UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
PRESIDIO CAPITAL CORP.
(Name of Issuer)
Class A Common Shares, U.S. $.01 par value
(Title of Class of Securities)
G72201109
(CUSIP Number)
Richard J. Sabella, Esq.
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
(212) 701-3000
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
August 28, 1997
(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 which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|.
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) 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 1 of 5 Pages
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SCHEDULE 13D
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CUSIP No. G72201109 Page 2 of 5 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Presidio Holding Company, LLC - EIN 13-3958513
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See instructions) (a)
(b)
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (See instructions)
00 - Equity Contribution
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
The Reporting Person is organized under the laws of New York
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7 SOLE VOTING POWER
6,755,586
NUMBER OF
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SHARES 8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY
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EACH 9 SOLE DISPOSITIVE POWER
REPORTING
PERSON WITH 6,755,586
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10 SHARED DISPOSITIVE POWER
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,755,586
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(See instructions)
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
approximately 67.6%
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14 TYPE OF REPORTING PERSON (See instructions)
00 - Limited Liability Company
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Page 2 of 5 Pages
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Item 1. Security and Issuer.
This Amendment No. 1 amends the Statement on Schedule 13D with respect to
the Class A Common Shares (the "Class A Shares") of Presidio Capital Corp. (the
"Issuer"), previously filed on July 28, 1997 by the reporting person named
therein (the "Schedule 13D"). Capitalized terms used herein without definition
shall have the meanings given to such terms in the Schedule 13D.
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 is amended by adding the following:
On August 28, 1997, the Reporting Person purchased the entire interest in
IRP II, LLC, a Delaware limited liability company ("IRP II"), for $30 million,
under the terms and conditions of the IRP Purchase Agreement (the "IRP Purchase
Agreement") dated as of August 28, 1997 by and between Presidio Holding Company,
LLC and IR Partners (the "Seller"). The Seller is a New York general partnership
whose partners consist of Steinhardt Management Company, LLC ("Steinhardt
Management"), certain of its affiliates and accounts managed by it and Roundhill
Associates III LLC ("Roundhill III"). Roundhill III is a limited partnership
whose general partners are Charles E. Davidson, the Chairman of the Board of the
Issuer ("Chairman"), and Joseph M. Jacobs, the President and Chief Executive
Officer of the Issuer ("President"), and whose limited partner is Robert Holtz,
a Vice-President of the Issuer ("Vice-President"). The Issuer is managed
under certain agreements with Wexford Management LLC and Steinhardt Management
(together, the "Managing Agents").
Prior to its purchase by the Reporting Person, IRP II held an undivided
ownership interest in 1.2 million shares of Class B Common Shares (the "Class B
Shares"), U.S. $.01 par value, of the Issuer. Upon the Reporting Person's
purchase of the entire interest in IRP II, Steinhardt Management and its
affiliates ceased beneficially to own in the aggregate 5% or more of the
outstanding shares of common stock of the Issuer, which triggered an automatic
conversion of the Class B Shares to an equivalent number of Class A Shares
pursuant to the Issuer's Amended and Restated Memorandum of Association.
The source of funds used to pay for the interest in IRP II was a capital
contribution received from the members of Northstar. Northstar received such
funds from long-term loans from a commercial lender on terms that include an
equity participation factor and which require payment out of Net Available Cash.
The IRP Purchase Agreement is attached hereto as Exhibit 2 and is
incorporated herein by reference.
In connection with the Reporting Person's purchase of its interest in
IRP II, the Reporting Person and the Seller exchanged certain releases and the
Reporting Person executed certain indemnities in connection with the management
of the Issuer and its affiliates and other matters. The Seller and certain
affiliates and related persons including the Managing Agents provided releases
of certain claims, if any, to the Issuer and certain affiliates and the
Reporting Person agreed to use its best efforts to cause the Issuer to release
certain claims, if any, held by the Issuer against the Seller and certain
affiliates and related persons, including the Managing Agents, and to indemnify
the Seller and certain affiliates and related persons, including the Managing
Agents, against certain claims that may be asserted against them. The
Reporting Person also obtained an agreement from Seller and its partners
and their affiliates to release their claims, if any, against the Farallon
Sellers relating to the Farallon Sellers' activities with respect to the
Issuer, subject to the satisfaction of certain conditions.
