect of any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company shall pay, in the first instance, the entire amount of any judgment or settlement of such Proceeding without requiring Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution it may have against Indemnitee. The Company shall not enter into any settlement of any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.
 
(b)           Without diminishing or impairing the obligations of the Company set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), the Company shall contribute to the amount of Expenses or Liabilities actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction from which such Proceeding arose; provided , however , that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the events that resulted in such Expenses or Liabilities, as well as any other equitable considerations which applicable law may require to be considered. The relative fault of the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such Proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.
 
(c)           The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Company other than Indemnitee, who may be jointly liable with Indemnitee.
 
(d)           To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for Liabilities and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
 
4.            Indemnification for Expenses of a Witness .  Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of Indemnitee’s Official Capacity, a witness, or is made (or asked to) respond to discovery requests, in any Proceeding to which Indemnitee is not a party, he or she shall be indemnified against all Expenses actually and reasonably incurred by him or on his or her behalf in connection therewith.           
 
 
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5.            No Obligation or Right of Indemnitee or Company to Continuation of Indemnitee's Official Capacity.
 
(a)           The Company expressly confirms and agrees that it has entered into this Agreement, and assumed the obligations imposed on the Company in this Agreement, in order to induce Indemnitee to serve or continue to serve the Company in Indemnitee's Official Capacity, and acknowledges that Indemnitee is relying upon this Agreement in serving or continuing to serve in such Official Capacity. The rights to indemnification and advancement of Expenses created by or provided pursuant to this Agreement are bargained-for conditions of Indemnitee's acceptance and/or maintenance of Indemnitee's Official Capacity with the Company. Such rights shall continue after Indemnitee has ceased to serve the Company or any Other Enterprise in Indemnitee's Official Capacity, and shall inure to the benefit of Indemnitee and Indemnitee's Affiliates.
 
(b)           Indemnitee agrees that neither the terms of this Agreement, nor the rights and benefits conferred on the Company, any Other Enterprise or Indemnitee under this Agreement, prohibits, limits or in any way restricts the Board from (i) seeking Indemnitee's resignation from his Official Capacity with the Company or any Other Enterprise, (ii) removing, or seeking the removal of Indemnitee from his Official Capacity with the Company or any Other Enterprise, or (iii) declining to re-nominate or re-engage Indemnitee for his Official Capacity with the Company or any Other Enterprise, nor shall this Agreement be construed or interpreted as creating a contract of employment or other engagement with Indemnitee.
 
(c)           The Company agrees that neither the terms of this Agreement, nor the rights and benefits provided to Indemnitee under this Agreement, prohibit, limit, or restrict in any way, Indemnitee's right to resign or otherwise terminate Indemnitee's Official Capacity with the Company or any Other Enterprise with immediate effect at any time subsequent to the execution of this Agreement, and neither such resignation or termination nor the length of such service shall affect the Indemnitee’s rights under this Agreement.
 
6.            Advancement of Expenses.
 
(a)           Notwithstanding any other provision of this Agreement, the Company shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding by reason of Indemnitee’s Official Capacity within fifteen (15) days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. To receive an advancement of Expenses under this Agreement, Indemnitee shall submit a written request to the Secretary of the Company. Such request shall reasonably evidence the Expenses incurred by or on behalf of Indemnitee.
 
(b)           All requests for advancement of Expenses shall include or be accompanied by an undertaking, by or on behalf of Indemnitee, to repay such amounts advanced by the Company only if, and to the extent that, it shall ultimately be determined, by final judicial decision of a court of competent jurisdiction from which there is no further right to appeal, that Indemnitee is not entitled to be indemnified for such amounts. Indemnitee's undertaking to repay the Company any amounts advanced for Expenses shall not be required to be secured and shall not bear interest. Advancements shall be made without regard to Indemnitee’s ability to repay the Expenses. Except as set forth in the first sentence of this Section 6(b), the Company shall not impose on Indemnitee additional conditions to advancement of Expenses or require from Indemnitee additional undertakings regarding repayment.
 
 
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(c)           Advancements shall include any and all reasonable Expenses incurred pursuing an action to enforce Indemnitee’s right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advancements claimed.
 
7.            Notification to Company by Indemnitee of a Proceeding or Permitted Action; Defense of Proceeding by Company .
 
(a)           Indemnitee agrees to promptly notify the Company in writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification covered hereunder; but the omission to so notify the Company shall not relieve the Company from any liability which it may have to Indemnitee under this Agreement or otherwise unless and only to the extent that such failure or delay materially prejudices the Company. Notice to the Company shall be directed to the Chief Executive Officer of the Company and shall be given in accordance with the provisions of Section 17(h) below.  In addition, Indemnitee shall give the Company such information and cooperation as it may reasonably request and as shall be within Indemnitee’s power.
 
(b)           With respect to a Proceeding of which the Company has notice pursuant to Section 7(a) or otherwise:
 
(i)           Except as otherwise provided below, the Company shall, alone or jointly with any other indemnifying party, assume the defense of such Proceeding, with counsel reasonably satisfactory to Indemnitee, upon the delivery to Indemnitee of a written notice of its election to do so. From and after the Company's assumption of the defense of the Proceeding, subject to Section 7(b)(ii), the Company shall not be liable to Indemnitee under this Agreement for any Expenses subsequently incurred by Indemnitee in connection with the defense of such Proceeding.
 
(ii)            Indemnitee shall have the right, in addition to the rights set forth in Section 7(b)(i) related to approval of counsel, to employ Indemnitee's own counsel in the defense of the Proceeding, but the fees and expenses of such counsel incurred after the Company has assumed the defense of such Proceeding, shall be at the expense of Indemnitee unless (I) the employment of counsel by Indemnitee has been authorized by a majority of the independent directors of the Company, excluding Indemnitee, (II) Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of the defense of the Proceeding, and such conclusion is supported by an opinion of counsel, or (III) the Company shall not in fact have timely employed counsel to assume the defense of the Proceeding, in each of which cases the Expenses of Indemnitee shall be advanced by the Company pursuant to Section 6 and indemnified pursuant to Section 2.
 
(c)           The Company shall not be liable to indemnify Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding or Permitted Action affected without the Company's prior written consent, which consent shall not be unreasonably withheld, delayed or conditioned.
 
(d)           The Company shall not, without the prior written consent of Indemnitee, which may be provided or withheld in Indemnitee’s sole discretion, effect any settlement of any Proceeding against Indemnitee or which could have been brought against Indemnitee unless such settlement solely involves the payment of money by persons other than Indemnitee and includes an unconditional release of Indemnitee from all Liabilities with respect to any matters that are the subject of such Proceeding and an acknowledgment that Indemnitee denies all wrongdoing in connection with such matters.
 
 
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8.            Additional Indemnification Rights .
 
(a)           Notwithstanding any other provision of this Agreement, the Company hereby agrees to indemnify Indemnitee to the fullest extent permitted by applicable law, notwithstanding that such indemnification is not specifically authorized by the other provisions of this Agreement, the Governing Documents or by statute.
 
