SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
High Equity Partners, L.P. - Series 86
(Name of Issuer)
Units of Limited Partnership Interest
(Title of Class of Securities)
(CUSIP Number)
Allan B. Rothschild, Esq.
411 West Putnam Avenue
Greenwich, CT 06830
(203) 862-7051
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
July 24, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition that is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(e), 13d-1(f) or 13d-1(g), check the following box [ ].
Note: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits.
See Rule 13d-7(b) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that Section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).<PAGE>
SCHEDULE 13D
CUSIP No. None
1 NAMES OF REPORTING PERSONS
Millenium Funding Corp.
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
(Intentionally Omitted)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (See Instructions)
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES None
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 20
EACH 9 SOLE DISPOSITIVE POWER
REPORTING None
PERSON WITH 10 SHARED DISPOSITIVE POWER
20
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
20
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
14 TYPE OF REPORTING PERSON (See Instructions)
CO
SCHEDULE 13D
CUSIP No. None
1 NAMES OF REPORTING PERSONS
Millenium Funding III Corp.
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
(Intentionally Omitted)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (See Instructions)
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES None
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 47,307
EACH 9 SOLE DISPOSITIVE POWER
REPORTING None
PERSON WITH 10 SHARED DISPOSITIVE POWER
47,307
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
47,307
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.1%
14 TYPE OF REPORTING PERSON (See Instructions)
CO
SCHEDULE 13D
CUSIP No. None
1 NAMES OF REPORTING PERSONS
Presidio Capital Corp.
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
(Intentionally Omitted)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (See Instructions)
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
British Virgin Islands
NUMBER OF 7 SOLE VOTING POWER
SHARES None
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 79,487**
EACH 9 SOLE DISPOSITIVE POWER
REPORTING None
PERSON WITH 10 SHARED DISPOSITIVE POWER
79,487**
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
79,487**
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.5%
14 TYPE OF REPORTING PERSON (See Instructions)
HC
** Includes 32,160 Units tendered to Olympia Investors, L.P.
("Olympia") pursuant to a tender offer commenced by Olympia
on March 12, 1998 (the "Offer"). See Item 6.
SCHEDULE 13D
CUSIP No. None
1 NAMES OF REPORTING PERSONS
Presidio Capital Investment Company, LLC
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
(Intentionally Omitted)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (See Instructions)
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES None
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 79,487**
EACH 9 SOLE DISPOSITIVE POWER
REPORTING None
PERSON WITH 10 SHARED DISPOSITIVE POWER
79,487**
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
79,487**
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.5%
14 TYPE OF REPORTING PERSON (See Instructions)
OO
** Includes 32,160 Units tendered to Olympia pursuant to the
Offer. See Item 6.
SCHEDULE 13D
CUSIP No. None
1 NAMES OF REPORTING PERSONS
Presidio Holding Company, LLC
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
(Intentionally Omitted)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (See Instructions)
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
NUMBER OF 7 SOLE VOTING POWER
SHARES None
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 79,487**
EACH 9 SOLE DISPOSITIVE POWER
REPORTING None
PERSON WITH 10 SHARED DISPOSITIVE POWER
79,487**
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
79,487**
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.5%
14 TYPE OF REPORTING PERSON (See Instructions)
HC
** Includes 32,160 Units tendered to Olympia pursuant to the
Offer. See Item 6.
SCHEDULE 13D
CUSIP No. None
1 NAMES OF REPORTING PERSONS
Northstar Presidio Management Company, LLC
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
(Intentionally Omitted)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (See Instructions)
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES None
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 79,487**
EACH 9 SOLE DISPOSITIVE POWER
REPORTING None
PERSON WITH 10 SHARED DISPOSITIVE POWER
79,487**
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
79,487**
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.5%
14 TYPE OF REPORTING PERSON (See Instructions)
OO
** Includes 32,160 Units tendered to Olympia pursuant to the
Offer. See Item 6.
SCHEDULE 13D
CUSIP No. None
1 NAMES OF REPORTING PERSONS
Northstar Operating, LLC
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
(Intentionally Omitted)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (See Instructions)
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES None
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 79,487**
EACH 9 SOLE DISPOSITIVE POWER
REPORTING None
PERSON WITH 10 SHARED DISPOSITIVE POWER
79,487**
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
79,487**
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.5%
14 TYPE OF REPORTING PERSON (See Instructions)
OO
** Includes 32,160 Units tendered to Olympia pursuant to the
Offer. See Item 6.
SCHEDULE 13D
CUSIP No. None
1 NAMES OF REPORTING PERSONS
Northstar Capital Partners, LLC
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
(Intentionally Omitted)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (See Instructions)
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES None
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 79,487**
EACH 9 SOLE DISPOSITIVE POWER
REPORTING None
PERSON WITH 10 SHARED DISPOSITIVE POWER
79,487**
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
79,487**
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.5%
14 TYPE OF REPORTING PERSON (See Instructions)
OO
** Includes 32,160 Units tendered to Olympia pursuant to the
Offer. See Item 6.
SCHEDULE 13D
CUSIP No. None
1 NAMES OF REPORTING PERSONS
Northstar Capital Holdings I, LLC
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
(Intentionally Omitted)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (See Instructions)
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES None
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 79,487**
EACH 9 SOLE DISPOSITIVE POWER
REPORTING None
PERSON WITH 10 SHARED DISPOSITIVE POWER
79,487**
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
79,487**
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.5%
14 TYPE OF REPORTING PERSON (See Instructions)
HC
** Includes 32,160 Units tendered to Olympia pursuant to the
Offer. See Item 6.
SCHEDULE 13D
CUSIP No. None
1 NAMES OF REPORTING PERSONS
David Hamamoto
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
(Intentionally Omitted)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (See Instructions)
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) []
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
NUMBER OF 7 SOLE VOTING POWER
SHARES None
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 79,487**
EACH 9 SOLE DISPOSITIVE POWER
REPORTING None
PERSON WITH 10 SHARED DISPOSITIVE POWER
79,487**
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
79,487**
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.5%
14 TYPE OF REPORTING PERSON (See Instructions)
IN
** Includes 32,160 Units tendered to Olympia pursuant to the
Offer. See Item 6.
SCHEDULE 13D
CUSIP No. None
1 NAMES OF REPORTING PERSONS
W. Edward Scheetz
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS
(Intentionally Omitted)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See
Instructions)
(a) [x]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (See Instructions)
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) []
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
NUMBER OF 7 SOLE VOTING POWER
SHARES None
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 79,487**
EACH 9 SOLE DISPOSITIVE POWER
REPORTING None
PERSON WITH 10 SHARED DISPOSITIVE POWER
79,487**
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
79,487**
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.5%
14 TYPE OF REPORTING PERSON (See Instructions)
IN
** Includes 32,160 Units tendered to Olympia pursuant to the
Offer. See Item 6.
Schedule 13D
Item 2. Identity and Background.
Item 2 is amended in its entirety as follows:
This statement is being filed by the following
entities, which are affiliated with Presidio Capital Corp.
(collectively, the "Presidio Entities"):
(1) Millenium Funding Corp., a Delaware corporation
("MFC");
(2) Millenium Funding III Corp., a Delaware corporation
("MFC III");
(3) Presidio Capital Corp., a British Virgin Islands
corporation ("Presidio");
(4) Presidio Capital Investment Company, LLC, a Delaware
limited liability company ("PCIC");
(5) Presidio Holding Company, LLC, a New York limited
liability company ("PHC");
(6) Northstar Presidio Management Company, LLC, a Delaware
limited liability company ("NP Management");
(7) Northstar Operating, LLC, a Delaware limited liability
company ("Northstar");
(8) Northstar Capital Partners, LLC a Delaware limited
liability company ("NCP");
(9) Northstar Capital Holdings I, LLC, a Delaware limited
liability company ("NCHI");
(10) W. Edward Scheetz, a United States citizen; and
(11) David Hamamoto, a United States citizen
Each of MFC and MFC III is a direct or indirect wholly-
owned subsidiary of Presidio. The principal business and office
address of each of MFC and MFC III is 411 West Putnam Avenue
Greenwich, CT 06830, and of Presidio is c/o Hemisphere Management
Limited, 9 Church Street, Hamilton HM DX, Bermuda.
PCIC, which holds all of the outstanding shares of
Presidio, is a Delaware limited liability company whose principal
business and office address is 527 Madison Avenue, 17th Floor,
New York, New York 10022. The members of PCIC are PHC, a New York
limited liability company which holds 71.93% of the membership
interests, and various other entities. The principal business and
office address of PHC is 527 Madison Avenue, 17th Floor, New
York, New York 10022. The members of PHC are Northstar, which
holds a 99% interest in PHC, and Polaris Operating, LLC
("Polaris"), which holds a 1% interest. Northstar and Polaris
also own 99% and 1%, respectively, of NP Management, whose
principal business and office address is 411 West Putnam Avenue,
Suite 270, Greenwich, Connecticut 06830.