In connection with the purchase of the interest in IRP II from the Seller,
the Reporting Person has agreed to purchase from Chairman, President and
Vice-President the partnership interests in the two partnerships that
Page 3 of 5 Pages<PAGE>
own all of the membership interests in T-Two Holding, L.L.C. ("T-Two LLC"),
which is the 99% limited partner of T-Two Partners, L.P. ("T-Two L.P."), the
entity that purchased the Grantor Trust T-2 Certificate (the "T-2 Certificate")
described in the Issuer's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996 ("10-K"). As a result of this transaction, the Reporting
Person will become the obligor on the $31.5 million note owing to the Issuer,
the proceeds of which were used to capitalize T-Two LLC and T-Two L.P. so that
T-Two L.P. could purchase the T-2 Certificate. Under certain circumstances
described in the Rights Offering Agreement attached to the 10-K, the Reporting
Person will be obligated to offer to the Issuer's shareholders the opportunity
to purchase membership interests in T-Two LLC. It is the intention of the
Reporting Person to conduct the rights offering after it purchases the
partnership interests in the two members of T-Two LLC.
With respect to T-Two General, L.P. ("T-Two General"), the 1% general
partner of T-Two L.P., the Reporting Person has purchased the limited
partnership interests in T-Two General which were held by certain affiliates of
Chairman and President. The Reporting Person has also entered into an Amended
and Restated Administrative Services Agreement with respect to the management of
T-Two L.P.
The Reporting Person funded a loan to a newly formed, wholly-owned
affiliate of Chairman and President, the proceeds of which were used by such
affiliate to acquire all of the outstanding stock of the general partner of
T-Two General held by Chairman and President. Under certain circumstances set
forth in the loan agreement relating to such loan, the loan is convertible into
99% of all the issued and outstanding equity interest in such affiliate.
The Reporting Person has revised its resolution to remove the existing
Class A Directors to be effective on September 16, 1997. The Issuer has
commenced an action in the High Court of Justice of the British Virgin Islands
which has the effect of tolling the effectiveness of the resolution. The
existing Class A Directors are considering resigning and appointing as their
successors Edward Scheetz, David Hamamoto and David King, although there are no
understandings or agreements requiring such action.
Item 5. Interest in Securities of the Issuer.
Item 5 is amended by adding the following:
(d) As of September 1, 1997, the Reporting Person beneficially owns
6,755,586 Class A Shares; approximately a 67.6% interest in the Issuer;
(e) As of September 1, 1997, sole power to vote - 6,755,586 Class A Shares;
sole power to dispose - 6,755,586 Class A Shares.
(f) To the best of the Reporting Person's knowledge, the aggregate number
of Class A Shares of the Issuer outstanding as of September 1, 1997 is
10,000,000, which Class A Shares constitute the entire equity interest in the
Issuer.
Item 7. Material to be Filed as Exhibits.
Item 7 is amended by adding the following:
Exhibit 2 IRP II Purchase Agreement dated as of August 28, 1997 by and
between Presidio Holding Company, LLC and IR Partners.
Page 4 of 5 Pages
<PAGE>
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
September 4, 1997
PRESIDIO HOLDING COMPANY, LLC
By: /s/ Edward Scheetz
------------------------------
Title: Authorized Signatory
Page 5 of 5 Pages
Exhibit 2 to Amendment
No. 1 to Schedule 13D
IRP PURCHASE AGREEMENT
By and between
IR PARTNERS,
as Seller,
and
PRESIDIO HOLDING COMPANY, LLC,
as Purchaser.
