0001144204-12-034728.txt : 20120614 0001144204-12-034728.hdr.sgml : 20120614 20120613202222 ACCESSION NUMBER: 0001144204-12-034728 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20120608 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20120614 DATE AS OF CHANGE: 20120613 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRESIDENTIAL REALTY CORP/DE/ CENTRAL INDEX KEY: 0000731245 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 131954619 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-08594 FILM NUMBER: 12906182 BUSINESS ADDRESS: STREET 1: 9 EAST 40TH STREET, SUITE 900 CITY: NEW YORK STATE: NY ZIP: 10016 BUSINESS PHONE: 914-948-1300 MAIL ADDRESS: STREET 1: 9 EAST 40TH STREET, SUITE 900 CITY: NEW YORK STATE: NY ZIP: 10016 8-K 1 v316057_8k.htm FORM 8-K

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): June 8, 2012

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)

9 East 40^th Street, Suite 900, New York, NY		10016
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (914) 948-1300

Not Applicable

(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.
Item 2.03	Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

On June 8, 2012 (the “Closing Date”), Palmer-Mapletree LLC (the “Borrower”), of which Presidential Realty Corporation (the “Company”) is the sole member, closed on a Loan Agreement dated June 8, 2012 (the “Loan Agreement”) with Country Bank for Savings (the “Lender”). The Loan Agreement provides to the Borrower a $500,000 commercial mortgage evidenced by a Commercial Note issued by the Borrower in favor of the Lender (the “Commercial Note”) and a commercial revolving demand line of credit in an amount not to exceed $500,000 evidenced by a Demand Revolving Line of Credit Note issued by the Borrower in favor of the Lender (the “Revolving Note” and together with the Commercial Note, the “Notes”).

The Commercial Note provides for an interest rate of 5% per annum for an initial period of 5 years from the Closing Date (the “Initial Period”). Thereafter, the interest rate will be adjusted during each one month period (the “Adjustment Period”), or any portion thereof, equal to the Lender’s Prime Rate plus 1% with a floor of 5% per annum. During the Initial Period, principal and interest of the Commercial Note shall be payable monthly in the amount of $3,973.24, and thereafter, in such amounts necessary to fully amortize the then unpaid principal existing at the expiration of the Initial Period and each Adjustment Period at the then applicable rate of interest and based upon an amortization period of 15 years from the Closing Date. Any remaining unpaid principal and accrued interest shall be due and payable on June 8, 2027. If any payment due under the Commercial Note is more than fifteen days overdue, a late charge of 5% of the overdue payment shall be immediately due and payable to the Lender. The Borrower may prepay the Commercial Note at any time, subject to a prepayment premium of 5% of the outstanding principal balance if the prepayment occurs during the first year of the Commercial Note, 4% if the prepayment occurs during the second year, 3% if the prepayment occurs during the third year, 2% if the prepayment occurs during the fourth year and 1% if the prepayment occurs during the fifth year. Upon an event of default, the outstanding principal of the Commercial Note shall bear interest at a rate equal to the lesser of (a) the highest interest rate permitted by applicable law or (b) 5% per annum above the interest rate then in effect at the time of the default.

The Revolving Note provides for an adjustable rate of interest of 1% per annum above the Lender’s Prime Rate on all loans advanced under the Revolving Note and shall be payable monthly in arrears. Interest rate changes shall be effective as of each change in the Prime Rate. Advances under the Revolving Note by Lender to Borrow shall be made in Lender’s sole and exclusive discretion. All unpaid principal, interest, and other amounts due under the Revolving Note shall be immediately due and payable on demand and shall be in default upon the failure of the Borrower to pay immediately any amount due, once demand is made. If any payment due under the Revolving Note is more than fifteen days overdue, a late charge of 5% of the overdue payment shall be immediately due and payable to the Lender. Upon an event of default, the outstanding principal of the Revolving Note shall bear interest at a rate equal to the lesser of (a) the highest interest rate permitted by applicable law or (b) 5% per annum above the interest rate then in effect at the time of the default. Funds advanced to Borrower will be utilized by Borrower and the Company for working capital or other business purposes.

The Borrower’s obligations under the Notes are secured by the Borrower’s land, with all buildings and improvements now or hereafter thereon, located at 20 Wilbraham Street, Palmer, Hampden County, Massachusetts pursuant to a Mortgage and Security Agreement (the “Mortgage”).

The foregoing description of the Loan Agreement, Notes and Mortgage are not complete and are qualified in their entirety by reference to the full terms and conditions of the documents filed as exhibits to this Current Report on Form 8-K.

Item 9.01.

Financial Statements and Exhibits

(d)

Exhibits

The following exhibits are filed herewith:

Exhibit		Description
10.1		Loan Agreement between Palmer-Mapletree LLC and Country Bank for Savings dated June 8, 2012+

10.2		Commercial Note issued by Palmer-Mapletree LLC to Country Bank for Savings dated June 8, 2012

10.3		Demand Revolving Line of Credit Note issued by Palmer-Mapletree LLC to Country Bank for Savings dated June 8, 2012

10.4		Mortgage and Security Agreement between Palmer-Mapletree LLC and Country Bank for Savings dated June 8, 2012

+ Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company hereby undertakes to furnish supplementally to the Securities and Exchange Commission copies of any of the omitted schedules and exhibits upon request by the Securities and Exchange Commission.

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: June 13, 2012	By:	/s/ Nickolas W. Jekogian
		Nickolas W. Jekogian
		Chief Executive Officer and Chairman of the Board

INDEX TO EXHIBITS

Exhibit		Description
10.1		Loan Agreement between Palmer-Mapletree LLC and Country Bank for Savings dated June 8, 2012+

10.2		Commercial Note issued by Palmer-Mapletree LLC to Country Bank for Savings dated June 8, 2012

10.3		Demand Revolving Line of Credit Note issued by Palmer-Mapletree LLC to Country Bank for Savings dated June 8, 2012

10.4		Mortgage and Security Agreement by Palmer-Mapletree LLC dated June 8, 2012

EX-10.1 2 v316057_ex10-1.htm EXHIBIT 10.1

LOAN AGREEMENT

THIS AGREEMENT is entered into as of June 8, 2012, by Palmer-Mapletree LLC, a Delaware limited liability company with its principal place of business at 9 East 40^th Street, Suite 900, New York, New York ("Borrower") and Country Bank for Savings, with its main office presently located at 75 Main Street, Ware, Massachusetts ("Lender").

IN CONSIDERATION of the mutual covenants and agreements set forth in this Agreement, Borrower and Lender agree as follows:

ARTICLE I - LOANS

Section 1.1 Notes. Subject to the terms and conditions of this Agreement and that certain Commercial Note of even date herewith issued by Borrower to Lender in the principal amount of FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($500,000.00) (the “Commercial Note”) and a Demand Revolving Line of Credit Note in the maximum amount of FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($500,000.00) (the “Demand Note”), Lender hereby agrees to lend to Borrower and Borrower hereby agrees to borrow from Lender, the aggregate amount not to exceed ONE MILLION AND 00/100 DOLLARS ($1,000,000.00) (the "Loans"), and in consideration therefor, Borrower agrees to pay interest to Lender as set forth in the Commercial Note and the Demand Note (the “Notes”).

Section 1.2 Security. Borrower has entered into that certain Mortgage and Security Agreement (the "Mortgage"); that certain Collateral Assignment of Rents and Leases (the "Assignment"), both of even date herewith, with respect to the property known as 20 Wilbraham Street, Palmer, Massachusetts described in Exhibit A attached hereto (the "Property”), which Mortgage and Assignment secures the Loans and the Obligations as defined in the Mortgage and the Assignment.

ARTICLE II - REPRESENTATIONS AND WARRANTIES

Section 2.1 Representations and Warranties. To induce Lender to make the Loans and enter into this Agreement, Borrower makes the representations and warranties set forth in this Section 2.1. Where representations and warranties are made in or pursuant to this Agreement to "Borrower's Knowledge", such representations and warranties are made based on the actual knowledge of Borrower, after due inquiry (a) of each of the principals of Borrower identified on Exhibit B (the "Principals"), each of the representatives of the Principals identified on Exhibit B, and any attorneys representing Borrower or any of the Principals in connection with the transactions contemplated hereby, and (b) into all information contained in documents under the control of any of the foregoing.

Section 2.1.1 Principals. No Principal has ever been convicted of any crime (other than moving vehicle violations for which the only consequence is payment of a fine or penalty of less than $1,000.00) or ever made an assignment for the benefit of his creditors, filed a voluntary petition (or has been subject to an involuntary petition) under Title 11 of the United States Code, filed any petition or answer seeking, consenting to or acquiescing in any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the federal bankruptcy code or any other bankruptcy or insolvency statute or law, sought or consented to or acquiesced in the appointment of any trustee, receiver, custodian, assignee, sequestrator, liquidator or other similar official of any Principal or of all or any substantial part of any of the assets or properties of any of them.

Section 2.1.2 Borrower. Borrower is a limited liability company duly and validly organized and existing under the laws of the State of Delaware and is duly registered within the Commonwealth of Massachusetts as a foreign limited liability company, has all requisite power and authority to enter into and to perform all of its duties and obligations under this Agreement and all the other loan documents (any and all loan documents by the Borrower are collectively referred to as the “Loan Documents”) and has made all necessary filings relating to its existence or doing business and is qualified or registered to do business in every state in which its maintenance of an office or conduct of business requires such qualification. This Agreement and all of the other Loan Documents have been duly authorized, executed and delivered by Borrower and all consents for this transaction, which consents are required under the organizational documents of Borrower or by any agreement or contract by which Borrower is bound or by law, have been obtained; this Agreement and all of the other Loan Documents to which Borrower is a party are the legal, valid and binding obligations of Borrower, enforceable in accordance with their terms, subject to bankruptcy and other generally applicable laws limiting creditors' rights, and do not violate any provisions of any agreement, law or judicial or other governmental order to which Borrower is a party or to which Borrower is subject; Borrower has no assets other than the Property or such other assets which have been disclosed in writing to the Lender; Borrower has never made an assignment for the benefit of its creditors, filed a voluntary petition (or has been subject to an involuntary petition) under Title 11 of the United States Code, filed any petition or answer seeking, consenting to or acquiescing in any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the federal bankruptcy code or any other bankruptcy or insolvency statute or law, sought or consented to or acquiesced in the appointment of any trustee, receiver, custodian, assignee, sequestrator, liquidator or other similar official of Borrower or of all or any substantial part of any of its assets or properties.

Section 2.1.3 Officers. The sole Managers of the Borrower are Nickolas W. Jekogian and Alexander Ludwig. Borrower has delivered to Lender true, complete and accurate copies of all organizational documents of the Borrower and all amendments thereto, including the Operating Agreement dated as of the date hereof (the " Agreement"); the Agreement have not been terminated, modified or amended, and is in full force and effect.

Section 2.1.4 Property Ownership. Borrower has good, clear, record and marketable title to the Property described in Exhibit A. The Property is subject only to the permitted exceptions (the "Permitted Exceptions") described for the Property in the title policy issued to Lender by Fidelity National Title Insurance Company in connection with the Loans; no event has occurred since the date as of which the Property was appraised for Lender in connection with these Loans which event has a material adverse impact on the fair market value of such Property.