Each of Northstar and Polaris is a Delaware limited
liability company whose principal business and office address is
527 Madison Avenue, 17th Floor, New York, New York 10022.
Polaris has two members, Northstar, which holds a 99% interest,
and Sextant Operating Corp., a Delaware corporation ("Sextant"),
which holds a 1% interest. The principal business and office
address of Sextant is 527 Madison Avenue, 17th Floor, New York,
New York 10022.
Northstar has two members, NCP, which holds a 99%
interest, and NCHI, which holds a 1% interest. Each of NCP and
NCHI is a Delaware limited liability company whose principal
business and office address is 527 Madison Avenue, 17th Floor,
New York, New York 10022. The members of NCP are NCHI, which
holds a 74.75% interest, and Northstar Capital Holdings II, LLC,
a Delaware limited liability company ("NCHII"), which holds a
25.25% interest. The principal business and office address of
NCHII is 527 Madison Avenue, 17th Floor, New York, New York
10022.
NCHI has two members, W. Edward Scheetz and David
Hamamoto, each of whom holds a 50% interest. Mr. Scheetz and Mr.
Hamamoto are each U.S. citizens whose business address is 527
Madison Avenue, 17th Floor, New York, New York 10022.
The Presidio Entities are also collectively referred to
as the "Reporting Persons."
During the last five years, none of the Reporting
Persons (i) has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii)
was a party to a civil proceeding of a judicial or administrative
body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any
violation with respect to such laws.
In connection with a tender offer for units of limited
partnership interest ("Units") of the issuer, High Equity
Partners, L.P. - Series 86, a Delaware limited partnership (the
"Partnership"), made March 12, 1998 (the "Offer") by Olympia
Investors, L.P., a Delaware limited partnership controlled by
Carl C. Icahn ("Olympia"), Olympia and Presidio entered into an
agreement, dated March 6, 1998 (as amended, the "Agreement"). As
a consequence of the Agreement, Presidio , PHC, NP Management,
Northstar, NCP, NCPI, W. Edward Scheetz and David Hamamoto
(collectively, the "Upper Tier Parties") may be deemed to
beneficially own the Units owned by Olympia. See Item 6.
Item 5. Interest in Securities of the Issuer.
Item 5 is amended in its entirety as follows:
The Reporting Persons own beneficially an aggregate of
13.5% of the outstanding Units (on the basis of 588,010 Units
outstanding), including Units tendered to Olympia pursuant to the
Offer. See Item 6. Set forth below is a summary for each
Reporting Person of its beneficial ownership of Units.
A. MFC
(a) Aggregate number of Units
beneficially owned: 20
Percentage: 0.0%
(b) 1. Sole power to vote or to direct vote: -0-
2. Shared power to vote or to direct vote:
20
3. Sole power to dispose or to direct the
disposition: -0-
4. Shared power to dispose or to direct the
disposition: 20
(c) There were no transactions by MFC during
the past 60 days, other than as set forth
below in this item 5.
(d) MFC may be deemed to have the right to
receive or the power to direct the receipt
of distribution from, or proceeds from
the sale of, the 20 Units
(e) Not applicable.
B. MFC III
(a) Aggregate number of Units
beneficially owned: 47,307
Percentage: 8.1%
(b) 1. Sole power to vote or to direct vote: -0-
2. Shared power to vote or to direct vote:
47,307
3. Sole power to dispose or to direct the
disposition: -0-
4. Shared power to dispose or to direct the
disposition: 47,307
(c) There were no transactions by MFC III during
the past 60 days, other than as set forth
below in this item 5.
(d) MFC III may be deemed to have the right to
receive or the power to direct the receipt
of distribution from, or proceeds from
the sale of, the 47,307 Units
(e) Not applicable.
C. Presidio
(a) Aggregate number of Units
beneficially owned: 79,487
Percentage: 13.5%
(b) 1. Sole power to vote or to direct vote: -0-
2. Shared power to vote or to direct vote:
79,487
3. Sole power to dispose or to direct the
disposition: -0-
4. Shared power to dispose or to direct the
disposition: 79,487
(c) There were no transactions by Presidio
during the past 60 days, other than as
set forth in this item 5.
(d) Presidio may be deemed to have the right to
receive or the power to direct the receipt of
distributions from, or proceeds from the sale
of, the 79,487 Units.
(e) Not applicable.
D. PCIC
(a) Aggregate number of Units
beneficially owned: 79,487
Percentage: 13.5%
(b) 1. Sole power to vote or to direct vote: -0-
2. Shared power to vote or to direct vote:
79,487
3. Sole power to dispose or to direct the
disposition: -0-
4. Shared power to dispose or to direct the
disposition: 79,487
(c) There were no transactions by PCIC
during the past 60 days, other than as
set forth in this item 5.
(d) PCIC may be deemed to have the right to
receive or the power to direct the receipt of
distributions from, or proceeds from the sale
of, the 79,487 Units.
(e) Not applicable.
E. PHC
(a) Aggregate number of Units
beneficially owned: 79,487
Percentage: 13.5%
(b) 1. Sole power to vote or to direct vote: -0-
2. Shared power to vote or to direct vote:
79,487
3. Sole power to dispose or to direct the
disposition: -0-
4. Shared power to dispose or to direct the
disposition: 79,487
(c) There were no transactions by PHC
during the past 60 days, other than as
set forth in this item 5.
(d) PHC may be deemed to have the right to
receive or the power to direct the receipt of
distributions from, or proceeds from the sale
of, the 79,487 Units.
(e) Not applicable.
F. NP Management
(a) Aggregate number of Units
beneficially owned: 79,487
Percentage: 13.5%
(b) 1. Sole power to vote or to direct vote: -0-
2. Shared power to vote or to direct vote:
79,487
3. Sole power to dispose or to direct the
disposition: -0-
4. Shared power to dispose or to direct the
disposition: 79,487
(c) There were no transactions by NP Management during
the past 60 days, other than as set forth
below in this item 5.
(d) NP Management may be deemed to have the right to
receive or the power to direct the receipt
of distribution from, or proceeds from
the sale of, the 79,487 Units
(e) Not applicable.
G. Northstar
(a) Aggregate number of Units
beneficially owned: 79,487
Percentage: 13.5%
(b) 1. Sole power to vote or to direct vote: -0-
2. Shared power to vote or to direct vote:
79,487
3. Sole power to dispose or to direct the
disposition: -0-
4. Shared power to dispose or to direct the
disposition: 79,487
(c) There were no transactions by Northstar during
the past 60 days, other than as set forth
below in this item 5.
(d) Northstar may be deemed to have the right to
receive or the power to direct the receipt
of distribution from, or proceeds from
the sale of, the 79,487 Units
(e) Not applicable.
H. NCP
(a) Aggregate number of Units
beneficially owned: 79,487
Percentage: 13.5%
(b) 1. Sole power to vote or to direct vote: -0-
2. Shared power to vote or to direct vote:
79,487
3. Sole power to dispose or to direct the
disposition: -0-
4. Shared power to dispose or to direct the
disposition: 79,487
(c) There were no transactions by NCP
during the past 60 days, other than as
set forth in this item 5.
(d) NCP may be deemed to have the right to
receive or the power to direct the receipt of
distributions from, or proceeds from the sale
of, the 79,487 Units.
(e) Not applicable.
I. NCHI
(a) Aggregate number of Units
beneficially owned: 79,487
Percentage: 13.5%
(b) 1. Sole power to vote or to direct vote: -0-
2. Shared power to vote or to direct vote:
79,487
3. Sole power to dispose or to direct the
disposition: -0-
4. Shared power to dispose or to direct the
disposition: 79,487
(c) There were no transactions by NCHI
during the past 60 days, other than as
set forth in this item 5.
(d) NCHI may be deemed to have the right to
receive or the power to direct the receipt of
distributions from, or proceeds from the sale
of, the 79,487 Units.
(e) Not applicable.
J. W. Edward Scheetz
(a) Aggregate number of Units
beneficially owned: 79,487
Percentage: 13.5%
(b) 1. Sole power to vote or to direct vote: -0-
2. Shared power to vote or to direct vote:
79,487
3. Sole power to dispose or to direct the
disposition: -0-
4. Shared power to dispose or to direct the
disposition: 79,487
(c) There were no transactions by W. Edward Scheetz
during the past 60 days, other than as
set forth in this item 5.
(d) W. Edward Scheetz may be deemed to have the right
to receive or the power to direct the receipt of
distributions from, or proceeds from the sale
of, the 79,487 Units.
(e) Not applicable.
