Presidential Realty Corporation (OTCMKTS:PDNLB) Files An 8-K Entry into a Material Definitive Agreement

Item 1.01. Entry into a Material Definitive Agreement

Entry into Second Amendment to Interest Contribution
Agreement

As previously disclosed on Forms 8-K filed by Presidential Realty
Corporation (the Company), on December 20, 2016 and January 12,
2017, respectively, the contents of which are incorporated by
reference herein, the Company and its newly formed operating
partnership, Presidential Realty Operating Partnership LP
(Presidential OP, and together with the Company, the Presidential
Parties), entered into an interest contribution agreement (the
Initial Agreement) with First Capital Real Estate Trust
Incorporated (FC REIT), First Capital Real Estate Operating
Partnership (FC OP, and together with FC REIT, the FC Parties),
the operating partnership of FC REIT, Township Nine Owner, LLC
(T9JV), Capital Station Holdings, LLC, Capital Station Member,
LLC, Capital Station 65 LLC and Avalon Jubilee LLC (Avalon). On
January 6, 2017, the Company and the other parties to the
Agreement entered into the First Amendment to the Initial
Agreement (the First Amendment, and, together with the Initial
Agreement, the Agreement). On March 31, 2017, the Company and the
other parties to the Agreement entered into the Second Amendment
to the Agreement (the Second Amendment).

FC OP is the owner of 92% of the limited liability company
interests and profit participation interests in T9 JV (the FC/T9
Interest). T9 JV is, indirectly through various subsidiaries, the
sole owner of 100% of certain equity interests related to 23
parcels of land located in Sacramento, California (collectively,
the T9 Properties). Under the Agreement, as amended by the Second
Amendment, on March 31, FC OP transferred to PRES-T9 Holdings
LLC, a newly formed wholly owned subsidiary of Presidential OP
(PRES-T9), 66% of the FC T9 Interest (Transferred Interest), and
in exchange Presidential OP preliminarily agreed to issue
$32,649,000 of its operating partnership units (OP Units), valued
at $1.00 per OP Unit, subject to adjustment and the conditions
described below. The final amount of the OP Units to be issued by
Presidential OP for the transfer of the Transferred Interest is
subject to adjustment, and the issuance of any OP Units is
entirely conditional on the satisfactory completion of the
conditions described below.

The Second Amendment provides for the satisfaction of certain
conditions prior to the issuance and delivery of 100% of the OP
Units to be issued in connection with the transaction. Those OP
Units will be held back (the Holdback Units) until a new
appraisal of the FC/T9 Interest has been obtained and the loan
secured by the T9 Properties has been extended or refinanced. The
loan is currently in default. Presidential has an opportunity for
30 days to endeavor to obtain an extension or refinancing of the
loan. Thereafter, the FC Parties will continue to seek an
extension/refinancing of the loan. If the appraisal and the loan
extension/refinancing are not obtained within 180 days, then the
FC Parties and the Presidential Parties may within 10 days
mutually agree in writing to extend the time to complete the
extension/refinancing of the loan, or either the FC Parties or
the Presidential Parties may elect to cancel the transfer of the
Transferred Interest following 10 days prior written notice to
the other party.

The number of OP Units ultimately issued if these conditions are
satisfied is subject to adjustment based on the new appraisal and
the amount of the mortgage debt (the extended/refinanced loan) at
that time. These adjustments could result in a material change in
the number of OP Units that are ultimately issued and delivered
if the conditions are satisfied. The final number of OP Units
will be determined by taking the amount of the new appraisal,
subtracting therefrom the amount of the extended/refinanced loan
and the legal costs and expenses incurred by the Company in
securing the extended/refinanced loan and multiplying the amount
thereby obtained by 66%. As a result of the conditional nature of
the transfer of the Transferred Interest, the Company will not be
reflecting the Transferred Interest in its financial statements
until the conditions in the Second Amendment have been satisfied
and the applicable number of OP Units has been determined and
issued.

The Second Amendment grants demand registration rights to the FC
Parties and their partners and stockholders for the OP Units
issued and to be issued to the Agreement and the common stock of
Presidential issuable upon conversion of those OP Units. The
registration rights of the OP Units are exercisable only after
the satisfaction of the conditions described above and issuance
of the Holdback Units and are intended to permit FC OP to
distribute the OP Units to its limited partners, including FC
REIT, and to permit FC REIT to distribute the OP Units it
receives to its stockholders, without restriction. It is not
intended to create a market in the OP Units.