Section 2.1.5 Compliance with Obligations. All consents, approvals or waivers of any Member of Borrower, any Principal or any third party required for the consummation of the transactions contemplated by the Loan Documents have been obtained; neither the execution and delivery of this Agreement and the other Loan Documents nor the performance of obligations set forth therein or the consummation of the contemplated transactions, will (i) vest in any party any right to exercise any election or right of purchase or (ii) constitute any breach, violation or default under any agreement, instrument, order, rule or regulation or other obligation or requirement to which Borrower or any of its property or assets is a party, subject or bound; neither the execution and delivery of this Agreement and the other Loan Documents nor the performance of the terms thereof and consummation of the transactions provided for therein will result in any lien or encumbrance upon any property or asset of Borrower except as contemplated in this Agreement and the other Loan Documents.

Section 2.1.6 Financial Condition. The factual basis for the most recent written appraisals prepared (or updated) and submitted to Lender by Borrower in connection with the Loans is correct to Borrower's Knowledge; all other written statements, financial or otherwise, submitted by Borrower and each of the Principals to Lender in connection with the transactions evidenced by the Loan Documents and (with respect to financial information) pertaining to historical conditions or performance as opposed to projections or forecasts are, true, complete, and correct in all material respects; each financial statement fairly presents the financial condition of the subject thereof and no material adverse change has occurred since the date of such statements with respect to Borrower; Borrower has delivered to Lender pro forma operating statements and a pro forma balance sheet; any financial statements which are on an accrual basis contain adequate reserves and notations for all significant accruals or contingencies and fairly represent the financial condition of the person, entity or property to which they pertain as of the date thereof; since the dates of any financial statement or certification delivered to Lender, Borrower and Principals have not experienced any material adverse change in its business, condition, assets, operations or prospects, and no event has occurred that might have such an effect; and there are no material liabilities, contingent or otherwise, or any material unrealized or anticipated losses from unfavorable commitments, or any adverse changes in the position of Borrower and Principals or the Property that have not been disclosed to Lender in writing.

Section 2.1.7 Leases and Property Agreements. Attached as Exhibit C are all of the true and correct leases, subleases and other occupancy agreements affecting the Property as shown on the rent roll on Exhibit C (the “Leases”); Borrower has delivered to Lender true and complete copies of all leases, subleases and other occupancy agreements affecting the Property; the leases and subleases are in full force and effect; the leases and subleases represent the entire agreements with the tenants thereunder and there are no other agreements, oral or written, relating to or granting any occupancy rights in or to the Property; except as shown on Exhibit C, no tenant or subtenant is in default of any payment or other material obligation under any of the leases or subleases; except as shown on Exhibit C, there is no circumstance which with the passage of time or the giving of notice, or both, would ripen into a default of any payment or other material obligation by any tenant or subtenant, and no tenant or subtenant intends to vacate or default; the rents set forth in the Leases are being collected on a current basis; no tenant or subtenant has paid rent more than one (1) month in advance (except for security deposits and last months' rents aggregating not more than two months' rent); no renewals or extension options have been granted to any tenant or subtenant except as set forth in the Leases; no tenant is entitled to rental concessions or abatements except as set forth in the Leases; there are no unsatisfied construction requirements or other pre-conditions to the payment of full rent under the leases or subleases, and there are no unsatisfied leasing commissions with respect to the leases or subleases; no tenant or subtenant has been granted or is entitled to a right or option of first refusal to purchase or acquire the Property or any portion thereof or interest therein except as disclosed in the Leases; Borrower is not in default under any of the leases; Borrower has not received any notice from any tenant under any of the subleases claiming that it is in material default of its obligations under any of the leases, which default if substantiated would entitle such tenant to a set-off or deduction in its rent or a termination of its lease; Borrower has entered into no other contract or agreement affecting the Property not terminable on thirty (30) days' notice except as shown on Exhibit D. All the contracts and agreements listed on Exhibit D (the "Property Agreements") are in full force and effect, represent the entire agreement of the parties thereto with respect to the Property, and are not terminable without cause. There is no default of any payment or other obligation under the Property Agreements by any party thereto and there is no circumstance which with the passage of time or the giving of notice, or both, would ripen into a default of any payment or other obligation under any of the Property Agreements by any party thereto. Borrower has delivered true, correct and complete copies of the Property Agreements to Lender.

Section 2.1.8 Improvements. There are no material structural defects in the improvements located on the Property (the "Improvements") or in installed systems in the Improvements and the same are in good working order; except as disclosed on surveys, plans, or in opinions or in reports delivered by Borrower to Lender, (i) no building or other improvement not included in any part of the Property relies on any part of the Property to fulfill any zoning, building code or other governmental or municipal requirements or for structural support or the furnishing to such building or improvement of any essential building system or utilities and (ii) no building or improvement on the Property relies on any building, improvement or other land not included in any part of the Property to fulfill any zoning, building code or other governmental or municipal requirements or for structural support or the furnishing to such building or improvement of any essential building system or utilities; the plans and surveys delivered by Borrower to Lender are true and correct and accurately reflect the Improvements.

Section 2.1.9 Utilities. The Property is connected to and serviced by water, solid waste and sewage disposal, storm drainage, fuel for heating and/or air conditioning, electricity and communication facilities which are convenient to the Property and adequate for the current or intended use of the Property.

Section 2.1.10 Insurance. Borrower has delivered to Lender certified copies of each general liability and casualty insurance policy maintained by Borrower, together with a statement for each such policy containing a brief description of any claims pending with respect to such policy; Borrower has delivered to Lender certificates issued by the insurer with respect to each such insurance policy; each of such policies is valid and in full force and effect, without any existing default or condition or fact which, with notice or lapse of time or both, would constitute a default; each of such policies names Lender as loss payee or as an additional insured, as its interests may appear; except as disclosed on such statement, there is no pending claim, action or proceeding arising out of or based upon any of the policies identified.

Section 2.1.11 Compliance With Law. The use and operation of the Property is authorized by, and in compliance with, all zoning, land-use, environmental, building, fire, health, handicap, disability, labor and safety laws, ordinances, rules, regulations, orders and administrative interpretations applicable to the Property; and all licenses, permits or other approvals required for the construction, use and occupancy of the Property have been validly issued by the appropriate authority and are in full force and effect.

Section 2.1.12 Environmental Condition. Borrower has delivered to Lender true and complete copies of all material existing site assessment reports and certifications within its possession or control with respect to the presence or absence of Hazardous Materials on the Property, to the best of the Borrower’s knowledge, and after due inquiry; and except as set forth in such environmental reports provided in writing to Lender, there are no surface or subsurface soil, water, mineral, chemical or environmental conditions which, or which with the passage of time will, require removal or encasement of materials or reporting to any governmental authority or constitute a nuisance, a violation of any federal, state or local environmental protection, maintenance, preservation or improvement statute, regulation or ordinance or otherwise adversely affect the use and operation of the Property; except for fuels and other materials used in the ordinary course of construction of the Improvements, neither Borrower, nor any Principal, any subsidiary, partner, tenant, subtenant or predecessor in interest of any of the foregoing has ever generated, stored, handled or disposed of any Hazardous Materials at the Property or permitted the same. There has been no discharge, spillage, uncontrolled loss, seepage or filtration of any Hazardous Materials at the Property, at any time, by anyone else; the Property does not lie in a flood plain or similar zone which is subject to restrictions on structures or use under applicable laws or regulations.

Section 2.1.13 Litigation. There is no litigation pending or, to Borrower's Knowledge, threatened, which does or may materially affect the Borrower, any Principal, any tenant, or the Property.

Section 2.1.14 Governmental Actions. There are no condemnation, zoning, environmental or other regulatory proceedings, either instituted or planned to be instituted, that would detrimentally affect in any material respect the use, occupancy and operation of the Property or the value of the Property; there are no commitments to or agreements with any federal, state or local governmental authority or agency affecting the Property in any material respect; there are no unpaid special assessments filed, pending or, to Borrower's Knowledge, proposed, against the Property or any portion thereof, including, without limitation, any street improvement or special district assessments, except as set forth in the Permitted Exceptions, or otherwise approved by Lender; and every filing by Borrower required to be made by any federal, state or local tax authority with respect to any income, sales, excise or other similar tax has been timely and completely filed and each such tax has been timely and completely paid.

Section 2.1.15 Commissions. Borrower has not agreed to pay any brokerage fees, finder's fees or other fees or commissions with respect to the real estate transaction contemplated by this Agreement, and no person is entitled, or intends to claim that it is entitled, to receive any such fees or commissions in connection with such transaction.

Section 2.1.16 Related Party Transactions. Except only as has been disclosed in writing to the Lender, including managers or principals of Borrower, including any Signature Community entity or related entity, Borrower neither has any contractual relationship or arrangement with nor has made any payment to (i) any Principal, or any Affiliate of Borrower or any Principal or (ii) any entity in which any such Principal or Affiliate has a substantial beneficial interest. None of those parties designated in clauses (i) and (ii) above has entered into any transaction, arrangement or agreement with any entity in which Borrower has a substantial beneficial interest. The term "substantial beneficial interest" as used in this Agreement shall mean legal or equitable ownership, directly or indirectly, by any one person or entity of more than ten percent (10%) of the beneficial interests in an entity or by any three or more persons of twenty-five percent (25%) or more of such beneficial interests. No loans or other advances have been made to Borrower from any of the parties designated in clauses (i) or (ii), or from Borrower to any such person.

Section 2.1.17 No Omissions. None of the representations or warranties in this Agreement nor any document, statement, certificate, schedule or other information furnished or to be furnished by Borrower or any Principal to Lender (or to any appraiser, engineer, architect, accountant or other employee, agent or contractor retained or employed by Lender) pursuant to this Agreement or in connection with the Notes or the transaction contemplated herein contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements of facts contained therein not misleading.

Section 2.2 Liability. Claims for breaches of the representations and warranties made in Section 2.1 shall survive the issuance of the Notes, notwithstanding any investigation which Lender may make or be entitled to make concerning the subject matter of any representation or warranty. In addition, Borrower agrees to indemnify Lender against and hold Lender harmless from all losses, costs, damages, liabilities and expenses (including without limitation reasonable attorneys fees) caused by any breach of any representation or warranty hereunder.

ARTICLE III - COVENANTS

Section 3.1 Operations. Borrower shall comply with the following provisions with respect to operation of the Property.

Section 3.1.1 Maintenance. Borrower shall maintain and repair or cause to be maintained and repaired the Improvements in good condition and repair, ordinary wear and tear excepted, consistent with other comparable well maintained buildings and improvements, and will promptly make or cause to be made any repairs and replacements necessary to comply herewith, whether interior or exterior, structural or non-structural, ordinary or extraordinary, and foreseen or unforeseen. All repairs made or caused to be made by Borrower shall be of a quality and class which will maintain the quality and standards of the Improvements as originally constructed, as the quality thereof may be upgraded by renovation or replacement, ordinary wear and tear excepted. Borrower shall in any event make or cause to be made all repairs necessary to avoid any structural damage or injury to the Improvements and to keep the Improvements (or cause the Improvements to be kept) in a proper condition for their intended uses. All work shall be done in a good and workmanlike manner, and in compliance with all applicable requirements. Borrower shall constantly keep the Improvements (or cause the Improvements to be kept) completely fitted, equipped and furnished, in a manner consistent with the operating practices applicable to comparable buildings and improvements.

