SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Rule 13e-3 Transaction Statement
(Pursuant to Section 13(e) of the Securities Exchange Act of 1934)
Amendment No. 1
PRESIDIO CAPITAL CORP.
(Name of Issuer)
PRESIDIO CAPITAL CORP.
(Name of Person Filing Statement)
Title CUSIP Number
Class A shares G72201109
(Title and CUSIP Number of Class of Securities)
Richard J. Sabella
President and Chief Executive Officer
Presidio Capital Corp.
411 West Putnam Avenue, Suite 270
Greenwich, Connecticut 06830
(203) 862-7444
with a copy to:
Lawrence A. Kobrin, Esq.
Jonathan I. Mark, 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 on Behalf of the Person Filing Statement)
This statement is filed in connection with (check the appropriate box):
a. [X] The filing of solicitation materials or an information statement
subject to Regulation 14A [17 CFR 240.14a-1 to 240.14b-1],
Regulation 14C [17 CFR 240.14c-1 to 240.14c-101] or
Rule 13e-3(c) [Sec. 240.13e-3(c)] under the Securities Exchange
Act of 1934.
b. [ ] The filing of a registration statement under the Securities Act
of 1933.
c. [ ] A tender offer.
d. [ ] None of the above.
Check the following box if the soliciting materials or information statement
referred to in checking box (a) are preliminary copies:
Calculation of Filing Fee
Transaction Valuation* Amount of Filing Fee
$15,713,175.00 $3,142.64
* Solely for purposes of calculating the filing fee and computed pursuant to
Section 13(e)(3) of the Securities Exchange Act of 1934, as amended, and Rule
0-11(b)(1) thereunder, the transaction value equals the total amount of funds,
excluding fees and other expenses, required to purchase all fractional shares of
the class of securities listed above pursuant to the reverse stock split
described in the Information Statement reference in Item 17(d)(1) herein.
/X/ Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount Previously Paid: $3,142.64
Form or Registration No.: Schedule 13E-3
Filing Party: Presidio Capital Corp.
Date Filed: February 13, 1998
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This Amendment No. 1 (the "Amendment") is a final amendment to the
Rule 13(e)(3) Transaction Statement on Schedule 13E-3 (the "Statement")
originally filed on January 27, 1998 and filed in definitive form on February
13, 1998 with respect to the reverse stock split by Presidio Capital Corp., a
British Virgin Islands corporation ("Presidio"), described in its Information
Statement, dated February 13, 1998 (the "Information Statement"), whereby (i)
each shareholder that surrenders 250,000 Class A shares, par value $0.01 per
share (the "Old Shares"), will receive one (1) Class A share, par value
$2,500.00 per Old Share (the "New Shares"), and (ii) a cash payment of $25.00
per Old Share (the "Cash Consideration") in lieu of issuing any fractional New
Shares to shareholders who, after the reverse stock split, would own fractional
New Shares. Items (i) and (ii) are referred to herein collectively as the
"Reverse Stock Split."
All capitalized terms used in this Amendment without definition have
the meanings attributed to them in the Statement.
The items of the Statement set forth below are hereby amended and
supplemented as follows:
Item 3. Past Contracts, Transactions or Negotiations.
(b) Item 3(b) is hereby amended by deleting the last sentence of the
last paragraph of such item and, further, by adding the following additional
paragraph.
On March 5, 1998, Presidio Holding Company, LLC ("PHC") entered into
an agreement with affiliates of Angelo, Gordon & Co., L.P., M.H. Davidson &
Company and Stonehill Partners, L.P., pursuant to which all the shares of the
Company beneficially owned by them and by PHC were contributed to Presidio
Property Holding Company, LLC ("PPHC"), a newly formed Delaware limited
liability company, in exchange for membership interests in PPHC. As a result of
such transaction, PPHC became the beneficial owner of approximately 94% of the
Class A shares. As a result of the Reverse Stock Split, PPHC is the sole
shareholder of the Company. PHC is the controlling member of PPHC.
Item 10. Interest and Securities of the Issuer.
(a) The information appearing under the caption, "Security Ownership
of Certain Beneficial Owners and Management" in the Information Statement
incorporated by reference is modified to reflect the transfer of all of the
Class A shares owned by PHC, and affiliates of Angelo, Gordon & Co. L.P., M.H.
Davidson & Co. and Stonehill Partners, L.P. to PHCC in exchange for membership
interests in PHCC. As a result of such transaction, PHCC became the beneficial
owner of approximately 94% of the Old Shares. PHC is the controlling member of
PPHC.
Item 16. Additional Information.
Item 16 is hereby amended to add the following sentence. In addition,
reference is hereby made to the Supplement to the Information Statement which is
filed herewith as Exhibit (d)(4), and which is incorporated in its entirety
herein by reference.
Item 17. Material to be Filed as Exhibits.
Paragraph Item 17(c) is amended as follows:
(c) Operating Agreement of Presidio Property Holding Company, LLC
dated March 5, 1998.
(d)(4) Supplement dated March 11, 1998 to Information Statement, dated
February 13, 1998.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this Amendment to the Statement is
true, complete and correct.
Dated: March 11, 1998
PRESIDIO CAPITAL CORP.
By: /s/ Richard J. Sabella
Name: Richard J. Sabella
Title: Authorized Signatory
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Exhibit (c)
PRESIDIO PROPERTY HOLDING COMPANY, LLC
OPERATING AGREEMENT
OPERATING AGREEMENT of PRESIDIO PROPERTY HOLDING COMPANY, LLC (the
"Company"), dated March 5, 1998, among PRESIDIO HOLDING COMPANY, LLC, a Delaware
limited liability company ("PHC"), and the persons listed on Schedule A hereto
(collectively, the "Members").
R E C I T A L S:
WHEREAS, the Members wish to form a limited liability company pursuant to
the laws of the State of Delaware;
WHEREAS, the Members wish to provide for the operation and management of
the Company for the purposes stated herein;
A G R E E M E N T:
NOW THEREFORE, in consideration of the mutual premises and covenants
contained herein, the parties agree as follows:
ARTICLE 1 - THE LIMITED LIABILITY COMPANY
1.01 Formation. The Members hereby form a limited liability company subject
to the provisions of the Delaware Limited Liability Company Act (the "DLLCA").
1.02 Filing. In connection with the execution and delivery of this
agreement, the Members have caused a Certificate of Formation that complies with
the requirements of the DLLCA to be properly filed with the Secretary of State
of the State of Delaware. In addition, the Members shall execute such further
documents (including amendments to the Certificate of Formation) and take such
further action as is appropriate to comply with the requirements of law for the
formation or operation of a limited liability company in all states and
countries where the Company may conduct its business. The Members hereby ratify,
adopt and approve all acts taken by Brett Fox as organizer.
1.03 Name. The name of the Company shall be Presidio Property Holding
Company, LLC.
1.04 Registered Office; Registered Agent. The location of the registered
office of the Company shall be c/o Corporation Trust Company, 1209 Orange
Street, Wilmington, Delaware 19801 and thereafter at such other location as the
Members may designate. The Company's registered agent at such address shall be
Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801.
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1.05 Events of Dissolution. The Company shall have perpetual existence
unless dissolved by:
(a) the affirmative vote of Members having Participation Percentages (as
defined in Section 3.02) aggregating more than 80%;
(b) the occurrence of a liquidation procedure pursuant to Section 12.02; or
(c) any other event causing a dissolution of a limited liability company
under the DLLCA.
1.06 Title to Company Assets. Title to Company assets, whether real,
personal or mixed and whether tangible or intangible, shall be deemed to be
owned by the Company as an entity, and no Member, individually or collectively,
shall have any ownership interest in such Company assets or any portion thereof.