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Dated as of August 28, 1997
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<PAGE>
IRP PURCHASE AGREEMENT
IRP PURCHASE AGREEMENT, dated as of August 28, 1997, by and between IR
PARTNERS, a New York general partnership ("Seller"), as seller, and PRESIDIO
HOLDING COMPANY, LLC, a New York limited liability company ("Purchaser"), as
purchaser.
R E C I T A L S :
A. Seller is the owner of all of the membership interests of IRP II LLC, a
Delaware limited liability company ("IRP LLC"), the only assets of which are
1,200,000 Presidio Shares (as hereinafter defined).
B. Roundhill III LLC has been substituted for Roundhill Associates LP as a
partner of Seller.
C. On the terms and subject to the conditions hereinafter set forth, Seller
desires to sell to Purchaser, and Purchaser desires to purchase from Seller, all
of the membership interests of IRP LLC (the "Membership Interests").
A G R E E M E N T :
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. As used in this Agreement, unless the context
requires a different meaning, the following terms have the meanings indicated:
"Administrative Services Agreement" means the Administrative Services
Agreement, dated as of November 3, 1994, between the Company and Concurrency
Management Corp.
"Affiliate" means, with respect to any Person, any Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
<PAGE>
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with") shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities or by contract or otherwise.
"Agreement" means this IRP Purchase Agreement, as amended from time to time
in accordance with the terms hereof.
"Closing" has the meaning provided therefor in Section 2.2 of this
Agreement.
"Company" means Presidio Capital Corp., a corporation organized and
existing under the laws of the British Virgin Islands and its successors and
assigns.
"Hallwood Litigations" means each of the following civil litigations: (i)
The Hallwood Group Incorporated v. Steinhardt Management Company, Inc.,
Steinhardt Management Co., Presidio Capital Corp., Presidio LP Corp., Presidio
GP Corp.)., Charles E. Davidson and IR Partners (Case. No. 95 Civ. 3675(WK)),
filed in the United States District Court for the Southern District of New York,
and (ii) The Hallwood Group Incorporated v. Presidio C.R. Holdings, L.P. (Index
No. 603408/96), filed in the Supreme Court of the State of New York, County of
New York.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
encumbrance, charge or security interest of any kind in or on such asset or the
revenues or income thereon or therefrom provided that the term Lien shall not
include the transfer restriction set forth in the Presidio Charts relating to
the Presidio Shares.
"Losses" means all damages, losses, penalties, fines, settlement payments,
obligations to third parties, claims, costs or expenses actually suffered or
incurred by such Person excluding any consequential, special or punitive
damages.
"Management Agreements" means the Management Agreement, dated as of
November 3, 1994, between the Company and Presidio Management Company, LLC and
the Management Agreement, dated as of November 3, 1994, between the Company and
Steinhardt Management Company, Inc.
"PCC Indemnification Agreement" means the PCC Indemnification Agreement and
Mutual Release, dated as of the date hereof, by and among the "Northstar
Parties" and the "IRP Indemnified Parties" identified therein.
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"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.
"Presidio Charter" means the Memorandum of Association and Articles of
Association of the Company, dated August 29, 1994 and amended and restated as of
May 22, 1995.
"Presidio Shares" means shares of Class B common stock of the Company
having a par value of U.S. $.01 per share.
"Purchase Price" has the meaning provided therefor in Section 2.1 of this
Agreement.
ARTICLE II
PURCHASE OF MEMBERSHIP INTERESTS
Section 2.1. Purchase. On the terms and subject to the conditions herein
set forth, Seller is selling to Purchaser and Purchaser is purchasing from
Seller the Membership Interests owned by Seller for a purchase price of
$30,000,000 (the "Purchase Price"), receipt of which is hereby acknowledged.
Section 2.2. Closing. The closing of the purchase and sale of the
Membership Interests ("Closing") is taking place simultaneously with the
execution and delivery of this Agreement at the offices of Cahill Gordon &
Reindel, 80 Pine Street, New York, New York 10005.