Section 3.1.2 The Leases and Other Agreements. No lease or other agreement for occupancy of all or part of the Property or other contract or agreement relating to the Property or any part thereof, whether now existing or hereafter arising (the "Leases") shall be entered into, extended, severed, terminated or otherwise modified or amended in any material respect without the prior consent of Lender, which may be withheld in Lender's sole discretion (unless same is on arm length terms in which case no consent of Lender shall be required for any Leases or amendment or termination of Leases). Borrower shall faithfully perform all of its obligations under the Leases. Borrower shall hold all tenant security deposits in compliance with applicable legal requirements. Borrower shall timely comply in all material respects with all of the terms, agreements, obligations, covenants, restrictions and warranties expressed as binding upon it under the Leases. Borrower shall not cause or permit any act or omission to occur at the Property if such act or omission gives rise to the right of any other party to any such lease, contract or agreement to purchase all or any portion of the Property. Decisions by Borrower in its capacity as landlord under the Leases to grant or withhold its approval or consent, or to evidence its satisfaction or dissatisfaction, whenever such approval, consent or satisfaction is required under the Leases, or to exercise or not to exercise any option or election or right of termination, shall require the prior consent of Lender, which consent may be withheld in Lender's sole discretion. Promptly after execution of each new Lease, Borrower shall provide Lender with a subordination, non-disturbance and attornment agreement in form and content satisfactory to Lender. Borrower shall faithfully perform all of its obligations under the Property Agreements and any other contract or agreement relating to the Property or any part thereof hereafter arising, and shall use best efforts to cause the other parties to such agreements faithfully to perform their obligations thereunder. Decisions by Borrower to grant or withhold its approval or consent, or to evidence its satisfaction or dissatisfaction, whenever such approval, consent or satisfaction is required under such agreements shall require the prior consent of Lender, which consent may be withheld in Lender's sole discretion. Borrower shall not extend, sever, terminate or otherwise modify or amend in any material respect any of such agreements without the prior consent of Lender, which may be withheld in Lender's sole discretion.

Section 3.2 Transfers.

Section 3.2.1 Borrower’s Legal Existence. Borrower shall at all times remain in legal existence and duly qualified to own property and transact business in all locations where its property is owned or its business is conducted. Borrower shall at all times remain a single-purpose entity which shall engage in no business other than the ownership and operation of the Property.

Section 3.2.2 Operating Agreement. The Borrower has delivered to the Lender its Operating Agreement dated as of the date hereof (the “Operating Agreement”). The Operating Agreement shall not be amended nor terminated, nor shall any provision thereof be waived, without the prior consent of Lender. The Borrower shall at all times remain in legal existence and duly qualified to own property and transact business in all locations where its property is owned or its business is conducted. There shall be no substitute or additional members of Borrower and no transfer, pledge or issuance of direct or indirect interests in Borrower or its members without the prior consent of Lender, which consent may be given or withheld in Lender's sole and absolute discretion.

Section 3.3 Accounting.

Section 3.3.1 Financial Procedures. Borrower shall establish with Lender's approval guidelines concerning financial operating procedures, including the establishment and location of bank accounts, maintenance of account balances, signatories, borrowing authorities and procedures and other similar matters. Such guidelines may be amended from time to time by Borrower with the written consent of Lender, which consent shall not be unreasonably withheld or delayed and shall comport with general accounting procedures. Borrower shall comply with such guidelines as they are in effect from time to time.

Section 3.3.2 Books and Records. Borrower shall keep or cause to be kept on an accrual basis full, true and complete books of account in which shall be entered fully and accurately all transactions of Borrower. The fiscal year of Borrower shall be the calendar year and the Borrower's books shall be kept on that basis. All of Borrower's books of account, an executed copy of the Operating Agreement, a complete list of the names and addresses of its members, its income tax returns, the tax returns of each partnership or corporation in which it holds any interest and all contracts, files, correspondence and other books, records and papers of Borrower and any wholly-owned subsidiary entities shall at all times be maintained at the principal office of Borrower and shall be available during normal business hours for the inspection and examination of Lender or its representatives, who shall have the right to make copies thereof at its own expense. Borrower shall promptly and fully provide all further information and answer all inquiries which Lender may make or request from time to time.

Section 3.3.3 Financial Statements: During the term of the Loans, the Borrower shall keep books of account in accordance with generally accepted accounting principals. The Borrower shall cause to be delivered financial statements and information as required by the Lender, in form and substance satisfactory to the Lender, including, without limitation:

(a)

Updated Property Summary Sheet (on Bank form), completed, signed and dated, for any real estate in which the Borrower has an interest;

(b)

Complete copies of annual federal income tax returns, signed, dated and filed, for any corporation, realty trust and/or partnership in which the Borrower has an interest; and

(c)

Any further financial information as the Bank may require from time to time, in its sole and exclusive discretion.

ARTICLE IV - DEFAULT AND REMEDIES

Section 4.1 Events of Default. Any one or more of the following acts, events or circumstances shall constitute an Event of Default:

Section 4.1.1 Default Under Loan Documents. The failure to pay or perform any amount or obligation under the Notes, the Mortgage, this Agreement or any other of the Loan Documents.

Section 4.1.2 Representations and Warranties. The failure of any representation, warranty or certification by Borrower to be true and complete in any material respect.

Section 4.1.3 Transfers of Interest. The sale, encumbrance or disposition of the Property, or the transfer of any direct or indirect interest in Borrower in violation of this Agreement or any agreement governing or pertaining to the Borrower.

Section 4.1.4 Other Defaults Under this Agreement. Any failure by Borrower to observe or perform any obligation to be performed by it under this Agreement.

Section 4.1.5 Defaults Under Other Loan Documents. Any default under the Notes or any other Loan Document.

Section 4.1.6 Dissolution. Any dissolution of Borrower.

Section 4.1.7 Defaults Under Other Agreements. Any failure by Borrower to perform any obligation to be performed by it under any obligation or agreement by which it is bound, or any failure by any affiliate of Borrower to perform any obligation to be performed by it under any obligation or agreement by which it is bound affecting the Property.

Section 4.1.8 Voluntary Bankruptcy. Any of the following acts or omissions by Borrower: (i) admission in writing that it is unable to pay its debts as such debts become due; (ii) making of an assignment for the benefit of its creditors; (iii) filing of a voluntary petition under Title 11 of the United States Code; (iv) filing of any petition or answer seeking, consenting to or acquiescing in any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the federal bankruptcy code or any other bankruptcy or insolvency statute or law; (v) seeking, consenting to or acquiescing in the appointment of any trustee, receiver, custodian, assignee, sequestrator, liquidator or other similar official of Borrower or of all or any substantial part of any of its assets or properties.

Section 4.1.9 Involuntary Bankruptcy. The commencement of any proceeding against Borrower seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under the present or any future federal bankruptcy code or any other present or future applicable federal, state or other bankruptcy or insolvency statute or law, or the appointment, without the consent or acquiescence of the Borrower, of any trustee, receiver, custodian, assignee, sequestrator, liquidator or other similar official of such person or of all or any substantial portion of its properties, unless such appointment shall not have been vacated within thirty (30) days after such appointment or, if such appointment is stayed on appeal or otherwise, within thirty (30) days after the expiration of any such stay.

Section 4.2 Remedies. If and for as long as any Event of Default exists, Lender shall have and may exercise, without notice except as otherwise provided herein, concurrently, successively or in such other manner as Lender may elect, all remedies which may be available at law or in equity, including, without limitation, those hereafter expressly enumerated in this Section 4.2. Except as may be required by law, Lender shall not be required to accept the tender of cure of any Event of Default after the exercise of any remedy has been commenced.

Section 4.2.1 Acceleration. Lender may declare the entire principal sum of the Notes, together with all accrued but unpaid interest and any other charges to be due and payable immediately or at such time and under such conditions as Lender may elect by notice to Borrower, and may exercise any or all of its remedies under this Agreement, the Security Instruments and the other Loan Documents.

Section 4.2.2 Management of Property by Receiver. Lender shall have the right, but not the obligation, to appoint a receiver to take over all or any part of the control and management of the Property. Upon receipt of notice that Lender elects to exercise such right, Borrower will turn over to Lender's receiver all check books, books of account, contracts, files, records and all other papers of Borrower, and all funds belonging to, deposited with or held by Borrower, and the Principals of Borrower will refrain from taking any further actions with respect to any aspect of control or management which Lender's receiver has taken over; provided, however, that Borrower and the Principals of Borrower will cooperate fully with Lender's receiver and will take or confirm such actions as Lender's receiver may request, including without limitation executing any instruments or other documents which Lender's receiver may request in the exercise of its powers hereunder. Borrower hereby grants to Lender or any appointed receiver the right to take any action which Borrower might take in connection with the control or management of its business and affairs (whether or not otherwise permitted by this Agreement), including, without limitation, executing in the name of Borrower deeds of trust, security agreements, assignments, assumptions, releases and other documents or instruments, whether or not of the same kind. All expenses reasonably incurred by Lender or its receiver in exercising the rights and powers granted by this paragraph shall be reimbursed by Borrower upon demand.

Section 4.2.3 Specific Enforcement - Injunctions. Many of the rights of Lender under this Agreement, whether arising from an Event of Default or otherwise, relate to unique assets and to restrictive covenants, including the right to preclude any Principal from taking various actions. Borrower and Lender recognize that Lender will not obtain the full benefit of its bargain through the receipt of money damages but must receive specific performance of the terms of this Agreement. Accordingly, Borrower and Lender hereby express their intention that a court award equitable relief and enforce specifically the rights of Lender under this Agreement.

All rights and remedies accorded to Lender by this Agreement, by the Mortgage and the other Loan Documents and by law are separate and cumulative and not alternative and may be pursued separately, successively or concurrently at Lender's sole option. All covenants hereof shall be construed as affording to Lender rights additional to and not exclusive of the rights conferred under any provision of any applicable state or local law.

ARTICLE V - ASSIGNMENT

Section 5.1 Lender Transfers. The Notes may be negotiated or assigned in whole or in part by Lender from time to time. The term "Lender" as used in this Agreement shall refer to the holder or holders of the Notes from time to time. Lender shall have the right to assign, participate, syndicate or transfer any or all of its investment in the Loans, including sales through one or more private placements or publicly registered offerings. Borrower shall, without expense to Borrower, cooperate with Lender to effect such transactions, provide such information as may be necessary, and execute documentation as requested by Lender in connection therewith, including amendments or restatements of the Loan Documents so long as such amendments or restatements do not alter the essential business terms thereof.

ARTICLE VI - GENERAL PROVISIONS

Section 6.1 Notes to Be Debt. It is expressly acknowledged and agreed that (i) the Notes are intended to be and shall constitute indebtedness of Borrower, (ii) the holder or holders of the Notes shall be a debt holder and (iii) Borrower and the holder or holders of the Notes shall treat the Notes as indebtedness on all tax returns or other reports at any time filed with the United States Internal Revenue Service and any state or local tax authorities. Lender shall not be a partner in or have any liability in connection with any obligation or liability of Borrower. Proceeds from the Notes, however may be utilized by Borrower’s affiliate company, Presidential Realty Corporation.

Section 6.2 Notices. Any notice, exercise of option or election, communication, consent, approval, expression of satisfaction, request or other document or demand required or permitted under this Loan Agreement shall be in writing, shall be deemed delivered on the earlier of (a) the date received, or (b) one (1) day after delivery to Federal Express or another guaranteed overnight delivery service, postage prepaid, addressed as follows:

(i) To Borrower:		Palmer-Mapletree LLC
		c/o Alexander Ludwig, Manager
		9 East 40^th Street, Suite 900
		New York, NY 10016


(ii) To Lender:		Country Bank for Savings
		75 Main Street
		Ware, MA 01082-2003
		Commercial Loan Department

Any party may, from time to time, change the address at which such written notices or elections, communications, requests, or other documents or demands are to be mailed, by giving the other party ten (10) days' written notice of such changed address in the manner hereinabove provided.