(b)           To the extent that a change in the DGCL or other applicable law (whether by statute or judicial decision), permits greater indemnification than would be afforded currently under the Governing Documents and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefit so afforded by such change.
 
(c)           In the event of any change in any applicable law, statute or rule which narrows the right of a Delaware corporation to indemnify a member of its board of directors or an officer, such changes, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement, shall have no effect on this Agreement or the parties’ rights and obligations hereunder.
 
9.            Noninterference . The Company shall not seek or agree to any order of any court or other governmental authority that would prohibit or otherwise interfere, and shall not take or fail to take any other action if such action or failure would reasonably be expected to have the effect of prohibiting or otherwise interfering, with the performance of the Company’s indemnification, advancement of Expenses or other obligations under this Agreement.
 
10.            Nonexclusivity .
 
(a)           The rights to indemnification and advancement of Expenses provided to Indemnitee by this Agreement shall not be deemed exclusive of any other rights of indemnification or advancement of Expenses to which Indemnitee may be entitled under the Governing Documents, any agreement, any vote of stockholders or disinterested directors, insurance policy, the DGCL, any other applicable law, or otherwise, both as to action in Indemnitee’s Official Capacity and as to action in any other capacity while holding such office, and shall not limit in any way any right the Company may have to create additional or independent or supplementary indemnity obligations for the benefit of Indemnitee.
 
(b)           No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
 
 
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11.            Mutual Acknowledgment .   Both the Company and Indemnitee acknowledge that in certain instances, Federal law or public policy may override applicable state law and prohibit the Company from indemnifying its directors and officers under this Agreement or otherwise.  For example, the Company and Indemnitee acknowledge that the Securities and Exchange Commission (the “ SEC ”) has taken the position that indemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain ERISA violations. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify Indemnitee.
 
12.            Maintenance of D&O Insurance .
 
(a)           The Company represents that it presently has in force and effect D&O Insurance coverage under the policies with the insurance carriers, and in the amounts set forth on Attachment A (the " Insurance Policies ").
 
(b)           The Company shall, from time to time, make the good faith determination whether or not it is practicable for the Company to obtain and maintain a policy or policies of insurance with reputable insurance companies providing the officers and directors of the Company with coverage for losses from wrongful acts, or to ensure the Company’s performance of its indemnification obligations under this Agreement. Among other considerations, the Company will weigh the costs of obtaining such insurance coverage against the protection afforded by such coverage.  In all policies of D&O Insurance, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits as are accorded to the most favorably insured of the Company’s directors, if Indemnitee is a director; or of the Company’s officers, if Indemnitee is not a director of the Company but is an officer; or of the Company’s key employees, if Indemnitee is not an officer or director but is a key employee.
 
(c)           Notwithstanding the foregoing, the Company shall have no obligation to obtain or maintain D&O Insurance coverage at least comparable to that provided by the Insurance Policies if said D&O Insurance is not reasonably available, if, in the reasonable business judgment of a two-thirds ( ) majority of the members of the Board, the premium costs for such D&O Insurance are substantially disproportionate to the amount of coverage provided, if the coverage provided by such D&O Insurance is limited by exclusions so as to provide an insufficient benefit, or if Indemnitee is covered by similar insurance maintained by a parent or subsidiary of the Company.  All decisions as to whether and to what extent the Company maintains D&O Insurance shall be made by the Board in its sole and absolute discretion. In making any determination to eliminate or reduce coverage, the Board shall seek the advice of independent legal counsel or other advisors experienced in the review and analysis of D&O Insurance coverage. The Company will provide the Indemnitee at least 30 days prior written notice of the termination, expiration or non-continuation of any of the Insurance Policies.
 
(d)           Promptly after (i) learning of facts and circumstances which may give rise to a Proceeding, the Company shall notify its D&O Insurance carriers, if such notice is required by the applicable insurance policies, and any other insurance carrier providing applicable insurance coverage to the Company, of such facts and circumstances, or (ii) receiving notice of a Proceeding, whether from Indemnitee, or otherwise, the Company shall give prompt notice to its D&O Insurance carriers, and any other insurance carriers providing applicable insurance coverage to the Company, in accordance with the requirements of the respective insurance policies. The Company shall, thereafter, take all appropriate action to cause such insurance carriers to pay on behalf of Indemnitee, all Expenses incurred or to be incurred, and liability incurred, by Indemnitee with respect to such Proceeding, in accordance with the terms of the applicable insurance policies.
 
 
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13.            Severability .   Nothing in this Agreement is intended to require or shall be construed as requiring the Company to do or fail to do any act in violation of applicable law.  The Company’s inability, pursuant to court order, to perform its obligations under this Agreement shall not constitute a breach of this Agreement.  The provisions of this Agreement shall be severable as provided in this Section 13.  If this Agreement or any portion hereof shall be invalidated on any ground by a final judgment of a court, administrative agency or arbitration panel, having competent jurisdiction, then the Company shall nevertheless indemnify Indemnitee to the fullest extent permitted by any applicable portion of this Agreement that shall not have been invalidated, and the balance of this Agreement not so invalidated shall be enforceable in accordance with its terms. Furthermore, if this Agreement shall be invalidated in its entirety on any ground, then the Company shall nevertheless indemnify Indemnitee to the fullest extent permitted by the Governing Documents, the DGCL and any other applicable law.
 
14.            Limitations on Indemnification . The Corporation shall not be required to hold Indemnitee harmless or provide indemnification pursuant to Section 2:
 
(a)           for Expenses or Liabilities for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or
 
(b)           on account of Indemnitee's conduct if it is finally adjudged by a court or administrative agency, having jurisdiction in the matter, which adjudication is not subject to a further right of appeal, or is admitted by Indemnitee, that such conduct (i) was in bad faith, (ii) was believed by Indemnitee to be opposed to the best interests of the Company, or (iii) in a criminal action or proceeding, constituted conduct that Indemnitee had reasonable cause to believe was unlawful;
 
(c)           if it shall be determined by a final adjudication of a court, or administrative agency, having jurisdiction in the matter, which adjudication is not subject to a further right of appeal, that such indemnification is not lawful;
 
(d)           on account of any suit for an accounting of profits  arising from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute; or
 
(e)           in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) such Proceeding is a Permitted Action, or (ii) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.
 
For purposes of this Agreement, a person shall be deemed to have acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Company, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe such person's conduct was unlawful, if such person's action is based on the records or books of account of the Company or an Other Enterprise, or on information supplied to such person by the officers of the Company or an Other Enterprise in the course of their duties, or on the advice of legal counsel for the Company or an Other Enterprise or on information or records given or reports made to the Company or an Other Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Company or an Other Enterprise. The foregoing shall not be deemed to be exclusive or to limit in any way the circumstances in which a person may be deemed to have met the applicable standard of conduct.
 
 
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15.            Non-attribution of Actions of any Indemnitee to any Other Indemnitee . For purposes of determining whether Indemnitee is entitled to indemnification or advancement of Expenses by the Company pursuant to this Agreement or otherwise, the actions or inactions of any other indemnitee or group of indemnitees shall not be attributed to Indemnitee.
 