Title to any or all of the Company assets may be held in the name of the Company
or one or more nominees, as the Managers may determine. All Company assets shall
be recorded as the property of the Company in its books and records,
irrespective of the name in which record title to such Company assets is held.
1.07 Power of Attorney. (a) Each Member hereby constitutes and appoints the
Managers, with full power of substitution, as its true and lawful agent and
attorney-in-fact, with full power and authority in his name, place and stead, to
execute, swear to, acknowledge, deliver, file and record in the appropriate
public offices (i) all certificates, documents and other instruments (including,
without limitation, the Certificate of Formation and all amendments or
restatements thereof) that the Managers deem necessary or appropriate to form,
qualify or continue the existence of qualification of the Company in the State
of Delaware and in all other jurisdictions in which the Company may conduct
business or own property; (ii) all certificates, documents and other instruments
that the Managers deem necessary or appropriate to reflect, in accordance with
its terms, any amendment, change, modification or restatement of this Agreement;
and (iii) all certificates, documents and other instruments (including
conveyances and a certificate of cancellation) that the Managers deem necessary
or appropriate to reflect the dissolution and liquidation of the Company
pursuant to the terms of this Agreement. Nothing contained in this Section shall
be construed as authorizing the Managers to amend this Agreement except as
expressly provided in this Agreement.
(b) The foregoing power of attorney is hereby declared to be irrevocable
and a power coupled with an interest, and it shall survive and not be affected
by the subsequent dissolution, bankruptcy or termination of any Member or the
transfer of any Capital Interest (as herein defined) and shall extend to a
Member's heirs, successors, assigns and personal representatives, but such power
shall terminate upon the dissolution of the Company.
1.08 Management of Business. The business of the Company shall be conducted
by its Managers, which may designate such individuals or other entities (which
may or may not be Members or affiliates thereof as provided in Article 9) to
conduct the day-to-day activities of the Company as further provided and subject
to Articles 6 and 7. The Managers may appoint such attorney-in-fact or agent as
they may determine from time to time. Such attorney-
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in-fact or agent shall serve until their successors are designated by written
action of the Managers.
1.09 Character of Business. The business of the Company shall be to
transact any and all business as may be lawfully engaged in by limited liability
companies organized under the laws of the State of Delaware. The initial
business of the Company shall be to hold Class A shares of Presidio Capital
Corp., a British Virgin Islands company ("Presidio").
1.10 Principal Place of Business. The location of the principal place of
business of the Company shall be at 411 West Putnam Avenue, Greenwich, CT 06831,
or at such other place as the Managers from time to time may select.
ARTICLE 2 - MEETINGS OF MEMBERS
2.01 Members. The name and place of residence of each Member are as set
forth on Schedule A. The Managers shall maintain and update Schedule A from time
to time as appropriate to reflect changes.
2.02 Annual Meeting. The annual meeting of the Members shall be held on
such date on or prior to June 30 as may be determined by the Managers,
commencing with the year 1998, for the purpose of the transaction of such
business as may come before the meeting.
2.03 Special Meetings. Special meetings of the Members, for any purpose or
purposes, unless otherwise prescribed by statute, may be called by the Managers
of the Company or any Member or Members whose collective Participation
Percentage is at least 25%; provided that no more than two such special meetings
shall be called in any twelve-month period unless all the Managers or Members,
as the case may be, join in calling the meeting.
2.04 Place of Meetings. The Members may designate any place, either within
or outside the State of Delaware, as the place of meeting for any meeting of the
Members. If no designation is made, or if a special meeting be otherwise called,
the place of meeting shall be the principal place of business of the Company.
2.05 Quorum. Members having Participation Percentages aggregating more than
50% (a "Majority in Interest"), represented in person or by proxy, shall
constitute a quorum at any meeting of Members. In the absence of a quorum at any
such meeting, a majority of the Participation Percentages so represented may
adjourn the meeting from time to time for a period not to exceed sixty (60) days
without further notice. However, if the adjournment is for more than sixty (60)
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each Member of
record entitled to vote at the meeting. At such adjourned meeting at which a
quorum shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally noticed. The Members
present at a duly organized meeting may continue to transact business until
adjournment, notwithstanding the withdrawal during such meeting of a number of
Members whose absence would cause less than a quorum to be present.
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2.06 Required Majority. If a quorum is present, the vote of a Majority in
Interest shall be the act of the Members, unless the vote of a greater or lesser
proportion or number is otherwise required by the DLLCA, by the Certificate of
Formation or by this Agreement. However, the affirmative vote or consent of
Members having Participation Percentages aggregating at least 80% shall be
required to approve any merger involving the Company in which the Company is not
the survivor, or any plan of liquidation that involves the distribution to
Members of assets other than cash or cash equivalents.
2.07 Conference Telephone. Any Member may participate in a meeting of the
Members by means of conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other, and
participation in the meeting by means of such equipment shall constitute
presence in person at such meeting.
2.08 Action by Members Without a Meeting. Action required or permitted to
be taken at a meeting of Members may be taken without a meeting, without prior
notice and without a vote, if the action is evidenced by one or more written
consents describing the action taken, signed by the proportion of Members as
would be required under Section 2.06 for an act of Members at a meeting, and
delivered to the Secretary of the Company for inclusion in the minutes or for
filing with the Company records. Action taken under this Section is effective
when Members sufficient to take the action pursuant to the preceding sentence
have signed the consent, unless the consent specifies a different effective
date. The record date for determining Members entitled to take action without a
meeting shall be the date the first Member signs a written consent. Any Member
or Manager proposing to take any such action by written consent shall use
reasonable best efforts to notify all Members simultaneously, and in any event
notice of any action so taken shall be given promptly to all Members.
ARTICLE 3 - CAPITAL CONTRIBUTIONS
3.01 Capital Contributions. Each Member shall contribute to the Company's
initial capital the respective number of Class A shares of Presidio ("Presidio
Shares") set forth opposite its name on Schedule A hereto ("Initial
Contribution"), each of which shares the parties agree shall be valued at the
Base Price. No Member shall be obligated to make any additional capital
contribution.
3.02 Certain Representations. Each Member represents that (i) this
Agreement has been duly authorized, executed and delivered by it, (ii) it has
marketable title to the Presidio Shares to be contributed by it to the Company
and (iii) when contributed to the Company, the Presidio Shares to be contributed
to the Company will be free and clear of any security interest, claim, lien or
other encumbrance.
3.03 Capital Interests. Each Member shall receive a Capital Interest in the
Company upon becoming a Member and making any capital contribution to the
Company. Each such Capital Interest shall (i) entitle its holder to an
allocation of the profits and losses of the Company, to distributions as
provided in Article 5, and to a share of the assets of the Company upon winding
up as provided in Article 12, and (ii) shall correspond to a limited liability
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company interest as provided in the DLLCA ("Capital Interest"). Each Member with
a Capital Interest shall have a Participation Percentage that shall initially
equal the fraction (expressed as a percentage) the numerator of which is the
number of Presidio Shares contributed by such Member and the denominator of
which is the number of Presidio Shares contributed by all Members
("Participation Percentage"). The value of any additional contributions by the
Members shall be determined in good faith by the Managers. In connection with
any capital contribution other than the Initial Contribution, the capital
accounts and Participation Percentages of the Members may be adjusted to reflect
the fair value of the Capital Interests immediately prior to such increase or
admission in accordance with Treasury Regulation 1.704-1(b)(2)(iv)(f).
3.04 Capital Accounts. The Company shall maintain capital accounts in
accordance with the provisions of Section 10.02 of this Agreement.
3.05 No Personal Liability. No Member shall have any individual liability
to the Company or to the other Members or to any third party with which the
Company may deal or transact business to make any additional capital
contribution. No additional claims or rights may be asserted by any third party
claimant or creditor of the Company or by any receiver, trustee, or other person
acting or purporting to act on behalf of the Company or the Member. No
participant in any Member and no officer, director, partner or owner of any
Member shall have any liability with respect to additional capital
contributions.
