-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RmKB9BvgURyO6dZbr3dPsZ9YlbuW5+9puQZuW2a8W0W9GJhZXR6a6WwAfygU/KMD 4V4f+dVIY417kA8HPjYI1A== /in/edgar/work/0000950134-00-008660/0000950134-00-008660.txt : 20001018 0000950134-00-008660.hdr.sgml : 20001018 ACCESSION NUMBER: 0000950134-00-008660 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20001017 GROUP MEMBERS: AMERICAN REALTY INVESTORS INC GROUP MEMBERS: AMERICAN REALTY TRUST INC GROUP MEMBERS: ART HOLDINGS INC GROUP MEMBERS: BASIC CAPITAL MANAGEMENT INC GROUP MEMBERS: GENE E PHILLIPS CHILDERNS TRUST GROUP MEMBERS: INCOME OPPORTUNITY REALTY INVESTORS INC GROUP MEMBERS: SYNTEK ASSET MANAGEMENT LP SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: TRANSCONTINENTAL REALTY INVESTORS INC CENTRAL INDEX KEY: 0000733590 STANDARD INDUSTRIAL CLASSIFICATION: [6798 ] IRS NUMBER: 946565852 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-40410 FILM NUMBER: 741171 BUSINESS ADDRESS: STREET 1: 10670 N CENTRAL EXPRWY STE 300 CITY: DALLAS STATE: TX ZIP: 75231 BUSINESS PHONE: 2146924700 MAIL ADDRESS: STREET 1: 10670 N CENTRAL EXPRWY STREET 2: SUITE 300 CITY: DALLAS STATE: TX ZIP: 75231 FORMER COMPANY: FORMER CONFORMED NAME: JOHNSTOWN CONSOLIDATED REALTY TRUST /CA/ DATE OF NAME CHANGE: 19890815 FORMER COMPANY: FORMER CONFORMED NAME: JOHNSTOWN CONSOLIDATED REALTY TRUST DATE OF NAME CHANGE: 19861005 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN REALTY TRUST INC CENTRAL INDEX KEY: 0000827165 STANDARD INDUSTRIAL CLASSIFICATION: [6510 ] IRS NUMBER: 540697989 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 10670 N CENTRAL EXPRESSWAY STREET 2: STE 300 CITY: DALLAS STATE: TX ZIP: 75231 BUSINESS PHONE: 2146924700 MAIL ADDRESS: STREET 1: 10670 N CENTRAL EXPRESSWAY STREET 2: SUITE 600 CITY: DALLAS STATE: TX ZIP: 75231 SC 13D/A 1 d80997asc13da.txt AMENDMENT NO.34 TO SCHEDULE 13D 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 34) TRANSCONTINENTAL REALTY INVESTORS, INC. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $0.01 per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 893617-20-9 - -------------------------------------------------------------------------------- (CUSIP Number) Robert A. Waldman 1800 Valley View Lane, Suite 300 Dallas, Texas 75234 (469) 522-4200 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) October 3, 2000 - -------------------------------------------------------------------------------- (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 Rules 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 persons'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). 2 CUSIP No. 893617-20-9 - -------------------------------------------------------------------------------- 1) Names of Reporting Persons I.R.S. Identification Nos. of Above Persons (entities only) American Realty Trust, Inc., FEI No. 54-0697989 - -------------------------------------------------------------------------------- 2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) (b) - -------------------------------------------------------------------------------- 3) SEC Use Only - -------------------------------------------------------------------------------- 4) Source of Funds (See Instructions) WC - -------------------------------------------------------------------------------- 5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) - -------------------------------------------------------------------------------- 6) Citizenship or Place of Organization Georgia - -------------------------------------------------------------------------------- 7) Sole Voting Power 2,119,400 Number of Shares Bene- -------------------------------------------------------------- ficially 8) Shared Voting Power -0- Owned by Each Report- -------------------------------------------------------------- ing Person 9) Sole Dispositive Power 2,119,400 With -------------------------------------------------------------- 10) Shared Dispositive Power -0- -------------------------------------------------------------- 11) Aggregate Amount Beneficially Owned by Each Reporting Person 2,119,400 - -------------------------------------------------------------------------------- 12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) - -------------------------------------------------------------------------------- 13) Percent of Class Represented by Amount in Row (11) 24.5% - -------------------------------------------------------------------------------- 14) Type of Reporting Person (See Instructions) CO - -------------------------------------------------------------------------------- 3 CUSIP No. 893617-20-9 - -------------------------------------------------------------------------------- 1) Names of Reporting Persons I.R.S. Identification Nos. of Above Persons (entities only) ART Holdings, Inc., FEI No. 75-2663476 - -------------------------------------------------------------------------------- 2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) (b) - -------------------------------------------------------------------------------- 3) SEC Use Only - -------------------------------------------------------------------------------- 4) Source of Funds (See Instructions) WC - -------------------------------------------------------------------------------- 5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) - -------------------------------------------------------------------------------- 6) Citizenship or Place of Organization Nevada - -------------------------------------------------------------------------------- 7) Sole Voting Power 16,000 Number of Shares Bene- -------------------------------------------------------------- ficially 8) Shared Voting Power -0- Owned by Each Report- -------------------------------------------------------------- ing Person 9) Sole Dispositive Power 16,000 With -------------------------------------------------------------- 10) Shared Dispositive Power -0- -------------------------------------------------------------- 11) Aggregate Amount Beneficially Owned by Each Reporting Person 16,000 - -------------------------------------------------------------------------------- 12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) - -------------------------------------------------------------------------------- 13) Percent of Class Represented by Amount in Row (11) 0.2% - -------------------------------------------------------------------------------- 14) Type of Reporting Person (See Instructions) CO - -------------------------------------------------------------------------------- 4 CUSIP No. 893617-20-9 - -------------------------------------------------------------------------------- 1) Names of Reporting Persons I.R.S. Identification Nos. of Above Persons (entities only) Basic Capital Management, Inc., FEI No. 75-2261065 - -------------------------------------------------------------------------------- 2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) (b) - -------------------------------------------------------------------------------- 3) SEC Use Only - -------------------------------------------------------------------------------- 4) Source of Funds (See Instructions) WC - -------------------------------------------------------------------------------- 5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) - -------------------------------------------------------------------------------- 6) Citizenship or Place of Organization Nevada - -------------------------------------------------------------------------------- 7) Sole Voting Power 1,157,976 Number of Shares Bene- -------------------------------------------------------------- ficially 8) Shared Voting Power -0- Owned by Each Report- -------------------------------------------------------------- ing Person 9) Sole Dispositive Power 1,157,976 With -------------------------------------------------------------- 10) Shared Dispositive Power -0- -------------------------------------------------------------- 11) Aggregate Amount Beneficially Owned by Each Reporting Person 1,157,976 - -------------------------------------------------------------------------------- 12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) - -------------------------------------------------------------------------------- 13) Percent of Class Represented by Amount in Row (11) 13.4% - -------------------------------------------------------------------------------- 14) Type of Reporting Person (See Instructions) CO - -------------------------------------------------------------------------------- 5 CUSIP No. 893617-20-9 - -------------------------------------------------------------------------------- 1) Names of Reporting Persons I.R.S. Identification Nos. of Above Persons (entities only) The Gene E. Phillips Children's Trust, I.D. No. 13-6599759 - -------------------------------------------------------------------------------- 2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) (b) - -------------------------------------------------------------------------------- 3) SEC Use Only - -------------------------------------------------------------------------------- 4) Source of Funds (See Instructions) N/A - -------------------------------------------------------------------------------- 5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) - -------------------------------------------------------------------------------- 6) Citizenship or Place of Organization Texas - -------------------------------------------------------------------------------- 7) Sole Voting Power 1,827 Number of Shares Bene- -------------------------------------------------------------- ficially 8) Shared Voting Power -0- Owned by Each Report- -------------------------------------------------------------- ing Person 9) Sole Dispositive Power 1,827 With -------------------------------------------------------------- 10) Shared Dispositive Power -0- -------------------------------------------------------------- 11) Aggregate Amount Beneficially Owned by Each Reporting Person 1,827 - -------------------------------------------------------------------------------- 12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) - -------------------------------------------------------------------------------- 13) Percent of Class Represented by Amount in Row (11) 0.02% - -------------------------------------------------------------------------------- 14) Type of Reporting Person (See Instructions) OO - -------------------------------------------------------------------------------- 6 CUSIP No. 893617-20-9 - -------------------------------------------------------------------------------- 1) Names of Reporting Persons I.R.S. Identification Nos. of Above Persons (entities only) Syntek Asset Management, L.P., FEI No. 75-2311348 - -------------------------------------------------------------------------------- 2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) (b) - -------------------------------------------------------------------------------- 3) SEC Use Only - -------------------------------------------------------------------------------- 4) Source of Funds (See Instructions) N/A - -------------------------------------------------------------------------------- 5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) - -------------------------------------------------------------------------------- 6) Citizenship or Place of Organization Delaware - -------------------------------------------------------------------------------- 7) Sole Voting Power 26,475 Number of Shares Bene- -------------------------------------------------------------- ficially 8) Shared Voting Power -0- Owned by Each Report- -------------------------------------------------------------- ing Person 9) Sole Dispositive Power 26,475 With -------------------------------------------------------------- 10) Shared Dispositive Power -0- -------------------------------------------------------------- 11) Aggregate Amount Beneficially Owned by Each Reporting Person 26,475 - -------------------------------------------------------------------------------- 12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) - -------------------------------------------------------------------------------- 13) Percent of Class Represented by Amount in Row (11) 0.3% - -------------------------------------------------------------------------------- 14) Type of Reporting Person (See Instructions) PN - -------------------------------------------------------------------------------- 7 CUSIP No. 893617-20-9 - -------------------------------------------------------------------------------- 1) Names of Reporting Persons I.R.S. Identification Nos. of Above Persons (entities only) Income Opportunity Realty Investors, Inc., FEI No. 75-2615944 - -------------------------------------------------------------------------------- 2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) (b) - -------------------------------------------------------------------------------- 3) SEC Use Only - -------------------------------------------------------------------------------- 4) Source of Funds (See Instructions) WC - -------------------------------------------------------------------------------- 5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) - -------------------------------------------------------------------------------- 6) Citizenship or Place of Organization Nevada - -------------------------------------------------------------------------------- 7) Sole Voting Power -0- Number of Shares Bene- -------------------------------------------------------------- ficially 8) Shared Voting Power -0- Owned by Each Report- -------------------------------------------------------------- ing Person 9) Sole Dispositive Power -0- With -------------------------------------------------------------- 10) Shared Dispositive Power -0- -------------------------------------------------------------- 11) Aggregate Amount Beneficially Owned by Each Reporting Person -0- - -------------------------------------------------------------------------------- 12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) - -------------------------------------------------------------------------------- 13) Percent of Class Represented by Amount in Row (11) -0-% - -------------------------------------------------------------------------------- 14) Type of Reporting Person (See Instructions) CO - -------------------------------------------------------------------------------- 8 CUSIP No. 893617-20-9 - -------------------------------------------------------------------------------- 1) Names of Reporting Persons I.R.S. Identification Nos. of Above Persons (entities only) American Realty Investors, Inc., FEI No. 75-2847135 - -------------------------------------------------------------------------------- 2) Check the Appropriate Box if a Member of a Group (See Instructions) (a) (b) - -------------------------------------------------------------------------------- 3) SEC Use Only - -------------------------------------------------------------------------------- 4) Source of Funds (See Instructions) WC - -------------------------------------------------------------------------------- 5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) - -------------------------------------------------------------------------------- 6) Citizenship or Place of Organization Nevada - -------------------------------------------------------------------------------- 7) Sole Voting Power -0- Number of Shares Bene- -------------------------------------------------------------- ficially 8) Shared Voting Power -0- Owned by Each Report- -------------------------------------------------------------- ing Person 9) Sole Dispositive Power -0- With -------------------------------------------------------------- 10) Shared Dispositive Power -0- -------------------------------------------------------------- 11) Aggregate Amount Beneficially Owned by Each Reporting Person -0- - -------------------------------------------------------------------------------- 12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) - -------------------------------------------------------------------------------- 13) Percent of Class Represented by Amount in Row (11) -0-% - -------------------------------------------------------------------------------- 14) Type of Reporting Person (See Instructions) CO - -------------------------------------------------------------------------------- 9 ITEM 1. SECURITY AND ISSUER This Amendment to Statement on Schedule 13D relates to the shares of Common Stock, par value $0.01 per share (the "Shares") of TRANSCONTINENTAL REALTY INVESTORS, INC., a Nevada corporation ("TCI" or the"Issuer") and further amends the original Statement on Schedule 13D as amended by Amendment Nos. 1 through 33 thereof (the "Amended Statement") filed by and on behalf of the "Reporting Persons" described below. From and after October 