Section 6.3 Captions. Any titles or captions contained in this Agreement are for convenience of reference only and shall not be deemed a part of this Agreement or play any role in the construction or interpretation hereof.

Section 6.4 Pronouns; Singular and Plural. The pronouns herein shall be deemed to refer to the masculine, feminine and neuter, and all singular words shall include the plural and vice versa, as the identification of persons, entities or things intended to be included therein may require.

Section 6.5 Binding Effect. Except as otherwise herein provided, this Agreement shall be binding upon and inure to the benefit of the parties hereto, their heirs, executors, successors and all persons hereafter having or holding any interest in Borrower or the Notes. Without limiting the foregoing, in the event that Borrower should be dissolved and reconstituted one or more times in accordance with the terms of the Operating Agreement, the term "Borrower" shall mean and refer to Borrower as so reconstituted from time to time.

Section 6.6 Entire Agreement. This Agreement, including all Exhibits hereto, and the Notes contain the entire understanding between the parties and supersede any prior understanding and agreements between them with respect to the subject matter hereof. There are no agreements, arrangements or understandings, oral or written, between the parties hereto relating to the subject matter of this Agreement which are not fully expressed in this Agreement, in the Notes or in the ancillary documents contemplated by this Agreement.

Section 6.7 Severability. If for any reason any word, phrase or provision of this Agreement or of the Notes or any of the other Loan Documents is held to be invalid or unenforceable by final decree of any court of competent jurisdiction, all other words, phrases and provisions hereof shall remain in full force and effect, and such court shall reform such portion so as to give maximum permissible effect to the intention of the parties as expressed therein.

Section 6.8 Waivers and Amendments. No waiver or consent shall be effective under this Agreement, the Notes or any other Loan Document unless it is in writing, unambiguous and executed by the party against which enforcement thereof is sought. A waiver or consent shall be effective only with respect to the specific event or circumstances for which it is given and not any subsequent occurrence, unless otherwise expressly stated therein. This Agreement may be amended only by a written instrument executed by Borrower and by Lender.

Section 6.9 CHOICE OF LAW AND FORUM. THE INTERPRETATION, CONSTRUCTION AND ENFORCEABILITY OF THIS AGREEMENT AND OF THE NOTES SHALL BE GOVERNED IN ALL RESPECTS BY THE LOCAL LAWS OF THE COMMONWEALTH OF MASSACHUSETTS WITHOUT REGARD TO ANY CHOICE OF LAW PRINCIPLES. ANY LEGAL PROCEEDINGS COMMENCED BY LENDER OR BORROWER ARISING OUT OF ANY OF THE TRANSACTIONS OR OBLIGATIONS CONTEMPLATED BY THIS AGREEMENT OR THE NOTES SHALL BE BROUGHT IN THE STATE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS. THE LENDER AND THE BORROWER EACH IRREVOCABLY AND UNCONDITIONALLY (A) SUBMITS TO THE JURISDICTION OF SUCH COURTS AND AGREE TO TAKE ANY AND ALL FUTURE ACTION NECESSARY TO SUBMIT TO SUCH JURISDICTION, (B) WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH COURTS AND (C) WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

Section 6.10 Lender's Costs. Borrower shall reimburse Lender on demand for any and all payments made or costs incurred in connection with the Loans, the preparation, interpretation and enforcement of the Loan Documents, or any refinancing occurring pursuant to this Agreement, including, without limitation, attorneys' fees and disbursements (including such fees and disbursements incurred in appellate, bankruptcy or insolvency proceedings), any mortgage taxes, intangibles tax, sales tax, transfer tax, title insurance premiums, engineering costs and financing fees and commissions. Borrower shall indemnify Lender against any cost, claim, loss, liability, damage, or expense (including attorneys' fees) in connection therewith. All payments and costs required to be paid to Lender under this Section 6.10 shall bear interest at the rate of default interest (as defined in the Notes) from the day of billing until paid.

Section 6.11 Litigation Expenses. Borrower shall indemnify Lender against any cost, claim, loss, liability, damage or expense (including attorneys’ fees) in connection with any litigation with any third party relating to the Loan Documents.

Section 6.12 Estoppels. Within ten (10) days following a written request from the Lender, the Borrower shall deliver to the Lender a statement as to (a) whether this Agreement, the Notes and ancillary agreements contemplated in this Agreement are in full force and effect and have not been amended, (b) the unpaid balance of principal under the Notes, including the date and amount of the last payment of any of such amounts and (c) whether there exists any Event of Default or, any circumstance which with the giving of notice, the passage of time or both would constitute an Event of Default.

Section 6.13 Exculpation of Lender. Notwithstanding anything to the contrary contained in this Agreement or any Loan Document, neither Lender nor any employee, agent, officer, director or shareholder of Lender shall have any personal liability with respect to the performance by Lender of its obligations under this Agreement, any Loan Document or the transaction evidenced thereby. The sole recourse of Borrower (or any person or party claiming by, through or under Borrower) shall be to Lender's interest under the Loan Documents. Neither Borrower, nor any person claiming by, through or under Borrower, shall seek to obtain any deficiency or any money judgment against Lender or any employee, agent, officer, director or shareholder of Lender.

Section 6.14 Counterparts and Execution. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which shall constitute one (1) Agreement. The signature pages from such counterparts may be detached from and reattached to other counterparts in order better to evidence the execution of this Agreement by all of the parties hereto.

Section 6.15 Demand Note. THE BORROWER COVENANTS ACKNOWLEDGES AND AGREES that the Demand Note shall, at all times, be due and payable ON DEMAND, notwithstanding anything to the contrary herein or in any other document.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement under seal effective as of the day and year first above written.

Witness:	PALMER-MAPLETREE, LLC


	By:	/s/ Nickolas W. Jekogian
		Nickolas W. Jekogian, Manager

	By:	/s/ Alexander Ludwig
		Alexander Ludwig, Manager



	COUNTRY BANK FOR SAVINGS


	By:	/s/ Phil B. Goncalves
		Phil B. Goncalves, First Vice President

EX-10.2 3 v316057_ex10-2.htm EXHIBIT 10.2

COMMERCIAL NOTE

FOR VALUE RECEIVED, the Undersigned, Palmer-Mapletree LLC, a Delaware limited liability company with its principal place of business at 9 East 40^th Street, Suite 900, New York, New, York (the "Borrower") promises to pay to the order of Country Bank for Savings ("Lender"), at the Lender's main office presently located at 75 Main Street, Ware, Hampshire County, Massachusetts, or at such other place as Lender may designate in writing, the principal sum of FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($500,000.00), plus interest, all as hereinafter set forth ("Note").

INTEREST

Interest from the date hereof upon the unpaid principal balance from time to time outstanding shall accrue at an initial fixed rate of five and 00/100 percent (5.00%) per annum for an initial period of five (5) years, commencing from the date hereof (the “Initial Period”), and thereafter, during each succeeding one (1) month period ("Adjustment Period"), at a fixed rate to be determined as of the first day of each such Adjustment Period and equal to Lender's Prime Rate on that date plus one and 00/100 percent (1.00%) per annum, provided, however, at no time, shall the interest rate charged in connection with this Note be less than five and 00/100 percent (5.00%) per annum. "Prime Rate" as used herein shall mean the "Prime Rate" as identified and published by the Wall Street Journal under its listing of Money Rates (and where more than one "Prime Rate" is so published, the highest rate shall be used herein). If the above Prime Rate index should no longer become available, Lender shall select a new index which is based upon comparable information and shall notify the Undersigned of the change. Interest hereunder shall be computed on the basis of a three hundred sixty (360) day year and shall accrue and be paid for the actual number of days any principal hereunder remains unpaid.

REPAYMENT

Principal and interest due Lender hereunder shall be repayable as follows:

Commencing one (1) month from the date hereof and on the same day of each month during the Initial Period, payments of principal and interest in the amount of $3,972.92;

Thereafter, and on the same day of each succeeding month during each Adjustment Period, payments of principal and interest in such amounts as are necessary to fully amortize the (then) unpaid principal hereunder existing on the first day of each such Adjustment Period at the (then) applicable rate of interest and based upon an amortization period of fifteen (15) years less the number of years elapsed from the date hereof;

Any remaining unpaid principal, and all accrued interest thereon, shall be due and payable IN FULL fifteen (15) years from the date hereof.

Any payments received by Lender with respect to this Note shall be applied first to any costs, charges or expenses (including reasonable attorneys’ fees) due Lender from the Undersigned, second to any unpaid accrued interest hereunder and third to the unpaid principal hereunder.

If any payment required hereunder is more than fifteen (15) days overdue, (in addition to the interest accruing hereunder) a late charge of five percent (5.00%) of the overdue payment shall be charged to the Undersigned and be immediately due and payable to Lender. Any payment having a due date falling upon any day during which the Lender is not open for business shall be due and payable on the next business day for which Lender is open for business and interest shall continue to accrue during the extended period.

If any payment received by Lender with respect to this Note shall be deemed by a court of competent jurisdiction to have been a voidable preference or fraudulent conveyance under federal or state law, or otherwise due any party other than Lender, then the obligation for which the payment was made shall not be discharged by the payment and shall survive as an obligation due hereunder, notwithstanding the Lender's return to the Undersigned or any other party of the original of this Note or other instrument evidencing the obligation for which payment was made.

The Borrower shall have the right to prepay this Note at any time, provided, however, in the event of any Prepayment the Borrower shall pay to the Lender a Prepayment premium computed as follows:

(a)

If Prepayment occurs during the first year of this Note, the premium shall be an amount equal to five percent (5.00%) of the outstanding principal balance existing immediately prior to the Prepayment.

(b)

If Prepayment occurs after the first year of this Note, but prior to commencement of the third year of this Note, the premium shall be an amount equal to four percent (4.00%) of the outstanding principal balance existing immediately prior to the Prepayment.

(c)

If Prepayment occurs after the second year of this Note, but prior to commencement of the fourth year of this Note, the premium shall be an amount equal to three percent (3.00%) of the outstanding principal balance existing immediately prior to the Prepayment.

(d)

If Prepayment occurs after the third year of this Note, but prior to commencement of the fifth year of this Note, the premium shall be an amount equal to two percent (2.00%) of the outstanding principal balance existing immediately prior to the Prepayment.

(e)

If Prepayment occurs after the fourth year of this Note, but prior to commencement of the sixth year of this Note, the premium shall be an amount equal to one percent (1.00%) of the outstanding principal balance existing immediately prior to the Prepayment.

For purposes hereof, “Prepayment” shall mean any payment of principal in advance of its due date. All Prepayments, whether by acceleration or otherwise, shall be applied against the principal payments due hereunder in the inverse order of their maturity.

Upon the occurrence of a default hereunder, interest upon the total unpaid principal hereunder shall thereafter, at Lender's option, without notice to Undersigned, and until payment in full of all obligations hereunder, accrue at a rate ("Default Rate") equal to the lesser of (a) the highest interest rate permitted by applicable law or (b) five percent (5.00%) per annum above the interest rate then in effect hereunder at the time of the default.

It is not intended under this Note to charge interest at a rate exceeding the maximum rate of interest permitted to be charged under applicable law, but if interest exceeding said maximum rate should be paid hereunder, the excess shall, at Lender's option, be (a) deemed a voluntary prepayment of principal not subject to the prepayment premium (if any) set forth herein or (b) refunded to the Undersigned.