ARTICLE 4 -CERTIFICATES FOR MEMBERSHIP INTERESTS
4.01 Issuance of Certificates. The Company shall, upon the request of a
Member, issue a certificate, signed by the Managers or such officers as the
Managers may designate, representing such Member's membership interests in the
Company. Any certificate so issued shall bear a legend setting forth the
restrictions on transfer set forth in section 11.03 hereof. For purposes of the
grant, pledge, attachment or perfection of a security interest in any Capital
Interest in the Company, the Capital Interests in the Company will be deemed to
be "securities" within the meaning of Section 8-102(a)(15) of the Uniform
Commercial Code as in effect from time to time in the State of Delaware.
ARTICLE 5 - PROFITS, LOSSES AND DISTRIBUTIONS
5.01 Distributions. (a) Annually or at more frequent intervals, at the
discretion and determination of the Managers, or at such other time as may be
required under any provision of this Agreement, then available funds shall be
distributed to the Members. Any distribution to Members shall be made in
accordance with this Section 5.01.
For this purpose, "available funds" means the Company's gross cash
receipts, less the Company's expenditures, and less the amount that, in the
Managers' reasonable judgment, the Company should retain in order to fulfill its
business purposes.
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(b) Distributions made pursuant to this Section 5.01 shall be made 100% to
PHC until the aggregate amount distributed to PHC, together with the aggregate
amount previously distributed to PHC pursuant to this sentence of Section
5.01(b) and all T-2 Distributions received by PHC, equals the PHC Priority.
Thereafter, distributions made pursuant to this Section 5.01 shall initially be
divided among the Members in proportion to their respective Participation
Percentages. Each Member's Participation Percentage of any distribution shall be
distributed:
(1) first, to the Member to the extent of the excess, if any, of (x)
the aggregate capital contributed by the Member over (y) the aggregate
amount previously distributed to the Member pursuant to this Section
5.01(b)(1), together with all T-2 Distributions received by the Member;
(2) second, to the Member, until the cumulative distributions to the
Member, together with all T-2 Distributions received by the Member,
represent an IRR of 10%;
(3) third, until the cumulative distributions to the Member, together
with all T-2 Distributions received by the Member, represent an IRR of 20%,
(A) 10% to PHC, and
(B) 90% to the Member;
(4) fourth, until the cumulative distributions to the Member, together
with all T-2 Distributions received by the Member, represent an IRR of 25%,
(A) 15% to PHC, and
(B) 85% to the Member; and
(5) fifth, to the extent that the cumulative distributions to the
Member, together with all T-2 Distributions received by the Member,
represent an IRR that exceeds 25%,
(A) 18% to PHC, and
(B) 82% to the Member.
Notwithstanding the foregoing, from and after a Change in Management, each
Member's Participation Percentage of any distribution shall be made 100% to the
Member without regard to any sharing with PHC, except to the extent such
distributions represent distributions of cash or cash equivalents held by the
Company at the time of the Change in Management or realized within three months
after the Change in Management that represent available funds; provided,
however, that no such payment to PHC under the provisions of this Agreement
shall be permitted if it would cause the Company to be insolvent.
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(c) Solely for purposes of determining the right of PHC to participate in
distributions in respect of the Participation Percentage of any other Member
pursuant to Section 5.01(b), (i) each Member's Initial Contribution shall be
deemed to have been made on August 28, 1997, (ii) each Presidio Share
contributed in the Initial Contribution shall be valued at the Base Price, (iii)
any capital contribution by a Member after the date hereof other than in cash
shall be valued by the Managers pursuant to Section 3.03 hereof in good faith,
(iv) any contribution of capital by a Member after the date hereof to any of the
T-2 Entities shall be treated as a capital contribution under this Agreement and
(v) any net cash proceeds realized by a Member in connection with a sale by all
Members of all of their capital interests in any of the T-2 Entities a single
transaction or series of related transactions shall be treated as having been
distributed to such Member pursuant to this Agreement. In the case of a transfer
by a Member of all or part of its Capital Interest in a transaction that is not
in connection with a sale by all Members of all of their Capital Interests in a
single transaction or series of related transactions, the transferee shall be
treated in the same manner as the transferor in determining the right of PHC to
participate in distributions in respect of the portion of the Capital Interest
transferred. A transfer by a Member of all or part of its interest in any T-2
Entity that is not subject to clause (v) above shall be disregarded in applying
the provisions of this Section 5.01(c).
(d) The Company shall at all times be entitled to make payments required to
discharge any obligation of the Company to withhold and make payments to any
governmental authority with respect to any Federal, state and local tax
liability of any Member arising out of such Member's share of allocations and
distributions attributable to such Member's interest in the Company ("affected
Member"). To the extent not deducted from any payment, each affected Member
shall pay the Company the amount of any such payment after five (5) days' notice
thereof, and, upon the failure to do so, such payment made by the Company shall
be deemed to be a loan by the Company to such affected Member and shall not be
deemed to be a distribution to such affected Member. The amount of such deemed
loan shall bear interest, on each such amount from the date of each such payment
until the date such amount is repaid to the Company, at an interest rate equal
to the rate from time to time in effect for late payments of the underlying
Federal, state or local tax liability in question, and shall be repaid to the
Company by (a) deduction from any distributions otherwise payable to such
affected Member pursuant to this Agreement or (b) earlier payment of such
amounts and interest by such affected Member to the Company.
5.02 Allocation of Profits and Losses. (a) The Company's Profits and Losses
shall be determined on an annual basis and shall be allocated to the Members in
accordance with this Section 5.02.
(b) Except as provided in Section 5.02(c) and (d), Profits or Losses for
each fiscal year shall be allocated among the Members (and credited or debited
to their Capital Accounts) in such manner that if the Company were to liquidate
completely immediately after the end of such fiscal year and in connection with
such liquidation sell all of its assets and settle all of its liabilities at
their then Adjusted Book Values (i.e., without any Profits or Losses resulting
therefrom); (i) the distribution by the Company of any remaining cash to the
Members in accordance with their respective positive Capital Account balances
(after crediting or debiting
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Capital Accounts for Profits or Losses for such fiscal year) would correspond as
closely as possible to the distributions that would result if the liquidating
distributions has instead been made in accordance with the provisions of Section
5.01(b), and (ii) any resulting deficit Capital Account balances (after
crediting or debiting Capital Accounts for Profits and Losses for such fiscal
year) would correspond as closely as possible to the manner in which economic
responsibility for Company deficit balances (as determined in accordance with
the principles of Treasury Regulations under Section 704 of the Code) would be
borne by the Members under the terms of this Agreement and any collateral
agreements. For purposes of maintaining the Capital Accounts, items of income,
gain, loss, deduction, expense and credit shall be allocated to the Members in
the same manner as are Profits and Losses, except where otherwise necessary to
more closely achieve the result contemplated by the first sentence of this
Section 5.02(b).
(c) Allocations necessary to fulfill the requirements of a "qualified
income offset" under Treas. Reg. ss. 1.704-1(b)(2)(ii)(d) and a "minimum gain
chargeback" under Treas. Reg. ss. 1.704-2(f) shall be made, but shall be
neutralized to the extent feasible by offsetting allocations made for subsequent
periods.
(d) To the extent practicable, distributions to PHC in respect of the PHC
Priority pursuant to the first sentence of Section 5.01(b) shall not be
considered made out of Profits, and taxable income and gain of the Company shall
not be allocated to PHC on account of such distributions (except with respect to
amounts representing notional interest).