2, 2000, the principal executive offices of TCI are located at 1800 Valley View Lane, Suite 300, Dallas, Texas 75234. The CUSIP number of the Shares is 893617-20-9. This Amendment No. 34 to Schedule 13D is being filed due to an increase in the total percentage of outstanding Shares owned by one of the Reporting Persons through October 3, 2000, and the addition of two more "Reporting Persons" which hold an option covering Shares. ITEM 2. IDENTITY AND BACKGROUND Item 2 of the Amended Statement is hereby further amended as follows: This Amendment is being filed on behalf of American Realty Trust, Inc., a Georgia corporation ("ART"), Basic Capital Management, Inc., a Nevada corporation ("BCM"), ART Holdings, Inc., a Nevada corporation ("AHI"), The Gene E. Phillips Children's Trust (the "GEP Trust"), Syntek Asset Management, L.P., a Delaware limited partnership ("SAM LP"), Income Opportunity Realty Investors, Inc., a Nevada corporation ("IORI") and American Realty Investors, Inc., a Nevada corporation ("ARL"), each of which have their principal executive offices located at 1800 Valley View Lane, Suite 300, Dallas, Texas 75234 from and after October 2, 2000. All of ART, BCM, AHI, the GEP Trust, SAM LP, IORI and ARL are collectively referred to as the "Reporting Persons." The Reporting Persons may be deemed to constitute a "person" within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended, because Gene E. Phillips is a general partner of SAM LP, BCM is beneficially owned by a trust for the benefit of Mr. Phillips' children; BCM serves as Advisor to IORI and ARL, and Mr. Phillips' son, Ryan T. Phillips, serves as a director of BCM and is a beneficiary of the GEP Trust. AHI is a wholly-owned subsidiary of ART and ART is a wholly-owned subsidiary of ARL. I. ART is a real estate investment company organized and existing as a Georgia corporation engaged in the business of investing in and originating mortgage loans and investing in real estate. On August 3, 2000, ART became a wholly-owned subsidiary of ARL. ART's principal business activities include investments in real estate and in other business ventures. The name, business 10 address and capacity with ART of each of the executive officers or directors of ART are set forth on Schedule 1 attached hereto. Each of the individuals listed on Schedule 1 is a citizen of the United States of America. II. AHI is a corporation organized and existing under the laws of the State of Nevada. AHI is a wholly-owned subsidiary of ART. AHI's principal business activity is the holding of record ownership of Shares beneficially owned by ART. The name, business address and capacity with AHI of each of the executive officers or directors of AHI are set forth on Schedule 2 attached hereto. Each of the individuals listed on Schedule 2 is a citizen of the United States of America. III. BCM is a corporation organized and existing under the laws of the State of Nevada. BCM's principal business activity is the provision of advisory services for real estate and investment trusts and other real estate entities. The name, business address and capacity with BCM of each of the executive officers or directors of BCM are set forth on Schedule 3 attached hereto. Each of the individuals listed on Schedule 3 is a citizen of the United States of America. IV. SAM LP is a Delaware limited partnership engaged in the business of investing in real estate and real estate related assets. SAM LP has no officers or directors. The general partners of SAM LP are Gene E. Phillips and Syntek Asset Management, Inc., a Texas corporation ("SAMI"). SAMI is a wholly-owned subsidiary of BCM. SAMI's principal business activities include investment in real estate and other business ventures. From and after October 2, 2000, SAMI's principal place of business and principal office is located at 1800 Valley View Lane, Suite 300, Dallas, Texas 75234. The name, business address and capacity with SAMI of each of the executive officers or directors of SAMI are set forth on Schedule 4 attached hereto. Each of the individuals listed on Schedule 4 is a citizen of the United States of America. Mr. Gene E. Phillips' business address is 1800 Valley View Lane, Suite 300, Dallas, Texas 75234. Mr. Gene E. Phillips' present principal occupation is Chief Executive Officer and President of Syntek West, Inc. Mr. Gene E. Phillips is a citizen of the United States of America. V. The GEP Trust is a trust formed under the laws of the state of Texas for the benefit of the children of Mr. Gene E. Phillips. The trustee of the GEP Trust is Mr. Gene E. Phillips' brother, Donald W. Phillips. Donald W. Phillips' business address is 1800 Valley View Lane, Suite 160, Dallas, Texas 75234. Mr. Donald W. Phillips present principal occupation is President and owner of Big D Oil Field Equipment Sales. Mr. Donald W. Phillips is a citizen of the United States of America. -2- 11 VI. IORI is a corporation organized and existing under the laws of the State of Nevada engaged in the business of investing in and originating mortgage loans and investing in real estate and real estate related assets. IORI is a real estate investment trust. The name, business address and capacity with IORI of each of the executive officers or directors of IORI are set forth on Schedule 5 attached hereto. Each of the individuals listed on Schedule 5 is a citizen of the United States of America. VII. ARL is a Nevada corporation, formed pursuant to the terms of an Agreement and Plan of Reorganization dated November 3, 1999, among ARL, National Realty, L.P., a Delaware limited partnership ("NRLP") and ART. Consolidation was effectuated following a vote of the security holders of NRLP and ART by closing on August 3, 2000, of separate mergers of ART and NRLP with and into wholly- owned subsidiaries of ARL with the result that ART and NRLP became wholly-owned subsidiaries of ARL with the securities of ART and NRLP converted into securities of ARL. ART and NRLP each continue business operations as wholly-owned subsidiaries of ARL. ARL's outstanding securities are listed and traded on the New York Stock Exchange ("NYSE"). The name, business address and capacity with ARL of each of the executive officers or directors of ARL are set forth on Schedule 6 attached hereto. Each of the individuals listed on Schedule 6 is a citizen of the United States of America. Individuals whose names are not listed on Schedules 1, 2, 3, 4, 5 or 6 who may have previously been referred to as executive officers or directors of ART, BCM, AHI or SAMI, respectively in Amendment No. 33 to Schedule 13D no longer occupy those positions, each having resigned or been removed prior to the date of this Amendment. (d) During the last five years, none of ART, BCM, AHI, SAM LP, the GEP Trust, IORI or ARL, nor any of their respective executive officers or directors, general partners or trustees has been convicted in a criminal proceeding (excluding traffic violations and/or similar misdemeanors). (e) During the last five years, none of ART, BCM, AHI, SAM LP, the GEP Trust, IORI or ARL, nor any of their respective executive officers or directors, general partners or trustees has been a party to any civil proceeding of a judicial or administrative body of competent jurisdiction which resulted in a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION The consideration paid to purchase the Shares described in Item 5 below is from working capital of each of the Reporting -3- 12 Persons and no part of the purchase price is represented by funds or other consideration borrowed or otherwise obtained for the purpose of acquiring, holding, trading or voting the Shares. Each of the Reporting Persons have in the past and may in the future, utilized margin accounts with various brokerage firms which accounts may, from time to time, have debit balances and include certain of the Shares. Since other securities are held in such accounts, it may be impracticable at any time to determine the amounts, if any, borrowed with respect to the Shares and interest costs vary with applicable costs and account balances. Certain of the matters reported under Item 5 below are dispositions caused by sales from margin accounts by brokerage firms pursuant to the terms of those account agreements according to such brokerage firms. The consideration paid as the fee for the Option described in Item 6 below is from the working capital of each of IORI and ARL, and no part of the purchase price is represented by funds or other consideration borrowed or otherwise obtained for the purpose of acquiring the Option. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER Item 5 of the Amended Statement is hereby further amended as follows: (a) According to the latest information available from the Issuer, as of September 30, 2000, the total number of issued and outstanding Shares was 8,633,845 Shares. As of October 3, 2000, the following Shares were owned directly and beneficially by the Reporting Persons set forth below:
Name No. of Units Owned Directly Approximate % Class ---- --------------------------- ------------------- ART 2,119,400 24.5% BCM 1,157,976 13.4% AHI 16,000 0.2% GEP Trust 1,827 0.002% SAM LP 26,475 0.3% IORI -0- -0- ARL -0- -0- --------- ------ Totals: 3,321,678 38.5% ========= ======
Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934 (the "Exchange Act"), each of the directors of ART may be deemed to beneficially own the number of Shares owned by ART described above; each of the directors of BCM may be deemed to beneficially own the Shares held directly by BCM; each of the directors of SAMI and the other General Partner of SAM LP may be deemed to beneficially own the Shares held by SAM LP; and each of the directors of AHI may be deemed to beneficially own the Shares held directly by AHI. Those individuals and the number of Shares deemed beneficially owned pursuant to Rule 13d-3, and the -4- 13 approximate percent of the class, as well as the relationship, are set forth in the following table:
Name of Director or No. of Shares % of General Partner Entity Beneficially Owned Class - ------------------- ------ ------------------ ------ Karl L. Blaha ART and AHI 2,135,400 25.3% Ryan T. Phillips BCM(a) 1,159,803 13.4% Mickey Ned Phillips BCM 1,157,976 13.4% Donald W. Phillips GEP Trust 1,827 0.002% Gene E. Phillips SAM LP 26,475 0.3% SAMI SAM LP 26,475 0.3% Robert A. Waldman AHI 16,000 0.2% --------- ----- Total Units beneficially owned by Reporting Persons 3,321,678 38.5% and individuals listed ========= ===== above:
- ---------- (a) Also beneficiary of the GEP Trust (b) Each of the directors of ART share voting and dispositive power over the 2,119,400 Shares held by ART. The directors of BCM have shared voting and dispositive power over the 1,157,976 Shares held by BCM. Each of the directors of AHI share voting and dispositive power over the 16,000 Shares held by AHI. The two General Partners of SAM LP each have shared voting and dispositive power over the 26,475 Shares by SAM LP. The Trustee of the GEP Trust has the sole voting and dispositive power over the 1,827 Shares held by the GEP Trust. (c) During the 60 calendar days ended October 3, 2000, except for the transactions that are described below, the Reporting Persons and their respective executive officers, directors, partners and trustees, as the case may be, did not engage in any transaction in the Shares or any other equity interests derivative thereof. The following table sets forth the acquisition and disposition transactions in the Shares that have been effectuated during the sixty days ended October 3, 2000:
No. of Shares Reporting Acquired Price per Type of Person Date (Disposed) Share Transaction - --------- -------- ---------- --------- ----------- BCM 07/03/00 12,500 $12.79 Open Market Purchase BCM 07/05/00 13,000 $12.50 Open Market Purchase BCM 07/05/00 9,800 $12.25 Open Market Purchase BCM 07/06/00 5,600 $12.13 Open Market Purchase BCM 07/07/00 400 $12.31 Open Market Purchase BCM 07/11/00 5,200 $12.19 Open Market Purchase BCM 07/17/00 400 $11.94 Open Market Purchase BCM 07/18/00 2,000 $12.00 Open Market Purchase
-5- 14
No. of Shares Reporting Acquired Price per Type of Person Date (Disposed) Share Transaction - --------- -------- ---------- --------- ----------- BCM 07/19/00 1,000 $12.00 Open Market Purchase BCM 07/20/00 1,700 $11.82 Open Market Purchase BCM 07/21/00 700 $11.75 Open Market Purchase BCM 07/25/00 500 $11.63 Open Market Purchase BCM 07/27/00 1,000 $11.63 Open Market Purchase BCM 07/28/00 2,000 $12.94 Open Market Purchase BCM 07/31/00 200 $12.88 Open Market Purchase BCM 08/01/00 1,000 $12.81 Open Market Purchase BCM 08/01/00 400 $12.81 Open Market Purchase BCM 08/02/00 1,000 $12.88 Open Market Purchase BCM 08/02/00 1,000 $12.88 Open Market Purchase BCM 08/07/00 500 $12.69 Open Market Purchase BCM 08/08/00 1,000 $12.25 Open Market Purchase BCM 08/09/00 900 $12.38 Open Market Purchase BCM 08/14/00 300 $12.31 Open Market Purchase BCM 08/15/00 100 $12.31 Open Market Purchase BCM 08/23/00 900 $12.25 Open Market Purchase BCM 08/23/00 5,000 $12.06 Open Market Purchase BCM 08/24/00 100 $12.00 Open Market Purchase BCM 08/25/00 900 $11.88 Open Market Purchase BCM 08/28/00 600 $12.13 Open Market Purchase BCM 08/29/00 600 $12.50 Open Market Purchase BCM 08/30/00 500 $12.63 Open Market Purchase BCM 09/01/00 600 $12.50 Open Market Purchase BCM 09/05/00 600 $12.75 Open Market Purchase BCM 09/05/00 3,400 $12.75 Open Market Purchase BCM 09/05/00 3,700 $12.75 Open Market Purchase BCM 09/05/00 3,700 $12.75 Open Market Purchase BCM 09/05/00 3,700 $12.75 Open Market Purchase BCM 09/06/00 600 $12.82 Open Market Purchase BCM 09/07/00 800 $12.50 Open Market Purchase BCM 09/11/00 300 $12.32 Open Market Purchase BCM 09/13/00 500 $12.32 Open Market Purchase BCM 09/13/00 3,100 $12.32 Open Market Purchase BCM 09/14/00 500 $11.82 Open Market Purchase BCM 09/20/00 700 $12.38 Open Market Purchase BCM 09/26/00 700 $14.13 Open Market Purchase BCM 09/27/00 700 $13.88 Open Market Purchase BCM 09/27/00 4,200 $13.88 Open Market Purchase BCM 09/28/00 700 $14.25 Open Market Purchase BCM 10/02/00 700 $16.00 Open Market Purchase BCM 10/03/00 200 $16.63 Open Market Purchase
In Amendment No. 33 to Schedule 13D, it was reported that as of June 30, 2000, the GEP Trust ceased to own of record or beneficially any Shares by virtue of the belief that all Shares owned by the GEP Trust had been allegedly foreclosed upon and sold -6- 15 on June 21, 22 and 30, 2000, to satisfy margin debt. During July 2000, the GEP Trust received advice from Morgan Stanley Dean Witter ("MSDW") that the GEP Trust account still held 1,827 Shares. Apparently such 1,827 Shares were originally reported as "sold" by MSDW, which was a broker advice error and the GEP Trust continues to own and hold 1,827 Shares. (d) No person other than the Reporting Persons or its respective Board of Directors, General Partners or Trustee is known to have the right to receive or the power to direct receipt of dividends from, or the proceeds of sale of, the Shares held by each of the Reporting Persons, subject to the matters set forth in Item 6 below. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER Item 6 of the Amended Statement is hereby further amended to read as follows: ART has pledged 152,212 Shares to United Pacific Bank pursuant to a loan agreement with such lender. ART has also pledged 249,191 Shares to Preferred Bank pursuant to a loan agreement with such lender. The remaining 1,717,997 Shares owned by ART may be deemed to be "collateral" for borrowings pursuant to margin or other account arrangements with banks and brokerage firms relating to accounts of ART. Such arrangements are standard arrangements involving margin securities of up to a specified percentage of the market value of the Shares and bear interest at varying rates and contain only standard default and similar provisions, the operation of any of which should not give any other person immediate voting power or investment power over such securities. Such arrangements exist with the Shares and other securities held in such accounts, and it is impracticable at any given time to determine the amounts, if any, with respect to the Shares and interest costs under such arrangements vary with applicable costs and account balances. BCM has pledged 898,207 Shares to Consolidated National Corp. pursuant to a loan agreement with such lender. The remaining 259,769 Shares owned by BCM may be deemed to be "collateral" for borrowings pursuant to margin or other account arrangements with bankers and brokerage firms relating to accounts of BCM. Such arrangements are standard arrangements involving margin securities of up to a specified percentage of the market value of the Shares and bear interest at varying rates and contain only standard default and similar provisions, the operation of any of which should not give any other