K. David Hamamoto
(a) Aggregate number of Units
beneficially owned: 79,487
Percentage: 13.5%
(b) 1. Sole power to vote or to direct vote: -0-
2. Shared power to vote or to direct vote:
79,487
3. Sole power to dispose or to direct the
disposition: -0-
4. Shared power to dispose or to direct the
disposition: 79,487
(c) There were no transactions by David Hamamoto
during the past 60 days, other than as
set forth in this item 5.
(d) David Hamamoto may be deemed to have the right to
receive or the power to direct the receipt of
distributions from, or proceeds from the sale
of, the 79,487 Units.
(e) Not applicable.
On July 24, 1998, Olympia purchased 32,160 Units
tendered by various holders thereof in response to the Offer, for
an aggregate purchase price of $2,733,600.00. On July 29, 1998,
MFC III purchased a total of 166 Units for an aggregate of
$14,691.00 (i.e., $88.50 per Unit) from the American Partnership
Board in brokerage transactions effected by [Trust Co. of
America]. On July 30, 1998, MFC III purchased 80 Units for
$7,088.80 (i.e., $88.61 per Unit) from the American Partnership
Board in a brokerage transactions effected by [Trust Co. of
America]. On August 13, 1998, MFC III purchased 430 Units for
$37,463.75, on August 27, 1998, MFC III purchased 180 Units for
$15,682.50 and on September 10, 1998, MFC III purchased 336 Units
for $29,377.32 (i.e., $87.43 per Unit) all in brokerage
transactions effected by DCC Securities Corp. Finally, on
September 19, 1998, MFC III purchased a total of 799 Units for an
aggregate of $71,910.00 (i.e., $90.00 per Unit) in brokerage
transactions effected by A-1 Partnership Service.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer.
The Agreement entered into between Olympia and Presidio
in connection with the Offer provides, among other things, for:
(i) Olympia's conduct of tender offers for up to 40% of the
outstanding Units of the Partnership and two related limited
partnerships (the "Related Partnerships"), and the cooperation of
the general partners of the Partnership and Related Partnerships
to facilitate such offers (including furnishing Olympia with
limited partner lists for use in connection with the Offers and
taking a neutral stance with respect thereto) and the transfer of
tendered Units to Olympia without the imposition of transfer
fees; (ii) an agreement by Olympia and its affiliates to limit
their acquisition of Units in the Partnership and the Related
Partnerships to Units acquired in the Offers and to limit their
acquisition of assets or properties of the Partnership or the
Related Partnerships to properties or assets which the general
partners or their affiliates have publicly announced their
intention to sell or have hired a broker for such purpose; (iii)
an agreement by Olympia and its affiliates not to: seek the
removal of the general partners or call any meeting of limited
partners of the Partnership or the Related Partnerships; make any
proposal to or seek proxies from limited partners of the
Partnership or the Related Partnerships; or act, either alone or
in concert with others, to seek to control the management,
policies or affairs of the Partnership or any Related Partnership
or to effect any business combination or other extraordinary
transactions with the Partnership or its general partners; (iv)
an agreement by Olympia and its affiliates to vote Units owned by
them in favor of a proposal, if any, by the general partners of
the Partnership or the Related Partnerships resulting in limited
partners receiving securities that are listed on NASDAQ or a
national securities exchange; (v) Olympia's grant to Presidio of
a call option to purchase 50% of the Units in the Partnership
acquired in the Offer at a price equal to the lesser of the price
paid by Olympia or $99.97 per Unit (except that the limitation of
the call price to $99.97 per Unit will not apply if the purchase
price of $85.00 per Unit offered by Olympia to holders of Units
pursuant to the Offer(the "Purchase Price") is increased to more
than that amount in response to a competing bid), plus 50% of
Olympia's costs associated with the Offer; (vi) the grant to
Presidio of a similar call option to purchase 50% of the Units in
the Related Partnerships acquired pursuant to the Offers; (vii) a
buy/sell agreement, pursuant to which either party can initiate
buy/sell procedures by notifying the other of a specified price
per Unit (not to exceed the then current net asset value of the
Units) and the other terms and conditions on which the non-
initiating party would then be required to elect (subject to
certain exceptions) either to buy certain Units from the
initiating party or to sell certain Units to the initiating party
(such Units consisting, in the case of Olympia, of all Units
owned by Olympia and its affiliates and, in the case of NCP, of
all Units purchased by NCP upon exercise of the call option
described above. The agreements of the Purchaser and its
affiliates described in clauses (ii), (iii) and (iv) above expire
on March 6, 2001 (the "Standstill Expiration Date"), but may
expire earlier under certain circumstances.
As a consequence of the Agreement, the Upper Tier
Parties may be deemed to beneficially own the Units owned by
Olympia.
Item 7. Material to be Filed as Exhibits.
Exhibit
Number Description
99.1 Agreement of Presidio Entities pursuant to Rule
13d-1(k)(1)(iii)
99.2 Letter Agreement, dated March 6, 1998, between
Presidio Capital Corp., Olympia Investors, L.P.
and American Real Estate Holdings, L.P. (the
"Agreement")
99.3 Amendment No. 1 to the Agreement, dated May 20,
1998
99.4 Amendment No. 2 to the Agreement, dated June 29,
1998
99.5 Amendment No. 3 to the Agreement, dated July 16,
1998
SIGNATURES
After reasonable inquiry and to the best of each of the
undersigned's knowledge and belief, each of the undersigned
certifies that the information set forth in this statement is
true, complete and correct.
Dated: October 30, 1998
MILLENIUM FUNDING CORP. MILLENIUM FUNDING III CORP.
By: /s/ Allan B. Rothschild By: /s/ Allan B. Rothschild
Name: Allan B. Rothschild Name: Allan B. Rothschild
Title: Authorized Signatory Title: Authorized Signatory
PRESIDIO CAPITAL CORP. PRESIDIO CAPITAL INVESTMENT COMPANY, LLC
By: /s/ Allan B. Rothschild By: /s/ W. Edward Scheetz
Name: Allan B. Rothschild Name: W. Edward Scheetz
Title: Authorized Signatory Title: Authorized Signatory
PRESIDIO HOLDING COMPANY, NORTHSTAR PRESIDIO MANAGEMENT
LLC COMPANY, LLC
By: /s/ W. Edward Scheetz By: /s/ Allan B. Rothschild
Name: W. Edward Scheetz Name: Allan B. Rothschild
Title: Authorized Signatory Title: Authorized Signatory
NORTHSTAR CAPITAL HOLDINGS NORTHSTAR CAPITAL PARTNERS, LLC
I, LLC
By: /s/ W. Edward Scheetz By: /s/ W. Edward Scheetz
Name: W. Edward Scheetz Name: W. Edward Scheetz
Title: Authorized Signatory Title: Authorized Signatory
/s/ David Hamamoto /s/ W. Edward Scheetz
David Hamamoto W. Edward Scheetz
EXHIBIT INDEX
Exhibit
Number Description
99.1 Agreement of Presidio Entities pursuant to Rule
13d-1(k)(1)(iii)
99.2 Letter Agreement, dated March 6, 1998, between
Presidio Capital Corp., Olympia Investors, L.P.
and American Real Estate Holdings, L.P. (the
"Agreement")
99.3 Amendment No. 1 to the Agreement, dated May 20,
1998
99.4 Amendment No. 2 to the Agreement, dated June 29,
1998
99.5 Amendment No. 3 to the Agreement, dated July 16,
1998
Pursuant to Rule 13d-1(k(1)(iii) of Regulation 13D-G of the
General Rules and Regulations of the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended,
the undersigned agree that the statement to which this Exhibit is
attached is filed on behalf of each of them in the capacities set
forth below.
MILLENIUM FUNDING CORP. MILLENIUM FUNDING III CORP.
By: /s/ Allan B. Rothschild By: /s/ Allan B. Rothschild
Name: Allan B. Rothschild Name: Allan B. Rothschild
Title: Authorized Signatory Title: Authorized Signatory
PRESIDIO CAPITAL CORP. PRESIDIO CAPITAL INVESTMENT COMPANY, LLC
By: /s/ Allan B. Rothschild By: /s/ W. Edward Scheetz
Name: Allan B. Rothschild Name: W. Edward Scheetz
Title: Authorized Signatory Title: Authorized Signatory
PRESIDIO HOLDING COMPANY, NORTHSTAR PRESIDIO MANAGEMENT
LLC COMPANY, LLC
By: /s/ W. Edward Scheetz By: /s/ Allan B. Rothschild
Name: W. Edward Scheetz Name: Allan B. Rothschild
Title: Authorized Signatory Title: Authorized Signatory
NORTHSTAR CAPITAL HOLDINGS NORTHSTAR CAPITAL PARTNERS, LLC
I, LLC
By: /s/ W. Edward Scheetz By: /s/ W. Edward Scheetz
Name: W. Edward Scheetz Name: W. Edward Scheetz
Title: Authorized Signatory Title: Authorized Signatory
/s/ David Hamamoto /s/ W. Edward Scheetz
David Hamamoto W. Edward Scheetz
AGREEMENT
Dated March 6, 1998
The parties to this agreement are Presidio Capital Corp., a
corporation organized in the British Virgin Islands ("Presidio"), American Real
Estate Holdings L.P., a Delaware limited partnership ("AREH") and Olympia
Investors, L.P., a Delaware limited partnership ("Olympia").