5.03 Book-Tax Disparities. Gain or loss or depreciation or amortization
with respect to property contributed to the Company by a Member or revalued
pursuant to Treas. Reg. ss. 1.704-1(b)(2)(iv)(f) shall be allocated in a manner
that takes into account the difference between the adjusted tax basis of such
property and its book value, as required by Section 704(c) of the Internal
Revenue Code and Treas. Reg. ss. 1.704-1(b)(4)(i), using any method permitted by
applicable Treasury Regulations. In connection with any sale by the Company of
Class A Common Shares of Presidio, the shares deemed sold shall be selected from
those contributed by the Members pro rata in proportion to the Participation
Percentages of the Members.
5.04 Capital Withdrawal. No member shall have the right to withdraw any
amount from its capital account or receive a distribution of property or cash
unless approved by the Managers.
5.05 Definitions. For purposes of this Article V, the following terms have
the meanings ascribed to them.
"Adjusted Book Value" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:
(a) The Adjusted Book Value of any asset contributed or deemed contributed
by a Member to the Company shall be the Fair Market Value of such asset at the
time of contribution;
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(b) The Adjusted Book Value of any asset distributed or deemed distributed
by the Company to any Member shall be adjusted immediately prior to such
distribution to equal its Fair Market Value, at such time;
(c) The Adjusted Book Values of all Company assets shall be adjusted
(unless the effect of such adjustment would be de minimis) to equal their
respective Fair Market Values as of:
(1) The date of the acquisition of an additional interest in the
Company by any new or existing Member in exchange for a contribution to the
capital of the Company; or
(2) Upon the liquidation of the Company, or the distribution by the
Company to a retiring or continuing Member of money or other Company
property in reduction of such Member' s interest in the Company;
(d) Any adjustments to the adjusted basis of any asset of the Company
pursuant to Section 734 or 743 of the Code shall be taken into account in
determining such asset's Adjusted Book Value in a manner consistent with
Regulation Section 1.704-1(b)(2)(iv)(m); and
(e) If the Adjusted Book Value of an asset has been determined pursuant to
paragraph (a) through (c) above, such Book Value shall thereafter be adjusted in
the same manner as would the asset's adjusted basis for federal income tax
purposes, except that depreciation deductions shall be computed based on the
asset's Adjusted Book Value as so determined, and not on the asset's adjusted
tax basis.
"Applicable Rate" means 10% per annum through June 30, 1998 and 6% per
annum thereafter.
"Base Price" means $25.00 per share; provided, however, that upon any
payment by PHC or any Affiliate of any deferred purchase price for the Presidio
Shares acquired by PHC in connection with the Farallon Purchase, the Base Price
shall be deemed increased by 81.96% of the per share amount of such payment,
discounted from the date of payment to August 28, 1997 at a cumulative and
annually compounded rate of 10%. For purposes of determining the right of PHC to
share in any distribution to Members under Section 5.01 subsequent to any
increase in the Base Price pursuant to the foregoing sentence, there shall be
taken into account the cumulative effect of such increase, but PHC shall not be
required to repay to the Company or to any of the Members distributions
previously made to PHC.
"Change in Management" means the first to occur of (i) the termination of
the Management Agreement between Presidio and Northstar Presidio Management
Company, LLC ("Northstar Manager") in accordance with its terms, (ii) either PHC
or Northstar Manager ceasing to be controlled by David Hamamoto and/or Edward
Scheetz or any Qualifying REIT, (iii) David Hamamoto and/or Edward Scheetz or
any Qualifying REIT ceasing to beneficially
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own at least a majority of the outstanding capital stock or equity interests of
either PHC or Northstar Manager and (iv) PHC or any entity directly or
indirectly controlled by David Hamamoto and/or Edward Scheetz and in which such
persons retain at least a majority of the voting power and right to share in
equity profits and assets on liquidation ceasing to own at least 30% by
Participation Percentage in the Company or in the Profit and Loss and capital of
the Company.
"Fair Market Value" of an asset means the fair market value of such asset
as determined by the Managers and approved by the Members to the extent provided
herein. The Fair Market Value of the Presidio Shares contributed in the Initial
Contribution shall be the Base Price.
"Farallon Purchase" means the Class A Common shares of Presidio purchased
by PHC on July 18, 1997 from Farallon Capital Partners, L.P., Farallon Capital
Institutional Partners, L.P., Farallon Capital Institutional Partners II, L.P.,
Tinicum Partners, Farallon Capital Offshore Investors, Inc., The Common Fund and
Consolidated Press International Limited.
"IRR" means the internal rate of return earned on such Member's capital
contributions compounded annually and computed on a cumulative basis for all
periods from the date of contribution through the period in question.
"PHC Priority" means an amount equal to $9.9 million plus the amount that
would represent interest on a notional loan in the principal amount of $9.9
million at the Applicable Rate from the date hereof through the date of payment.
"Profit" and "Loss" means, for each taxable year of the Company (or other
period for which Profit or Loss must be computed), the Company's taxable income
or loss determined in accordance with Code Section 703(a), with the following
adjustments:
A(a) all items of income, gain, loss, deduction, or credit required to be
stated separately pursuant to Code Section 703(a)(1) shall be included in
computing taxable income or loss; and
(b) any tax-exempt income of the Company, not otherwise taken in account in
computing Profit or Loss, shall be included in computing taxable income or loss;
and
(c) any expenditures of the Company described in Code Section 705(a)(2)(B)
(or treated as such pursuant to Regulation Section 1.704-1(b)(2)(iv)(i)) and not
otherwise taken into account in computing Profit or Loss, shall be subtracted
from taxable income or loss; and
(d) gain or loss resulting from any taxable disposition of assets of the
Company shall be computed by reference to the Adjusted Book Value of the assets
disposed of, notwithstanding the fact that the adjusted book value differs from
the adjusted basis of the assets for federal income tax purposes; and
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(e) in lieu of the depreciation, amortization, or cost recovery deductions
allowable in computing taxable income or loss, there shall be taken into account
the depreciation computed based upon the Adjusted Book Value of the assets; and
(f) If the Adjusted Book Value of any Company asset is adjusted pursuant to
clauses (a), (b) or (c) of the definition thereof the amount of such adjustment
shall be taken into account in the taxable year of adjustment as gain or loss
from the disposition of such asset for purposes of computing Profit and Loss.
"Qualifying REIT" means a real estate investment trust or similar
investment vehicle formed or sponsored by a Northstar Affiliate and as to which
a Northstar Affiliate performs significant management functions.
"T-2 Distributions" means any distributions to a Member after the date
hereof by any of the T-2 Entities.
"T-2 Entities" shall mean collectively, T-Two Management, LLC, T-Two
General, L.P., Roundhill Associates Limited Partnership and Roundhill Associates
Limited Partnership II.
ARTICLE 6 - MEMBERS AND MANAGERS
6.01 Members. The liability of the Members shall be limited as provided in
the DLLCA. No Member shall be liable for the debts, obligations, or liabilities
of the Company.
6.02 Designation of Managers. The Company shall have seven Managers to be
designated by the Members as follows: PHC: 4; AG Presidio Investors, LLC
("Angelo Gordon"): 1; DK Presidio Investors, LLC ("Davidson"): 1; and Stonehill
Partners, L.P. ("Stonehill"): 1. The initial Managers shall be:
PHC Designees David Hamamoto
David King
Richard J. Sabella
W. Edward Scheetz
Angelo Gordon Designee Jeffrey H. Aronson
Davidson Designee Thomas L. Kempner, Jr.
Stonehill Designee John A. Motulsky
Any transferee of a Capital Interest representing at least a majority of
the Capital Interest as of the date hereof of any of PHC, Angelo Gordon,
Davidson or Stonehill and its affiliates, as the case may be, shall succeed to
the right of the transferring person to designate Managers as set forth above.