person immediate voting power or investment power over such securities. Such arrangements exist with the Shares and other securities held in such accounts, and it -7- 16 is impracticable at any given time to determine the amounts, if any, with respect to the Shares and interest costs under such arrangements vary with applicable costs and account balances. All 16,000 Shares owned by AHI may be deemed to be "collateral" for borrowings pursuant to margin or other account arrangements with two separate brokerage firms relating to accounts of AHI. Such arrangements with both brokerage firms are standard arrangements involving margin securities of up to a specified percentage of the market value of the Shares, as well as other securities in such accounts, and bear interest at varying rates and contain only standard default and similar provisions, the operation of any of which should not give any other person immediate voting power or investment power over the Shares. All 26,475 Shares owned by SAM LP may be deemed to be "collateral" for borrowings pursuant to margin or other account arrangements with Bear Stearns relating to an account of SAM LP. Such arrangement with such brokerage firm is a standard arrangement involving margin securities of up to a specified percentage of the market value of all securities in such account, including the Shares, and bears interest at varying rates and contains only standard default and similar provisions, the operation of which should not give any other person immediate voting power or investment power over such securities. All 1,827 Shares owned by the GEP Trust may be deemed to be "collateral" for borrowings pursuant to margin or other account arrangements with a brokerage firm relating to an account of the GEP Trust. Such arrangements are standard arrangements involving margin securities of up to a specified percentage of the market value of the Shares and bear interest at varying rates and contain only standard default and similar provisions, the operation of any of which should not give any other person immediate voting power or investment power over such securities. Such arrangements exist with the Shares and other securities held in such account, and it is impracticable at any given time to determine the amount, if any, with respect to the Shares and interest cost under such arrangements vary with applicable costs and account balances. On October 3, 2000, pursuant to a Stock Option Agreement dated October 3, 2000, Gotham Partners, L.P. and Gotham Partners III, L.P. (both New York limited partnerships) and Gotham Partners International, Ltd., a Canadian island company (all collectively "Gotham") granted to ARL and IORI jointly, an option to purchase 1,858,900 Shares [of TCI Common Stock] (the "Option") at an exercise price of $12 per Share (a total price of $22,306,800). Such Option is exercisable on January 1, 2001, through 5:00 p.m. central standard time on April 4, 2001 (the "Option Period") and may only be exercised as to the whole of such Option (not in part). As a fee for the Option, ARL and IORI paid to Gotham an initial -8- 17 Option Fee of $5,576,700 ($3 per Share) at the time of execution of the Option Agreement and are obligated to pay to Gotham on or before December 15, 2000, the remaining portion of the Option Fee of $2,788,350 ($1.50 per Share). The Shares covered by such Option constitute approximately 21% of the presently issued and outstanding number of Shares of Common Stock of TCI. Pursuant to the Option Agreement, Gotham agreed to a "standstill" for a period of two years from the date of the Option Agreement and agreed not to purchase directly or indirectly any security issued by ARL, TCI or IORI, provided, however, the standstill shall terminate if the additional Option Fee is not made on or before December 15, 2000, or if the Option is not exercised prior to April 4, 2001. Gotham also executed a proxy covering the Shares in favor of ARL and IOT to attend the Annual Meeting of Stockholders of TCI on October 10, 2000, to represent, vote, execute consents and otherwise act for Gotham only in approving the four proposals set forth in TCI's Proxy Statement for such Annual Meeting dated September 11, 2000. No other agreement or arrangement exists among Gotham and ARL and IORI with respect to any securities of TCI or the giving or withholding of proxies. Except as set forth in the preceding paragraphs, the Reporting Persons do not have any contracts, arrangements, understandings or relationships (legal or otherwise) with any person with respect to any securities of the Issuer including finder's fees, joint ventures, loan or option arrangements, puts or calls, guaranties of profits, division of profits or loss, or the giving or withholding of proxies. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS The following are filed herewith as exhibits: EXHIBIT DESIGNATION DESCRIPTION OF EXHIBIT 1 Stock Option Agreement dated October 3, 2000, between American Realty Investors, Inc., Income Opportunity Investors, Inc., Gotham Partners, LP, Gotham Partners III, LP and Gotham Partners International, Ltd. 2 Revocable Proxy of Gotham Partners, LP covering 1,376,000 Shares 3 Revocable Proxy of Gotham Partners III, LP covering 35,860 Shares 4 Revocable Proxy of Gotham Partners International, Ltd. covering 447,040 Shares -9- 18 SIGNATURES After reasonable inquiry and to the best of their respective knowledge and belief, the undersigned certify that the information set forth in this Amendment No. 34 to Statement on Schedule 13D is true, complete and correct. Dated: October 17, 2000. SYNTEK ASSET MANAGEMENT, LP, a AMERICAN REALTY TRUST, INC. Delaware limited partnership By: Syntek Asset Management, Inc., General Partner By: /s/ Karl L. Blaha --------------------------- Karl L. Blaha, President By: /s/ Karl L. Blaha --------------------------------- Karl L. Blaha, President AMERICAN REALTY INVESTORS, INC. BASIC CAPITAL MANAGEMENT, INC. By: /s/ Karl L. Blaha By: /s/ Karl L. Blaha --------------------------------- --------------------------- Karl L. Blaha, President Karl L. Blaha, President INCOME OPPORTUNITY REALTY ART HOLDINGS, INC. INVESTORS, INC. By: /s/ Karl L. Blaha By: /s/ Karl L. Blaha --------------------------------- --------------------------- Karl L. Blaha, President Karl L. Blaha, President THE GENE E. PHILLIPS CHILDREN'S TRUST By: /s/ Donald W. Phillips, --------------------------- Donald W. Phillips, Trustee -10- 19 SCHEDULE 1 EXECUTIVE OFFICERS AND DIRECTORS OF AMERICAN REALTY TRUST, INC.
PRESENT BUSINESS IN NAME AND CAPACITY WITH WHICH EMPLOYMENT IS AMERICAN REALTY TRUST, INC. BUSINESS ADDRESS CONDUCTED Karl L. Blaha, Director, 1800 Valley View Lane President, Basic Chief Executive Officer and Suite 300 Capital Management, President Dallas, Texas 75234 Inc. Mark W. Branigan, Executive 1800 Valley View Lane Executive Vice Vice President and Chief Suite 300 President, Basic Financial Officer Dallas, Texas 75234 Capital Management, Inc. Bruce A. Endendyk, 1800 Valley View Lane Executive Vice Executive Vice President Suite 300 President, Basic Dallas, Texas 75234 Capital Management, Inc. David W. Starowicz, 1800 Valley View Lane Executive Vice Executive Vice President - Suite 300 President, Basic Commercial Asset Management Dallas, Texas 75234 Capital Management, Inc. Robert A. Waldman, Senior 1800 Valley View Lane Senior Vice President, Vice President, Secretary Suite 300 General Counsel and and General Counsel Dallas, Texas 75234 Secretary, Basic Capital Management, Inc. Kelly Stracener, Treasurer 1800 Valley View Lane Treasurer, Basic Suite 300 Capital Management, Dallas, Texas 75234 Inc.
20 SCHEDULE 2 EXECUTIVE OFFICERS AND DIRECTORS OF ART HOLDINGS, INC.
PRESENT BUSINESS IN NAME AND CAPACITY WITH WHICH EMPLOYMENT IS ART HOLDINGS, INC. BUSINESS ADDRESS CONDUCTED Karl L. Blaha, President 1800 Valley View Lane President, Basic Capital and Director Suite 300 Management, Inc. Dallas, Texas 75234 Robert A. Waldman, 1800 Valley View Lane Senior Vice President, Director and Secretary Suite 300 General Counsel and Dallas, Texas 75234 Secretary, Basic Capital Management, Inc. Mark W. Branigan, Vice 1800 Valley View Lane Executive Vice President President and Chief Suite 300 and Chief Financial Financial Officer Dallas, Texas 75234 Officer, Basic Capital Management, Inc. Kelly Stracener 1800 Valley View Lane Treasurer, Basic Capital Suite 300 Management, Inc. Dallas, Texas 75234