Presidio, directly or indirectly, controls the general partners of
each of Integrated Resources High Equity Partners, Series 85, a California
limited partnership ("HEP 85"), High Equity Partners L.P. - Series 86, a
Delaware limited partnership ("HEP 86"), and High Equity Partners L.P. - Series
88, a Delaware limited partnership ("HEP 88" and collectively with HEP 85 and
HEP 86, the "Partnerships"). On the date of this agreement, AREH and its
affiliates beneficially own 1,657 units of limited partnership interest
("Units") of HEP 85, 3,243Units of HEP 86 and 2,346 Units of HEP 88. Olympia, a
newly-formed Delaware limited partnership affiliated with AREH, wishes to make
tender offers (the "Offers") to acquire up to approximately 40% of the
outstanding Units of each of the Partnerships and, in that connection, proposes
to file with the Securities and Exchange Commission (the "Commission") a Tender
Offer Statement on Schedule 14D-1 relating to each Offer (collectively, the
"Schedule 14D-1's") substantially in the forms set forth on schedule A.
The parties agree as follows:
1. Offers. (a) Olympia intends to file the Schedule 14D-1's with the
Commission, and to cause the related Offers to Purchase, Assignments of
Partnership Interest and Cover Letters included as exhibits to such Schedule
14D-1's (such Offers to Purchase,
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Assignments of Partnership Interest and Cover Letters, together with any
amendments or supplements thereto or any other communications proposed to be
sent to holders of Units of any Partnership being collectively referred to as
the "Offering Materials") to be mailed to holders of Units, on or before the
fifth business day following delivery by the Partnerships to Olympia of the
Lists referred to in section 1(b) hereof. Olympia shall cause each Offer to
expire on or before May 12, 1998 (the date on which an Offer expires in
accordance with this sentence, as the same may be extended in accordance with
the proviso set forth below, the "Final Expiration Date"); provided, however,
that the Final Expiration Date with respect to any Offer may be extended, upon
notice by Olympia to Presidio, under the following circumstances: (i) if there
is in effect, on such date, any preliminary or permanent injunction or other
order of any federal or state court, government or governmental authority or
agency of the type described in paragraph (a) of Section 14 of the applicable
Offer to Purchase (such preliminary or permanent injunction or other order being
hereinafter referred to as an "Injunction"), the Final Expiration Date of such
Offer may be extended to the earliest practicable date on which such Offer may
expire in accordance with the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations promulgated by the commission
thereunder (the Exchange Act and such rules and regulations being hereinafter
collectively referred to as the "Rules"), following the vacation or dissolution
of such Injunction and the dissemination to limited partners of additional
Offering Materials containing any necessary disclosure relating thereto; (ii)
subject to clause (i) above, if there is pending, on such date, any action or
proceeding of the type described in paragraph (h) of Section 14 of the
applicable Offer to Purchase, the Final Expiration Date of such Offer may be
extended to the earlier of (A) the earliest practicable date on which such Offer
may expire in accordance
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<PAGE>
with the Rules following the final resolution of such action or proceeding and
the dissemination to limited partners of additional offering Materials
containing any necessary disclosure relating thereto or (B) June 11, 1998; (iii)
the Final Expiration Date of such Offer may be extended to the earliest
practicable date on which such Offer may expire in accordance with the Rules
following the dissemination to limited partners of additional Offering Materials
prepared for the purpose of complying with comments by the staff of the
Commission, provided that Olympia uses its best efforts to comply with such
comments expeditiously; or (iv) in the event that a competing offer for Units is
commenced by a third party bidder who is not affiliated with AREH (a "Competing
Offer"), the Final Expiration Date of such Offer may be extended, on one or more
occasions, to the earliest practicable date on which such Offer may expire in
accordance with the Rules following an increase in the offering price to a price
equal to or higher than the price offered by the competing bidder and the
dissemination to limited partners of amended Offering Materials disclosing such
increase, provided, however, that if such Competing Offer is for less than 5% of
the outstanding Units of a Partnership, the Final Expiration Date may not be
extended for more than ten business days beyond June 11, 1998 pursuant to this
clause (iv). Presidio will not unreasonably withhold or delay its consent to any
request by Olympia to extend the Final Expiration Date of any Offer, for any
reason other than those set forth in the immediately preceding sentence,
provided that such request does not seek to extend such Final Expiration Date
beyond June 11, 1998.
(b) Concurrently herewith, Presidio has caused the Partnerships to
furnish Olympia with lists, as of the most recent practicable date and in
computer readable form, of the names, addresses and numbers of Units held by
limited partners of the Partnerships (the "Lists"),
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<PAGE>
together with such computer processing data as is necessary to make use of such
computer readable Lists and printouts of such Lists for verifications purposes.
AREH shall not, and shall cause its affiliates, agents and representatives not
to, use the Lists for any purpose other than to acquire Units pursuant to the
Offers.
(c) Olympia shall make all decisions regarding the conduct of the
Offers and the acquisition and transfer of Units pursuant thereto, including
without limitation decisions regarding any change in the terms or waiver of any
of the conditions thereof; provided, however, that, without obtaining the prior
written approval of Presidio, Olympia shall not amend or otherwise modify the
terms of any Offer: (i) to increase the number of Units of any Partnership
sought to be purchased in such Offer to a number in excess of 40% of the
outstanding Units of such Partnership; or (ii) in a manner that violates or is
inconsistent with its obligations under this agreement. Olympia shall provide
Presidio with copies of Offering Materials describing any proposed change in the
terms of, or waiver of any condition to, an Offer not less than two business
days prior to the date such Offering Materials are first mailed to holders of
Units. Each party shall, and shall cause its affiliates to, comply with the
Rules in connection with the Offers.
(d) Presidio will not, and will cause its affiliates not to, directly
or indirectly, purchase or otherwise acquire beneficial ownership of Units in
any Partnership, enter into any agreement with a third party to purchase or
otherwise acquire beneficial ownership of any Units in any Partnership, or make
any offer to purchase or otherwise acquire beneficial ownership of, or solicit
any offer to sell, Units in any Partnership, at any time commencing on the date
hereof through and including the Final Expiration Date of the Offer with respect
to such Partnership.
2. Standstill. (a) Prior to the Standstill Expiration Date (as
hereinafter defined),
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except to the extent AREH or its affiliates is invited to do otherwise by
Presidio, AREH shall not, and shall not permit any of its affiliates to,
directly or indirectly:
(i) acquire, announce an intention to acquire, offer or propose
to acquire, solicit an offer to sell or agree to acquire, by purchase, by gift,
by joining a partnership, a limited partnership, a syndicate or any group or
otherwise (other than any partnership, limited partnership, syndicate or group
consisting solely of AREH and its affiliates and, in such event, only to the
extent permitted pursuant to section 2(b) below), (A) any Units in any
Partnership or (B) any assets, businesses or properties of any Partnership;
(ii) participate in the formation or encourage the formation of,
or join or in any way participate with, any partnership, limited partnership,
syndicate, group or other person or entity that beneficially owns or seeks to
acquire beneficial ownership of Units in any Partnership for the purpose of
beneficially owning or acquiring beneficial ownership of any such Units (other
than any group consisting solely of AREH and its affiliates);
(iii) solicit, or participate in the solicitation of, proxies or
become a participant in any election contest (the terms used in this section 2.3
having the respective meanings given them to Regulation 14A under the Exchange
Act) with respect to any Partnership;
(iv) initiate, propose or otherwise solicit limited partners for
the approval of one or more proposals with respect to any Partnership or induce
any other person to initiate any such proposal; (v) seek the removal of any
general partner of any Partnership or seek to have called any meeting of limited
partners of any Partnership; (vi) deposit any Units of any Partnership in a
voting trust or subject them to
5
<PAGE>
a voting agreement or other agreement or arrangement with respect to voting
(other than this agreement or any agreement or arrangement solely among AREH and
its affiliates); or
(vii) otherwise act, alone or in concert with others, to seek to
control the management, policies or affairs of any Partnership or solicit,
propose, seek to effect or negotiate with any other person or entity (including,
without limitation, any Partnership) with respect to any form of business
combination or other extraordinary transaction with any Partnership or any of
its general partners; solicit, make or propose, or negotiate with any other
person or entity with respect to, or announce an intent to make, any tender
offer or exchange offer for any Units in any Partnership; publicly disclose an
intent, purpose, plan or proposal with respect to any Partnership or any
securities or assets of any Partnership that would violate the provisions of
this section 2; or assist, participate in, facilitate or solicit any effort or
attempt by any person or entity to do or seek to do any of the foregoing.