The Company or any Manager proposing to convene any meeting
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of Managers or to take any other action of Managers shall use its good faith
reasonable efforts to notify all Managers of the proposed meeting or action a
reasonable time in advance. Notice of any action of the Managers taken at a
meeting, by written consent or otherwise shall be given promptly to all Managers
who did not participate in the meeting, consent or action. Any Manager that is
not a PHC designee may convene a meeting of Managers for any purpose relating to
the Company; provided that such meetings so convened need not occur more than
four times in any year. The Managers shall not be entitled to fees for their
services as Managers. The Managers need not be Members.
6.03 Powers of Managers to Manage Business of Company. The Managers shall,
except as specifically provided in this Agreement, by majority vote make all
decisions concerning (a) (except as limited by the provisions of Section 6.04)
the development, sale, lease or other disposition of the Company's assets; (b)
the purchase or other acquisition of other assets of all kinds; (c) the
management of all or any part of the Company's assets; (d) the borrowing of
money and the granting of security interests in the Company's assets (including
loans from Members); (e) the prepayment, refinancing or extension of any
mortgage affecting the Company's assets; (f) the compromise or release of any of
the Company's claims or debts; and (g) the employment of persons, firms or
corporations for the operation and management of the Company's business,
including affiliates of the Members.
6.04 Exercise of Management Powers. In the exercise of management powers
the Managers, or such officers, attorneys-in-fact, agents or representatives as
the Managers shall designate or appoint, are authorized to execute and deliver
(a) all contracts, conveyances, assignments, leases, subleases, franchise
agreements, licensing agreements, management contracts and maintenance contracts
covering or affecting the Company's assets; (b) all checks, drafts and other
orders for the payment of the Company's funds; (c) all promissory notes,
mortgages, deeds of trust, security agreements and other similar documents; and
(d) all other instruments of any kind or character relating to the Company's
affairs, whether like or unlike the foregoing. No Member acting without the
authorization required under this Section shall have management power over the
business and affairs of the Company or actual or apparent authority to enter
into contracts or bind the Company, except as may be specifically authorized by
the Members pursuant to this Article 6.
6.05 Nominee. Title to the Company's assets shall be held in the Company's
name or in the name of any nominee that the Managers may designate. The Managers
shall have power to enter into a nominee agreement with any such person, and
such agreement may contain provisions indemnifying the nominee, except for his
or its gross negligence or willful misconduct.
6.06 Time Devoted to Business. Each Member shall be required to devote such
time to the business of the Company as it in its discretion deems necessary for
the efficient operation of the Company's business. The Members shall at all
times be free to engage for their own account in all aspects of any business or
investment in which the Company is involved.
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6.07 Information Relating to Company. Each Member or his or its authorized
representative shall have access to and may inspect and copy all books, records
and materials regarding the Company or its activities.
6.08 Exculpation. Any act or omission of a Member the effect of which may
cause or result in loss or damage to the Company or the Members if done in good
faith to promote the best interests of the Company shall not subject such Member
to any liability to any other Member or to the Company.
6.09 Indemnification. (a) Each Member, Manager, officer, attorney-in-fact,
agent or representative, shall, to the fullest extent permitted by law, be
indemnified and held harmless by the Company from and against any and all
losses, claims, damages, liabilities, joint or several, expenses (including
reasonable legal fees and expenses as incurred), judgments, fines, penalties,
interests, settlements, and other amounts arising from any and all claims,
demands, actions, suits or proceedings, whether civil, criminal, administrative
or investigative, relating to the activities of such person in any of such
capacities. The indemnification provided in this Section shall extend to the
fullest extent as would be permitted by applicable law of the State of Delaware
from time to time affording indemnification to persons acting on behalf of
corporations organized in such State.
(b) The right to be indemnified conferred in this Section 6.09 shall be a
contract right and shall include the right to be paid by the Company the
expenses incurred in defending any such proceeding in advance of its final
disposition; provided, however, that, the payment of such expenses incurred by a
Member, Manager, officer, attorney-in-fact, agent or representative in his or
her capacity as a Member, Manager, officer, attorney-in-fact, agent or
representative (and not in any other capacity in which service was or is to be
rendered by such person while a Member, Manager, officer, attorney-in-fact,
agent or representative), in advance of the final disposition of a proceeding,
shall be made only upon delivery to the Company of (i) a written request for
advancement of expenses which sets forth in reasonable detail the expenses
incurred by the Member, Manager, attorney-in-fact, officer, agent or
representative and (ii) an undertaking, by or on behalf of the Member, Manager,
officer, attorney-in-fact, agent or representative, to repay all amounts so
advanced if it shall ultimately be determined that the Member, Manager, officer,
attorney-in-fact, agent or director is not entitled to be indemnified under this
Section 6.09 or otherwise. The financial ability of a Member, Manager, officer,
attorney-in-fact, agent or representative to repay any amounts to be advanced
shall not be a prerequisite to making an advance of expenses.
(c) The indemnification provided by this Section 6.09 shall not limit or
exclude any rights, indemnities or limitations of liability to which any person
may be entitled, whether as a matter of law, by agreement or otherwise.
(d) If a claim under Section 6.09 is not paid in full by the Company within
sixty days after a written claim has been received by the Company, the claimant
may at any time thereafter bring suit against the Company to recover the unpaid
amount of the claim and, if successful in whole or in part, the claimant shall
be entitled to be paid also the expense of
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prosecuting such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Company) that the claimant has not
met the standards of conduct which make it permissible under the law of the
State of Delaware affording indemnification to persons acting on behalf of
corporations to indemnify the claimant for the amount claimed, but the burden of
proving such defense shall be on the Company. In any action to recover the
unpaid amount of a claim the claimant shall be presumed to have met the
applicable standards of conduct and be entitled to indemnification.
(e) The Company may maintain insurance, at its expense, to protect itself
and any Member, Manager, officer, attorney-in-fact, agent or representative of
the Company against any such expense, liability or loss, whether or not the
Company would have the power to indemnify such person against such expense,
liability or loss under the law of the State of Delaware affording
indemnification to persons acting on behalf of corporations. In the event the
Company or any subsidiary procures any such insurance covering any Member,
Manager, officer or director, then the Company agrees to cause all of the
Members or Managers (as the case may be) that are not Northstar Affiliates to be
covered by such insurance at least to the same extent as such other persons.
(f) The indemnification provided by this Section 6.09 shall survive
termination of this Agreement and shall apply to any person that is or was a
Manager, officer, attorney-in-fact, agent or representative of the Company.
6.10 Records at Principal Place of Business. The Managers shall cause the
Company to keep at its principal place of business the following:
(a) a current list in alphabetical order of the full name and last known
business street address of each Member;
(b) a copy of the Certificate of Formation and all certificates of
amendment thereto, together with (i) receipts of filing thereof, and (ii)
executed copies of any powers of attorney pursuant to which any certificate of
amendment has been executed;
(c) copies of the Company's federal, state and local income tax returns and
reports, if any, for the three most recent years; and
(d) copies of any financial statements of the Company, if any, for the
three most recent years.
6.11 Tax Matters Member. The "tax matters partner" of the Company pursuant
to Section 6231(a)(7) of the Internal Revenue Code shall be PHC. Such tax
matters partner shall be authorized to represent the Company in connection with
all matters relating to the tax status, tax reports or filing of the Company. No
Member shall take any action that would have the effect of causing the Company
to be treated as a C corporation for federal income tax purposes.
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6.12 Certain Regulatory Matters. The Managers shall operate the Company
such that (i) none of the Company's assets would be deemed "plan assets" for
purposes of the Employee Retirement Income Security Act of 1974, as amended and
(ii) the Company shall not be required to register as an investment company
under the Investment Company Act of 1940, as amended (the "Investment Company
Act"). Each Member agrees to furnish to the Company such information as may
reasonably be requested by any Manager from time to time to monitor compliance
with the foregoing.