21 SCHEDULE 3 EXECUTIVE OFFICERS AND DIRECTORS OF BASIC CAPITAL MANAGEMENT, INC.
NAME AND CAPACITY WITH PRESENT BUSINESS IN BASIC CAPITAL WHICH EMPLOYMENT IS MANAGEMENT, INC. BUSINESS ADDRESS CONDUCTED Ryan T. Phillips, 1800 Valley View Lane President, Signature Director Suite 300 Asset Management, Inc. Dallas, Texas 75234 Mickey Ned Phillips, 264 Rolling Hills Circle President, Ned Phillips Director Gaffney, SC 29340 Construction Company Karl L. Blaha, President 1800 Valley View Lane President, Basic Capital Suite 300 Management, Inc. Dallas, Texas 75234 Mark W. Branigan, 1800 Valley View Lane Executive Vice Executive Vice President Suite 300 President, Basic Capital and Chief Financial Dallas, Texas 75234 Management, Inc. Officer Clifford C. Towns, Jr., 1800 Valley View Lane Executive Vice Executive Vice President Suite 300 President, Basic Capital - - Finance Dallas, Texas 75234 Management, Inc. Bruce A. Endendyk, 1800 Valley View Lane Executive Vice Executive Vice President Suite 300 President, Basic Capital Dallas, Texas 75234 Management, Inc. David W. Starowicz, 1800 Valley View Lane Executive Vice Executive Vice President Suite 300 President, Basic Capital - - Commercial Asset Dallas, Texas 75234 Management, Inc. Management Cooper B. Stuart, 1800 Valley View Lane Executive Vice Executive Vice President Suite 300 President, Basic Capital Dallas, Texas 75234 Management, Inc. Robert A. Waldman, 1800 Valley View Lane Senior Vice President, Senior Vice President, Suite 300 General Counsel and Secretary and General Dallas, Texas 75234 Secretary, Basic Capital Counsel Management, Inc. Kelly Stracener, 1800 Valley View Lane Treasurer, Basic Capital Treasurer Suite 300 Management, Inc. Dallas, Texas 75234
22 SCHEDULE 4 EXECUTIVE OFFICERS AND DIRECTORS OF SYNTEK ASSET MANAGEMENT, INC.
NAME AND CAPACITY WITH PRESENT BUSINESS IN SYNTEK ASSET WHICH EMPLOYMENT IS MANAGEMENT, INC. BUSINESS ADDRESS CONDUCTED Karl L. Blaha, President 1800 Valley View Lane President, Basic Capital Suite 300 Management, Inc. Dallas, Texas 75234 Mark W. Branigan, 1800 Valley View Lane Executive Vice Executive Vice President Suite 300 President, Basic Capital and Chief Financial Dallas, Texas 75234 Management, Inc. Officer Bruce A. Endendyk, 1800 Valley View Lane Executive Vice Executive Vice President Suite 300 President, Basic Capital Dallas, Texas 75234 Management, Inc. David W. Starowicz, 1800 Valley View Lane Executive Vice Executive Vice President Suite 300 President, Basic Capital - - Commercial Asset Dallas, Texas 75234 Management, Inc. Management Robert A. Waldman, 1800 Valley View Lane Senior Vice President, Senior Vice President, Suite 300 General Counsel and Secretary and General Dallas, Texas 75234 Secretary, Basic Capital Counsel Management, Inc. Kelly Stracener, 1800 Valley View Lane Treasurer, Basic Capital Treasurer Suite 300 Management, Inc. Dallas, Texas 75234
23 SCHEDULE 5 EXECUTIVE OFFICERS AND DIRECTORS OF INCOME OPPORTUNITY REALTY INVESTORS, INC.
NAME AND CAPACITY WITH INCOME OPPORTUNITY REALTY PRESENT BUSINESS IN WHICH INVESTORS, INC. BUSINESS ADDRESS EMPLOYMENT IS CONDUCTED Ted P. Stokely, Chairman 1800 Valley View Lane General Manager, Minority of the Board of Directors Suite 160 and Elderly Housing Dallas, Texas 75234 Assistance Foundation, Inc. R. Douglas Leonhard, 13230 Hunters Lark Retired. Director San Antonio, Texas 78230 Murray Shaw, Director 3713 Ebony Hollow Pass Chairman of the Board of Austin, Texas 78745 Stephen F. Austin University Matin L. White, Director 8051 Coach Drive Chairman of the Board and Oakland, California 94605 Chief Executive Officer of Community Based Developers, Inc. Edward G. Zampa No. Fifty Osgood Place General Partner, Edward G. Suite 110 Zampa & Company San Francisco, California 94133 Karl L. Blaha, President 1800 Valley View Lane President, Basic Capital Suite 300 Management, Inc. Dallas, Texas 75234 Mark W. Branigan, 1800 Valley View Lane Executive Vice President, Executive Vice President Suite 300 Basic Capital Management, and Chief Financial Dallas, Texas 75234 Inc. Officer Bruce A. Endendyk, 1800 Valley View Lane Executive Vice President, Executive Vice President Suite 300 Basic Capital Management, Dallas, Texas 75234 Inc. David W. Starowicz, 1800 Valley View Lane Executive Vice President, Executive Vice President - Suite 300 Basic Capital Management, Commercial Asset Dallas, Texas 75234 Inc. Management Robert A. Waldman, Senior 1800 Valley View Lane Senior Vice President, Vice President, Secretary Suite 300 General Counsel and and General Counsel Dallas, Texas 75234 Secretary, Basic Capital Management, Inc. Kelly Stracener, Treasurer 1800 Valley View Lane Treasurer, Basic Capital Suite 300 Management, Inc. Dallas, Texas 75234
