Document:

<PAGE>   1
                             AMENDMENT NUMBER ONE TO
                         PRESIDENTIAL REALTY CORPORATION
                              DEFINED BENEFIT PLAN

         BY THIS AGREEMENT, Presidential Realty Corporation Defined Benefit Plan
(herein referred to as the "Plan") is hereby amended as follows, effective as of
January 1, 1995, except as otherwise provided:

1.       The definition of "Actuarial Equivalent" is amended, effective with the
later of the adoption date or the effective date of this amendment, by the
addition of the following paragraphs:

                  Notwithstanding the foregoing, the mortality table and the
interest rate for the purposes of determining an Actuarial Equivalent amount
(other than nondecreasing life annuities payable for a period not less than the
life of a Participant or, in the case of a Pre-Retirement Survivor Annuity, the
life of the surviving spouse) shall be the "Applicable Mortality Table" and the
"Applicable Interest Rate" described below. However, if prior to the first day
of the Plan Year beginning after the later of the adoption date or the effective
date of this amendment, the Plan used an interest rate other than the Pension
Benefit Guaranty Corporation interest rate (or an interest rate or rates based
on the Pension Benefit Guaranty Corporation interest rate) in determining the
present value of a Participant's Accrued Benefit, the mortality table and the
interest rate for the purposes of determining an Actuarial Equivalent amount
(other than nondecreasing life annuities payable for a period not less than the
life a Participant or, in the case of a Pre-Retirement Survivor Annuity, the
life of the surviving spouse) shall be the mortality table and the interest rate
specified above or the "Applicable Mortality Table" and the "Applicable Interest
Rate" described below, whichever produces the greater benefit:

         (a) The "Applicable Mortality Table" means the table prescribed by the
Secretary of the Treasury. Such table shall be based on the prevailing
commissioner's standard table (described in Code Section 807(d)(5)(A)) used to
determine reserves for group annuity contracts issued on the date as of which
present value is being determined (without regard to any other subparagraph of
Code Section 807(d)(5)).

         (b) The "Applicable Interest Rate" means the annual rate of interest on
30-year Treasury securities determined as of the first calendar month preceding
the first day of the Plan Year

                                      89
<PAGE>   2
during which the "annuity starting date" occurs. However, except as provided in
Regulations, if a Plan amendment (including this amendment) changes the time for
determining the interest rate assumption (including an indirect change as a
result of a change in the Plan Year), any distribution for which the "annuity
starting date" occurs in the one-year period commencing at the time the Plan
amendment is effective (if the amendment is effective on or after the adoption
date) must use the interest rate as provided under the terms of the Plan after
the effective date of the amendment, determined at either the date for
determining the interest rate before the amendment or the date for determining
the interest rate after the amendment, whichever results in the larger
distribution. If the Plan amendment is adopted retroactively (that is, the
amendment is effective prior to the adoption date), the Plan must use the
interest rate determination date resulting in the larger distribution for the
period beginning with the effective date and ending one year after the adoption
date.

                  In the case of a distribution (other than nondecreasing life
annuities payable for a period not less than the life of a Participant or, in
the case of a Pre-Retirement Survivor Annuity, the life of the surviving spouse)
that was made in a Plan Year beginning after December 31, 1994, and before the
later of the adoption date or the effective date of this amendment, the
calculation shall be made by using the interest rate determined under the
regulations of the Pension Benefit Guaranty Corporation for determining the
present value of a lump sum distribution on plan termination that were in effect
on September 1, 1993, and using the provisions of the Plan as in effect on the
day before December 8, 1994; but only if such provisions of the Plan met the
requirements of Code Section 417(e)(3) as in effect on the day before December
8, 1994.

2.       Section 5.6(a) is amended as follows:

(a) Payment to a Former Participant of the Vested portion of his Accrued
Benefit, unless he otherwise elects, shall begin not later than the 60th day
after the close of the Plan Year in which the latest of the following events
occurs: (1) the date on which the Participant attains the earlier of age 65 or
the Normal Retirement Age specified herein; (2) the 10th anniversary of the year
in which the Participant commenced participation in the Plan; or (3) the date
the Participant terminates his service with the Employer.