ARTICLE 7 - OFFICERS
7.01 Officers of the Company. The officers of the Company shall consist of
a president, a treasurer and a secretary, and such vice presidents, assistant
vice presidents, assistant treasurers, assistant secretaries or other officers
or agents as may be elected and appointed by the Managers. Any two or more
offices may be held by the same person. The officers shall act in the name of
the Company and shall supervise its operation under the direction and management
of the Managers, as further described below. The initial officers shall be as
set forth on Schedule B.
7.02 Election and Term of Office. The officers of the Company shall be
designated by the Managers. Vacancies may be filled or new offices created and
filled at any meeting of Managers. Each officer shall hold office until his or
her successor shall have been duly elected and shall have qualified or until his
or her death or until he or she shall resign or shall have been removed in the
manner hereinafter provided. Election or appointment of an officer or agent
shall not of itself create contract rights. A person may be both a Manager and
an officer.
7.03 Removal. Any officer or agent may be removed by the Managers whenever
in their judgment the best interests of the Company would be served thereby, but
such removal shall be without prejudice to the contact rights, if any, of the
person so removed.
7.04 Vacancies. A vacancy in any office because of death, resignation,
removal, disqualification or otherwise may be filled by the Managers for the
unexpired portion of the term.
7.05 President. The president shall be the chief executive officer of the
Company and shall be in general and active charge of the entire business and all
the affairs of the Company and shall have the powers and perform the duties
incident to that position, including the power to bind the Company in accordance
with this Section 7.05. The president shall, when present, preside as chairman
at all meetings of the Members. He shall have such other powers and perform such
duties as are specified in this Agreement and as may from time to time be
assigned to him by the Managers of the Company.
The president shall have general and active management of the business of
the Company and shall see that all orders and resolutions of the Members of the
Company are carried into effect. The president may execute any certificates for
units, deeds, bonds, mortgages, contracts and other instruments (whenever
requiring a seal, under the seal of the Company),
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except where required or permitted by law to be otherwise signed and executed
and except where the signing and execution thereof shall be expressly delegated
by the Managers of the Company to some other officer or agent of the Company.
The president shall have general powers of supervision and shall be the final
arbiter of all differences between officers of the Company, and such decision as
to any matter affecting the Company shall be final and binding as between the
officers of the Company subject only to the Managers of the Company.
7.06 The Vice Presidents. In the absence of (or at the request of) the
president or in the event of his or her inability or refusal to act, a vice
president (or in the event there be more than one vice president, the vice
presidents in the order designated, or in the absence of any designation, then
in the order of their election) shall perform the duties of the president, and
when so acting, shall have all the powers of and be subject to all the
restrictions upon the president. Any vice president shall perform such other
duties as from time to time may be assigned to him by the president or by the
Managers of the Company.
7.07 The Treasurer. The treasurer shall be the chief financial officer of
the Company. The treasurer shall not be required to give a bond for the faithful
discharge of his or her duties. He or she shall: (i) have charge and custody of
and be responsible for all funds and securities of the Company; (ii) be charged
with primary responsibility for dealing with commodity exchanges or other
exchanges in which the Company may hold a membership or on which the Company may
trade, (iii) receive and give receipts for moneys due and payable to the Company
from any source whatsoever, and deposit all such moneys in the name of the
Company in such banks, trust companies or other depositories as shall be
selected by the Members of the Company; and (iv) in general perform all the
duties incident to the office of treasurer and such other duties as from time to
time may be assigned to him or her by the president or by the Managers of the
Company.
7.08 The Secretary. The secretary shall: (a) keep the minutes of the
Members' meetings in one or more books provided for that purpose; (b) see that
all notices are duly given in accordance with the provisions of this Agreement
or as required by law; (c) be custodian of Company records; (d) keep a register
of the post office address of each Member which shall be furnished to the
secretary by such Member; (e) sign with the president or a vice president (as
designated by the president), any certificates for units the issue of which
shall have been authorized by resolution of the Members; (f) certify the
resolutions of the Members and other documents to the Company as true and
correct thereof, and (g) in general perform all duties incident to the office of
secretary and such other duties as from time to time may be assigned to him or
her by the president, a vice president (as designated by the president) or by
the Members of the Company.
7.09 Assistant Treasurers and Assistant Secretaries. The assistant
treasurers shall respectively, if required by the Managers of the Company, give
bonds for the faithful discharge of their duties in such sums and with such
sureties as the Managers of the Company shall determine. The assistant
treasurers and assistant secretaries, in general, shall perform such duties as
shall be assigned to them by the treasurer or the secretary, respectively, or by
the president or the Managers of the Company.
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7.10 Salaries. The salaries and other compensation of the officers and
other employees of the Company shall be fixed from time to time by the Managers,
and no officer or employee shall be prevented from receiving such salary by
reason of the fact that he is also a manager of the Company.
ARTICLE 8 - COMPENSATION
8.01 No Entitlement to Compensation. No Member acting on behalf of the
Company shall be entitled to compensation or remuneration except as may be
specifically provided in this Agreement or otherwise by the Members. This
provision shall not limit any compensation or remuneration which any Member
shall receive from any other entity with which the Company may be an affiliate
or in which the Company is a participant or partner. It is specifically
understood that affiliates or subsidiaries of PHC may, at the sole discretion of
the Managers, render administrative or management services to the Company and
shall receive payment for such services determined at the discretion of the
Managers, subject to the provisions of Article 9.
8.02 Reimbursement. The Company shall reimburse the Members, Managers,
officers, attorneys-in-fact, agents and representatives for all direct
out-of-pocket expenses incurred by them in managing or acting on behalf of the
Company, where such management or action was authorized or directed by the
Company.
ARTICLE 9 - AFFILIATE TRANSACTIONS
9.01 Affiliated Transactions. Notwithstanding anything to the contrary in
this Agreement, any transaction or series of related transactions between the
Company or any controlled Affiliate of the Company on the one hand and any
Northstar Affiliate on the other involving aggregate consideration that is
reasonably expected to exceed $100,000 (and any modification of any such
transaction other than any modification that does not adversely affect the
rights, benefits or interests of the Company, any controlled Affiliate or the
Members that are not Northstar Affiliates) shall require the prior written
approval of the Members having Participation Percentages aggregating more than
50% of the Participation Percentages of all Members who are not Northstar
Affiliates ("Minority Approval"). The foregoing shall not prohibit the Existing
Transactions on their current terms.
"Existing Transactions" means (i) the Management Agreement between Presidio
and Northstar Manager (the "Northstar Management Agreement"), (ii) the
employment of Richard Sabella for compensation at the rate of $1.0 million per
annum for so long as he is employed on a full time basis as Chief Executive
Officer of the Company and the options granted to Richard Sabella to acquire up
to 2% of Presidio and the right to borrow against such options as set forth in
the existing employment agreements and (iii) the assumption by the Company of
compensation of Charles Humber and David King not exceeding $30,000 per month in
the aggregate for so long as each is engaged for at least one-third of his full
business time in the business and affairs of the Company.
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"Northstar Affiliate" means any Affiliate of PHC or Northstar Manager, any
Person with whom PHC or Northstar Managers or any Affiliate has a significant
business relationship, any partner, officer, director or employee of any such
Person, any family member of any of the foregoing, or any person known to
Northstar to be an Affiliate of any of the foregoing, but shall exclude the
Company and any wholly owned subsidiary of the Company. From and after a Change
in Management, references in the foregoing sentence to "PHC" or "Northstar
Manager" shall be deemed to include any Person or group which has acquired
beneficial ownership of at least 30% by Participation Percentage in the Company
or any Person who has become the manager under the Northstar Management
Agreement or any successor management agreement.
"Affiliate" means, with respect to any person, any other person
controlling, controlled by or under common control with, such person.