24 SCHEDULE 6 EXECUTIVE OFFICERS AND DIRECTORS OF AMERICAN REALTY INVESTORS, INC.
NAME AND CAPACITY WITH AMERICAN REALTY PRESENT BUSINESS IN WHICH INVESTORS, INC. BUSINESS ADDRESS EMPLOYMENT IS CONDUCTED Karl L. Blaha, Director and 1800 Valley View Lane President, Basic Capital President Suite 300 Management, Inc. Dallas, Texas 75234 Roy E. Bode, Director 2435 E. F.M. 879 Vice President for Public Palmer, Texas 75152 Affairs, University of Texas Southwestern Medical Center at Dallas Collene C. Currie, Director 6617 Ridgeview Circle Assistant Director, Dallas, Texas 75240 Cambridge Technology Partners (CATP:NASDAQ) Cliff Harris, Director 2838 Woodside Street President, Energy Dallas, Texas 75204 Transfer Group, L.L.C. Joseph Mizrachi, Director 6971 North Federal Hwy. President, PAZ Suite 203 Securities, Inc. and Boca Raton, Florida 33487 Chairman of the Board, Third Millennium Properties, Inc. Richard D. Morgan, Director 5910 North Central President, Tara Group, Expressway Inc. Dallas, Texas 75206 Mark W. Branigan, Director, 1800 Valley View Lane Executive Vice President, Executive Vice President Suite 300 Basic Capital Management, and Chief Financial Officer Dallas, Texas 75234 Inc. Bruce A. Endendyk, 1800 Valley View Lane Executive Vice President, Executive Vice President Suite 300 Basic Capital Management, Dallas, Texas 75234 Inc. David W. Starowicz, 1800 Valley View Lane Executive Vice President, Executive Vice President - Suite 300 Basic Capital Management, Commercial Asset Management Dallas, Texas 75234 Inc. Robert A. Waldman, Senior 1800 Valley View Lane Senior Vice President, Vice President, Secretary Suite 300 General Counsel and and General Counsel Dallas, Texas 75234 Secretary, Basic Capital Management, Inc. Kelly Stracener, Treasurer 1800 Valley View Lane Treasurer, Basic Capital Suite 300 Management, Inc. Dallas, Texas 75234
25 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 1 Stock Option Agreement dated October 3, 2000, between American Realty Investors, Inc., Income Opportunity Investors, Inc., Gotham Partners, LP, Gotham Partners III, LP and Gotham Partners International, Ltd. 2 Revocable Proxy of Gotham Partners, LP covering 1,376,000 Shares 3 Revocable Proxy of Gotham Partners III, LP covering 35,860 Shares 4 Revocable Proxy of Gotham Partners International, Ltd. covering 447,040 Shares
EX-99.1 2 d80997aex99-1.txt STOCK OPTION AGREEMENT 1 EXHIBIT 1 STOCK OPTION AGREEMENT This STOCK OPTION AGREEMENT (the "Agreement") is made and entered into on this 3rd day of October, 2000, between AMERICAN REALTY INVESTORS, INC., a Nevada corporation ("ARL") and INCOME OPPORTUNITY REALTY INVESTORS, INC., a Nevada corporation ("IOT") (ARL and IOT are sometimes collectively hereinafter referred to as "Purchaser"), on one hand, and GOTHAM PARTNERS, L.P., a New York Limited Partnership ("Gotham Partners"), GOTHAM PARTNERS III, L.P., a New York Limited Partnership ("Gotham III"), and GOTHAM PARTNERS INTERNATIONAL, LTD., a Cayman Island Company ("Gotham International")(GOTHAM PARTNERS, GOTHAM III, and GOTHAM INTERNATIONAL are sometimes collectively hereinafter referred to as "Seller"), on the other hand. The aforementioned entities and individuals are sometimes collectively referred to as the "Parties". RECITALS WHEREAS, in or about June of 2000, the Seller purchased through Morgan Stanley Dean Witter a total of One Million Two Hundred Fifty-Three Thousand Two Hundred (1,253,200) shares of the Common Stock of Transcontinental Realty Investors, Inc.(the "MS Shares"), originally held in the margin accounts for American Realty Trust, Inc. ("ART"), ART Holdings, Inc. and Basic Capital Management, Inc.; WHEREAS, during the period from June 1, 2000 to October 2, 2000, Seller also purchased in certain open market transactions a total of Six Hundred Five Thousand Seven Hundred (605,700) shares of Common Stock of Transcontinental Realty Investors, Inc.("Additional Shares") (the MS shares and Additional Shares, totaling One Million Eight Hundred Fifty-Eight Thousand Nine Hundred (1,858,900) shares, are sometimes collectively hereinafter referred to as the "Seller's Shares"); WHEREAS, as a result of a dispute between the Parties concerning the acquisition of certain of the Seller's Shares by Seller, a lawsuit styled American Realty Trust, Inc., ART Holdings, Inc., and Transcontinental Realty Investors, Inc. vs. Gotham Partners, L.P., Gotham Partners III, L.P., Gotham Partners International, Ltd., Gotham International Advisors, L.L.C., Section H Partners, L.P., Karenina Corporation, DPB Corp., William A. Ackman, David P. Berkowitz and Basic Capital Management, Inc., Case No. CC-00-10463-e, was filed in County Court at Law No. 5, Dallas County, Texas; and WHEREAS, Purchaser desires to acquire the exclusive right and option to purchase the Seller's Shares beneficially owned by Seller, and Seller desires to grant Purchaser the exclusive right and option to purchase and to become obligated to sell the Seller's Shares to Purchaser on the terms and conditions hereinafter set forth. NOW, THEREFORE, for and in consideration of the premises, mutual promises, covenants, conditions, obligations, warranties, representations and releases set forth 1 2 herein, and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Parties hereto agree as follows: ARTICLE 1 PURCHASE OPTION FOR THE SELLER'S SHARES 1.01 PURCHASE OPTION. Effective immediately upon the execution of this Agreement by all the Parties, Seller grants to Purchaser and its successors and assigns, the exclusive right to purchase the Seller's Shares beneficially owned by Seller as of October 3, 2000 (the "Option"). The purchase of the Seller's Shares may be made upon the terms and conditions stated in this Agreement. 1.02 PURCHASE OPTION PRICE. As consideration for the grant of this Option, Purchaser shall pay to Seller the total non-refundable sum of Eight Million Three Hundred Sixty-Five Thousand Fifty and No/100 Dollars ($8,365,050.00) (comprised of $4.50 per share x 1,858,900 shares = $8,365,050.00), payable (i) by wire transfer to Seller in the amount of Five Million Five Hundred Seventy-Six Thousand Seven Hundred and No/100 Dollars ($5,576,700.00) (comprised of $3.00 per share x 1,858,900 shares = $5,576,700.00), upon execution of this Agreement; and, (ii) by wire transfer to Seller in the amount of Two Million Seven Hundred Eighty-Eight Thousand Three Hundred Fifty and No/100 Dollars ($2,788,350.00) (comprised of $1.50 per share x 1,858,900 shares = $2,788,350.00), on or before December 15, 2000 (the "$1.50 Option Payment"). If Purchaser fails to make timely payment of the $1.50 Option Payment, Purchaser shall be obligated to Seller as follows: (a) Purchaser shall pay Seller the $1.50 Option Payment with interest due from and including December 16, 2000 until the date of payment. Interest will accrue and be payable on the unpaid balance at the rate of fifteen percent (15%) per annum; (b) The Option shall not be exercised by Purchaser until such time as Purchaser has paid to Seller the $1.50 Option Payment with all accrued interest thereon; and, (c) In the event the Option is not exercised during the Option Period and the $1.50 Option Payment (plus all accrued interest) has not then been paid, 2 3 Purchaser shall remain obligated to Seller for the payment of the $1.50 Option Payment, with all accrued interest thereon, which obligation shall survive the termination of this Agreement. All amounts due and payable pursuant to this Section 1.02 shall be due and payable without notice. 1.03 OPTION PERIOD. This Option which is irrevocable and effective immediately, will expire at 5:00 p.m., Central Standard Time, on April 5, 2001 (the "Option Period"). This Option shall remain irrevocable for the Option Period, and may not be exercised prior to January 1, 2001. 1.04 EXERCISE OF THE OPTION. Purchaser may exercise this Option only on or after January 1, 2001 through the expiration of the Option Period. To exercise this Option, Purchaser shall provide Seller with written notice of its intention to exercise this Option via hand delivery, facsimile, electronic mail, U.S. mail, U.S. mail via certified, first class United States mail, return receipt requested, or other appropriate method, before the expiration of the Option Period. Within three (3) business days after receipt of such notice, Seller must deliver the Seller's Shares to Purchaser in consideration of Purchaser's payment of the Purchase Price (defined herein below) payable in the manner described in Section 2.03 below, together with any amounts then due and payable pursuant to Section 1.02 (ii) above. If this Option is exercised in accordance with the terms hereof, then any consideration paid to Seller by Purchaser pursuant to Section 1.02 above shall not apply to the Purchase Price. This Option is exercisable in whole and not in part, and shall expire and shall no longer be exercisable if Purchaser does not deliver such exercise notice prior to the expiration of the Option Period. 