Section 2.3. Closing Deliveries. Delivery of the Membership Interests sold
hereunder is being made by delivery to Purchaser, against payment of the
Purchase Price therefor provided for in Section 2.1, of instruments of
assignment and transfer of the Membership Interests duly executed by Seller.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Certain Representations and Warranties of Seller. Seller
represents and warrants, as of the date hereof, as follows:
(a) Organization and Good Standing. Seller is a partnership duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation. IRP LLC is a limited liability company, duly
organized, validly existing and in good standing under the laws of
Delaware. Each of Seller and IRP LLC is duly qualified or licensed and in
good standing, and authorized to do business, in each jurisdiction in which
the ownership or leasing of its properties or the character of its
operations makes such qualification necessary, except where failure to
obtain such qualification, license, authorization or good standing would
not individually or in the aggregate reasonably be expected to have a
material adverse effect upon its respective financial condition,
properties, assets, business or results of operations or, in the case of
Seller only, upon its ability to perform its obligations under this
Agreement (each, a "Material Adverse Effect"). Each of Seller and IRP LLC
has all requisite power and authority to own its assets and to carry on its
business as presently conducted and as presently proposed to be conducted.
(b) Authorizations. Seller has all requisite power and authority to
execute, deliver and perform its obligations under this Agreement. The
execution and delivery by Seller of this Agreement and the consummation of
the transactions contemplated hereby have been duly and validly authorized
by all necessary action of Seller.
(c) The Presidio Shares. Seller has good and valid title to the
Membership Interests purported to be sold by it, free and clear of any
Liens, and IRP LLC has good and valid title to the Presidio Shares, free
and clear of any Liens. Assuming Purchaser has the requisite power and
authority to be the lawful owner of the Membership Interests, good and
valid title to the Membership Interests is, upon the Closing, passing to
Purchaser, free and clear of any Liens other than those arising from acts
of Purchaser. Neither the Membership Interests nor any of the Presidio
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Shares is subject to any voting trust agreement or other contract,
agreement, arrangement, commitment or understanding, including any such
agreement, arrangement, or understanding restricting or otherwise relating
to the voting, dividend rights or disposition of Membership Interests and
such Presidio Shares, other than the Presidio Charter.
(d) Capitalization. The Presidio Shares owned by IRP LLC constitute
all of the authorized, issued and outstanding Presidio Shares. All of the
Presidio Shares are duly and validly issued, fully paid and non-assessable.
Other than the Presidio Charter, there are no (i) outstanding options,
warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible or
exchangeable into, Presidio Shares, or contracts, commitments,
understandings or arrangements by which the Company is or may become bound
to issue additional Presidio Shares or options, warrants or rights to
purchase or acquire any interest in any Presidio Shares, or (ii) voting
trusts or other agreements or understandings with respect to the Presidio
Shares. The Membership Interests constitute all of the membership interests
of IRP LLC.
(e) Conflicting Agreements and Similar Matters. Neither the execution
and delivery of this Agreement nor the consummation of the transactions
contemplated hereby will (i) violate any provision of any United States
Federal, State or foreign law, statute, rule or regulation, or any order,
judgment, injunction, decree, determination or award of any United States
Federal, State or foreign court or governmental authority presently in
effect (each, a "Law") having applicability to Seller except such
violations as would not reasonably be expected to have (individually or in
the aggregate) a Material Adverse Effect on Seller, (ii) conflict with or
result in a breach of or constitute a default under the partnership
agreement of Seller, (iii) require any consent, approval or notice under,
or conflict with or result in a breach of or constitute a default under,
any note, bond, mortgage, license, indenture or loan or credit agreement,
or any other agreement or instrument to which Seller is a party or by which
any of its properties is bound, except such conflicts or defaults as would
not reasonably be expected to have (individually or in the aggregate) a
Material Adverse Effect on Seller, or (iv) result in or require the
creation or imposition of any Lien upon or with respect to any
<PAGE>
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of the properties now owned or hereafter acquired by Seller; provided, that
the representation and warranty contained in this subc1ause (e) shall not
apply to the Presidio Charter and the other agreements identified on
Schedule 1 hereto.