(b) Notwithstanding the provisions of section 2(a):
(i) AREH and its affiliates: may conduct the Offers, and acquire
Units pursuant to the Offers, in accordance with section 1 hereof and may
exercise their rights and perform their obligations under this Agreement;
(ii) Olympia and/or any Permitted Transferee may acquire from any
Partnership, as a distribution from the Partnership, any securities or other
assets or properties the Partnership distributes to its partners in any such
distribution.
(iii) Except as to the matters expressly referred to in section
2(a) and except as provided in section 5, Olympia and any Permitted Transferee
of Units shall be entitled to exercise their rights as a limited partner of each
Partnership in which they own Units, including, without
6
<PAGE>
limitation, the rights to access books and records of the Partnership and to
vote.
(iv) Neither AREH nor any affiliate of AREH shall be deemed to
have violated section 2 of this Agreement in the event that such person acquires
beneficial ownership of Units of any Partnership pursuant to a transaction in
which such person acquires another entity, in circumstances in which the
principal purpose of such transaction is not to acquire Units of such
Partnership or otherwise to circumvent the intent of this agreement, provided
that the number of Units so acquired, together with the aggregate number of
Units of such Partnership acquired by AREH or any affiliate of AREH in any other
transactions permitted pursuant to this paragraph (iv), represent a de minimis
amount of the total outstanding Units of such Partnership.
(v) AREH and its affiliates may acquire, offer or propose to
acquire, or agree to acquire one or more assets, businesses or properties of any
Partnership if, prior to AREH or any affiliate taking action with respect to
such acquisition, the general partners of the Partnership owning such assets,
businesses or properties or their affiliates have publicly announced such
Partnership's intention to offer such assets, businesses or properties for sale
or to solicit offers for the purchase thereof or have retained a broker for such
purpose.
(c) For purposes of this agreement, "Standstill Expiration Date",
with respect to any Partnership, shall mean the earliest to occur of: (i) the
third anniversary of the date hereof; (ii) the date of a Default (as hereinafter
defined) by Presidio in its obligation to purchase Units of such Partnership
pursuant to the buy/sell agreements set forth in section 4 hereof; and (iii) the
closing date of the purchase by Olympia and/or any affiliate of Units from
Presidio pursuant to the buy/sell agreements set forth in section 4 hereof.
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3. Restrictions on Transfer
3.1 Transfers to be made only as Permitted or Required by this
Agreement. Olympia and its affiliates shall not, directly or indirectly, sell,
assign, transfer, pledge or otherwise encumber or dispose of (collectively,
"transfer") any Units any of them acquires pursuant to the Offers, except as
specifically permitted or required by this agreement. Any other purported
transfer shall be void and of no effect. The foregoing provisions shall not be
deemed to prohibit (a) the transfer of the capital stock or other equity
interest in Olympia, AREH or any of their respective affiliates in circumstances
in which the principal purpose of such transfer is not to dispose of Units or
otherwise to circumvent the intent of this agreement; or (b) the pledge of any
Units acquired pursuant to the Offers or any capital stock or other equity
interest in Olympia, AREH or any such affiliates from being pledged to
collateralize or otherwise support general corporate or partnership obligations
of Olympia, AREH or such affiliate existing of the date or incurred during the
term of this agreement, provided that the foregoing shall not relieve Olympia,
AREH or such affiliate from its obligations to fully perform its undertakings
hereunder and provided further that any direct pledgee of Units shall agree to
be bound by the provisions of this agreement to the same extent as Olympia is so
bound as a condition to foreclosing upon such Units.
3.2 Permitted Transfers. Olympia and its affiliates may, at any
time or from time to time, transfer some or all of the Units they acquire
pursuant to the Offers (or the right to acquire Units pursuant to the Offers) to
any of their affiliates (Olympia and each such affiliate being hereinafter
referred to as a "Permitted Transferee"). No transfer to a Permitted Transferee
shall be effective, however, unless the Permitted Transferee agrees, in a
writing that is reasonably
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satisfactory to Presidio, to be bound by all the terms of this agreement to the
same extent that Olympia and AREH are so bound.
3.3 Termination of Restrictions. The provisions of section 3.1
shall terminate, as to a Partnership, on the earlier to occur of: (a) the third
anniversary of this agreement; or (b) the closing of any purchase of Units of
such Partnership by Olympia or an affiliate upon exercise of the buy/sell
provisions set forth in section 4 hereof. In addition, the provisions of section
3.1 shall not apply to any of the Partnerships at any time following the
occurrence and during the continuance of a Default by Presidio in its obligation
to purchase Units of one or more Partnerships upon exercise of the buy/sell
provisions set forth in section 4 hereof. If Units are transferred to a third
party other than a Permitted Transferee at any time when the restrictions on
transfer do not apply (as provided in the immediately preceding sentence) or
transferred to any third party following the termination of such restrictions,
the transferee will not be bound by any of the obligations applicable to the
transferor of such Units under this Agreement.
4. Call; Buy/Sell
4.1 Call. At any time after the Final Expiration Date and before
the ninety-first day following the Final Expiration Date, Presidio shall have
the option (the "Call Option") to purchase 50% (but not less than 50%) of the
Units in each Partnership acquired pursuant to the Offers by Olympia and its
affiliates for a price determined in accordance with schedule 4.1. The Call
Option will be exercisable only by written notice by Presidio to Olympia and
AREH, which notice must be given, if at all, prior to the expiration of such
option.
4.2 Buy/Sell. (a) Either Olympia or Presidio may initiate buy/sell
procedures with respect to one or more Partnerships at any time commencing on
the Buy/Sell
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Effective Date (as hereinafter defined) through and including the Standstill
Expiration Date. Anything herein to the contrary notwithstanding, buy/sell
procedures may not be instituted more than once with respect to any Partnership
(except that the delivery of a Buy/Sell Offer that is rescinded pursuant to
section 4.2(d) hereof shall not constitute the institution of buy/sell
procedures for this purpose). Such buy/sell procedures shall cover, in the case
of Olympia, all Units of a Partnership acquired by Olympia and/or any Permitted
Transferee pursuant to an Offer (other than Units purchased by Presidio upon
exercise of the Call Option) and all other Units owned by Olympia or any
affiliate of Olympia at the time the buy/sell procedures are initiated
(collectively, the "Olympia Covered Units") and, in the case of Presidio, all
Units of such Partnership acquired by Presidio or any affiliate of Presidio upon
exercise of the Call Option (collectively, the "Presidio Covered Units").
(b) Either Olympia or Presidio may initiate the buy/sell procedures
with respect to one or more Partnerships by delivering to the other a written
offer (the "Buy/Sell Offer") stating the buy/sell price on a per Unit/per
Partnership basis (which buy/sell price shall be payable solely in cash and
shall not exceed, for any Partnership, the net asset value per Unit for such
Partnership as of the date of the Buy/Sell Offer (the "Maximum Price")) and
other material terms and conditions on which the initiating party is willing to
purchase all, but not less than all, Olympia Covered Units or Presidio Covered
Units, as the case may be, of such Partnership. The non- initiating party shall
then be obligated to elect to sell Units to the initiating party at the per Unit
price and upon the other terms and conditions set forth in the Buy/Sell Offer,
or to purchase Units from the initiating party upon such terms and conditions.
(If the Buy/Sell Offer relates to more than one Partnership, the non-initiating
party may, in its discretion, elect to buy Units of one
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Partnership and sell Units of another, subject to Section 4.2(c) below). The
non-initiating party shall have fifteen days from the date the Buy/Sell Notice
is delivered to it (the "Reply Period") to decide whether to buy or sell.
Failure to notify the initiating party of such decision at or prior to the end
of the Reply Period shall be deemed a decision to buy Units. Notwithstanding the
foregoing, in the event that the non-initiating party wishes to buy Units of a
Partnership but believes that the buy/sell price named in the Buy/Sell Offer
exceeds the Maximum Price for such Partnership, the non-initiating party shall
notify the initiating party during the Reply Period of its election to buy such
Units at the Maximum Price, which notice (the "Appraisal Notice") shall set
forth the Maximum Price (in the opinion of the non-initiating party) and shall
name an appraiser with a minimum of ten years experience in the appraisal of
properties of the type owned by the Partnership(s) whose Units are subject to
appraisal (a "Qualified Appraiser"). If the parties cannot agree upon the
Maximum Price, the initiating party shall name a Qualified Appraiser (and shall
so notify the non-initiating party in writing) within ten days following its
receipt of the Appraisal Notice, and the two Qualified Appraisers shall choose a
third impartial Qualified Appraiser (the "Impartial Appraiser") within ten days
following selection of the second Qualified Appraiser. If the initiating party
fails timely to select (and to notify the non-initiating party of its selection
of) a Qualified Appraiser in accordance the immediately preceding sentence, the
Qualified Appraiser selected by the non-initiating party shall select the
Impartial Appraiser. The Impartial Appraiser so selected shall perform an
appraisal to determine the Maximum Price of Units of the Partnership(s) subject
to the dispute between the parties and shall present the results of such
appraisal and his determination of the Maximum Price to the parties in writing
within 90 days following such appraiser's selection. The determination of such
Impartial Appraiser shall be
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final and binding on the parties hereto. Each party shall bear any costs and
expenses of the Qualified Appraiser selected by such party and Presidio shall
bear 50% and AREH shall bear 50% of the costs and expenses of the Impartial
Appraiser.