16.            Enforcement of this Agreement by Indemnitee .
 
(a)           Any indemnification and advances provided for in Section 2 and Section 7 shall be made no later than fifteen (15) days after receipt of the written request of Indemnitee.  If a claim for indemnification and/or advancement of expenses made under this Agreement, the Governing Documents, the DGCL, any other applicable law, or any other agreement entered into between Indemnitee and the Company subsequent to the execution of this Agreement, is not paid in full by the Company within fifteen (15) days after a written request for payment thereof has first been received by the Company, Indemnitee may, but need not, at any time thereafter institute a Proceeding to enforce and/or recover damages for breach of such rights of indemnification and advancement of Expenses and such Proceeding shall be a Permitted Action for purposes of this Agreement.  It shall be a defense to any such Proceeding (other than a Proceeding brought to enforce a claim for Expenses incurred in connection with any Proceeding in advance of its final disposition) that Indemnitee has not met the standards of conduct which make it permissible under applicable law for the Company to indemnify Indemnitee for the amount claimed, but the burden of proving such defense shall be on the Company and Indemnitee shall be entitled to receive interim payments of Expenses pursuant to Section 6 unless and until such defense may be finally adjudicated by court order or judgment from which no further right of appeal exists.
 
(b)           It is the parties’ intention that if the Company contests Indemnitee’s right to indemnification, the question of Indemnitee’s right to indemnification shall be for a court to decide, and neither the failure of the Company (including its Board, any committee or subgroup of the Board, independent legal counsel, or its stockholders) to have made a determination that indemnification of Indemnitee is proper in the circumstances because Indemnitee has met the applicable standard of conduct required by applicable law, nor an actual determination by the Company (including its Board, any committee or subgroup of the Board, independent legal counsel, or its stockholders) that Indemnitee has not met such applicable standard of conduct, shall create a presumption that Indemnitee has or has not met the applicable standard of conduct.
 
(c)           In the event that any Proceeding is instituted by Indemnitee, the Company or any other person to enforce or interpret this Agreement or any rights of Indemnitee to indemnification or advancement of Expenses (or related obligations of Indemnitee) under the Governing Documents, any other agreement to which Indemnitee and the Company are party, any vote of stockholders or disinterested directors of the Company, the DGCL, any other applicable law or liability insurance policy, the Company shall indemnify Indemnitee against all Expenses incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding to the fullest extent permitted by applicable law in effect on the date hereof and as amended to increase the scope of permitted indemnification.
 
 
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17.            Miscellaneous .
 
(a)            Governing Law .   This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be exclusively governed by, and construed and interpreted in accordance with, the internal laws of the State of Delaware, without giving effect to principles of conflict of law (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
 
(b)            Consent to Jurisdiction and Venue . The Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “ Delaware Court ”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (iv) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.
 
(c)            Entire Agreement . This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter herein and merges all prior agreements and understandings, both written and oral, among the parties hereto, with respect to the subject matter hereof.
 
(d)            Conflict With Governing Documents . To the fullest extent permitted by applicable law, in the event of a conflict between the terms of this Agreement and the terms of the Governing Documents, the terms of this Agreement shall prevail.
 
(e)            Amendment . This Agreement may not be amended, modified, or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment hereto, signed on behalf of each party. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his or her Official Capacity prior to such amendment, alteration or repeal.
 
(f)            Waiver . No failure or delay of either party in exercising any right or remedy hereunder shall operate as a waiver thereof, and no single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power
 
(g)            Construction .   This Agreement is the result of negotiations between and has been reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed in favor of or against any one of the parties hereto.
 
 
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(h)            Notices .   Any notices, demands, requests and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given (i) on the date of delivery if delivered personally, or by facsimile, upon confirmation of receipt, (ii) on the first business day following the date of dispatch if delivered by a recognized next-day courier service, or (iii) on the third business day following the date of mailing if delivered by domestic registered or certified mail, properly addressed, or on the fifth business day following the date of mailing if sent by airmail from a country outside of North America, to Indemnitee at the address shown on the signature page of this Agreement, to the Company at the address shown on the signature page of this Agreement, or in either case as subsequently modified by written notice.
 
(i)            Counterparts .   This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. In the event that any signature to this Agreement is delivered by facsimile transmission or by e-mail delivery of a portable document format (.pdf or similar format) data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.
 
(j)            Successors and Assigns .   This Agreement shall be binding upon the Company and its successors and assigns, and inure to the benefit of Indemnitee and Indemnitee’s heirs, legal representatives and assigns, including with respect to the Company, succession by purchase, merger, consolidation, or sale of all or substantially all of the business and/or assets of the Company. The Company shall require and cause any successor entity to all or substantially all of the business and/or assets of the Company, by written agreement in form and substance satisfactory to the Indemnitee, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform this Agreement as if no succession had taken place.
 
(k)            Subrogation .  In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company to effectively bring suit to enforce such rights.
 
(l)            Headings; References; Pronouns . The section headings contained in this Agreement are for reference purposes only and shall not effect in any way the meaning or interpretation of this Agreement. References herein to section numbers are to sections of this Agreement. All pronouns and any variations thereof shall be deemed to refer to the singular or plural as appropriate.
 
[SIGNATURE PAGE FOLLOWS]

 
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The parties hereto have executed this Agreement effective as of the day and year set forth on the first page of this Agreement.
 
 
Presidential Realty Corporation
 
       
Date
By:
   
       
  Title:      
       
  Address:     
       
AGREED TO AND ACCEPTED:
     
       
       
       
[                                ]
     
 
 
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ATTACHMENT A

INSURANCE POLICIES

Primary Policy :
 
 
Excess Policies :
 
 
Side A Coverage :
 
 
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Exhibit 99.1
 
CLASS A STOCK PURCHASE AGREEMENT
 
STOCK PURCHASE AGREEMENT (this “ Agreement ”) dated as of November 8, 2011 by and between BBJ Family Irrevocable Trust (the “ Class A Purchaser ”) and PDL Partnership (the “ Seller ”), a New York general partnership of which Jeffrey F. Joseph, Steven Baruch and Thomas Viertel are the general partners.
 