(f) Enforceability. This Agreement constitutes a legal, valid and
binding obligation of Seller, enforceable against Seller in accordance with
its terms, except as such enforceability may be limited by bankruptcy,
insolvency, moratorium or any other laws affecting creditors' rights
generally or principles of equity.
(g) Litigation, Proceedings, etc. There is no action, suit, notice of
violation, proceeding or investigation pending or, to the best knowledge of
Seller, threatened against or affecting Seller or any its properties before
or by any court, governmental or administrative agency or regulatory
authority (Federal, State, county, local or foreign) which (i) relates to
or challenges the legality, validity or enforceability of this Agreement or
the Presidio Shares or (ii) will (individually or in the aggregate) have a
Material Adverse Effect on Seller or IRP LLC.
(h) Governmental Consents. No authorization, consent, approval,
waiver, license, qualification or formal exemption from, nor any filing,
declaration, qualification or registration with, any court, governmental
agency or regulatory authority or any securities exchange is required in
connection with the execution, delivery or performance by Seller of this
Agreement and the performance of its obligations hereunder other than any
of the foregoing which are ministerial in nature and do not challenge the
legality, validity or enforceability of this Agreement or the Membership
Interests or the Presidio Shares.
(i) Management Agreements. Purchaser has been provided with true and
complete copies of the Management Agreements and the Administrative
Services Agreement and all amendments thereto and neither Management
Agreement or the Administrative Services Agreement has been extended beyond
November 3, 1997.
(j) IRP LLC. Prior to the date hereof, IRP LLC has conducted no
business and has owned no assets. IRP LLC acquired the Presidio Shares on
the date hereof in the form of a capital contribution from its sole member
in re-
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turn for the issuance to such sole member of all of the membership
interests in IRP LLC. IRP LLC has no liabilities or obligations of any kind
or character other than those nominal filing fees and similar expenses
incurred in connection with its formation. The transaction in which IRP LLC
acquired the Presidio Shares did not (i) violate any provision of any
applicable Law, (ii) conflict with or constitute a default under or a
breach of any note, bond, mortgage, license, indenture, loan or credit
agreement or Seller's partnership agreement or any other instrument or
agreement to which Seller is a party or by which any of its properties is
bound, (iii) result in or require the creation or imposition of any Lien
upon or with respect to any of the properties now owned or hereafter
acquired by Seller, or (iv) constitute a fraudulent transfer or preference
or otherwise violate the rights of any creditor of Seller or its partners;
provided, however, that the representations and warranties contained in
this subc1ause (j) shall not apply to the Presidio Charter.
Section 3.2. Representations and Warranties of Purchaser.
(a) Investment Intent. Purchaser represents and warrants to Seller that the
Membership Interests are being acquired for its own account with no intention of
distributing or reselling the Membership Interests or any part thereof or
interest therein in any transaction that would be in violation of the securities
laws of the United States of America or any State.
(b) Purchaser Status. Purchaser represents and warrants to Seller that (i)
at the time it was offered the Membership Interests, it was, and (ii) at the
date hereof, it is an "accredited investor" as defined in Rule 501(a) under the
Securities Act of 1933, and has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Membership Interests, and has so
evaluated the merits and risks of such investment and is able to bear the
economic risk of such investment and, at the present time, is able to afford a
complete loss of such investment.
(c) Authority. Purchaser represents and warrants to Seller that (i) the
purchase of the Membership Interests has been duly and properly authorized and
this Agreement has been duly executed and delivered by it and constitutes the
valid and legally binding obligation of Purchaser, enforceable in accor- <PAGE>
-8-
dance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, moratorium, or any other laws affecting creditors'
rights generally or principles of equity and (ii) the purchase of the Membership
Interests to be sold hereunder does not conflict with or violate its operating
agreement or any law, regulation or court order applicable to it.