"Control" shall mean the possession, directly or indirectly, of the power
to direct, or cause the direction of, the management or policies of a person,
whether through the ownership of voting securities, by contract or otherwise.
9.02 Corporate Opportunities. PHC agrees that, notwithstanding anything
else in this Agreement, it shall refer to the Company all opportunities
available to it or any other Northstar Affiliate to make investments that are
directly or indirectly related to the assets of the Company as of the date of
this Agreement, and further agrees that, without a Minority Approval (which
shall not be unreasonably withheld), no Northstar Affiliate shall, directly or
indirectly, make any such investment.
ARTICLE 10 - ACCOUNTS
10.01 Books. The Managers shall maintain complete and accurate books of
account of the Company's affairs at the Company's principal place of business.
Such books shall be kept on such method of accounting as the Managers shall
select. The Company's accounting period shall be the calendar year.
10.02 Member Capital Accounts. Separate capital accounts shall be
maintained for each Member. Each Member's capital account shall consist of the
Initial Contribution made by the Member, shall be increased by any additional
capital contributions made and by the Member's share of the Profits of the
Company, and shall be decreased by (a) distributions to the Member, and (b) the
Member's share of Company Losses. Such capital accounts shall be maintained in
accordance with Treasury Regulations Section 1.704-1(b)(2)(iv), and shall be
adjusted appropriately to reflect any other adjustments required in accordance
with that Regulation, except to the extent such adjustments would materially
affect the amount or timing of any amount otherwise distributable hereunder.
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10.03 Transfers During Year. The share of Profits and Losses under Article
5 of a Member who transferred part or all of its interest in the profit or loss
and capital of the Company during the calendar year shall be determined on the
"interim closing of the books" in accordance with applicable Federal tax
principles as set forth in Section 706 of the Code and the Treasury Regulations
thereunder on the basis of the number of days the transferor and transferee was
a Member during the taxable year; provided, however, the Company's taxable year
shall be segregated into two or more segments in order to account for Profit,
Loss or proceeds attributable to any extraordinary non-recurring items of the
Company. The proration shall be based on the portion of the calendar year that
has elapsed prior to the transfer. The balance of the Profits and Losses
attributable to the transferred interest shall be allocated to the transferee of
such interest.
10.04 Reports. There shall be prepared monthly statements of income and
expenses and annual reports of the business and operations of the Company in
accordance with generally accepted accounting principles consistently applied,
including a balance sheet, statement of income and expenses and the capital of
the Members. The books of account shall be closed promptly after the close of
each calendar year, and there shall be prepared and sent to each Member a
statement of such Member's distributive share of income and expense for federal
income tax reporting purposes, including reasonable details of the character of
such items attributable to each investment of the Company.
10.05 Further Information. Prior to funding any new investment by the
Company, the Managers shall provide notice to the Members specifying the nature
of the proposed investment, whether any portion of the investment may be debt
financed, whether the investment will be made in a pass-through vehicle
(partnership, limited liability company, trust or other similar entity) and the
nature of the anticipated income to be derived from such investment. Such
notification shall be provided no later than 10 business days (or if 10 business
days is not practicable then the earliest reasonably practicable time). The
requirement in this Section to provide notice of any investment shall not limit
or otherwise affect the authority of the Managers under this Agreement to make
investments or otherwise manage the business and affairs of the Company.
Notwithstanding the foregoing, the Members agree that no advance notice is
required for the investment by the Company in any non-convertible,
non-participating debt investment having a fixed rate of interest that is not
acquired with borrowed funds.
ARTICLE 11 - TRANSFERS
11.01 Assignment of Membership Interest. Subject to the provisions of
Section 11.03, a Member may sell, assign or otherwise dispose of all or any part
of its Capital Interest in the Company and the assignee thereof shall
automatically become a Member upon execution of a joinder agreement.
11.02 Transfer of Interest in Profit or Loss or Capital. Without limiting
the provisions of Section 11.01, a Member may transfer its interest in the
Profit or Loss and capital of the Company. The transferee of such a transfer
shall not become a Member or acquire any of the rights of a Member by reason of
such a transfer, but shall be entitled to distributions of profits when declared
by the Members and to the proper share of distributions on winding up.
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11.03 No Transfers in Certain Cases. Notwithstanding any provision of this
Article 11 to the contrary, no transfer of any membership or other interest in
the Company shall be permitted, if after giving effect thereto the Company would
be required to register as an investment company under the Investment Company
Act or if such transfer would require registration under the Securities Act of
1933, as amended (the "1933 Act") or if the Company might reasonably be expected
to be treated as a publicly traded partnership within the meaning of Code
Section 7704. Any purported transfer which would cause a violation of this
Section shall be null and void, and shall not give rise to any obligation on the
part of the Company. In connection with any proposed transfer, the Managers may
request the proposed transferor to furnish an opinion of recognized counsel to
the effect that the proposed transfer would not cause the Company to be required
to register under the Investment Company Act, would not require registration
under the 1933 Act or would not cause the Company to be treated as a publicly
traded partnership, as the case may be. Such counsel shall be entitled to
request, receive and rely upon a certificate from the Company as to such factual
matters concerning the Company and the Members as may be reasonably necessary in
order to render such an opinion.
ARTICLE 12 - DISSOLUTION AND TERMINATION
12.01 Final Accounting. In case of the Company's dissolution, a proper
accounting shall be made from the date of the last previous accounting to the
date of dissolution.
12.02 Liquidation. Upon the Company's dissolution and the failure of the
remaining Members to continue the Company as provided in Section 1.06, the
remaining Members or, if none, a person selected by a majority in Capital
Interest of the Members shall act as liquidator to wind up the Company. The
liquidator shall have full power and authority to sell, assign and encumber any
or all of the Company's assets and to wind up and liquidate the Company's
affairs in an orderly and prudent manner. The liquidator shall apply and
distribute any liquidation proceeds or assets of the Company in kind in the
following manner and in the following order of priority:
(a) to the payment of the debts and liabilities of the Company (other than
the capital accounts of the Members) and to the expenses of liquidation in the
order of priority as provided by law; then
(b) to the establishment of any reserves deemed reasonably necessary by the
liquidator for the payment of any contingent or unforeseen liabilities or
obligations of the Company and, at the expiration of such period as reasonably
deemed advisable by the liquidator, the balance of such reserves shall be
applied and distributed in the manner hereinafter provided in this Section
12.02; then
(c) to the Members in accordance with the provisions of Section 5.01(b).
12.03 Cancellation of Certificate. Upon the completion of the distribution
of Company assets, the Company shall be terminated and the Members shall cause
the Company to
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execute articles of dissolution and take such other actions as may be necessary
or appropriate to terminate the Company.
12.04 Deficit Accounts. No Member shall have any obligation to restore any
negative balance in its capital account upon liquidation of the Company.
ARTICLE 13 - AMENDMENT TO AGREEMENT
Amendments to this Agreement and to the Certificate of Formation that do
not affect the rights of any of the Members or Managers in any material respect
may be made by the Managers. Any other amendment to this Agreement or the
Certificate of Formation shall require the affirmative approval of Members
having Participation Percentages aggregating more than 80%; provided that any
amendment that has the effect, directly or indirectly, of reducing the
entitlement of any Member to share in the profits or distributions of the
Company shall require the affirmative consent of each Member adversely affected
thereby.
ARTICLE 14 - GENERAL PROVISIONS
14.01 Arbitration. Any claim or controversy arising out of or relating to
this Agreement or a breach hereof shall, upon the request of any party involved,
be submitted to and settled by arbitration in accordance with the then obtaining
rules in New York City of the American Arbitration Association, but providing
for the arbitrators to fix as part of the arbitration determination the manner
in which the parties to such arbitration shall share the costs thereof, or such
other form of arbitration as the parties may accept. The decision made pursuant
to such arbitration shall be binding and conclusive on all parties involved and
judgment upon such decision may be entered in any appropriate court having
jurisdiction.