WHEREAS, upon the terms and subject to the conditions set forth in this Agreement, the Class A Purchaser wishes to purchase from the Seller, and the Seller wishes to transfer, assign and sell to the Class A Purchaser, an aggregate of 177,013 shares (the “ Class A Shares ”) of Class A common stock, par value U.S. $0.10 per share (the “ Class A Common Stock ”), of Presidential Realty Corporation, a Delaware corporation (the “ Company ”);
 
WHEREAS, simultaneously with the execution, delivery and performance hereof, the Company is selling an aggregate of 250,000 shares (the “ Class B Shares ”) of Class B common stock, par value U.S. $0.10 per share of the Company (the “ Class B Common Stock ”), to the purchasers identified on Exhibit A to the Class B Stock Purchase Agreement of even date herewith by and between the Company and such purchasers (the “ Class B Stock Purchase Agreement ” and the sale of the Class B Shares pursuant thereto, the “ Class B Sale ”), a copy of which is attached hereto as Exhibit A ; and
 
WHEREAS, immediately prior to the execution and delivery of this Agreement and the Class B Stock Purchase Agreement, the board of directors of the Company declared a special dividend of $0.35 per share with respect to all shares of Class A Common Stock and Class B Common Stock, payable on November 28, 2011 to holders of record on November 18, 2011 (the “ Special Dividend ”), but it is the intention and agreement of the Class A Purchaser and the Seller pursuant to this Agreement and of the Class B Purchasers and the Company pursuant to the Class B Stock Purchase Agreement that no Special Dividend shall be payable in respect of the Class A Shares or the Class B Shares to the Class A Purchaser or the Class B Purchasers, respectively, and that neither the Class A Purchaser nor the Class B Purchasers shall be entitled to the Special Dividend in respect of the Class A Shares or Class B Shares, respectively.
 
NOW, THEREFORE, in consideration of the foregoing premises and the mutual agreements contained herein, intending to be legally bound hereby, the parties hereto agree as follows:
 
1.            Sale of Class A Shares .
 
1.1            Transfer of Class A Shares, etc .  The Seller hereby sells, conveys, transfers, assigns and delivers to the Class A Purchaser, and the Class A Purchaser hereby purchases and acquires from the Seller, all right, title and interest (except as provided in the following sentence) of the Seller, legal or equitable, in and to the Class A Shares, free and clear of all liens, mortgages, pledges, charges, security interests, claims or other encumbrances (each, a “ Lien ” and together, “ Liens ”).  The sale of the Class A Shares does not include any right to the Special Dividend payable in respect thereof, and the right to such Special Dividend is retained by the Seller and shall be payable for the benefit of the Seller.  The transfer of the Class A Shares on the date hereof is absolute and is intended by the parties as a sale or other absolute transfer.
 
 
 

 
 
1.2            Payment .  Simultaneously with the execution and delivery hereof, the Class A Purchaser is paying the purchase price for the Class A Shares to be acquired by such Class A Purchaser, which equals US$1.00 per Share or an aggregate US$177,013 (the “ Purchase Price ”) by wire transfer to the account of the Seller set forth in Exhibit B .
 
1.3            Deliverables .  The Seller is delivering to the Class A Purchaser, simultaneous against the delivery by the Class A Purchaser of the Purchase Price as described in Section 1.2 :
 
(i)           Originals of one or more certificates evidencing the Class A Shares to be sold by the Seller, accompanied by duly executed irrevocable stock powers in such form as required by the Company’s transfer agent;
 
(ii)           Evidence, satisfactory to the Class A Purchaser, that all Liens on the Class A Shares, have been removed;
 
(iii)           A duly executed letter of instruction from the Seller, in such form as required by the transfer agent, instructing the transfer agent to transfer the Class A Shares held in the name of the Seller to the Class A Purchaser;
 
(iv)           A duly executed letter from the Company, in such form as required by the transfer agent, authorizing the transfer agent to complete the transfer of the Class A Shares held in the name of the Seller to the Class A Purchaser and to provide a certificate or certificates representing the Class A Shares acquired hereunder by the Class A Purchaser, which certificate or certificates shall be registered in the Class A Purchaser’s name or such name as the Class A Purchaser designates and shall contain the following legends:
 
“THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THEY MAY NOT BE OFFERED OR TRANSFERRED BY SALE, ASSIGNMENT, PLEDGE OR OTHERWISE UNLESS (I) A REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES ACT OF 1933 IS IN EFFECT OR (II) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, WHICH OPINION IS SATISFACTORY TO THE COMPANY, TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.
 
THE ACCUMULATION OF SHARES OF COMMON STOCK BY ANY PERSON, AS DEFINED IN THE COMPANY’S CERTIFICATE OF INCORPORATION, IS RESTRICTED TO 9.2% OF THE NUMBER OF OUTSTANDING SHARES OF COMMON STOCK WITHOUT REGARD TO CLASS.  ANY TRANSFER WHICH CREATES AN ACCUMULATION IN EXCESS OF THAT AMOUNT VIOLATES THE CERTIFICATE OF INCORPORATION AND IS VOID.  IF, NOTWITHSTANDING THE ABOVE, SUCH ACCUMULATION RESULTS, THE SHARES IN EXCESS OF 9.2% ARE SUBJECT TO CERTAIN RESTRICTIONS ON VOTING POWER AND RECEIPT OF DIVIDENDS, AND MAY BE MADE SUBJECT TO PURCHASE BY THE COMPANY.  FURTHER, SUCH PERSON MAY BE REQUIRED TO INDEMNIFY THE COMPANY AGAINST TAXES INCURRED AND OTHER LOSSES RESULTING FROM (1) LOSS OF ITS TAX QUALIFICATION AS A REAL ESTATE INVESTMENT TRUST OR (2) BECOMING A PERSONAL HOLDING COMPANY”
 
 
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(v)            Certified Documents .  The Company shall have delivered to the Class A Purchaser copies of the following documents, duly certified by the Secretary of the Company:
 
A.     Amendments to the employment agreements of Messrs. Steven Baruch, Jeffrey F. Joseph and Thomas Viertel, the forms of which are attached hereto as Exhibits C , D, E , respectively (including the Delgado amendment referred to below, collectively, the “ Amendments ”), duly executed by the Company and each of Messrs. Steven Baruch, Jeffrey F. Joseph and Thomas Viertel, which Amendments, among other things, provides for the deferral of certain payments upon termination of employment to be paid by the Company three years after the date hereof to each of Messrs. Baruch, Joseph and Viertel (collectively, the “ Deferred Payment ”) and an amendment to the employment agreement of Elizabeth Delgado, the form of which is attached hereto as Exhibit K ;
 
B.      An Asset Management Agreement and a Property Management Agreement (collectively, the “ Asset Management Agreements ”) with Signature Community Investment Group, LLC  and/or certain of its affiliates (“ Signature Community ”) in the forms attached hereto as Exhibits F and G , respectively;
 
C.      Resolutions of the Company Board providing, among other things, for: (1) termination of the plan of liquidation adopted by the stockholders of the Company on January 20, 2011 (the “ Plan of Liquidation ”); (2) approval of the transactions contemplated hereby and in the Class B Stock Purchase Agreement; (3) approval of the execution and delivery of the Amendments; (4) declaration of the Special Dividend; (5) election of Nickolas W. Jekogian, III, Alexander Ludwig and Jeffery Rogers as directors effective as of the closing of the sale of the Class B Shares pursuant to the Class B Stock Purchase Agreement and the transactions contemplated hereby, (6) election of the persons identified on Exhibit H attached hereto as the officers of the Company effective as of immediately following the filing by the Company of its Quarterly Report on Form 10-Q for the quarter ended September 30, 2011; (7) approval of the execution and delivery of the Asset Management Agreements and the consummation of the transactions contemplated thereby; and (8) approval of the employment and option agreements between the Company and each of Nickolas W. Jekogian, III, Alexander Ludwig.
 