(d) No Representations. Purchaser represents and warrants to Seller that
Purchaser has made such examination, review and investigation of facts and
circumstances necessary to evaluate the Company and the purchase of the
Membership Interests as it has deemed necessary or appropriate and has made its
own investment determination and analysis based upon such information as
Purchaser deemed sufficient to enter into this Agreement and not based on any
statements or representations by Seller and has not relied on Seller except as
expressly set forth herein.
Section 3.3. Acknowledgments. Seller and Purchaser acknowledge and
represent and warrant to each other that neither party has made any
representation or warranty, whether express or implied, of any kind or character
in respect of the transaction herein contemplated except as expressly set forth
in this Agreement and in the PCC Indemnification Agreement.
Section 3.4. No Broker. Each of the parties hereto represents and warrants
to the other that no broker or finder was involved in such party's determination
to enter into the transactions contemplated in this Agreement.
ARTICLE IV
Section 4.1. Further Assurances. Each of the parties hereto will use all
reasonable efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the sale of the Membership
Interests pursuant to this Agreement. From time to time after the Closing,
without further consideration (except for reimbursement of actual out-of-pocket
expenses including legal fees), Seller will execute and deliver such documents
to Purchaser as Purchaser may reasonably request in order to vest more
effectively in Purchaser good and valid title (free of Liens) to the Membership
Interests to be sold hereunder or to <PAGE>
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confirm or perfect any of the other transactions contemplated by this Agreement.
From time to time after the Closing, without further consideration (except for
reimbursement of actual out-of-pocket expenses including legal fees), Purchaser
will execute and deliver such documents to Seller as Seller may reasonably
request in order to consummate more effectively the sale of the Membership
Interests to be sold hereunder or to confirm or perfect any of the other
transactions contemplated by this Agreement.
Section 4.2. Public Announcements; Confidentiality. Except for such
disclosures as may be required by law, legal process or regulatory authority,
neither party hereto shall issue any press release or otherwise make any
announcement or disclosure concerning the transactions herein contemplated
unless such information is already in the public domain.
Section 4.3. Sales and Transfer Taxes. All transfer taxes incurred in
connection with this Agreement and the transactions contemplated hereby shall be
borne by Seller and Seller shall, at its own expense, file all necessary tax
returns and other documentation with respect to all such transfer taxes.
Section 4.4. Additional Purchaser Undertakings. Purchaser undertakes to
cause IRP LLC to use its best efforts (other than the payment of money or the
prosecution of litigation), subject only to its fiduciary duties to present or
future shareholders of the Company (other than Purchaser and its Affiliates), to
cause the Company to (i) make all payments and expense reimbursements
(including, without limitation, indemnification payments as and when due) as and
when required by the Administrative Services Agreement and the Management
Agreements, including, without limitation, in the event that any of such
agreements is terminated by the Company, and (ii) provide from time to time to
each employee or principal of Seller or its partners or affiliates who has
served as an officer or director of the Company or any of its subsidiaries, for
a period of six years from the date hereof, the same indemnification
arrangements that are from time to time hereafter available to directors and
officers of the Company and its subsidiaries and controlled affiliates, whether
pursuant to the Presidio Charter, directors and officers insurance or otherwise.
Section 4.5. No Tax Election. Purchaser shall not make an election for IRP
LLC to be treated as a corporation for tax purposes for any period up to and
including the date hereof.
<PAGE>
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ARTICLE V
SURVIVAL AND INDEMNIFICATION
Section 5.1. Survival of Agreements. The representations and warranties of
Seller and of Purchaser set forth in Article 3 hereof and all other covenants
and agreements of the parties herein set forth shall survive the Closing.