There are currently two vacancies on the Companys six person
Board of Directors. Subject to review by the Companys Nominating
Committee and approval of the Companys Board of Directors, the
Second Amendment provides that Serge Kasarda and Richard Shea
will be elected by the Companys Board of Directors to fill the
two vacancies. Both individuals have strong backgrounds in the
finance and real estate sectors and are veterans of Blackrock,
Inc.

In connection with the Second Amendment, the Company approved a
new business strategy to focus its future investments in the
healthcare sector. In furtherance of that strategy, subject to
review and approval of the Companys Board of Directors, the
Second Amendment provides for the appointment of a new management
team to be led by Serge Kasarda to implement the new business
strategy.

The foregoing description of the Second Amendment is subject to
and qualified in its entirety by reference to the complete text
of the Second Amendment, which is attached as Exhibit 10.1 to
this Current Report on Form 8-K and incorporated by reference
herein.

Entry into the Limited Liability Company Agreement of T9
JV

On February 5, 2016, FC OP and T-9 Developers, LLC (T9
Developers) entered into the Limited Liability Company Agreement
(the T9 Owner Agreement) of Township Nine Owner, LLC (T9 JV). to
the T9 Owner Agreement, T9 Developers formerly acted as the
day-to-day development manager of T9 JV and developer of the T9
Properties. For a description of the material terms of the T9
Owner Agreement, please refer to FC REITs Current Report on Form
8-K dated February 5, 2016.

In contemplation of the transactions described in the Second
Amendment, on March 31, 2017, FC OP and T9 Developers entered
into the First Amendment to Limited Liability Company Agreement
(the First Amendment), which amended the T9 Owner Agreement in
contemplation of the admission of PRES-T9 as a member. The First
Amendment, among other things, replaces T9 Developers as the
day-to-day manager of T9 JV with FC OP and replaces the managers
of T9 JV designated by T9 Developers with three managers
designated by PRES-T9. Under the First Amendment, the management
board will consist of a total of six managers, three designated
by FC OP and three designated by PRES-T9. Each manager has one
vote and all actions of the management board require the vote,
approval or consent of a majority of the managers. Actions
requiring the vote, consent, approval or determination of the
members of T9 JV require the vote, consent, approval or
determination of the members holding at least two-thirds of the
outstanding units of T9 JV. PRES-T9 will hold 60,720, FC OP will
hold 31,280 and T9 Developers will hold 8,000 units of T9 JV.
PRES-T9 will not be required to pay any fees to T9 JV in
connection with its admission as a member of T9 JV.

On March 31, 2017, as transferee of the Transferred Interest,
PRES-T9 executed a Joinder and became party to the T9 Owner
Agreement, as amended.

The foregoing summary of the material terms of the T9 Owner
Agreement and the First Amendment is subject to and qualified in
its entirety by reference to the complete texts of (a) the
original T9 Owner Agreement, which is attached as Exhibit 10.2 to
this Current Report on Form8-K and incorporated by reference
herein; and (b)the First Amendment, which is attached as Exhibit
10.3 to this Current Report on Form8-K and incorporated by
reference herein.

About Presidential Realty Corporation (OTCMKTS:PDNLB)

Presidential Realty Corporation is a self-administrated, self-managed real estate investment trust. The Company holds, directly or indirectly, interests in real estate and interests in entities that own real estate. The Company’s segment includes investments in real estate related assets. The Company holds interests in the Mapletree Industrial Center located in Palmer, Massachusetts. The Mapletree Industrial Center is a multi-tenant rental facility. The Mapletree Industrial Center property consists of approximately 30 buildings located on over 50 acres. The property offers traditional office space and industrial/warehouse space, along with vacant land with rail access ready for development. The buildings comprise a total of approximately 418,680 square feet, with over 393,488 square feet of rentable space.

Presidential Realty Corporation (OTCMKTS:PDNLB) Recent Trading Information

Presidential Realty Corporation (OTCMKTS:PDNLB) closed its last trading session 00.000 at 0.250 with 16,150 shares trading hands.