14.02 No Partition Rights. No Member shall be entitled to receive property
other than cash on account of any distribution to be made and no Member shall
have any right to partition of any interest in real property or personal
property owned or acquired at any time by the Company, whether under any statute
or rule of law.
14.03 Notices. Any and all notices, designations, consents, offers,
elections, acceptances or other communications provided for in this Agreement
shall be in writing and delivered in any of the following ways: (1) personally,
(2) by registered or certified mail (return receipt requested), sent by airmail
where outside of the continental United States, (3) by reputable overnight
private courier service, or (4) where a Member or other party has furnished a
fax communication number, by such fax communication, to the Members at the
addresses shown on Schedule A to this Agreement. Any of the addresses provided
for the Members or for the copies described in this Section may be changed by
notice given in accordance with the provisions of this Section. Any notice sent
by registered or certified mail shall be deemed made or given upon receipt.
14.04 Effect of Agreement. This Agreement (a) together with the Termination
and Mutual Release of even date herewith among the Members, contains the entire
agreement
21
<PAGE>
among the parties, (b) except as provided in Article 13, may not be amended nor
may any rights hereunder be waived except by an instrument in writing signed by
the party sought to be charged with such amendment or waiver, (c) shall be
construed in accordance with, and governed by, the laws of Delaware, applicable
to agreements executed and wholly performed therein, and (d) shall be binding
upon and shall inure to the benefit of the parties and their respective personal
representatives, successors and assigns. Each of the Managers of the Company is
an intended third party beneficiary of the provisions of Section 6.09 of this
Agreement.
14.05 Construction. Words in any gender shall be deemed to include the
other genders. The singular shall be deemed to include the plural and vice
versa. The headings and underlined paragraph titles are for guidance only and
shall have no significance in the interpretation of this Agreement. All pronouns
or variations shall be deemed to include masculine, feminine, or neuter,
singular, or plural as the context or identity may require.
14.06 Partial Invalidity. If any provision of this Agreement or the
application thereof to any person or circumstance is determined to be invalid or
unenforceable, the remaining provisions or the application to other persons or
circumstances shall not be affected and shall be valid and enforceable to the
fullest extent permitted by law.
14.07 No Oral Change. No change or termination of this Agreement may be
made except in a writing signed in the manner provided and required herein.
14.08 Counterpart Copies. This Agreement may be executed in counterpart
copies which, taken together, shall constitute the Agreement. A copy of the
fully constituted Agreement shall be furnished by the Managers to each Member.
[Signature pages follow]
22
<PAGE>
IN WITNESS WHEREOF, each of the Members has executed this operating
agreement as set forth below to be effective as of the date first above written.
PRESIDIO HOLDING COMPANY, LLC
By:/s/ Richard Sabella
-------------------------------
Name: Richard Sabella
Title: Authorized Signatory
AG PRESIDIO INVESTORS, LLC
By:/s/ Jeffrey H. Aronson
-------------------------------
Name: Jeffrey H. Aronson
Title: Authorized Signatory
DK PRESIDIO INVESTORS, LLC
By:/s/ Thomas L. Kempner, Jr.
-------------------------------
Name: Thomas L. Kempner, Jr.
Title: Authorized Signatory
STONEHILL PARTNERS, L.P.
By:/s/ John Motulsky
-------------------------------
Name: John Motulsky
Title: Authorized Signatory
STONEHILL OFFSHORE PARTNERS LIMITED
By Stonehill Advisors LLC
By:/s/ John Motulsky
-------------------------------
Name: John Motulsky
Title: Authorized Signatory
STONEHILL INSTITUTIONAL PARTNERS, L.P.
By:/s/ John Motulsky
-------------------------------
Name: John Motulsky
Title: Authorized Signatory
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE A
INITIAL
CONTRIBUTION -
NAME ADDRESS FOR NOTICES NUMBER OF SHARES
<S> <C> <C>
Presidio Holding Company, LLC c/o Presidio Capital Corp. 6,770,656
411 West Putnam Avenue, Suite 270
Greenwich, CT 06830
AG Presidio Investors, LLC c/o Angelo, Gordon & Co., L.P. 1,329,501
245 Park Avenue, 26th Fl.
New York, N.Y. 10167
DK Presidio Investors, LLC. c/o M.H. Davidson & Company 795,201
885 Third Avenue
New York, NY 10022
Stonehill Partners, L.P. Stonehill Partners, L.P. 282,139
110 East 59th Street
New York, NY 10022
Stonehill Offshore Partners Limited c/o Stonehill Investment Corporation 111,521
110 East 59th Street
New York, NY 10022
Stonehill Institutional Partners, L.P. c/o Stonehill Investment Corporation 123,697
110 East 59th Street
New York, NY 10022
</TABLE>
<PAGE>
SCHEDULE B
Individual Office
Richard J. Sabella President and Chief
Executive Officer
W. Edward Scheetz Vice President
David Hamamoto Vice President
David King Chief Operating Officer
Kevin Reardon Chief Financial Officer,
Treasurer and Secretary
<PAGE>
EXHIBIT A
FORM OF LLC JOINDER AGREEMENT
JOINDER AGREEMENT, dated as of ___________, by and between ________________
(the "Assignee"), and ______________ (the "Assignor").
R E C I T A L S
A. Pursuant to ______ the Assignor has transferred to Assignee a Capital
Interest representing a Participation Percentage of __% in __________, LLC (the
"Company").
B. The Assignee desires to be admitted as a Member of the Company.
C. The Company has required, as a condition to admitting the Assignee as a
Member, that the Assignee become a party of the Operating Agreement of the
Company by executing and delivering this agreement.
A G R E E M E N T
NOW, THEREFORE, the parties hereby agree as follows:
1. The Assignee joins as a Member of the Company and agrees to be bound by
all of the terms and provisions of the Operating Agreement.
2. The name and address of the Assignee is as listed on the Schedule
attached hereto.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this agreement as of the
date first above written.
[Assignor]
By:______________________
Name:
Title:
[Assignee]
By:______________________
Name:
Title:
<PAGE>
Exhibit (d)(4)
PRESIDIO CAPITAL CORP.
411 WEST PUTNAM AVENUE, SUITE 270
GREENWICH, CONNECTICUT 06830
SUPPLEMENT TO INFORMATION
STATEMENT DATED FEBRUARY 13, 1998
This Supplement to Information Statement (the "Supplement") is being
mailed on or about March 12, 1998 to holders of record on March 5, 1998 of Class
A shares, par value $0.01 per share of Presidio Capital Corp. Capitalized terms
used herein shall have the meaning set forth in the Information Statement. YOU
ARE URGED TO READ THIS SUPPLEMENT CAREFULLY. YOU ARE NOT, HOWEVER, REQUIRED TO
TAKE ANY ACTION.
On March 5, 1998, Presidio Holding Company, LLC ("PHC") entered into
an agreement with affiliates of Angelo, Gordon & Co., LP, MH Davidson & Company
and Stonehill Partners, LP, pursuant to which all the shares of the Company
beneficially owned by them and by PHCC were contributed to Presidio Property
Holding Company, LLC ("PPHC"), a newly formed Delaware limited liability
company, in exchange for membership interests in PPHC. As a result of such
transaction, PPHC became the beneficial owner of approximately 94% of the Class
A shares. As a result of the reverse stock split, PPHC is the sole shareholder
of the Company.
On March 11, 1998, the reverse stock split of the Class A shares
became effective upon filing of a Certificate of Amendment to the Company's
Memorandum of Association with the effect described in the Information
Statement, as supplemented hereby.
Sincerely,
Dated: March 11, 1998
Presidio Capital Corp.
By: The Board of Directors