(c) If Presidio or an affiliate does not exercise the Call Option with
respect to one or more Partnerships (and, as a result, there are no Presidio
Covered Units of such Partnership(s)) or if, at the time buy/sell procedures are
initiated, Presidio and its affiliates collectively own more than 15% of the
outstanding Units of the Partnership(s) with respect to which such buy/sell
procedures are initiated, then, notwithstanding the provisions of section 4.2
hereof to the contrary: (i) if AREH or an affiliate initiates buy/sell
procedures with respect to such Partnership(s), AREH or such affiliate may
require Presidio to buy the Units of such Partnership(s) covered by AREH's or
such affiliate's Buy/Sell Offer at the Maximum Price then applicable to such
Units, and (ii) if Presidio initiates buy/sell procedures with respect to such
Partnership(s), AREH and its affiliates may, in their discretion, elect to sell
the Units covered by Presidio's Buy/Sell Offer at the Maximum Price then
applicable to such Units or to retain such Units. The appraisal procedures set
forth in paragraph (b) above shall apply to buy/sell procedures governed by this
paragraph (c), if applicable.
(d) As used herein, "Buy/Sell Effective Date" shall mean, as to Units
of any Partnership, the earlier to occur of: (a) the six-month anniversary of
the Final Expiration Date; and (b) the date on which Presidio gives notice (in
accordance with Section 8.7 hereof) to Olympia and AREH of a proposal by or on
behalf of the general partners of any Partnership or any affiliate of such
general partners to effect a "roll-up" transaction (within the meaning of Item
901 of Regulation S-K promulgated by the Commission under the Exchange Act)
involving such
12
<PAGE>
Partnership (it being agreed by Presidio that it will not permit any such
"roll-up" transaction to be consummated less than sixty days following the
giving of such notice (in accordance with Section 8.7 hereof) to Olympia and
AREH). Any notice given pursuant to clause (b) of the immediately preceding
sentence shall set forth, in reasonable detail, all material terms of the
"roll-up" transaction being proposed. Notwithstanding the foregoing, in the
event that Presidio makes a Buy/Sell Offer at a time when either the purchase or
sale of Units by Olympia or its affiliates pursuant to the buy/sell procedures
set forth in this section 4 would cause Olympia or any such affiliate to incur
liability under Section 16(b) of the Exchange Act, Olympia may so notify
Presidio (which notice shall state the earliest date (the "Trigger Date") on
which Olympia or such affiliate could commit either to purchase or sell Units
without incurring such liability, provided that such Trigger Date shall not be
more than six months and one day following the date of Presidio's Buy/Sell
Offer), in which event Presidio's Buy/Sell Offer shall be deemed to be rescinded
for all purposes of this agreement, and Presidio may not initiate another
Buy/Sell Offer prior to the Trigger Date. Olympia may not cause a Buy/Sell Offer
to be rescinded pursuant to this section 4.2(c) more than once.
4.3 Closing. The closing of any purchase and sale of Units of a
Partnership upon exercise of the Call Option or pursuant to the buy/sell
procedures, as the case may be, shall be held in New York City during normal
business hours at a place and date specified by Presidio in writing to Olympia
and AREH, but not fewer than 10 days or more than 30 days after: (x) the
exercise of the Call Option or with respect to such Partnership; or (y) the end
of the Reply Period following delivery of a Buy/Sell Offer covering such
Partnership (or, if an Appraisal Notice is timely given relating to Units of
such Partnership, then the final determination by the Impartial
13
<PAGE>
Appraiser of, or the mutual agreement of the parties as to, the Maximum Price).
Once scheduled, such closing shall not be postponed or adjourned except by
mutual consent of the parties hereto. At such closing, (a) the party selling
Units shall deliver to the party purchasing Units instruments of transfer with
respect to the Units being sold, which instruments shall be substantially in the
form set forth in schedule 4.3, and (b) the party purchasing Units shall pay the
full purchase price for the Units being purchased by wire transfer of
immediately available funds to an account specified in writing by party selling
Units at least two days before the closing. As used herein, a "Default" by
Presidio in its obligation to purchase Units upon exercise of the buy/sell
procedures means the failure by Presidio timely to schedule a closing for such
purchase as required by this section 4.3 or to pay the full purchase price for
any or all of the Units required to be purchased by Presidio at such closing in
the manner required by this section, provided that Olympia and/or any Olympia
affiliate owning the Units required to be purchased at such closing are ready,
willing and able to perform their obligations to transfer such Units to
Presidio. Anything herein to the contrary notwithstanding, if, between the date
a Buy/Sell Offer is made and the date of the closing pursuant to this section
4.3, a transaction has been consummated as a result of which the Units required
to be transferred at such closing (and all other Units of the subject
Partnership) have been exchanged for or converted into another security, the
party required to sell such Units shall deliver at the closing the securities so
received by it in connection with such exchange or conversion and the purchase
price payable to such party shall be unaffected by such exchange or conversion.
5. Agreement to Vote. If, at any time or from time to time before the
Standstill Expiration Date, the general partners of a Partnership submit to the
limited partners of that
14
<PAGE>
Partnership a proposal that would result in such limited partners receiving
securities that, upon consummation of the proposal, are listed on a national
securities exchange or NASDAQ, AREH shall cause all the Units in that
Partnership owned by AREH or any affiliate of AREH and not theretofore purchased
by Presidio to be voted in favor of the proposal.
6. Neutrality. Presidio will not, and will not cause or permit its
affiliates to, take any action that would result in the conditions to the Offers
set forth in Section 14 of each Offer to Purchase not to be satisfied and will
not, and will not cause or permit its affiliates to, actively oppose the Offers,
but rather will take, and will cause its affiliates to take, a neutral stance
with respect thereto, except that in the case of (i) a competing third party bid
(i.e., a bid made by or on behalf of a party other than AREH or an affiliate or
Presidio or an affiliate that is not topped by Olympia) made prior to the
expiration date of the Offers or (ii) the occurrence of any event materially
adversely affecting the Offers, Presidio or any affiliate of Presidio may change
any recommendation they have made to limited partners with respect to the Offers
to reflect such competing bid or the occurrence of such event. In furtherance
and not in limitation of the foregoing, Presidio will cause the general partners
of the Partnerships to admit Olympia or a Permitted Transferee as a limited
partner of each Partnership in which it purchases Units pursuant to an Offer
upon delivery of each Partnership's standard transfer paperwork, such admission
to be effective as of the first day of the calendar quarter next following the
date of such delivery by Olympia. Presidio shall cause each of the Partnerships
to waive applicable transfer fees in connection with transfers to Olympia or a
Permitted Transferee of Units acquired pursuant to the Offers.
7. Termination. (a) Anything herein to the contrary notwithstanding,
Olympia
15
<PAGE>
and AREH shall have the right to terminate this agreement, by giving written
notice of such termination to Presidio (without any liability on the part of any
party hereto to any other party hereto, other than liability for breaches
occurring prior to such termination), in the event that Presidio and/or any
affiliate of Presidio fails or refuses to comply with (a) any comment made by
the staff of the Commission to amend the Offers to the extent necessary to
include Presidio and/or affiliate of Presidio as co-bidders and to make any
related disclosures in the Offering Materials or (b) any other reasonable
comment made by the staff relating to the Offers which comment applies to and
contemplates the taking of certain action or making certain disclosures by
Presidio and/or any affiliate of Presidio (and, in the case of clause (a) or (b)
above, after counsel for Presidio has had reasonable opportunity to persuade the
staff of the correctness of Presidio's position on such matter, if different
than that of the staff). The obligations of Presidio pursuant to section 6
hereof will survive such termination.
(b) Anything herein to the contrary notwithstanding, Presidio shall
have the right to terminate this agreement (without any liability on the part of
any party hereto to any other party hereto, other than liability for breaches
occurring prior to such termination), by giving written notice of such
termination to AREH and Olympia, at any time on or after the sixty-first day
following the entry of an Injunction (but in no event prior to June 11, 1998),
provided that the Final Expiration Date has not occurred and such Injunction
remains in effect on the date Presidio terminates such agreement.