         However, the Administrator shall direct at the Participant's request,
the earlier payment of the entire Vested portion of the Present Value of Accrued
Benefit, but only if it
<PAGE>   3
does not exceed $3,500 and has never exceeded $3,500 at the time of any prior
distribution.

3.       Section 6.3(a) is amended, effective with the first "limitation year"
beginning after December 31, 1994, by the deletion of the last sentence and the
addition of the following sentences:

                  In order to determine actuarial equivalence for this purpose,
the lesser of the equivalent amount computed using the Plan interest rate and
mortality table and the amount computed using five percent (5%) interest and the
"Applicable Mortality Table" shall be used. However, if the "annual benefit" is
paid in a form other than a nondecreasing life annuity payable for a period not
less than the life of a Participant or, in the case of a Pre-Retirement Survivor
Annuity, the life of the surviving spouse, the actuarial equivalence shall be
determined by substituting the "Applicable Interest Rate" for five percent (5%)
in the preceding sentence.

4.       Section 6.3 is amended, effective with the first "limitation year"
beginning after December 31, 1994, by the addition of the following subsection:

                  For purposes of adjusting the "annual benefit" to a straight
life annuity, the equivalent "annual benefit" shall be the greater of the
equivalent "annual benefit" computed using the Plan interest rate and mortality
table and the equivalent "annual benefit" computed using five percent (5%)
interest rate assumption and the "Applicable Mortality Table." However, if the
"annual benefit" is paid in a form other than a nondecreasing life annuity
payable for a period not less than the life of a Participant or, in the case of
a Pre-Retirement Survivor Annuity, the life of the surviving spouse, the
"Applicable Interest Rate" shall be substituted for five percent (5%) in the
preceding sentence.

5.       Section 6.6(c)(4) is amended, effective with the first "limitation
year" beginning after December 31, 1994, to read as follows:

         If, as a result of a reasonable error in estimating a Participant's
Compensation or other facts and circumstances to which Regulation 1.415-6(b)(6)
shall be applicable, voluntary employee contributions for the "limitation year"
would cause the "annual additions" credited to a "participant's account" to
exceed that lesser of (A) $30,000 adjusted annually as provided in Code Section
415(d) pursuant to the Regulations, or (B) twenty-five percent (25%) of the
Participant's "415 Compensation" for Regulation 1.415-6(b)(6)(iv), return such
<PAGE>   4
voluntary employee contributions and distribute any gains attributable to such
voluntary employee contributions to the Participant to the extent necessary so
that "annual additions" for the "limitation year" do not exceed the lesser of
(A) or (B).

6.       Section 6.7 is amended, effective with the first "limitation year"
beginning after December 31, 1994, by the addition of the following paragraph:

                  A Participant's Accrued Benefit shall not be reduced
Below his Accrued Benefit as of the last day of the last Plan Year beginning
before January 1, 1995 (freeze date), merely because his Accrued Benefit is
determined solely in accordance with changes made to Code Section 415(b)(2)(E)
by the Retirement Protection Act of 1994, which is part of the Uruguay Round
Agreements Act of 1994. Accordingly, a Participant's Accrued Benefit shall be
equal to the greater of (1) the Participant's benefit under the terms of the
Plan, for the "annuity starting date" and optional form and taking into account
the limitations of Code Section 415 as amended, and (2) the Participant's
protected Accrued Benefit as of the freeze date. However, the protected Accrued
Benefit may be reduced if the Plan interest rate is changed to comply with Code
Section 417(e).

         IN WITNESS WHEREOF, this Amendment has been executed this 11th day of
December, 1995.

Signed, sealed, and delivered
in the presence of:

                                 Presidential Realty
                                 Corporation

                                 By Jeffrey F. Joseph
                                    -------------------------------
                                    EMPLOYER

                                 ATTEST Roslyn Lacativa
                                        ---------------------------

                                        Robert Feder
                                 ----------------------------------
                                 TRUSTEE

                                        Thomas Viertel
                                 ----------------------------------
                                 TRUSTEE
<PAGE>   5
                                SECOND AMENDMENT
                                     TO THE
              PRESIDENTIAL REALTY CORPORATION DEFINED BENEFIT PLAN

         WHEREAS, Presidential Realty Corporation (the "Employer"), has
previously adopted the Presidential Realty Corporation Defined Benefit Plan (the
"Plan"); and

         WHEREAS, the Employer desires to amend the Plan; and

         NOW, THEREFORE, effective January 1, 2000, the Plan is hereby amended
to read as follows:

1.       Section 1.1 of the Plan shall be amended by adding the following
paragraph at the end thereof:

         "The Accrued Benefit of a Participant who is a Participant in the Plan
as of December 31, 1999 shall not be less than the Accrued Benefit as determined
under the terms of the Plan as in effect on December 31, 1999."