The following described property, in addition to all other collateral now or hereafter provided by the Undersigned to Lender, shall secure this Note and all other present or future obligations of the Undersigned to Lender: Mortgage on property owned by the Borrower and located at 20 Wilbraham Street, Palmer, Hampden County, Massachusetts (the "Mortgaged Premises").

As additional collateral for the payment and performance of this Note and all other obligations, whether now existing or hereafter arising, of the Undersigned to Lender, Lender shall at all times have and is hereby granted a security interest in, and right of offset against, all cash, deposit balances and/or accounts, instruments, securities or other property of the Undersigned, and of any endorser or guarantor hereof, now or hereafter in the possession of Lender, whether for safekeeping or otherwise. This right of offset shall permit Lender at any time and without notice to the Undersigned or any endorser or guarantor hereof, to transfer such funds or property as may be deemed by Lender to be appropriate so as to reduce or satisfy any obligation of the Undersigned to the Lender, whether or not such obligation is then due.

This Note shall be IN DEFAULT and the total unpaid principal hereunder and all accrued interest thereon shall, at Lender's option, be immediately due and payable, without prior notice, protest, or demand, upon the occurrence of any one or more of the following events of default (an “Event of Default”): (a) the failure of the Undersigned to pay any amount when due hereunder within 10 days following written notice from Lender; (b) the failure of the Undersigned to perform any other obligation to Lender as required hereunder or under any other agreement between Lender and the Undersigned, after the expiration of any applicable grace or cure period; (c) the occurrence of any default under, or the breach of, any term or condition of this or any other note, any mortgage, loan and/or security agreement, guaranty, or any other agreement between Lender and the Undersigned, after the expiration of any applicable grace or cure period; (d) Lender's determination that any representation made by the Undersigned to Lender at any time was not true or accurate in any material respect when given;(e) the granting of any trust mortgage upon any assets of the Undersigned, the occurrence of any assignment for the benefit of the Undersigned's creditors or the appointment of a custodian, trustee, or receiver with respect to any assets of the Undersigned, or the filing of any petition by or against the Undersigned under the Bankruptcy Reform Act of 1978 (as amended) or any other federal or state law by which the Undersigned is or may be relieved from its debts, provided however, the Undersigned shall have forty five (45) days within which to obtain a final dismissal of any involuntary bankruptcy petition; (f) the service of any process upon Lender by which any funds of the Undersigned being held by Lender may be attached if not dismissed or fully bonded within 30 days; (g) the attachment of any other assets of the Undersigned, where such attachment is not released, terminated or fully bonded within thirty (30) days of the order authorizing it; (h) the entry of any judgment against the Undersigned which is not satisfied or appealed from within fifteen (15) days of its entry; (i) the death, incapacity, dissolution, termination of existence or liquidation of any of the Undersigned; (j) the occurrence of any of the foregoing events of default with respect to any endorser of any obligations of the Undersigned to Lender.

The Undersigned respectively (a) waive presentment, demand, notice, protest and delay in connection with the delivery, acceptance, performance, collection and enforcement of this Note, and (b) assent to any extension, renewal, modification or other indulgence permitted by Lender with respect to this Note, including, without limitation, any release, substitution, or addition of co-makers, endorsers or guarantors of this Note and any release, substitution or addition of collateral securing this Note or any other obligations of the Undersigned, or any such endorsers or guarantors, to Lender, and (c) authorize Lender, in its sole and exclusive discretion and without notice to the Undersigned, or any endorser or guarantor hereof, to complete this Note if delivered incomplete in any respect.

No indulgence, delay or omission by Lender in exercising or enforcing any of its rights or remedies hereunder shall operate as a waiver of any such rights or remedies or of the right to exercise them at any later time. No waiver of any default hereunder shall operate as a waiver of any other default hereunder or as a continuing waiver. The Lender's acceptance of any payment hereunder, following any default, shall not constitute a waiver of such default or of any of the Lender's rights or remedies hereunder (including charging interest at the Default Rate), unless waived in writing by Lender.

All of the Lender's rights and remedies hereunder, and under any other related loan documents, shall be cumulative and may be exercised singularly or concurrently, at the Lender's sole and exclusive discretion.

The Undersigned jointly and severally agree to pay on demand all costs and expenses, including, but not limited to, reasonable attorneys’ fees, incurred by Lender in connection with the protection and/or enforcement of any of Lender's rights or remedies hereunder, whether or not any suit has been instituted by Lender.

The word "Lender" where used herein shall mean the named payee, its successors, assigns, affiliates and endorsees (and/or the holder of this Note if, at any time, it is made payable to bearer), all of whom this Note shall inure to their benefit as holders in due course.

The word "Undersigned" where used herein includes the Borrower, any and all makers and co-makers hereof, and their respective heirs, successors, assignees and representatives, all of whom and their respective heirs, successors, assigns and representatives, shall be jointly and severally liable hereunder. Any reference herein to the Undersigned is a reference to such party or parties individually as well as collectively.

The use of masculine or neuter genders hereunder shall be deemed to include the feminine and the use of the singular or the plural herein shall be deemed to include the other, as the context may require.

The Undersigned represents that the proceeds of this Note will not be used for personal, family or household purposes and that this loan is strictly a commercial transaction.

The Undersigned, at its own expense, shall provide Lender with such financial statements and other information as Lender may from time-to-time require.

This Note shall be governed by the laws of the Commonwealth of Massachusetts and the Undersigned submit to the jurisdiction of its courts with respect to all claims concerning this Note or any collateral securing it.

ALL PARTIES TO THIS NOTE, INCLUDING LENDER, HEREBY EXPRESSLY WAIVE ALL RIGHTS TO TRIAL BY JURY, AS TO ALL ISSUES, INCLUDING ANY COUNTERCLAIMS, WITHOUT EXCEPTION, IN ANY ACTION OR PROCEEDING RELATING, DIRECTLY OR INDIRECTLY, TO THIS NOTE AND/OR OTHER INSTRUMENTS OR LOAN DOCUMENTS (IF ANY) EXECUTED IN CONNECTION HEREWITH.

IN THE EVENT THAT UNDERSIGNED SHALL BECOME A DEBTOR IN ANY BANKRUPTCY PROCEEDING PURSUANT TO USC 11 AND LENDER SHALL SEEK RELIEF FROM AUTOMATIC STAY PURSUANT TO §362 THEREOF, UNDERSIGNED ACKNOWLEDGES AND AGREES THAT THE PARTIES INTEND, AS A NEGOTIATED CONDITION OF THE MAKING OF THE LOAN REPRESENTED HEREBY, THAT LENDER BE GRANTED IMMEDIATE RELIEF FROM STAY UPON SUCH HAPPENING, AND THAT THIS WRITING MAY BE DEEMED CONCLUSIVE EVIDENCE AS TO THE NEGOTIATED ONGOING INTENTION OF THE PARTIES AND IS INTENDED TO REMAIN THE PRINCIPAL BASIS UPON WHICH ANY COURT SHALL MAKE SUCH DETERMINATION.

This Note constitutes a final written expression of all of its terms and is a complete and exclusive statement of those terms. Any modification or waiver of any of these terms must be in writing signed by the party against whom the modification or waiver is to be enforced.

The Undersigned agree to be bound by the terms of this Note and acknowledge receipt of a signed copy hereof.

Signed as a sealed instrument this 8^th day of June, 2012.

Witness:	Palmer-Mapletree LLC


	By:	/s/ Nickolas W. Jekogian, III
		Nickolas W. Jekogian, III, Manager

	By:	/s/ Alexander Ludwig
		Alexander Ludwig, Manager

EX-10.3 4 v316057_ex10-3.htm EXHIBIT 10.3

REVOLVING LINE OF CREDIT

MAXIMUM PRINCIPAL AMOUNT:

DEMAND REVOLVING LINE OF CREDIT NOTE

FOR VALUE RECEIVED, the Undersigned, Palmer-Mapletree LLC, a Delaware limited liability company with its principal place of business at 9 East 40^th Street, Suite 900, New York, New, York (the "Borrower"), promise(s) to pay to the order of Country Bank for Savings ("Lender"), at the Lender's main office presently located at 75 Main Street, Ware, Hampshire County, Massachusetts, or such other place as Lender may designate in writing, ON DEMAND, the principal sum of FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($500,000.00), or, if greater or lesser, the (then) total unpaid principal balance due Lender (as reflected by the Lender's books and records) as a result of loans hereafter made by Lender to the Undersigned under this Note from time to time, plus all interest and other charges due Lender hereunder.

Interest upon all loans advanced under this Note shall, from the date of the advance and until repaid, accrue at an adjustable rate of interest floating at one and 00/100 percent (1.00%) per annum over Lender's Prime Rate (as hereinafter defined) and shall be payable monthly in arrears, commencing one (1) month from the date hereof and on the same day of each month thereafter, without demand. "Prime Rate" as used herein shall mean the "Prime Rate" as identified and published by the Wall Street Journal under its listing of Money Rates (and where more than one "Prime Rate" is so published, the highest rate shall be used herein). Each change in such interest rate shall take effect simultaneously with the corresponding change in such Prime Rate. If the above Prime Rate index should no longer become available, Lender shall select a new index which is based upon comparable information and shall notify the Undersigned of the change. Interest hereunder shall be computed on the basis of a three hundred sixty (360) day year and shall accrue and be paid for the actual number of days any principal hereunder remains unpaid. Funds advanced to Borrower will be utilized by Borrower and its sole member Presidential Realty Corporation for working capital or other business purposes.

In accordance with the terms hereof, Lender shall consider the Undersigned's requests from time-to-time for loans hereunder, and Lender may from time-to-time make such loans to the Undersigned, at Lender's sole and exclusive discretion. The aggregate amount of all loans or advances (plus any amounts added to principal pursuant to the terms of this Note) made by Lender to Undersigned hereunder, less all payments and credits which Lender has applied against principal under the terms of this Note, shall constitute the unpaid principal balance due Lender hereunder, while the total amount of the Undersigned's indebtedness to Lender by reason of loans, advances, and other appropriate charges, including interest, under this Note, less all payments and credits which Lender has applied against the indebtedness under the terms of this Note, shall constitute the total unpaid balance due Lender hereunder. The Lender's books and records shall at all times constitute prima facie evidence of all amounts due Lender. At least once each month, Lender shall render a statement of account for the amounts due Lender hereunder, which statement shall be considered correct, accepted by, and conclusively binding upon the Undersigned, unless the Undersigned submits a written objection within fifteen (15) days from the date the statement is mailed to the Undersigned.

It will be within the continuing, sole and exclusive discretion of Lender whether to make or continue to make loans of any amount under this Note. At no time shall the Undersigned be entitled to any loans or advances which cause the unpaid principal balance hereunder to exceed the stated maximum principal amount hereof, and if at any time such excess does arise, the Undersigned shall pledge, assign, and transfer to Lender additional collateral or shall pay cash to Lender to be credited to the total unpaid balance hereof in such an amount as may be necessary to eliminate this excess. However, nothing herein shall be construed to restrict Lender, in its sole and exclusive discretion, from making advances in excess of the stated maximum principal amount or from waiving any requirements upon collateral herein, without modification hereof or the execution of any additional note(s), and by so doing at any time, Lender does not waive its right to insist upon strict compliance with the terms hereof at any other time and to further rely upon all collateral secured to it for satisfaction of all obligations of the Undersigned to Lender, without exception.