 
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(vi)            Director Resignations .  Each of Messrs. Steven Baruch, Mortimer M. Caplin and Thomas Viertel shall have resigned as a director of the Company.
 
(vii)           Severance and Similar Payments .  The Company shall have paid in full all severance payments or made arrangements for deferred severance as set forth in Exhibit I attached hereto (the “ Deferred Severance ”) to each employee of the Company entitled thereto and all employment agreements to which the Company is party or by which it is bound shall have been terminated with no further obligation of the Company, other than as provided in the Amendments, which include the Deferred Payment, and any letters with respect to the Deferred Severance.
 
(viii)          Closing Financial Certificate .  The Company shall have delivered to the Class A Purchaser a certificate of the Company’s Chief Financial Officer in the form of Exhibit J hereto;
 
(ix)            Opinion .  The Company shall have delivered an opinion of Morrison & Foerster LLP, counsel to the Company, with respect to termination of the Plan of Liquidation.
 
1.4            Class B Sale. It is a condition to the closing of the sale of the Class A Shares hereunder that the Class B Sale shall be consummated simultaneously.
 
1.5            Closing .  The sale and purchase of the Class A Shares, delivery of the documents set forth in Section 1.3 and other related actions, including the Class B Sale, are being consummated on the date hereof at the offices of Morrison & Foerster LLP, 1290 Avenue of the Americas, New York, New York.
 
2.            Representations and Warranties of the Seller .  The Seller represents and warrants as follows:
 
2.1            Class A Shares Free and Clear .  Upon delivery of the Class A Shares to the Class A Purchaser as provided herein, the Class A Purchaser will acquire good, valid and marketable title to the Class A Shares, free and clear of all Liens.
 
2.2            Organization and Power .  The Seller is a general partnership formed under the laws of the State of New York and has all requisite power and authority to execute, deliver and perform this Agreement.
 
2.3            Authorization, etc .  The Seller has full power and authority to execute and deliver this Agreement and to carry out the transactions contemplated hereby.  This Agreement and any other document or instrument to be executed and delivered by the Seller pursuant hereto have been duly executed and delivered by the Seller.  This Agreement constitutes a valid and binding agreement of the Seller, enforceable against the Seller in accordance with its terms, except that (i) such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
 
 
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2.4            Company Representations .  To the Best Knowledge of the Seller, the representations and warranties of the Company set forth in the Class B Stock Purchase Agreement are true and correct.  For purposes of this Agreement, “Best Knowledge of the Seller” shall mean the best knowledge any of the three general partners, Jeffrey F. Joseph, Steven Baruch and Thomas Viertel, after due inquiry.
 
2.5            No Litigation .  To the Best Knowledge of the Seller, there is no action, suit, proceeding or investigation pending or currently threatened against the Seller or the Company relating to the transactions contemplated hereby and by the Class B Stock Purchase Agreement.
 
2.6            Non-Contravention .  The Seller’s execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not (x) conflict with or constitute a breach of, or default (or, with the giving of notice or lapse of time, would be in default) under, or require the consent of any other party to, any indenture, mortgage, loan or credit agreement, note, contract, lease or other instrument to which the Seller is a party or by which it may be bound, (y) result in any violation of any Law applicable to the Seller or (z) violate the partnership agreement of the Seller as in effect on the date hereof.  No consent, approval, authorization or other order of, or registration or filing with, any Governmental Authority is required for the Seller’s execution, delivery and performance of this Agreement and consummation of the transactions contemplated hereby except where the failure to obtain such consent, approval, authorization or order or to make such filing or registration would not, individually or in the aggregate, affect the parties’ ability to consummate the transactions contemplated hereby.  For purposes of this Agreement, (1) “ Law ” shall mean any law, statute, rule, regulation, ordinance, order, code, common law, arbitration award, judgment, decree, orders or other legal requirement of any Governmental Authority, and the rules of any stock exchange; as applicable; and (2) “ Governmental Authority ” shall mean any federal, state, local or foreign government or any subdivision, authority, department, commission, board, bureau, agency, court or other instrumentality thereof.
 
2.7            No Other Representations .  Except as set forth herein, the Seller is not making any representation or warranty of any kind.
 
3.            Representations and Warranties of the Class A Purchaser .  The Class A Purchaser represents and warrants,  to the Seller, as follows:
 
3.1            Existence .  The Class A Purchaser is a trust, duly organized, validly existing and in good standing under the laws of the State of New York.
 
3.2            Authorization, etc .  The Class A Purchaser has full power and authority to execute and deliver this Agreement and to carry out the transactions contemplated hereby.  This Agreement has been duly executed and delivered by the Class A Purchaser.  This Agreement constitutes a valid and binding agreement of the Class A Purchaser, enforceable against the Class A Purchaser in accordance with its terms, except that (i) such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors’ rights generally and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.
 
 
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3.3            Purchase for Investment, etc .  The Class A Purchaser (a) is capable of evaluating and bearing the economic risks associated with the investment in the Class A Shares; (b) has been provided   the opportunity to ask questions and receive answers concerning the Company and to obtain any additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to verify the accuracy of information furnished to it; and (c) is acquiring the Class A Shares for its own account and not with a view toward, or for resale in connection with, the sale or distribution thereof; provided, however , the Class A Purchaser does not agree to hold the Class A Shares for any minimum or other specific term, and reserves the right to dispose of the Class A Shares at any time in accordance with or pursuant to an exemption under the Securities Act of 1933, as amended (the “ Securities Act ”).  Nothing contained in this Section 3.3 will derogate from the Class A Purchaser’s right to rely on the Seller’s representations and warranties included in this Agreement.
 
3.4            Reliance on Exemptions .  The Class A Purchaser understands that the Class A Shares are being offered and sold to it in reliance on specific exemptions from the registration requirements of the U.S. federal and state securities laws and that the Seller and the Company (in issuing the directive to the transfer agent described in clause (iv) of Section 1.3 hereof) are relying in part upon the truth and accuracy of, and the Class A Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Class A Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of the Class A Purchaser to acquire the Class A Shares.
 
3.5            Transfer or Resale .  The Class A Purchaser understands that the Class A Shares have not been and are not being registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless subsequently registered thereunder or sold, assigned or transferred pursuant to an exemption from registration under the 1933 Act.
 
4.            Post-Closing Obligations .
 
4.1          Special Dividend .  For the avoidance of doubt, the Class A Purchaser waives any and all claims or demands with respect to the Special Dividend.  If, notwithstanding Section 1.1 and this Section 4.1, the Class A Purchaser shall receive payment of the Special Dividend in respect of the Class A Shares, the Class A Purchaser shall promptly pay over such Special Dividend to the Seller.
 