8. Miscellaneous
8.1 Definitions. As used in this agreement: the terms "affiliate"
and "control" have the respective meanings given them in Rule 12b-2 under the
Exchange Act; the
16
<PAGE>
terms "beneficially own," "beneficial ownership" and "group" have the respective
meanings given them in Rule 13d-3 under the Exchange Act; the term "Partnership"
refers to each of the Partnerships (as defined in the preface to this agreement)
and also includes each entity whose securities are issued to limited partners of
a Partnership pursuant to a transaction of the type described in section 5
hereof; and the term "Unit" refers to Units of each Partnership (as defined in
the preface to this agreement) and also includes any securities of the type
described in section 5 hereof issued to limited partners of a Partnership in
exchange for Units.
8.2 Benefit. This agreement shall be binding upon, and inure to the
benefit of, the respective successors and assigns of the parties.
Notwithstanding the foregoing, no party may assign its rights or obligations
under this Agreement without obtaining the prior written consent of the other
parties; provided, however, that any party may assign its right or obligation to
purchase or sell Units pursuant to Section 4 hereof, provided that such
assignment will not relieve the assigning party of any liability hereunder.
8.3 Governing Law; Jurisdiction. This agreement shall be governed by
and construed in accordance with the law of the state of NewYork applicable to
agreements made and to be performed wholly in New York. Any litigation based on,
or arising out of, under or in connection with this Agreement or the
consummation of the transactions contemplated hereby shall be brought and
maintained exclusively (to the extent permitted under applicable law) in the
courts of the State of New York, New York County or in the United States
District Court for the Southern District of New York. The parties expressly and
irrevocably submit to the jurisdiction of the courts of the State of New York,
New York County, and of the United States District Court for the Southern
District of New York for the purpose of any such litigation as set forth
17
<PAGE>
above and irrevocably agree to be bound by any judgment rendered thereby in
connection with such litigation. Each of the parties irrevocably consents to the
service of process by registered mail, postage prepaid, or by personal service
within or without the State of new York.
8.4 Remedies. The parties to this agreement will be irreparably
damaged if this agreement is not specifically enforced. If any dispute arises
under this agreement concerning any transfer of Units or any other right or
obligation, that right or obligation shall be enforceable in a court of equity
by an injunction or a decree of specific performance without any bond or other
security being required. These remedies shall not be exclusive, and shall be in
addition to any other remedies the parties may have.
8.5 Separability. If any provision of this agreement, or the
application of any provision to any person or circumstance, shall for any reason
or to any extent be invalid or unenforceable, the remainder of this agreement
and the application of that provision to other persons or circumstances shall
not be affected, but shall be enforced to the full extent permitted by law.
8.6 Waiver. The failure of a party to insist upon strict adherence to
any term of this agreement on any occasion shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this agreement. Any waiver must be in writing.
8.7 Notices. Any notice or other communication under this agreement
shall be in writing and shall be considered given when delivered by hand. Notice
may also be given by electronic facsimile transmission, but in such case will be
deemed given only when received by the addressee. Notices shall be directed to
the parties at their respective addresses set
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<PAGE>
forth below (or such other address as the party to be notified may have
requested in writing): (a) if to Presidio, to it c/o Northstar Capital Partners
LLC, 527 Madison Avenue, New York, New York 10022, Attn: Richard Sabella (Tel.
No. (212)319-3400; Fax No. (212)319-4557), with a copy to: Edward W. Kerson,
Esq., Proskauer Rose LLP, 1585 Broadway, New York, New York 10036 (Tel. No.
(212)969-3290; Fax No. (212)969-2900) ; and (b) if to AREH or Olympia, to it c/o
Icahn Associates Corp., 767 Fifth Avenue, 47th Floor, New York, New York 10153,
Attn: Martin L. Hirsch (Tel. No. (212)702-4343; Fax No. (212)750-5841) with a
copy to: Theodore Altman, Esq., Gordon Altman Butowsky Weitzen Shalov & Wein,
114 W. 47th Street, New York, New York 10036 (Tel. No. (212)626-0812; Fax No.
(212)626-0799).
8.8 Counterparts. This agreement may be executed in counterparts, each
of which shall be considered an original, but both of which together shall
constitute the same instrument.
8.9 Complete Agreement. This agreement contains a complete statement
of all the arrangement between the parties with respect to its subject matter,
supersedes all existing agreements between them relating to that subject matter
and cannot be changed or terminated orally. Except as expressly set forth
herein, there are no contracts, arrangements, understandings or relationships
between the parties hereto with respect to the Units.
8.10 Joint and Several Liability. AREH shall be jointly and severally
liable for the obligations of AREH and of its affiliates (including Olympia)
hereunder (and, in this regard, any action or inaction required hereunder to be
taken or not taken, or which AREH is required to cause or prevent or not permit
by such affiliate shall be deemed to be an obligation of both such affiliate and
AREH hereunder), and Presidio shall have the right to enforce this
19
<PAGE>
Agreement with respect to all such matters directly against AREH, without first
being required to file suit or seek recourse of any kind against any other
person. Presidio shall be jointly and severally liable for the obligations of
Presidio and its affiliates (including the general partners of each Partnership)
hereunder (and, in this regard, any action or inaction required hereunder to be
taken or not taken, or which Presidio is required to cause or prevent or not
permit by such affiliate shall be deemed to be an obligation of both such
affiliate and Presidio hereunder), and AREH and Olympia shall have the right to
enforce this Agreement with respect to all such matters directly against
Presidio, without first being required to file suit or seek recourse of any kind
against any other person.
8.11 Delivery of Offering Materials. Presidio hereby agrees on behalf
of the Partnerships and their general partners that, for purposes of compliance
by Olympia (and any affiliates who are co-bidders in the Offers) with Rule
14d-3(a)(2) and (b) of the Rules, Olympia may hand deliver a copy of its
Schedule 14D-1's together with all exhibits thereto and any amendments thereto
to the Partnerships c/o Edward W. Kerson, Esq., Proskauer Rose, LLP, 1585
Broadway, New York, New York 10036 and shall send a copy of such materials to
the Partnerships at their principal executive offices for delivery on the next
business day.
20
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this agreement to be
executed by their duly authorized representatives as of the date first above
written.
PRESIDIO CAPITAL CORP.
By:_____________________
OLYMPIA INVESTORS, L.P.
By: Olympia-GP, Inc.
By:_______________________________
AMERICAN REAL ESTATE HOLDINGS, L.P.
By: American Property Investors, Inc.
By:_______________________________
[Signature Page of Agreement, dated March 6, 1998, among Presidio Capital Corp.,
Olympia Investors, L.P. and American Real Estate Holdings L.P.]
21
<PAGE>
Schedule 4.1
The purchase price per Unit payable upon exercise of the Call Option will be the
sum of : (i) the Purchase Price per Unit (as hereinafter defined); and (ii)
Expenses per Unit (as hereinafter defined). The Purchase Price per Unit will
equal the lesser of (A) the price per Unit paid by Olympia in the Offers or (B)
$110.68 per Unit for Units of HEP 85, $99.97 per Unit for Units of HEP86, and
$124.13 per Unit for Units of HEP 88. Notwithstanding the foregoing, in the
event that Olympia increases its offering price per Unit in order to equal or
top a competing bidder, then the Purchase Price per Unit will equal the price
per Unit paid by Olympia in the Offers. Expenses per Unit will equal (i) the sum
of all out-of-pocket costs and expenses incurred by Olympia and its affiliates
(including attorneys fees and expenses) with respect to the Offers and the
purchase and transfer to Olympia or an affiliate of Units purchased pursuant
thereto, including without limitation the fees and expenses of Beacon Hill
Partners (the information agent for the Offer)(including without limitation fees
and expenses incurred in connection with telephone calls to limited partners of
the Partnerships), Harris Trust Company (the depositary for the Offer), printing
and mailing expenses, Commission filing fees, and any out-of-pocket costs and
expenses attributable to the admission of Olympia or an affiliate as a
substitute limited partner (but will not include (x) any costs and expenses or
attorneys fees and expenses attributable to the negotiation, execution and
delivery of this agreement or any litigation arising out of or in connection
with this agreement or the Offers or (y) the Purchase Price per Unit) divided by
(ii) the total number of Units of the Partnerships purchased by Olympia and its
affiliates pursuant to the Offers.
22
<PAGE>
Amendment No. 1
to
Agreement
dated March 6, 1998
This Amendment No. 1 (the "Amendment"), dated as of May 20, 1998,
amends the agreement, dated March 6, 1998 (the "Agreement"), among Presidio
Capital Corp., a corporation organized in the British Virgin Islands
("Presidio"), American Real Estate Holdings, L.P., a Delaware limited
partnership ("AREH") and Olympia Investors, L.P., a Delaware limited partnership
("Olympia"). Capitalized terms used herein and not otherwise defined will have
the meanings ascribed to them in the Agreement.