The Undersigned agree that Lender, in its sole and exclusive discretion, may make loans hereunder to the Undersigned upon verbal or written authority from any person representing to have authority to act on behalf of the Undersigned and may deliver loans hereunder to the Undersigned by direct deposit to any demand deposit account of the Undersigned with Lender, or as otherwise instructed.

If any payment required hereunder is more than fifteen (15) days overdue, (in addition to the interest accruing hereunder) a late charge of five percent (5.00%) of the overdue payment shall be charged to the Undersigned and be immediately due and payable to Lender. Any payment having a due date falling upon a legal holiday or a day during which Lender is not open for business shall be due and payable on the next business day for which Lender is open for business, and interest shall continue to accrue during the extended period.

The Undersigned hereby authorizes Lender to debit from any account(s) of the Undersigned with Lender, at any time, any interest or other charges due Lender hereunder, upon prior notice to the Undersigned.

Any interest or other charges hereunder, if not paid when due, may, at Lender's option and without prior notice to the Undersigned be added to the principal balance due hereunder, with interest likewise accruing thereon at the rates set forth herein.

Any payments received by Lender with respect to this Note shall be applied first to any charges, or expenses (including attorneys’ fees) due Lender from the Undersigned, second to any unpaid accrued interest hereunder, and third to the unpaid principal hereunder.

The following described property, in addition to all other collateral now or hereafter provided by the Undersigned to Lender, shall secure this Note and all other present or future obligations of the Undersigned to Lender: 20 Wilbraham Street, Palmer, Hampden County, Massachusetts.

As additional collateral for the payment and performance of this Note and all other obligations, whether now existing or hereafter arising, of the Undersigned to Lender, Lender shall at all times have and is hereby granted a security interest in and right of offset against all cash, deposit balances and/or accounts, instruments, securities, or other property of the Undersigned, and of any endorser or guarantor hereof, now or hereafter in the possession of Lender, whether for safekeeping or otherwise. This right of offset shall permit Lender at any time and without notice to the Undersigned or any endorser or guarantor hereof, to transfer such funds or property as may be deemed by Lender to be appropriate so as to reduce or satisfy any obligation of the Undersigned to the Bank, whether or not such obligation is then due.

All unpaid principal, interest, and other amounts due under this Note shall at all times be immediately due and payable UPON DEMAND (whether or not scheduled payments required hereunder have been timely made), and this Note shall be IN DEFAULT upon the failure of the Undersigned to pay immediately any amount due hereunder, once demand is made.

The Undersigned, and each endorser and guarantor hereof, respectively (a) waive presentment, demand, notice, protest, and delay in connection with the delivery, acceptance, performance, collection, and enforcement of this Note, and (b) assent to any extension, renewal, modification, or other indulgence permitted by Lender with respect to this Note, including, without limitation, any release, substitution, or addition of co-makers, endorsers, or guarantors of this Note and any release, substitution, or addition of collateral securing this Note or any other obligations of the Undersigned, or any such endorsers or guarantors, to Lender, and (c) authorize Lender, in its sole and exclusive discretion and without notice to the Undersigned, or any endorser or guarantor hereof, to complete this Note if delivered incomplete in any respect.

All of the Lender's rights and remedies hereunder and under any other related loan documents shall be cumulative and may be exercised singularly or concurrently, at the Lender's sole and exclusive discretion.

The Undersigned jointly and severally agree to pay on demand all costs and expenses, including, but not limited to, reasonable attorney's fees, incurred by Lender in connection with the protection and/or enforcement of any of Lender's rights or remedies hereunder, whether or not any suit has been instituted by Lender.

The word "Lender" where used herein shall mean the named payee, its successors, assigns, affiliates, and endorsees (and/or the holder of this Note if, at any time, it is made payable to bearer), all of whom this Note shall inure to their benefit as holders in due course.

The word "Undersigned" where used herein includes the Borrower(s), any and all makers and co-makers hereof, and their respective heirs, successors, assigns, and representatives, all of whom, along with each endorser and guarantor of this Note, and their respective heirs, successors, assigns, and representatives, shall be jointly and severally liable hereunder. Any reference herein to the Undersigned is a reference to such party or parties individually as well as collectively.

The use of masculine or neuter genders hereunder shall be deemed to include the feminine, and the use of the singular or the plural herein shall be deemed to include the other, as the context may require.

The Undersigned represents that the proceeds of this Note will not be used for personal, family, or household purposes and that this loan is strictly a commercial transaction.

The Undersigned, at its own expense, shall provide Lender with such financial statements and other information as Lender may from time-to-time require.

This Note shall be governed by the laws of the Commonwealth of Massachusetts, and the Undersigned, and each endorser and guarantor hereof, submit to the jurisdiction of its courts with respect to all claims concerning this Note or any collateral securing it.

THE UNDERSIGNED ACKNOWLEDGES THAT THIS NOTE IS A DEMAND NOTE AND THE RIGHT OF THE LENDER TO DEMAND PAYMENT OF THIS NOTE IN WHOLE OR IN PART AT ANY TIME SHALL BE ABSOLUTE, UNCONDITIONAL AND IN THE SOLE DISCRETION OF THE LENDER.

The Undersigned agree to be bound by the terms of this Note and acknowledge receipt of a signed copy hereof.

Signed as a sealed instrument this 8^th day of June, 2012.

Witness:	Palmer-Mapletree LLC


	By:	/s/ Nickolas W. Jekogian, III
		Nickolas W. Jekogian, III, Manager

	By:	/s/ Alexander Ludwig
		Alexander Ludwig, Manager

EX-10.4 5 v316057_ex10-4.htm EXHIBIT 10.4

MORTGAGE AND SECURITY AGREEMENT

This Mortgage and Security Agreement (collectively, the "Mortgage") is made and entered into as of this 8^th day of June, 2012, by Palmer-Mapletree LLC, a Delaware limited liability company with its principal place of business at 9 East 40^th Street, Suite 900, New York, New, York (the "Mortgagor") in favor of Country Bank for Savings, a Massachusetts banking institution with a principal place of business at 75 Main Street, Ware, Hampshire County, Massachusetts (the "Mortgagee").

GRANT OF MORTGAGE AND SECURITY INTEREST

1.01

For good and valuable consideration, and in order to secure the prompt and complete payment and performance of any and all charges, debts, claims, agreements, liabilities and obligations of Mortgagor to Mortgagee of every kind, nature and description, whether now existing or hereafter arising, absolute or contingent, direct or indirect, and whether as maker or otherwise, including, without limitation, (i) the payment of a Commercial Note of even date in the principal amount of $500,000.00; (ii) the payment of a Demand Revolving Line of Credit Note in the principal amount of $500,000.00; and (iii) all terms, covenants and agreements contained in this Mortgage, (collectively, the "Obligations"), Mortgagor does hereby grant to Mortgagee, with MORTGAGE COVENANTS, the land, with all buildings and improvements now or hereafter thereon, located at 20 WILBRAHAM STREET, PALMER, HAMPDEN COUNTY, MASSACHUSETTS, as more particularly described in Exhibit A annexed hereto, and with all easements, covenants, agreements and rights which are appurtenant to or benefit such land, and also including any item of Related Personal Property (as hereinafter defined) constituting a fixture under the Uniform Commercial Code as enacted in the Commonwealth of Massachusetts (collectively, the "Real Property") and pledges and assigns to Mortgagee, and grants to Mortgagee a security interest in, all right, title and interest of Mortgagor in and to all tangible and intangible personal property (whether now existing or hereafter acquired or arising, and wherever located) upon, concerning or in any way relating to the Real Property, including, without limitation, (i) all fixtures, machinery, equipment, furniture, inventory, building supplies, appliances and other personal property, including but not limited to, all furnaces, ranges, heaters, plumbing goods, gas and electric fixtures, screens, screen doors, mantels, shades, storm doors and windows, awnings, oil burners and tanks or other equipment, gas or electric refrigerators and refrigerating systems, ventilating and air conditioning apparatus and equipment, doorbell and alarm systems, sprinkler and fire extinguishing systems, portable or sectional buildings, and all fixtures of whatever kind or nature now or hereafter contained in or on the Real Property; (ii) all machinery, equipment, furniture, fixtures, accounts, general intangibles, instruments, documents, chattel paper, inventory, building materials or supplies, and appliances used or useful in the construction, operation, maintenance or occupation of the Real Property; (iii) all leases, contracts or agreements relating to the lease, rental, hire or use by Mortgagor of any of the aforementioned personal property; (iv) all leases, tenancies, occupancies and license arrangements pertaining to the Real Property or any portion thereof, and all guaranties and security relating thereto; (v) all rents, issues, profits and other benefits from the Real Property, any of the above described personal property, and any of the leases, tenancies, occupancies, license arrangements and rental agreements relating thereto; (vi) all contracts, agreements, licenses, permits and approvals, privileges, warranties and representations relating to the use, operation, management, construction, repair or service of any of the Real Property or personalty described above; (vii) any and all agreements to sell the Real Property or any portion thereof; (viii) all funds held by Mortgagee as tax or insurance escrow payments or for other purposes; (ix) all insurance policies and all proceeds or unearned insurance premiums relating thereto; (x) all claims, awards, damages, proceeds or refunds from any federal, state or local condemnation or other taking of, and all municipal tax abatements relating to, any or all of the Real Property or any personalty relating thereto; (xi) all construction contracts, subcontracts, architectural agreements, labor, material and payment bonds, guaranties and warranties, and plans and specifications relating to the construction of improvements upon the Real Property, and (xii) all proceeds, products, substitutions and accessions to any of the foregoing (collectively, the "Related Personal Property"). The Real Property and all Related Personal Property shall hereinafter be collectively referred to as the "Collateral".

1.02

It is expressly intended by Mortgagor that this Mortgage shall at all times secure all of the Obligations, whether now existing or hereafter incurred by future advance or otherwise, whether or not any of the Obligations are related to the present transaction pertaining to this Mortgage or contemplated by Mortgagor or Mortgagee at the time of this Mortgage, and whether or not this Mortgage is referenced within any document evidencing any of such Obligations. To the extent any of the Obligations shall be that of less than all parties constituting the Mortgagor herein, any such co-mortgagor not liable for any of such Obligations hereby expressly hypothecates his/her/its ownership interest in the Collateral to the extent of all Obligations. It is also intended that the lien of this Mortgage shall at all times take priority over any other lien hereafter granted by Mortgagor upon any of the Collateral, whether or not the Obligations secured hereby are incurred prior to or after the grant of such junior lien.

II.

REPRESENTATIONS, WARRANTIES AND COVENANTS

Mortgagor hereby further covenants, warrants and agrees with Mortgagee as follows:

2.01

Mortgagor shall pay when due, and fully and promptly perform all of the provisions, agreements and covenants of, the Obligations.

2.02

Mortgagor is, and shall hereafter remain, the owner of the Collateral free and clear of all liens and encumbrances, except for the mortgage and security interest created hereby and liens for real estate taxes and municipal betterments not yet due and payable. Mortgagor has the full right, power, and authority to execute and deliver this Mortgage. Mortgagor shall defend the Collateral and Mortgagee forever against all claims and demands of all persons and indemnify Mortgagee against any losses or expenses resulting from such claims and demands.

2.03

Mortgagor shall pay when due all taxes, charges for water, sewer and other municipal services, and assessments, now or hereafter assessed or imposed against any of the Collateral, any interest therein, or any obligations secured thereby. Mortgagor shall deliver to Mortgagee, upon request, evidence of such payments.