4.2         Voting Agreement.  The Class A Purchaser agrees to vote the Class A Shares for Mr. Robert Feder and/or Mr. Richard Brandt, current independent directors of the Company, as directors of the Company (subject to their desire to remain as directors); provided that each of them continues to qualify as an independent director under applicable rules, including the rules of any exchange on which either the Class A Common Stock or Class B Common Stock may then be listed and until the occurrence of a Capital Event.  “Capital Event” shall mean the receipt by the Company of at least $20,000,000 in cash or property from a capital raising activity including the following:  (a) the sale for cash of shares of the Class A or Class B Common Stock or securities convertible into shares of the Class A or Class B Common Stock; (b) the exchange of shares of Class A or Class B Common Stock for real estate assets consistent with the Company’s status as a REIT; (c) the sale of unsecured subordinated debt instruments of the Company, the proceeds of which may be used to acquire real estate assets which are consistent with the Company’s status as a REIT.  For the avoidance of doubt, the proceeds of any refinancing of any of the Company’s properties or any working capital line of credit shall not be included in a Capital Event.  The valuation of any property shall be supported by independent appraisals of such property.
 
 
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4.3            Further Action .  The Seller agrees to take, or cause to be taken, from and after the date hereof, such further reasonable actions to execute, deliver and file, or cause to be executed, delivered and filed, such further documents and instruments as may be necessary in order to fully effectuate the purposes, terms and conditions of this Agreement, and the Seller hereby agrees to cooperate fully in any such actions as the Class A Purchaser shall reasonably request.
 
5.            Miscellaneous .
 
5.1          Counterparts .  This Agreement may be executed in one or more counterparts, but all such counterparts shall constitute one and the same instrument.
 
5.2          Communications and Notices .  Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile or email (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) three days after deposit with an internationally recognized overnight delivery service, in each case properly addressed to the party to receive the same.  The addresses, facsimile numbers and email addresses for such communications shall be:
 
If to the Seller, c/o Jeffrey F. Joseph:
       
   
Mailing Address:
 
19 Stillman Lane
Pleasantville, New York  10570
   
Email Address:
 
jjoseph@presrealty.com
   
Fax Number:
 
914-948-1307
With a copy to Nilene R. Evans
 
Mailing Address:
 
Morrison & Foerster LLP
1290 Avenue of the Americas,
New York, New York 10104-0050
   
Email Address:
 
nevans@mofo.com
   
Fax Number:
 
212-468-7900
         
If to the Class A Purchaser:
 
Mailing Address:
 
C/O Nickolas W. Jekogian
312 Lewis Rd.
Broomall, PA 19008
   
Email Address:
 
njekogian@scig.co
         
   
Fax Number:
 
212-954-5263
With a copy to Pamela E. Flaherty
 
Mailing Address:
 
Blank Rome LLP
405 Lexington Avenue
New York, New York 10174
   
Email address:
 
pflaherty@blankrome.com
   
Fax Number:
 
917-332-3733
 
 
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5.3            Governing Law .  This Agreement shall be construed in accordance with and governed by the laws of the State of Delaware, without regard to the conflicts of laws and rules thereof.
 
5.4            Integration and Severability .  This Agreement embodies the entire agreement and understanding among the parties hereto, and supersedes all prior agreements and understandings, relating to the subject matter hereof.  In case any one or more of the provisions contained in this Agreement or in any instrument contemplated hereby, or any application thereof, shall be invalid, illegal or unenforceable in any respect, under the laws of any jurisdiction, the validity, legality and enforceability of the remaining provisions contained herein and therein, and any other application thereof, shall not in any way be affected or impaired thereby or under the laws of any other jurisdiction.
 
5.5            Headings .  The headings of the articles, sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part of this Agreement.
 
[Signature Page Follows]
 
 
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first above stated.
 
 
BBJ FAMILY IRREVOCABLE TRUST
 
       
 
By:
/s/ Nickolas W. Jekogian, Jr.
 
   
Nickolas W. Jekogian
 
       
       
 
PDL PARTNERSHIP
 
       
 
By:
/s/ Steven Baruch
 
   
Steven Baruch, general partner
 
       
 
By: 
/s/ Jeffrey F. Joseph
 
   
Jeffrey F. Joseph, general partner
 
       
 
By: 
/s/ Thomas Viertel
 
   
Thomas Viertel, general partner
 
       

 
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Exhibit A

Class B Stock Purchase Agreement
 
 
 

 
 
Exhibit B
Seller Wire Instructions

 
 

 
 
Exhibit C

Amendment to Steven Baruch’s Employment Agreement
 
 
 

 

Exhibit D
Amendment to Jeffrey F. Joseph’s Employment Agreement
 
 
 

 
 
Exhibit E
Amendment to Thomas Viertel’s Employment Agreement

 
 

 

 
Exhibit F
 
Asset Management Agreement
 
 
 

 

Exhibit G
 
Property Management Agreement
 
 
 

 
 
Exhibit H
New Officers
 
Title
 
Person
Chairman of the Board and Chief Executive Officer
 
Nickolas W. Jekogian, III
President, Chief Operating Officer, Principal Financial Officer and Secretary
 
Alexander Ludwig
 
 
 

 

Exhibit I
Deferred Severance Arrangements
 
 
 

 
 
Exhibit J
Closing Financial Certificate
 
 
 

 
 
Exhibit K
Delgado Amendment
 
 
 

 
 

 

Exhibit 99.2
 
Presidential Realty Corporation
180 South Broadway
White Plains, N.Y. 10605 (914) 948-1300
 
NEWS
FOR IMMEDIATE RELEASE
White Plains, New York
November 8, 2011

PRESIDENTIAL REALTY ANNOUNCES STRATEGIC TRANSACTION AND
NEW MANAGEMENT FOR THE COMPANY

PRESIDENTIAL REALTY CORPORATION (OTC). Jeffrey Joseph, President and Chief Executive Officer of Presidential Realty Corporation, a real estate investment trust that currently trades in the over-the-counter market (the "Company"), announced today that the Company had terminated its Plan of Liquidation and completed a strategic transaction (the "Transaction") with Signature Community Investment Group LLC, its founder, Nickolas W. Jekogian, III, and persons introduced to the Company by Mr. Jekogian. The purpose of the Transaction is to permit the Company to continue its operations under a new management team and afford the Company an opportunity for growth. The principal features of the Transaction are as follows:
 
 
·  
Pdl Partnership, a general partnership of which Mr. Joseph and two directors and former officers of the Company are the general partners and that owned approximately 51% of the Company's outstanding Class A Common Stock, has sold 177,013 shares of Class A Common Stock of the Company, representing 40% of the outstanding Class A Shares, to the BBJ Family Irrevocable Trust for a purchase price of $1.00 per share. The Trust was created by Mr. Jekogian for the benefit of members of his family and Nickolas Jekogian, Jr., Mr. Jekogian’s father, is the sole trustee. The holders of the Class A Common Stock have the right to elect two-thirds of the members of the Company’s Board of Directors.
 