2.       Section 5.1, paragraph (a) of the Plan shall be amended by inserting
the following paragraph after the first paragraph thereof:

         "Notwithstanding the foregoing, effective January 1, 2000, and solely
for Participants who are Eligible Employees on and after January 1, 2000, a
Participant's Accrued Benefit is based on a retirement benefit formula equal to
the sum of (1) 7.15% of such Participant's Average Monthly Compensation
multiplied by the Participant's total number of Plan Years of Service (up to a
maximum of 10 years), plus (2) .62% of such Average Monthly Compensation in
excess of one-twelfth of Covered Compensation multiplied by the Participant's
total number of Plan Years of Service (up to a maximum of 10 years), computed to
the nearest dollar."
<PAGE>   6
                  IN WITNESS WHEREOF, the Employer has caused this Amendment to
be executed by a duly authorized officer on this 8th day of December, 1999.

                                     PRESIDENTIAL REALTY CORPORATION

                                     By:     Jeffrey F. Joseph
                                             -----------------------------
                                     Title:  President
                                             -----------------------------
<PAGE>   7
                         PRESIDENTIAL REALTY CORPORATION

                            CERTIFICATE OF SECRETARY

       The undersigned Secretary of Presidential Realty Corporation (the
"Employer") hereby certifies that the following resolutions were duly authorized
by the Board of Directors of the Employer on this 8th day of December, 1999:

                  RESOLVED, that the Employer hereby authorizes the
                  adoption of the Second Amendment to the Presidential
                  Realty Corporation Defined Benefit Plan, effective
                  January 1, 2000; and be it further

                  RESOLVED, that the appropriate officers of the
                  Employer are hereby authorized and directed to
                  execute any and all documents necessary in order to
                  effectuate the foregoing resolution.

                                     Roslyn Lacativa
                                     ---------------------------------------
                                     Secretary

                                     December 8, 1999
                                     ---------------------------------------
                                     Date<PAGE>   1
                         PRESIDENTIAL REALTY CORPORATION
                             1999 STOCK OPTION PLAN

                            EFFECTIVE JANUARY 1, 1999

1.       PURPOSE

         The purpose of the Presidential Realty Corporation 1999 Stock Option
Plan (the "Plan") is to advance the interests of Presidential Realty Corporation
(the "Company") by providing stock ownership opportunities to certain key
employees (including officers and directors who are employees) who contribute
significantly to the performance of the Company. In addition, the Plan is
intended to enhance the ability of the Company to attract and retain individuals
of superior managerial ability and to motivate such key employees to exert their
best efforts towards the future progress and profitability of the Company.

2.       ADMINISTRATION AND INTERPRETATION

         (a) ADMINISTRATION. The administration and operation of the Plan shall
be supervised by the Compensation Committee of the Board of Directors of the
Company, or such other committee of such Board of Directors which shall succeed
to the functions and responsibilities, in whole or in part, of said Compensation
Committee (the "Committee"). The Committee shall consist of not less than three
members of the Board of Directors of the Company (the "Board of Directors") who
are not officers of the Company. No member of the Committee shall be entitled to
participate in the Plan.

            The Committee shall have the authority, consistent with the
provisions of the Plan, to determine the provisions of the Options to be granted
under the Plan; to determine the form of any such Option; to interpret the Plan
and any Option granted under the Plan; to adopt, amend and rescind rules and
regulations for the administration of the Plan and the Options granted under
the Plan; and to make all determinations in connection therewith which may be
necessary or advisable. The day-to-day administration of the Plan shall be
carried out by such officers and employees of the Company as shall be designated
from time to time by the Committee.

                                      90
<PAGE>   2
         (b) INTERPRETATION. The interpretation and construction by the
Committee of any provisions of the Plan or of any Option granted under the Plan
and any determination by the Committee under any provision of the plan or any
such Option shall be final and conclusive, unless otherwise determined by the
Board of Directors, in which event the determination of the Board of Directors
shall be final and conclusive.