2.04

At Mortgagee's request, Mortgagor shall pay monthly, in addition to any other payment due upon the Obligations, an amount equal to one-twelfth (1/12) of the estimated yearly taxes, assessments and other charges which may be levied against the Collateral. Such funds shall be held by Mortgagee, without obligation to pay interest thereon and free of liens and claims of all other creditors of Mortgagor, to pay such taxes, assessments and charges when due, but only to the extent of such funds actually held by Mortgagee. Such funds shall not be, nor deemed to be, trust funds but may at any time be commingled with the general funds of Mortgagee. Such funds are pledged as additional security for the Obligations and may at any time be applied, at Mortgagee's option and without notice to Mortgagor, to the payment of the Obligations. If at any time the funds held by Mortgagee hereunder shall be less than the amount deemed necessary by Mortgagee to pay such taxes, assessments and charges when due, Mortgagor shall pay to Mortgagee, within five (5) days after notice from Mortgagee to Mortgagor requesting payment thereof, any amount necessary to make up the deficiency.

2.05

Mortgagor, at his own expense, shall keep the Collateral, other than intangible property, insured at all times against fire and all other casualties and contingencies as Mortgagee shall require, and by such insurance companies, in such amounts, in such form and substance, and with such coverages, endorsements, deductibles and expiration dates as are acceptable to Mortgagee, in its sole and exclusive discretion. Mortgagor shall deposit all such policies and/or certificates evidencing such coverages with Mortgagee on the binding thereof and shall deliver, at least thirty (30) days before the expiration, new policies and certificates for any coverage about to expire. All such insurance policies shall be first payable in case of loss to Mortgagee pursuant to standard mortgagee and loss payee clauses in favor of Mortgagee and shall provide that such policies shall not be cancelled or amended without at least thirty (30) days prior written notice to Mortgagee. In the event of any loss or damage to any of the Collateral, Mortgagor shall immediately notify Mortgagee and the insurer in writing. Mortgagor irrevocably authorizes and empowers Mortgagee as attorney in fact for Mortgagor, at Mortgagee's option and sole discretion, to settle and adjust any claim under such insurance polices, to appear and prosecute any action arising therefrom, and to collect and receive all proceeds thereof unless the casualty is under $50,000 in which case Mortgagor may settle without Mortgagee’s consent. Mortgagor further authorizes Mortgagee, at Mortgagee's option, to apply such proceeds to the Obligations or to make such proceeds available, upon such terms and conditions as Mortgagee shall determine, for the repair, restoration or replacement of Collateral. Mortgagor also authorizes and empowers Mortgagee, at Mortgagee's option, following any Event of Default (as hereinafter defined) under this Mortgage, to cancel or transfer any insurance policy and/or to retain unearned premiums for application to the Obligations.

2.06

Mortgagor shall (i) not commit or permit any physical waste of the Collateral; (ii) keep the Collateral in good operating order and condition at all times; (iii) restore or repair promptly, fully and in a good workmanlike manner the Collateral after any damage or loss thereto; (iv) comply at all times with all laws, ordinances, regulations, requirements and restrictions applicable to the Collateral; and (v) not remove any of the Related Personal Property (unless replaced with equal or better Related Personal Property) or demolish or materially alter any improvements to the Real Property. Mortgagee may, at Mortgagor's sole expense, make or cause to be made reasonable entries upon the Real Property for inspections of the Collateral during normal business hours or at any other time when necessary to protect and preserve any of the Collateral.

2.07

Mortgagor represents and warrants to Mortgagee that, except for the environmental conditions disclosed in writing to Mortgagee, no condition, activity or conduct exists on or in connection with any of the Collateral which violates any Environmental Law (as hereinafter defined), that no Hazardous Material (as hereinafter defined) was ever, or is now, stored or otherwise present (except in compliance with all Environmental Laws), or disposed of, upon the Real Property, that there has been no release, or threat of release, or any Hazardous Material upon, into or from any of the Collateral, or upon, into or from any premises adjacent to the Real Property, and that Mortgagor has not received any notice of any such release or threat of release or of any violation of any Environmental Law. Mortgagor shall at all times comply with all Environmental Laws, shall not store (except in the ordinary course of Mortgagor's business and in compliance with all Environmental Laws) or otherwise allow the presence of Hazardous Material upon, in or from any of the Collateral, and shall not dispose or release, or allow the disposal or release by any other party, of any Hazardous Materials upon, into or from any of the Collateral. Upon receiving notice or obtaining knowledge of the presence, release or threat of release of any Hazardous Material upon, into or from any of the Collateral, or of any violation of any Environmental Law, Mortgagor shall immediately notify Mortgagee in writing. Upon Mortgagee's request from time to time, Mortgagor shall, at Mortgagor's sole expense, take all such action, including, without limitation, the conducting of engineering tests and response actions, to confirm the absence of any Hazardous Material on, in, under or emanating from any of the Collateral, and if such Hazardous Material is present, to assess, contain and remove any such Hazardous Material. Mortgagor agrees, at Mortgagor's sole cost and expense, to indemnify, defend and hold harmless Mortgagee from and against any and all losses, liabilities, and/or expenses incurred by Mortgagee and arising directly or indirectly from (i) the presence and/or release of Hazardous Material upon, into or from any of the Collateral; (ii) the violation of any Environmental Law; (iii) the Mortgagor's failure to comply with the terms and conditions of this section and/or Mortgagor's breach of any warranty or representation made herein; and/or (iv) Mortgagee's enforcement of this section, including, without limitation, the costs of assessment, containment and/or removal of any Hazardous Material from all or any portion of the Real Property or any surrounding area and/or the costs incurred to effectuate compliance with all Environmental Laws. For purposes of this section, "Environmental Law" or "Environmental Laws" shall mean all federal, state and local laws and regulations, or any judicial or administrative decree or decision, whether now existing or hereafter enacted, promulgated or issued with respect to the use, storage, disposal, transportation, release, or threat of release, of hazardous or toxic materials or substances, including, without limitation, the Massachusetts Oil and Hazardous Material Release Prevention Response Act (M.G.L. Chapter 21E), as from time to time amended, and "Hazardous Material" or substances constituting hazardous or toxic materials or substances under any Environmental Law, including, without limitation, asbestos, urea formaldehyde insulation, and leaded paint. All representations, warranties and indemnities set forth in this section shall survive the payment and performance of the Obligations and shall not merge with any deed given by Mortgagor to Mortgagee in lieu of foreclosure or any deed under a power of sale. All such warranties, representations and indemnities shall, without notice to or further consent of Mortgagor, be assignable to Mortgagee's successors and assigns in any subsequent purchase of all or any portion of the Collateral by, through or under Mortgagee.

2.08

Mortgagor shall maintain at all times true and complete books and records reflecting the results of the operation of the Collateral and copies of all written contracts, leases and other instruments affecting the Collateral. All books and records, contracts, leases and other instruments shall be subject to examination and copying by Mortgagee at any reasonable time by Mortgagee and at Mortgagor's sole expense.

2.09

That, except as agreed to in writing by Mortgagee, the legal or beneficial ownership of the Real Property or any part thereof or interest therein will not at any time become vested in a person or entity other than Mortgagor. The foregoing shall include, without limitation, the sale, transfer, assignment or other conveyance of the Real Property, the sale, transfer or conveyance (whether voluntary or by operation of law) of legal, partnership, stock or beneficial interest in and/or of Mortgagor, or security interests, except this Mortgage, without, in each instance, prior written approval of Mortgagee. Notwithstanding the foregoing, transfers or issuance of shares of stock in Presidential Realty Corporation, the sole member of Borrower, shall not require the consent of Mortgagee. If the legal or beneficial ownership of the Real Property or any part thereof or any interest therein does become vested in a person or entity other than Mortgagor, Mortgagee may, without notice to Mortgagor, deal with such successor(s) in interest with reference to this Mortgage and the Obligations secured hereby, and in the same manner as with Mortgagor, without in any way vitiating or discharging Mortgagor's liability hereunder or under the Obligations secured hereby.

2.10

Mortgagor will from time to time do all such things and execute such documents as Mortgagee may reasonably request in order to carry into effect the provisions and intent of this Mortgage and to protect, perfect and maintain Mortgagee's interest in and to the Collateral.

2.11

Mortgagor is not in default under any terms or conditions of any lease or tenancy upon any of the Real Property and shall, at all times, perform all Obligations of Mortgagor under any and all such leases or tenancies, with all such leases and tenancies, and all rents and profits relating thereto, remaining assigned hereby to Mortgagee as additional security for the Obligations. Mortgagor will not, without Mortgagee's prior written consent, (i) accept any prepayment of any rent or other amount due upon any lease or tenancy, except for the current month's rent; (ii) modify, in any material respect, any provision of, or cancel or terminate, any lease or tenancy; or (iii) enter into any lease or tenancy. Upon Mortgagee's request, Mortgagor shall take all action necessary to obtain agreements (in form and substance satisfactory to Mortgagee) from each tenant subordinating such lease or tenancy to the lien of this Mortgage.

2.12

Mortgagor is, and shall at all times remain, in full compliance with all federal and state laws and regulations (including, without limitation, Section 15B of Chapter 186 of Massachusetts General Laws, as from time to time amended) governing security deposits and last month's rents relating to any lease or tenancy upon the Real Property. Mortgagor agrees, at Mortgagor's sole cost and expense, to indemnify, defend and hold harmless Mortgagee from and against any and all losses, liabilities and/or expenses incurred by Mortgagee in connection with any failure by Mortgagor to comply fully with such laws and regulations. This indemnity shall survive the payment and performance of the Obligations and/or any release of this Mortgage.

2.13

If any of the Collateral shall be damaged or taken through condemnation, or any conveyance in lieu thereof, Mortgagor authorizes Mortgagee, at Mortgagee's option, as irrevocable attorney in fact for Mortgagor, to commence, appear in and/or prosecute, in Mortgagor's or Mortgagee's name, any action or proceeding leading to such condemnation or other taking of the Collateral and to settle or compromise any claim in connection thereto. The proceeds of any award or claim for damages in connection with such condemnation or any other taking, or for conveyances in lieu of condemnation, are hereby assigned and shall be paid to Mortgagee to be applied, after deduction of Mortgagee's costs and expenses incurred in collecting such amounts, at Mortgagee's option, to the payment of the Obligations, whether or not then due, and/or to the restoration or repair of the Collateral, with the balance, if any, to Mortgagor.

2.14

If any portion of the Real Property shall constitute a unit in a condominium or planned unit development, Mortgagor shall at all times perform all of Mortgagor's obligations under the declaration, covenants and/or other constituent documents creating or governing such condominium or planned unit development, including, without limitation, all by-laws and regulations of the condominium or planned unit development.

2.15

If Mortgagor shall fail to perform any of the covenants or agreements contained in this Mortgage, Mortgagee may (in addition to any other right to remedy available to Mortgagee hereunder or otherwise) from time to time, and at Mortgagee's option and without obligation to do so, disburse such amounts and take such action as Mortgagee may deem necessary to effectuate compliance with Mortgagor's covenants and agreements herein, including, but not limited to, paying any taxes or insurance premiums, the payment of which is then due, satisfying any liens or encumbrances on any part of this Collateral, or entering upon the Real Property to make repairs or complete improvements. All amounts so expended or incurred by Mortgagee shall be included in the Obligations of Mortgagor to Mortgagee, shall be payable upon demand, and shall accrue interest at the highest rate applicable to any of the Obligations.