 
·  
The Company sold 250,000 shares of newly issued Class B Common Stock, representing 6.8% of the total outstanding Class A and Class B Common Stock of the Company after taking the sale into account, to two individuals introduced to the Company by Mr. Jekogian for a purchase price of $1.00 per share.
 
 
·  
Steven Baruch, Thomas Viertel and Mortimer Caplin resigned from the Company's Board of Directors and Robert Feder resigned as Chairman of the Board. Mr. Jekogian, Alexander Ludwig and Jeffrey Rogers (an individual introduced by Mr. Jekogian) were appointed as directors to fill the vacancies on the Board, with Mr. Jekogian elected as Chairman of the Board. Mr. Joseph, Robert Feder and Richard Brandt will continue as members of the Board of Directors but Mr. Joseph will resign as President and Chief Executive officer of the Company prior to the end of November.
 
 
·  
Mr. Jekogian has been elected as Chief Executive Officer of the Company and Mr. Ludwig has been elected as President and Chief Operating Officer of the Company, to take office before the end of November. The Company has entered into employment agreements with each of them and has issued options to acquire 370,000 shares of Class B Common Stock to each of them at a purchase price of $1.25 per share.
 
 
·  
The Board of Directors declared a special dividend in the amount of $.35 per share on the Company's Class A and Class B Common Stock to be paid on November 28, 2011 to stockholders of record on November 18, 2011 (the "Special Dividend"). The purchasers of the 250,000 Class B shares are not entitled to receive the Special Dividend. Similarly, the purchaser of the Class A shares is not entitled to retain the Special Dividend, which will be paid over to Pdl Partnership.
 
 
 

 
 
 
·  
In order to induce Signature and the purchasers of the Class A and Class B shares to enter into the transactions and to provide liquidity to the Company to pay the Special Dividend, Messrs. Joseph, Baruch and Viertel amended their Employment Agreements with the Company to waive or defer an aggregate of $1,187,500 of the amounts payable to them upon retirement, of which $593,750 was waived permanently and the balance of $593,750 was deferred for a three-year period. The amounts waived and deferred were in addition to the reductions in the compensation otherwise payable to them upon termination of their employment that were agreed to in August 2010 in connection with the approval by the Board of the Plan of Liquidation.
 
 
·  
The Company entered into a Property Management Agreement with Signature to be the exclusive managing and leasing agent for the Company’s Mapletree Industrial Center property in Palmer, Massachusetts and an Asset Management Agreement with Signature to provide oversight of the Company’s Mapletree Industrial Center property and an office building in Hato Rey, Puerto Rico.
 
 
·  
In connection with the Transaction and in light of the plans for the Company presented to the Company’s Board of Directors by Messrs. Jekogian and Ludwig and the Board’s consideration of the alternatives available to the Company and other matters it deemed relevant, including the tax consequences of the Transaction, the Board of Directors determined that the Transaction will be more favorable to the stockholders of the Company than effecting the plan of liquidation and sale of all or substantially all of the assets of the Company, and pursuant to the discretion given to the Board of Directors by the stockholders in the Plan of Liquidation, terminated the Plan of Liquidation approved by the stockholders on January 20, 2011.
 
Mr. Joseph said that the Board of Directors was pleased to welcome Mr. Jekogian, Mr. Ludwig and Mr. Rogers as members of the Board and was looking forward to their leadership in moving the Company forward.
 
Mr. Jekogian said that he and Mr. Ludwig, together with the Signature team, were excited by the opportunity to stabilize the existing assets and contribute to the future growth of Presidential and that he looked forward to working with the Board of Directors.
 
Mr. Jekogian is the founder, owner and President of Signature Community Investment Group LLC, a Delaware limited liability company (together with its affiliates, “Signature”), an integrated real estate company focused on multi family rental properties in urban areas. Mr. Jekogian also has more than 15 years experience developing commercial projects in the New York and Philadelphia Metropolitan areas for retail chains. Mr. Jekogian will not be exclusive to the Company. He will continue to own and operate Signature. The Company’s independent directors will review all transactions between the Company and Signature and the activities of Mr. Jekogian.
 
Mr. Ludwig has provided consulting services for Signature since February 2011. He worked at Urban Real Estate Growth Fund LLC from the beginning of 2009 until October 2011, where he oversaw new real estate investments. Prior to joining Urban Real Estate Growth Fund LLC, Mr. Ludwig worked from 2003 to 2008 for ADG Capital LLC, where he oversaw multiple real estate development projects. Mr. Ludwig previously held various positions in banking where he structured debt and corporate finance transactions. Mr. Ludwig will continue to provide consulting services to and receive compensation from Signature. Mr. Ludwig has agreed to keep the independent directors of the Board advised of his activities for and compensation from Signature.
 
Mr. Rogers has served as President and Chief Operating Officer since February 2005 and as Chief Operating Officer between February 2004 and February 2005 of Integra Realty Resources, Inc., a commercial real estate valuation and counseling firm, where he oversees corporate operations, technology and software initiatives, and all aspects of financial reporting and audit procedures. Mr. Rogers also serves on the Board of Directors of Integra Realty Resources, Inc. and IRR Residential, LLC, an affiliate of Integra Realty Resources, Inc. Since March 2009, Mr. Rogers has served as a Director of TNP Strategic Retail Trust, Inc., a real estate investment trust who files periodic reports under the Securities Exchange Act of 1934. Mr. Rogers also serves on TNP’s audit committee and investment committee.
 
 
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About Presidential Realty
 
Presidential Realty Corporation, a real estate investment trust, is engaged principally in the ownership of income-producing real estate and in the holding of notes and mortgages secured by real estate or interests in real estate.

Forward-Looking Statements
 
Certain statements made in this press release that are not historical fact may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include statements regarding the intent, belief or current expectations of the Company and its management. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among other things, the following:

·  
the risk that new management will not be able to stabilize the Company;
 
·  
the risk that lenders on the Company’s property in Hato Rey, Puerto Rico may foreclose on that property;
 
·  
the risk that the Company may not be able to raise capital or make real estate investments;
 
·  
the risk and expense of stockholder litigation with respect to termination of the plan of liquidation;
 
·  
continuing generally adverse economic and business conditions, which, among other things (a) affect the demand for retail and office space at properties owned by the Company and (b) affect the availability and creditworthiness of prospective tenants and the rental rates obtainable at the properties;
 
·  
continuing adverse conditions in the real estate markets, which affect the ability of the Company to sell, or refinance the mortgages on, its properties and which may also affect the ability of prospective tenants to rent space at these properties;
 
·  
general risks of real estate ownership and operation;
 
·  
governmental actions and initiatives;
 
·  
environmental and safety requirements; and
 
·  
the Company’s ability to continue as a real estate investment trust (“REIT”).

Additional factors that could cause Presidential’s results to differ materially from those described in the forward-looking statements can be found in the Company’s 2010 Annual Report on Form 10-K and its Quarterly Report on Form 10-Q for the quarter ended June 30, 2011. Except as required by law, the Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any changes in the Company’s expectations with regard thereto or change in events, conditions or circumstances on which any such statement is based.