         (c) LIMITATION ON LIABILITY. Neither the Board of Directors nor the
Committee, nor any member of either, shall be liable for any act, omission,
interpretation, construction or determination made in connection with the Plan
in good faith, and the members of the Committee shall be entitled to
indemnification and reimbursement by the Company in respect to any claim, loss,
damage or expense (including counsel fees) arising therefrom to the full extent
permitted by law and under any directors and officers liability insurance
coverage which may be in effect from time to time.

3.       SHARES SUBJECT TO OPTIONS UNDER THE PLAN

         (a) LIMITATION ON NUMBER OF SHARES. The shares subject to Options under
the Plan ("Option Shares") shall be shares of the Company's authorized but
unissued Class B common stock, par value $.10 per share ("Common Stock"). The
aggregate number of Option Shares as to which options may be granted under and
issued pursuant to the Plan shall not exceed 150,000.

         If any outstanding Option expires or terminates unexercised or is
terminated for any reason prior to December 31, 2003, the shares allocable to
the unexercised or terminated portion of such Option may again be made the
subject of grants under the Plan.

         (b) ADJUSTMENTS OF AGGREGATE NUMBER OF SHARES. The aggregate number of
shares stated in Section 3(a) shall be subject to appropriate adjustment, from
time to time, in accordance with the provisions of Section 4(c) hereof. In the
event of a change in the designation thereof to "Capital Stock" or other similar
designation, or to a change in the par value thereof, without increase or
decrease in the number of issued shares, the shares resulting from any such
change shall be deemed to be Common Stock within the meaning of the Plan.
<PAGE>   3
4.       STOCK OPTIONS

         (a) ELIGIBILITY. The individuals who shall be eligible to receive
Options under the Plan shall be such key employees (including officers and
directors who are employees) of the Company as the Board of Directors and the
Committee from time to time shall determine as provided below.

(b)      GRANTS OF OPTIONS

         (1) IN GENERAL. Options granted under the Plan shall be Non-qualified
Stock Options (as defined below). Options granted under the Plan shall be for
such number of Option Shares (subject to the limitation contained in Section 3)
as the Board of Directors and the Committee shall designate.

         The Committee, at any time and from time to time before December 31,
2003, may authorize the granting of Options to any individual eligible to
receive the same; provided, however, that Options to be granted to a senior
executive officer of the Company, as determined by the Board of Directors, and
the aggregate number of Options to be granted on a given date to all other
eligible employees, shall be approved by the Board of Directors.

         (2) NON-QUALIFIED STOCK OPTIONS. The term "Non-qualified Stock Option"
shall mean an Option which is not intended to qualify as an incentive stock
option under Section 422A of the Internal Revenue Code of 1986, as amended.

         (c) TERMS OF OPTIONS. Options granted pursuant to this Plan shall be
evidenced by agreements ("Stock Option Agreements"). Stock Option Agreements
shall comply with and be subject to the following terms and conditions and may
contain such other provisions, consistent with the terms of this Plan, as the
Committee or the Board of Directors shall deem advisable:

         (1) MEDIUM OF PAYMENT. Upon exercise of an Option, the option price
shall be payable to the Company (i) in United States dollars in cash or by
certified check, bank draft or money order payable to the order of the Company
(or such other forms of payment as the Committee may determine to be acceptable)
or (ii) by tendering to the Company for purchase and cancellation shares of
Common Stock owned by the optionee having an aggregate Market Value Per Share as
of the date of exercise which is not greater than the option price and by paying
the
<PAGE>   4
remainder of the option price as provided in (i) above. Payment instruments will
be received subject to collection.

         (2) NUMBER OF SHARES. Each Stock Option Agreement shall state the total
number of Option Shares which are subject to the Option.

         (3) OPTION PRICE. The option price for each Option Share shall not be
less than the "Closing Price Per Share" on the date of the granting of the
Option.

         (4) CLOSING PRICE. The Closing Price Per Share as of any particular
date shall be the closing price on such date for the Common Stock (or if there
are no trades on such date, the closing price prior to such date), on the
American Stock Exchange if the Common Stock is then listed thereon, or if such
stock it not then listed on the American Stock Exchange, on the principal
securities market on which it is traded.