In response to comments received from the Staff of the Commission on
April 2, 1998 relating to the Schedule 14D-1's filed by Olympia, AREH and
certain of their affiliates (collectively, the "Olympia Bidders") relating to
the Offers, Presidio and certain of its affiliates (collectively, the "Presidio
Bidders") and the Olympia Bidders propose to file amendments to the Schedule
14D-1's pursuant to which, among other things, the Presidio Bidders will be
added as co-bidders. For purposes of this Amendment, the Schedule 14D-1's, as
amended as described in the preceding sentence and as the same may be further
amended from time to time, are hereinafter referred to as the "Amended Schedule
14D-1's.
The parties agree as follows:
1. The following paragraph is hereby added as Section 8.12 to the
Agreement:
"8.12 AREH shall indemnify and hold harmless the Presidio Bidders, and
Presidio shall indemnify and hold harmless the Olympia Bidders, against
any loss, claim, damage or liability, or any action in respect thereof
(including the reasonable fees and expenses of counsel) to which the
Presidio Bidders or the Olympia Bidders, as the case may be, may become
subject, insofar as such loss, claim, damage, liability or action
arises out of or is based upon any violation of the Williams Act, any
untrue statement of a material fact included in the Amended Schedules
14D-1 or the omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, but only to the extent that any such loss, claim, damage,
liability or action is based upon an untrue statement or alleged untrue
statement, or omission or alleged omission, made in reliance upon and
in conformity with information furnished by the Olympia Bidders or the
Presidio Bidders, as the case may be, relating to themselves, their
affiliates and associates (including without limitation information
relating to their respective future plans with respect to the
Partnerships, including any "roll up" transaction (within the meaning
of Item 901 of Regulation S-K promulgated by the Commission under the
Exchange Act) that they or their affiliates may propose in the future
involving one or more Partnerships, their purpose for acquiring Units
and analysis of the valuation of the
<PAGE>
Units) for inclusion in such Amended Schedules 14D-1. Information
pertaining to the business and operations of the Partnerships,
Partnership historical financial information, the trading history of
the Units and the description of this agreement and any amendments
hereto will not be deemed to have been furnished by the Olympia Bidders
or the Presidio Bidders for purposes of this Section 8.12. Without
limiting the generality of the foregoing, Presidio shall indemnify and
hold harmless the Olympia Bidders against any loss, claim, damage or
liability or any action in respect thereof (including the reasonable
fees and expenses of counsel) to which the Olympia Bidders may become
subject, insofar as such loss, claim, damage, liability or action
arises out of or is based upon any failure of the Amended Schedules
14D-1 to comply with the requirements of Section 14(h) of the Exchange
Act or related rules promulgated by the Commission and such failure to
comply neither arises out of nor is based upon an untrue statement or
alleged untrue statement, or omission or alleged omission, made in
reliance upon and in conformity with information furnished by the
Olympia Bidders relating to themselves, their affiliates and associates
for inclusion in the Amended Schedules 14D-1."
2. All references in the Agreement to "the agreement" or "this
agreement" shall hereinafter be deemed to refer to the Agreement as amended by
this Amendment. Except as expressly amended hereby, the Agreement shall remain
in full force and effect as originally executed by the parties.
[text continued on next page]
<PAGE>
3. The provisions of Section 8.3 of the Agreement are incorporated by
reference herein as if fully set forth herein, except that, for purposes of this
Amendment, all references to "the agreement" in said Section shall be deemed to
refer to this Amendment.
4. This Amendment may be executed in counterparts, each of which shall
be considered an original, but both of which together shall constitute the same
instrument.
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
executed by their duly authorized representatives as of the date first above
written.
PRESIDIO CAPITAL CORP.
By: /s/ Allan B. Rothschild
Allan B. Rothschild
Authorized Signatory
OLYMPIA INVESTORS, L.P.
By: Olympia-GP, Inc.
By: /s/ Martin L. Hirsch
--------------------
Martin L. Hirsch
Vice President
AMERICAN REAL ESTATE HOLDINGS, L.P.
By: American Property Investors, Inc.
By: /s/ Martin L. Hirsch
--------------------
Martin L. Hirsch
Vice President
Amendment No. 2
to
Agreement
dated March 6, 1998
This Amendment No. 2 (the "Amendment"), dated as of June 29, 1998,
amends the agreement, dated March 6, 1998 (the "Agreement") and as amended by
Amendment No. 1 thereto, dated as of May 20, 1998 ("Amendment No. 1"), among
Presidio Capital Corp., a corporation organized in the British Virgin Islands
("Presidio"), American Real Estate Holdings, L.P., a Delaware limited
partnership ("AREH") and Olympia Investors, L.P., a Delaware limited partnership
("Olympia"). Capitalized terms used herein and not otherwise defined will have
the meanings ascribed to them in the Agreement.
The parties agree as follows:
1. The following proviso is hereby added to the end of Section 5 of
the Agreement:
"; provided, however, that AREH shall have no obligation to cause Units
of a Partnership to be voted in favor of any proposal otherwise covered
by this Section 5 if such proposal (a) is made prior to the first
anniversary of the completion of the Offer relating to such Partnership
and (b) relates to a transaction or series of related transactions
constituting a "roll-up transaction" (within the meaning of Regulation
S-K, Item 901), other than a proposal for the conversion of such
Partnership into a stand-alone (i.e., not part of another entity or
entities), actively traded, real estate investment trust pursuant to
Section 3(a)(10) of the Securities Act of 1933, where the terms and
conditions of the transaction, or series of related transactions,
including any related tender offer for Units or any sale or financing
of Partnership properties, are approved, after a hearing upon the
fairness of such terms and conditions at which all limited partners
have the right to appear, by the court in connection with a settlement
of the litigation described in Item 4, paragraph 12 of the Schedules
14D-9 filed by HEP 85 and HEP 88 in connection with the Offers for
Units of those Partnerships and in Item 4, paragraph 11 of the Schedule
14D-9 filed by HEP 86 in connection with the Offer for Units of HEP
86."
2. All references in the Agreement and in Amendment No. 1 to "the
agreement" or "this agreement" shall hereinafter be deemed to refer to the
Agreement as amended by Amendment No. 1 and by this Amendment. Except as
expressly amended by Amendment No. 1 and hereby, the Agreement shall remain in
full force and effect as originally executed by the parties.
<PAGE>
3. The provisions of Section 8.3 of the Agreement are incorporated by
reference herein as if fully set forth herein, except that, for purposes of this
Amendment, all references to "the agreement" in said Section shall be deemed to
refer to this Amendment.
4. This Amendment may be executed in counterparts, each of which shall
be considered an original, but both of which together shall constitute the same
instrument.
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
executed by their duly authorized representatives as of the date first above
written.
PRESIDIO CAPITAL CORP.
By:_____________________
Allan B. Rothschild
Authorized Signatory
OLYMPIA INVESTORS, L.P.
By: Olympia-GP, Inc.
By:_______________________
Martin L. Hirsch, Vice President
AMERICAN REAL ESTATE HOLDINGS, L.P.
By: American Property Investors, Inc.
By:_____________________________
Martin L. Hirsch, Vice President
Amendment No. 3
to
Agreement
dated March 6, 1998
This Amendment No. 3 (the "Amendment"), dated as of July 16, 1998,
amends the agreement, dated March 6, 1998 (the "Agreement") and as amended by
Amendment No. 1 and Amendment No. 2 thereto, dated as of May 20, 1998 and June
29, 1998, respectively, by and among Presidio Capital Corp., a corporation
organized in the British Virgin Islands ("Presidio"), American Real Estate
Holdings, L.P., a Delaware limited partnership ("AREH"), and Olympia Investors,
L.P., a Delaware limited partnership ("Olympia"). Capitalized terms used herein
and not otherwise defined will have the meanings ascribed to them in the
Agreement.
The parties agree as follows:
1. Notwithstanding anything in the Agreement to the contrary, the
Offers shall be extended until 5:00 p.m. on Friday, July 24, 1998.
2. All references in the Agreement and in Amendment No. 1 and
Amendment No. 2 to "the agreement" or "this agreement" shall hereinafter be
deemed to refer to the Agreement as amended by Amendment No. 1, Amendment No. 2
and this Amendment. Except as expressly amended by Amendment No. 1, Amendment
No. 2 and hereby, the Agreement shall remain in full force and effect as
originally executed by the parties.
<PAGE>
3. This Amendment may be executed in counterparts, each of which shall
be considered an original, but both of which together shall constitute the same
instrument.
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be
executed by their duly authorized representatives as of the date first above
written.
PRESIDIO CAPITAL CORP.
By:_____________________
Allan B. Rothschild
Authorized Signatory
OLYMPIA INVESTORS, L.P.
By: Olympia-GP, Inc.
By:_______________________
Martin L. Hirsch, Vice President
AMERICAN REAL ESTATE HOLDINGS, L.P.
By: American Property Investors, Inc.
By:_____________________________
Martin L. Hirsch, Vice President