Section 5.2. Indemnification by Seller. Seller shall indemnify and hold
harmless Purchaser from and against any and all Losses suffered or incurred by
Purchaser as a result of the breach or incorrectness of any representation and
warranty of Seller set forth in Section 3.1 or in Section 3.4 of this Agreement.
Purchaser shall promptly notify Seller in writing of the occurrence of any
event, or of its discovery of any facts, which in Purchaser's opinion entitle or
may entitle it to indemnification hereunder. Purchaser's failure to do so shall
not preclude it from seeking indemnification hereunder from Seller unless such
failure has materially prejudiced Seller's ability to defend as provided herein.
With respect to any threatened or asserted claims of third parties, Seller shall
have the right to defend such claims by counsel of its choosing and to direct or
control the defense and settlement thereof. Purchaser shall cooperate in all
reasonable respects with such counsel. The total of all payments of
indemnification hereunder by Seller, taken together with any amounts paid by
Seller and its affiliates pursuant to paragraph 7 of the PCC Indemnification
Agreement shall not exceed $30,000,000.
Section 5.3. Indemnification by Purchaser. Purchaser shall indemnify and
hold harmless Seller from and against any and all Losses suffered or incurred by
Seller as a result of the breach or incorrectness of any representation and
warranty of Purchaser set forth in Section 3.2 or in Section 3.4 of this
Agreement. Seller shall promptly notify Purchaser in writing of the occurrence
of any event, or of its discovery of any facts, which in Seller's opinion
entitle or may entitle it to indemnification hereunder. Seller's failure to do
so shall not preclude it from seeking indemnification hereunder from Purchaser
unless such failure has materially prejudiced Purchaser's ability to defend as
provided herein. With respect to any threatened or asserted claims of third
parties, Pur- chaser shall have the right to defend such claims by counsel of
its choosing and to direct or control the defense and settlement thereof. Seller
shall cooperate in all reasonable respects with such counsel. The total of all
payments of indem- <PAGE>
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nification hereunder by Purchaser, taken together with any amounts paid by
Purchaser pursuant to the applicable provisions of the PCC Indemnification
Agreement shall not exceed $30,000,000.
ARTICLE VI
MISCELLANEOUS
Section 6.1. No Waiver; Modifications in Writing. No failure or delay on
the part of Seller or Purchaser in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to Seller or Purchaser at law or in equity. No
waiver of or consent to any departure by either Seller or Purchaser from any
provision of this Agreement shall be effective unless signed in writing by the
party entitled to the benefit thereof. No amendment, modification or termination
of any provision of this Agreement shall be effective unless signed in writing
by or on behalf of Seller and Purchaser. Any amendment, supplement or
modification of or to any provision of this Agreement, any waiver of any
provision of this Agreement, and any consent to any departure from the terms of
any provision of this Agreement, shall be effective only in the specific
instance and for the specific purpose for which made or given.
Section 6.2. Notices. All notices and demands provided for hereunder shall
be in writing and shall be deemed given when received, and shall be given by
registered or certified mail, return receipt requested, telecopy, courier
service or personal delivery, and, if to Purchaser, addressed to Purchaser at:
Presidio Holding Company, LLC
299 Park Avenue, 33rd Floor
New York, New York 10171
Attention: W. Edward Scheetz
Telecopy: (212) 821-4517
<PAGE>
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With a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Attention: Richard J. Sabella, Esq.
Telecopy: (212) 269-5420
or to such other address as Purchaser may designate to Seller in writing and, if
to Seller, addressed to Seller at:
IR Partners
c/o Wexford Management, LLC
411 West Putnam Avenue
Greenwich, Connecticut 06830
Attention: Joseph Jacobs
Telecopy: (203) 862-7320
and
Attention: Robert Holtz
Telecopy: (203) 862-7310
and
Steinhardt Management Company, Inc.