         (5) TERM. The term of each Option shall be determined by the Committee
at the date of grant; provided, however, that each Option shall expire not more
than six years from the date the Option is granted.

         (6) DATE OF EXERCISE. Each Stock Option Agreement shall state that the
Option granted therein may not be exercised in whole or in part for any period
or periods of time specified in such agreement or otherwise as specified by the
Committee. Except as may be so specified, any Option may be exercised in whole
at any time or in part from time to time during its term.

         (7) TERMINATION OF EMPLOYMENT. In the event that an optionee's
employment by the Company shall terminate, the optionee's Options shall
terminate immediately, except as hereinafter provided in this subsection.

         The Committee, in its sole discretion, may determine that the
optionee's Options, to the extent exercisable immediately prior to such
termination of employment, may remain exercisable for a designated period of
time not to exceed 90 days after such termination of employment.

         If any termination of employment is due to retirement with the consent
of the Company, the optionee shall have the right, subject to the provisions of
subsections (5) and (6) above, to exercise his Option at any time within the
thirty-six month period after such retirement to the extent that the optionee
was
<PAGE>   5
entitled to exercise the same immediately prior to retirement. Whether any
termination of employment is to be considered a retirement with the consent of
the Company and whether an authorized leave of absence or absence on military or
government service or for other reasons shall constitute a termination of
employment for the purpose of the Plan shall be determined by the Committee.

         If an optionee shall die while entitled to exercise an Option, the
optionee's estate, personal representative, or beneficiary, as the case may be,
shall have the right, subject to the provisions of subsections (5) and (6)
above, to exercise the Option at any time within thirty-six months from the date
of the optionee's death (but in no event more than thirty-six months from the
date of the optionee's retirement with the consent of the Company), to the
extent that the optionee was entitled to exercise the same immediately prior to
the optionee's death.

         (8) RECAPITALIZATION. The aggregate number of shares stated in Section
3(a), the number of Option Shares to which each outstanding Option relates, and
the option price in respect of each such Option shall all be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a subdivision or consolidation of shares or other capital
adjustments, or the payment of a stock dividend or other increase or decrease in
such shares, effected without receipt of consideration by the Company or a
Subsidiary; provided, however, that any fractional shares resulting from any
such adjustment shall be eliminated.

         (9) MERGER OR CONSOLIDATION. After a merger of one or more corporations
in the Company, or after a consolidation of the surviving or resulting
corporation, an optionee shall, at the same cost, be entitled upon the exercise
of an Option, to receive (subject to any required action by stockholders) such
securities of the surviving or resulting corporation as the board of directors
of such corporation, in its sole discretion and without liability to any person,
shall determine to be equivalent, as nearly as practicable, to the nearest whole
number and class of shares of stock or other securities to the Option Shares
which were then subject to such Option, and such shares of stock or other
securities shall, after such merger or consolidation, be deemed to be Option
Shares for all purposes of the Plan and of the Options granted under the Plan;
provided, however, that anything herein contained to the contrary notwith-
standing, upon the dissolution or liquidation of the Company, or
<PAGE>   6
a merger or consolidation in which the Company is not the surviving or resulting
corporation, every Option outstanding hereunder shall terminate, except to the
extent that the surviving or resulting corporation may, in its absolute and
uncontrolled discretion, issue substituted options.

         (10) OPTIONEE'S AGREEMENT. If, at the time of the exercise of any
Option, in the opinion of counsel for the Company, it is necessary or desirable,
in order to comply with any then applicable laws or regulations relating to the
sale of securities, that the optionee exercising the Option shall agree to hold
any Option Shares issued to the optionee for investment and without any present
intention to resell or distribute the same and that the optionee will dispose of
such shares only in compliance with such laws and regulations, the optionee
will, upon the request of the Company, execute and deliver to the Company a
further agreement to such effect. Each optionee understands that the Common
Stock to be issued upon the exercise of any Option will not be registered under
the Securities Act of 1933 and must be held indefinitely unless they are
specifically registered under the Securities Act of 1933 or an exemption from
such registration is available (including an exemption according to the
provisions of Rule 144). Optionee further acknowledges that any sales of Shares
made in reliance upon Rule 144 can be made only in limited amounts in accordance
with the terms and conditions of that Rule and that other exemptions from
registration are extremely limited and may not be available at such time as
optionee may wish to sell said Shares. Optionee further understands that no
Shares may be issued pursuant to the Option until such Shares are listed on the
American Stock Exchange.