III.

EVENTS OF DEFAULT

3.01

The term "Event of Default" as used in this Mortgage shall mean any one or more of the following conditions or events: (i) the failure of Mortgagor to pay any amount required to be paid under this Mortgage within ten (10) days of when due or the failure to pay when due any of the other Obligations after the expiration of any applicable grace period; (ii) the failure of Mortgagor to perform any term, covenant, obligation or agreement contained in this Mortgage or any other agreement with the Mortgagee, provided, however, in the event of any non-monetary default under this Mortgage which does not pose an imminent danger to any of the Collateral and provided such default is capable of being cured within thirty (30) days (as determined by the Mortgagee), the Mortgagor shall have thirty (30) days after written notice thereof to fully cure such default; (iii) the occurrence of any default under, or breach of, any term or condition of this or any other mortgage, note and/or security agreement, guaranty or any other agreement between the Mortgagee and the Mortgagor or any guarantors of the Mortgagor, after the expiration of any applicable grace or cure period; (iv) the Mortgagee’s determination that any representation made by the Mortgagor to the Mortgagee at any time was not true or accurate in any material respect when given; (v) the granting of any trust mortgage upon any assets of Mortgagor, the occurrence of any assignment for the benefit of Mortgagor's creditors, or the appointment of a custodian, trustee or receiver with respect to any assets of Mortgagor, or the filing of any petition by or against Mortgagor under the Bankruptcy Reform Act of 1978 (as amended) or any other federal or state law by which Mortgagor is or may be relieved from its debts, provided however, the Mortgagor shall have forty-five (45) days to effect a final dismissal of any involuntary bankruptcy proceeding; (vi) the service of any process upon Mortgagee by which any funds of the Mortgagor being held by Mortgagee may be attached if not dismissed or fully bonded within 30 days; (vii) the attachment of any other assets of the Mortgagor, where such attachment is not released, terminated or fully bonded within thirty (30) days of the order authorizing it; (viii) the entry of any judgment against the Mortgagor which is not satisfied or appealed from within fifteen (15) days of its entry; (ix) the dissolution, termination of existence or liquidation of the Mortgagor; (x) the Real Property, in its entirety, shall be damaged by fire or other casualty or taken through condemnation or conveyance in lieu thereof; (xi) the occurrence of any event of default under any other permitted mortgage and/or security agreement (and/or any of the obligations secured thereby) encumbering any of the Collateral, after the expiration of an applicable cure or grace period; or (xii) the breach of the Statutory Condition herein contained.

IV.

RIGHTS AND REMEDIES UPON DEFAULT

4.01

Upon the occurrence of an Event of Default, any and all Obligations shall, at Mortgagee's option, become immediately due and payable without notice or demand, and the Mortgagee, with or without taking possession of the Collateral, may (i) collect all rents, payments in the nature of rents, or account receivables relating to the Collateral; (ii) sell, lease or otherwise dispose of any or all of the Collateral in its then condition or following such preparation or processing as Mortgagee deems advisable; (iii) without assuming the obligations of Mortgagor thereunder, exercise the rights of Mortgagor under any contract, lease, permit, license or other beneficial right pertaining to any of the Collateral; (iv) either directly, by agent, or by appointment of receiver, and with or without bringing any action or proceeding, maintain, repair and/or preserve the Collateral, construct the improvements thereon, or otherwise make alterations thereto, and/or manage, lease or operate the Collateral on such terms as Mortgagee in its sole discretion deems proper and appropriate; (v) exercise the Statutory Power of Sale; (vi) foreclose any and all rights of Mortgagor in and to any of the Collateral; (vii) proceed by a suit or suits at law or in equity or by other appropriate proceedings or remedy to collect the Obligations; (viii) require Mortgagor to assemble any or all of the Related Personal Property and make it available to Mortgagee, at Mortgagor's sole risk and expense, in a place or places determined by Mortgagee; (ix) take possession of any or all of the Collateral; and/or (x) exercise any other right or remedy of a mortgagee or secured party under the laws of the Commonwealth of Massachusetts.

4.02

This Mortgage is upon the STATUTORY CONDITION, upon the breach of which Mortgagee shall have, in addition to all other rights and remedies hereunder, the STATUTORY POWER OF SALE.

4.03

All rights and remedies of Mortgagee hereunder shall be cumulative and not exclusive of any other rights and remedies available to Mortgagee at law or in equity. No indulgence, delay or omission by Mortgagee in exercising or enforcing any of its rights or remedies hereunder shall operate as a waiver thereof on that occasion nor on any other occasion. No waiver of any Event of Default hereunder shall operate as a waiver of any other Event of Default hereunder, nor as a continuing waiver.

4.04

Any sale or other disposition of the Related Personal Property may be at public or private sale and upon such terms and in such manner as Mortgagee deems advisable. Mortgagee may conduct such sale or other disposition of the Related Personal Property upon the Real Property, in which event Mortgagee shall not be liable for any rent or charge for such use of the Real Property. Mortgagee may sell any of the Related Personal Property as part of the Real Property, or any portion or unit thereof, at the foreclosure sale or sales conducted pursuant hereto. Mortgagor waives any right to require marshalling of any of its assets in connection with any disposition conducted pursuant hereto, the single total price for the Collateral, or for such part thereof as is sold, may be accepted by Mortgagee with no obligation to distinguish between the application of proceeds amongst the real or personal property comprising the Collateral. If all or any portion of the Collateral is sold by Mortgagee, Mortgagor shall pay Mortgagee, on demand, an amount equal to one percent (1.00%) of the purchase price thereof, in addition to the Obligations and any other amounts due Mortgagee hereunder. The obligation of Mortgagor to pay such amounts shall be included in the Obligations and shall accrue interest at the highest rate applicable to any of the Obligations.

4.05

In the event Mortgagee, in the exercise of the Statutory Power of Sale contained herein, elects to sell the Collateral in parts or parcels, said sales may be held from time to time, and the power shall not be exhausted until all of the Collateral not previously sold shall have been sold and the Obligations paid in full.

4.06

Mortgagor hereby irrevocably constitutes and appoints Mortgagee as Mortgagor's true and lawful attorney in fact, to take, after the occurrence of an Event of Default, any action with respect to the Collateral to preserve, protect and/or realize upon Mortgagee's interest therein, all at the sole risk, costs and expense of Mortgagor, and for the sole benefit of Mortgagee. Mortgagee shall not be obligated to exercise such power, but if Mortgagee so elects to exercise it, Mortgagee shall not be accountable for more than it actually receives as a result of such exercise of power and shall not be responsible to Mortgagor, except for Mortgagee's willful misconduct and actual bad faith. All powers conferred upon Mortgagee by this Mortgage, being coupled with an interest, shall be irrevocable until terminated by written instrument executed by Mortgagee.

NOTICE

5.01

All notices required or permitted hereunder shall be in writing and shall be deemed given when personally delivered or deposited in the United States mail and, if delivered by mail, shall be mailed by registered or certified mail, return receipt requested, which is pre-paid and addressed as follows: If to Mortgagee, to the address hereinabove stated as Mortgagee's address or such other address as Mortgagee shall designate to Mortgagor in writing for the receipt of notice pursuant hereto, and if to Mortgagor, to either the address hereinabove stated as Mortgagor's address, to the Real Property or any portion thereof, or to such other address as Mortgagor shall designate to Mortgagee in writing for the receipt of notice pursuant hereto.

VI.

MISCELLANEOUS

6.01

In the event Mortgagor is more than one person or entity, all of such parties constituting Mortgagor shall be jointly and severally liable hereunder, and each reference in this Mortgage to Mortgagor shall mean each of such co-mortgagors, individually, as well as collectively.

6.02

The proceeds of any collection, sale or disposition of the Collateral or of any other payments received hereunder, shall be applied to the Obligations in such order and manner as Mortgagee shall determine in its sole discretion, any statute, custom or usage to the contrary notwithstanding. Mortgagor shall remain liable to Mortgagee for any deficiency remaining following such application.

6.03

This Mortgage and all other instruments executed in connection herewith incorporate all discussions and negotiations between Mortgagor and Mortgagee concerning the matters included herein and in such other instruments. No such discussions or negotiations shall limit, modify or otherwise affect the provisions hereof. No modification, amendment or waiver of any provision hereof, or of any provision of any other agreement between Mortgagor and Mortgagee, shall be effective unless executed in writing by the party to be charged with such modification, amendment or waiver.

6.04

Mortgagor shall pay on demand all costs and expenses incurred by Mortgagee in connection with the preparation, execution and delivery of this Mortgage and of any other documents and agreements by Mortgagor in favor of Mortgagee, including, without limitation, reasonable attorneys' fees and expenses, and all expenses which Mortgagee may hereafter incur in connection with the collection of the Obligations or the protection or enforcement of any of Mortgagee's rights and remedies against Mortgagor, any Collateral, and any guarantor or endorser of the Obligations. Mortgagor authorizes Mortgagee to pay all such fees and expenses and to charge the same to any account of Mortgagor with Mortgagee.

6.05

Mortgagor shall, within ten (10) days of written request from Mortgagee, furnish Mortgagee with a written statement, duly acknowledged, setting forth the amount of the Obligations, any right to set off, counterclaim or other defense which may exist or be claimed by Mortgagor against the Obligations.

6.06

Mortgagee shall not be liable for any loss sustained by Mortgagor resulting from any action, omission, or failure to act by Mortgagee with respect to the exercise or enforcement of its rights under this Mortgage or its relationship with Mortgagor. This Mortgage and Mortgagee's exercise of its rights hereunder shall not operate to place any responsibility upon Mortgagee for the control, care, management or repair of the Collateral, nor shall it operate to place any responsibility upon Mortgagee to perform the obligations of Mortgagor under any lease, license, or contract, or to make Mortgagee responsible or liable for any waste committed on the Collateral, any damages or defective condition of the Collateral, or any negligence in the management, upkeep, repair or control of the Collateral.

6.07

Mortgagor shall indemnify, defend and hold harmless Mortgagee of and from any and all claims or liabilities (except for such claims or liabilities arising from Mortgagee's willful misconduct or actual bad faith) asserted against and/or incurred by Mortgagee in connection with the Obligations, this Mortgage, the Collateral, or any part thereof, or the exercise by Mortgagee of any of its rights or remedies hereunder.

6.08

Mortgagor expressly waives all rights to trial by jury, as to all issues, including any counterclaims, without exception, in any action or proceeding relating, directly or indirectly, to the Obligations, this Mortgage, the Collateral or Mortgagee's relationship with Mortgagor.

6.09

This Mortgage and Security Agreement shall be binding upon Mortgagor and Mortgagor's successors and assigns and shall enure to the benefit of Mortgagee and Mortgagee's successors and assigns.

6.10

Any determination that any provision of this Mortgage or any application thereof if invalid, illegal or unenforceable in any respect in any instance shall not affect the validity, legality and enforceability of such provision in any other instance, nor the validity, legality or enforceability of any other provision of this Mortgage.

6.11

This Mortgage shall be governed by the laws of the Commonwealth of Massachusetts, and shall take effect as a sealed instrument.

IN WITNESS WHEREOF, Mortgagor has executed this Mortgage and Security Agreement under seal as of the day and year first above written.

WITNESS:	Palmer-Mapletree LLC


	By:	/s/ Nickolas W. Jekogian, III
		Nickolas W. Jekogian, III, Manager

	By:	/s/ Alexander Ludwig
		Alexander Ludwig, Manager