605 Third Avenue, 33rd Floor
New York, New York 10158
Attention: Lisa Addeo
Telecopy: (212) 953-3027
With copies to:
Shapiro & Allen
565 Fifth Avenue
New York, New York 10017
Attention: Stuart Shapiro
Telecopy: (212) 557-1275
and
Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Attention: Philip H. Harris
Telecopy: (212) 753-2000
and to:
<PAGE>
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Schulte Roth & Zabel
900 Third Avenue
New York, New York 10022
Attn: Paul N. Roth
Telecopy: (212) 593-5955
or to such other address as Seller may designate in writing.
Section 6.3. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto on separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.
Section 6.4. Binding Effect; Assignment. Except as contemplated in Section
6.11 below, the rights and obligations of Purchaser or Seller under this
Agreement may not be assigned to any other Person except with the prior written
consent of the other party hereto. This Agreement shall not be construed so as
to confer any right or benefit upon any Person other than the parties to this
Agreement, and their respective successors and permitted assigns. This Agreement
shall be binding upon Seller and Purchaser, and their respective successors and
permitted assigns.
Section 6.5. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT
MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF SAID STATE, WITHOUT REGARD TO
PRINCIPLES OF CONFLICT OF LAWS. THE PARTIES TO THIS AGREEMENT HEREBY AGREE THAT
JURISDICTION OVER SUCH PARTIES AND OVER THE SUBJECT MATTER OF ANY ACTION OR
PROCEEDING ARISING UNDER THIS AGREEMENT MAY BE EXERCISED BY A COMPETENT COURT OF
THE STATE OF NEW YORK OR BY A UNITED STATES COURT SITTING IN NEW YORK CITY.
Section 6.6. Severability of Provisions. Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 6.7. Headings. The Article and Section headings used or contained
in this Agreement are for convenience of reference only and shall not affect the
construction of this Agreement.
<PAGE>
-14-
Section 6.8. No Reliance. Each party hereto acknowledges that it has
obtained separate advice with respect to the legal, tax and accounting
consequences of the transactions contemplated by this Agreement, and that it has
neither sought nor relied upon any such advice from any other party hereto or
its Affiliates.
Section 6.9. Expenses. Each of the parties hereto will pay its own
expenses, costs and fees (including fees and expenses of counsel and auditors)
incurred in connection with this Agreement or any transaction contemplated by
this Agreement, including the preparation, execution and delivery of this
Agreement and compliance herewith. The foregoing shall not be construed as
limiting any other rights which any party or its affiliates may have as an
indemnified party hereunder or as the result of a misrepresentation or breach of
obligation of the other party with respect to this Agreement.
Section 6.10. Entire Agreement. This Agreement and the agreements executed
contemporaneously herewith constitute the entire agreement between the parties
with respect to the subject matter hereof and there are no promises or
undertakings with respect thereto relative to the subject matter hereof not
expressly set forth or referred to herein.
Section 6.11. Guarantee; Dissolution of Seller. The obligations hereunder
of Seller are hereby guaranteed, on a joint and several basis, by Charles
Davidson and Joseph Jacobs. Such guarantee shall be a guarantee of payment and
not collection. No waiver or amendment hereto or hereunder shall release in any
manner either such guarantor. Purchaser agrees that Seller may dissolve and wind
up as and when determined by its partners in their sole discretion and that, in
the event of such dissolution and winding up, Purchaser's rights against Seller
shall be released as to Seller and its partners effective upon such dissolution
and winding up but not as to its rights against Messrs. Davidson and Jacobs
under this Section 6.11 and Messrs. Davidson and Jacobs and each of the partners
of IR Partners shall succeed to the rights of Seller under this Agreement.
<PAGE>
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
IR PARTNERS
By:
-----------------------------
Name:
Title:
By:
-----------------------------
Name:
Title:
PRESIDIO HOLDING COMPANY, LLC
By:
-----------------------------
Name:
Title:
Agreed to (as to Section 6.11 only):
- -----------------------------------
Joseph Jacobs
- -----------------------------------
Charles Davidson