         (d) EFFECT OF EXERCISE OF OPTIONS. The right of an optionee to exercise
an Option shall terminate to the extent that such Option is exercised.

         (e) APPLICATION OF FUNDS. The proceeds received by the Company from the
sale of Option Shares pursuant to Options will be used for general corporate
purposes.

5.       WITHHOLDING FOR TAXES

         Any distribution of shares of Common Stock under the Plan shall not be
made until appropriate arrangements have been made for the payment of any
amounts which may be required to be withheld or paid with respect thereto under
all present or future federal, state and local tax laws and regulations which
<PAGE>   7
may be effective as of the date of each such distribution, including, but not
limited to, withholding the distribution of a portion of the shares of Common
Stock otherwise issuable or the tendering of such shares back to the Company
(under such rules and conditions as may be established by the Committee) in
order to satisfy all or a portion of the required withholdings or payments.

6.       AMENDMENT AND TERMINATION

         The Board of Directors may from time to time and at any time alter,
amend, suspend, discontinue or terminate this Plan and any Options granted
hereunder.

7.       PREEMPTION BY APPLICABLE LAWS AND REGULATIONS

         Anything in the Plan or any Stock Option Agreement entered into
pursuant to the Plan to the contrary notwithstanding, if, at any time specified
herein or therein for the making of any determination or the issue or other
distribution of shares of Common Stock, any law, regulation or requirement of
any governmental authority having jurisdiction in the premises shall require
either the Company or the employee (or the employee's beneficiary thereof) to
take any action in connection with any such determination or the shares then to
be issued or distributed, the issue or distribution of such shares shall be
deferred until such action shall have been taken.

8.       MISCELLANEOUS

         (a) NO EMPLOYMENT CONTRACT. Nothing contained in the Plan shall be
construed as conferring upon an employee the right to continue in the employ of
the Company.

         (b) NO RIGHTS AS A STOCKHOLDER. An employee shall have no rights as a
stockholder with respect to Option Shares covered by the employee's Option until
the date of the issuance of such shares to the employee and only after such
shares are fully paid. No adjustment will be made for dividends or other
distributions or rights for which the record date is prior to the date of such
issuance.

         (c) NO RIGHT TO CORPORATE ASSETS. Nothing contained in the Plan shall
be construed as giving an employee, the employee's beneficiaries or any other
person any equity or interest of any kind in any assets of the Company or
creating a
<PAGE>   8
trust of any kind or a fiduciary relationship of any kind between the Company
and any such person.

         (d) NO RESTRICTION ON CORPORATE ACTION. Nothing contained in the Plan
shall be construed to prevent the Company from taking any corporate action which
is deemed by the Company to be appropriate or in its best interest, whether or
not such action would have an adverse effect on the Plan or any Option granted
under the Plan. No employee, beneficiary or other person shall have any claim
against the Company as a result of any such action.

         (e) NON-ASSIGNABILITY. Neither an employee nor an employee's
beneficiary shall have the power or right to sell, exchange, pledge, transfer,
assign or otherwise encumber or dispose of such employee's or beneficiary's
interest in the Plan or in any Option received under the Plan; nor shall such
interest be subject to seizure for the payment of an employee's or beneficiary's
debts, judgments, alimony, or separate maintenance or be transferable by
operation of law in the event of an employee's or beneficiary's bankruptcy or
insolvency.

         The Company's obligations under the Plan are not assignable or
transferable except to a corporation which acquires all or substantially all of
the assets of the Company or to any corporation into which the Company may be
merged or consolidated.

         (f) OTHER BENEFIT PLANS. No Option or payment under the Plan shall be
taken into account in determining any benefits under any retirement,
profit-sharing or other plan maintained by the Company.

         (g) GOVERNING LAW; CONSTRUCTION. All rights and obligations under the
Plan shall be governed by, and the Plan shall be construed in accordance with,
the laws of the State of New York. Titles and headings to Sections herein are
for purposes of reference only, and shall in no way limit, define or otherwise
affect the meaning or interpretation of any provisions of the Plan.

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