For further information contact :
Nickolas W. Jekogian, III, njekogian@scig.co
Or Jeffrey F. Joseph, jjoseph@presrealty.com
Tel: 1-914-948-1300
 
 
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Exhibit 99.3

PUT AGREEMENT
 
Put Agreement, dated as of November __, 2011 (the “Agreement”), between NICKOLAS W. JEKOGIAN, III (“Jekogian”) and RICHARD ZORN (“Stockholder”).
 
WITNESSETH:
 
WHEREAS, simultaneously with the execution and delivery hereof, Stockholder is purchasing 125,000 shares (the “Shares”) of Class B Common Stock of Presidential Realty Corp., a Delaware corporation (the “Company”), directly from the Company at a purchase price of $1.00 per share;
 
WHEREAS, simultaneously with the execution and delivery hereof, pursuant to terms negotiated by Jekogian, the BBJ Family Revocable Trust is purchasing 177,013 shares of Class A Common Stock of the Company from one of the existing stockholders of the Company, Jekogian is being appointed as a Director and Chief Executive Officer of the Company and Jekogian’s company Signature Community Group LLC is entering into management agreements with the Company and/or its subsidiaries with respect to the Company’s properties;
 
WHEREAS, as an inducement to Stockholder to purchase the Shares, Jekogian is willing to grant to the Stockholder certain “put option” rights with respect to the Shares.
 
NOW, THEREFORE, in consideration of the agreements hereinafter set forth, the parties hereto agree as follows:
 
1.   Commencing on the date that is 30 months after the date hereof (the “Put Start Date”), and for a period of three (3) business Days thereafter, the Stockholder shall have the option to sell (the “Put Option”) to Jekogian all or any portion of the Shares and Jekogian shall have the obligation to purchase from the Stockholder, subject to Section 5, all of the Shares elected to be sold by Stockholder at $1.21 per share (the “Put Option Price”).
 
2.   The Put Option shall be exercisable by Stockholder by giving written notice (a “Put Notice”; and the date such Put Notice is given, the “Put Notice Date”) to Jekogian and the Company any time after the Put Start Date and before 5:00 P.M. on the third business day thereafter, setting forth Stockholder’s exercise of the Put Option and the number of Shares to be sold. The date of the giving of a Put Notice shall be deemed to be the date of exercise of the Put Option, regardless of when the Option Closing Date (as defined below) occurs.
 
3.   The closing of the sale of the Shares indicated in the Put Notice shall take place on a date mutually agreed to by the Stockholder and Jekogian, which shall in any event be no later than five (5) business days following the Put Notice Date (the “Option Closing Date”). The transfer of such Shares shall be accompanied by the Stockholder’s written representation and warranty to the effect that Stockholder has the necessary authority to transfer the Shares and that such Shares are free and clear of all liens and encumbrances.
 
 
 

 
 
 
4.   On the Option Closing Date, payment of the Put Option Price shall be paid by Jekogian, at Stockholder’s option, by wire transfer of immediately available funds or by certified check payable to Stockholder against delivery of the certificates representing the Shares being sold, together with duly executed stock powers endorsed in blank. Concurrently herewith, Jekogian is executing and delivering a promissory note in the form of Exhibit A annexed hereto evidencing his obligation to pay the Put Option Price as aforesaid.
 
5.   The Company’s certificate of incorporation, as amended (the “Certificate”) provides that shares of the Company’s capital stock may not be transferred to any person if the transfer would cause such person to be the owner of more than 9.2% of the Company’s outstanding capital stock. If the number of Shares required to be purchased by Jekogian upon exercise of the Put Option would cause Jekogian to own more than 9.2% of the Company’s outstanding capital stock or otherwise be in conflict with the Company’s Certificate, then the number of Shares is excess of the number which may be transferred to Jekogian under the Certificate shall be deemed “Excess Shares” as defined in the Certificate and the Excess Shares shall be transferred directly to the Company and dealt with in accordance with the Certificate. Notwithstanding the foregoing, Jekogian shall nevertheless be required to pay the full Put Option Price for all of the shares elected to be sold by Stockholder in the Put Notice.
 
6.   All notices required or permitted to be given hereunder must be in writing and will be deemed to have been duly given when (a) delivered by hand (with written confirmation of receipt), (b) sent by fax (with written confirmation of receipt sent concurrently by one of the other methods provided herein)), or (c) received by the addressee, if sent by a nationally recognized overnight delivery service, in each case to the appropriate addresses or fax numbers set forth below (or to such other address, person’s attention or fax number or email address as a party may designate by notice to the other parties given in accordance with this Section 6):
 
 
If to the Company, to it at:
 
Mailing Address: 180 South Broadway
 
White Plains, New York 10605
 
Email Address: jjoseph@presrealty.com
 
Fax Number: 914-948-1327
 
 
With a copy to:
 
Blank Rome LLP
 
The Chrysler Building
405 Lexington Avenue
Attention: Pamela E. Flaherty, Esq.
New York, NY 10174
Facsimile: (917) 332-3733
   
 
If to the Stockholder, to him at:
 
 
[Address]
 
 
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With a copy to:
 
 
Charles M. O'Rourke, Esq.
2 Swenson Drive
Woodbury, NY 11797
Tel. (516) 677-9785
Fax. (516) 677-9786
 
 
If to Jekogian, to him at:
 
c/o Signature Community Group
 
9 East 40 th Street
 
New York, New York 10016
   
 
Blank Rome LLP
The Chrysler Building
405 Lexington Avenue
Attention: Samuel Walker, Esq.
New York, NY 10174
Facsimile: (917) 332-3805
 
7.   This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of laws principles thereof.
 
8.   Any Proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement may be brought against any of the parties only in the courts of the State of New York, County of Nassau, and each of the parties consents to the jurisdiction of such courts (and of the appropriate appellate courts) in any such Proceeding and waives any objection to venue laid therein. Service of process or any other papers in any such Proceeding may be made by registered or certified mail, return receipt requested, pursuant to the provisions of Section 6. The term “ Proceeding ” means any claim, action, investigation, arbitration, litigation or other proceeding.
 
9.   This Agreement shall inure for the benefit of the parties hereto and their respective personal representatives. The obligations of Jekogian under this Agreement shall not be assignable by the Stockholder without the written consent of Jekogian which may be granted or withheld in his sole discretion. The obligations of Jekogian under this Agreement shall automatically terminate with respect to any Shares sold or disposed of by the Stockholder.
 
10.   This Agreement constitutes the complete understanding among the parties with respect to its subject matter and supersedes all prior agreements and understandings with respect to such subject matter. No alteration or modification of any of the provisions of this Agreement shall be valid unless made in writing and signed by Stockholder and Jekogian.
 
11.   This Agreement may be executed in counterparts and all such counterparts taken together shall constitute one and the same document.
 
[Signature Page Follows]
 
 
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date above written.
 
     
 
  NICKOLAS W. JEKOGIAN, III
 
     
     
 
RICHARD ZORN
 
 
[Signature Page to Put Agreement]
 
 
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