1.05 RETENTION OF CONSIDERATION. If this Option is not exercised during the Option Period, subject to the continuing obligations described in Section 1.02 (ii) (c) above, all sums paid to Seller by Purchaser shall be retained by Seller in consideration of granting of this Option. 1.06 DISMISSAL OF TEXAS LAWSUIT. Upon the execution of this Agreement by all Parties hereto, the party Plaintiffs shall nonsuit with prejudice all claims asserted in the Texas Lawsuit pursuant to Texas Rule of Civil Procedure 162. 1.07 POSSESSION. Seller will continue in possession of the Seller's Shares and will not prior to the expiration of the Option Period, transfer, convey, assign, pledge, hypothecate or sell any of the Seller's Shares, or any interest therein. 1.08 BINDING EFFECT. This Option will be binding on and inure to the benefit of the Parties to it and to their successors and assigns. 3 4 ARTICLE 2 PURCHASE AND SALE OF THE SELLER'S SHARES 2.01 SALE OF THE SHARES. If the Option is exercised in accordance with the terms of this Agreement, in consideration of the Purchase Price and upon the terms and subject to the conditions provided for in this Agreement, and in reliance upon the full performance of the covenants, conditions, representations and warranties contained herein, Purchaser hereby agrees to purchase and acquire from Seller, and Seller hereby agrees to sell, transfer, convey and assign to Purchaser the Seller's Shares as of the date of Closing (as defined below), free and clear of any liens, claims or encumbrances granted by Seller. 2.02 TIME AND PLACE OF CLOSING. The Closing with respect to the exercise of the Option and the purchase of the Shares under this Agreement shall occur at the offices of Fried, Frank, Harris, Shriver & Jacobson, One New York Plaza, New York, New York 10004, on the third business day after receipt of the exercise notice as provided for under Section 1.04 above, or on such other date to which the Parties may mutually agree (the "Closing"). 2.03 DELIVERY OF THE SHARES. Upon the exercise of this Option, Seller shall deposit the Seller's Shares into the Depository Trust Corporation ("DTC") for transfer at the Closing to Purchaser's account(s) so as to deliver the Seller's Shares against payment of the Purchase Price and all amounts due pursuant to Section 1.02 (ii) above. 2.04 PURCHASE PRICE AND PAYMENT. The Purchase Price for the Seller's Shares shall be payable at the Closing by Purchaser's wire transfer to Seller of Twenty-Two Million Three Hundred Six Thousand Eight Hundred and No/100 Dollars ($22,306,800.00) (comprised of $12.00 per share x 1,858,900 shares = $22,306,800.00) (the "Purchase Price"). Any consideration paid to Seller by Purchaser pursuant to Section 1.02 above shall not constitute part of the Purchase Price. ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER 3.01 MAKING OF REPRESENTATIONS AND WARRANTIES. In order to induce Purchaser to purchase the Seller's Shares, Seller makes the following representations and warranties which shall be true, correct and complete in all respects as of the date hereof and shall be true, correct and complete in all respects as of the Closing. 3.02 TITLE TO THE SELLER'S SHARES. The Seller's Shares are owned beneficially by Seller. Seller possesses full authority and legal right to sell, transfer and assign the legal and beneficial ownership of the Seller's Shares to Purchaser, free and clear of all liens, encumbrances, pledges, charges, claims, restrictions, rights of first refusal, voting trusts, voting agreements, buy/sell agreements, preemptive rights, proxies or other interests of any nature granted by Seller to any person, except Gotham International Advisors, L.L.C. Upon transfer of the Seller's Shares at the Closing, Purchaser will own the sole and exclusive interest in the Seller's Shares free and clear of all liens, encumbrances, pledges, 4 5 charges, claims, restrictions, rights of first refusal, voting trust, voting agreements, buy/sell agreements, preemptive rights, proxies or other interests of any nature granted by Seller to any person. 3.03 ENFORCEABILITY OF AGREEMENT. Seller has all requisite power, authority and capacity to enter into this Agreement and to perform Seller's respective obligations hereunder. This Agreement constitutes the valid and legally binding obligation of Seller, enforceable in accordance with its terms. Neither the execution and delivery of this Agreement nor the performance hereof will constitute or result in the breach of any term, condition or provision of, or constitute a default under, any material agreement or other instrument to which Seller is a party, or under any law, regulation, judgment or order binding upon Seller, or result in the creation of any lien, charge or encumbrance against the Seller's Shares. 3.04 ACCURACY OF REPRESENTATIONS, WARRANTIES AND COVENANTS. No representation or warranty made by Seller in this Agreement, contains or will at Closing, contain any untrue statement of a material fact, or omits or will omit to state any material fact necessary to make such representation or warranty not misleading, in light of the circumstances in which it was made. 3.05 CONSENTS AND GOVERNMENTAL APPROVALS. No consent of any third party or consent, approval, license or authorization of, or designation, declaration or filing with, any court or governmental authority is or will be required on the part of Seller in connection with the execution, delivery and performance by Seller of this Agreement, and any other agreements or instruments executed by Seller in connection herewith or therewith, except for filings required to be made with the U. S. Securities and Exchange Commission or any other regulatory body. ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PURCHASER 4.01 MAKING OF REPRESENTATIONS AND WARRANTIES. In order to induce Seller to sell the Seller's Shares, Purchaser makes the following representations and warranties which shall be true, correct and complete in all respects as of the date hereof and shall be true, correct and complete in all respects as of the Closing. 4.02 INVESTMENT REPRESENTATION. Purchaser is acquiring the Option and the Seller's Shares for Purchaser's own account for the purpose of investment and not with a view to or for sale in connection with any distribution thereof. 4.03 ENFORCEABILITY OF AGREEMENT. Purchaser has all requisite power, authority and capacity to enter into this Agreement and to perform Purchaser's respective obligations hereunder. This Agreement constitutes the valid and legally binding obligation of Purchaser, enforceable in accordance with its terms. Neither the execution and delivery of this Agreement nor the performance hereof will constitute or result in the breach of any term, condition or provision of, or constitute a default under, any material agreement or 5 6 other instrument to which Purchaser is a party, or under any law, regulation, judgment or order binding upon Purchaser. 4.04 ACCURACY OF REPRESENTATIONS, WARRANTIES AND COVENANTS. No representation or warranty made by Purchaser in this Agreement, contains or will at Closing, contain any untrue statement of a material fact, or omits or will omit to state any material fact necessary to make such representation or warranty not misleading, in light of the circumstances in which it was made. 4.05 CONSENTS AND GOVERNMENTAL APPROVALS. No consent of any third party or consent, approval, license or authorization of, or designation, declaration or filing with, any court or governmental authority is or will be required on the part of Purchaser in connection with the execution, delivery and performance by Purchaser of this Agreement, and any other agreements or instruments executed by Purchaser in connection herewith or therewith. ARTICLE 5 CONDITIONS TO CLOSING 5.01 CONDITIONS TO PURCHASER CLOSING. The obligation of Purchaser to purchase Seller's Shares is subject to the fulfillment, prior to or at the Closing, of each of the following conditions: (a) The representations and warranties made by Seller in this Agreement shall have been true when made and shall be true on the date of this Closing as though such representations and warranties were made on and as of such date; (b) Seller shall have performed and complied with all agreements, obligations and conditions required by this Agreement to be performed or complied with by Seller on or before the date of the Closing; and (c) Upon the exercise of this Option, Seller shall deposit the Seller's Shares into DTC for transfer at the Closing to Purchaser's account(s) so as to deliver the Seller's Shares against payment of the Purchase Price and all amounts due pursuant to Section 1.02 (ii) above. 5.02 CONDITIONS TO SELLER CLOSING. The obligations of Seller to sell the Seller's Shares is subject to the fulfillment, prior to or at the Closing of each of the following conditions: (a) The representations and warranties made by Purchaser in this Agreement shall have been true when made and shall be true on the date of the Closing as though such representations and warranties were made on and as of such date; 6 7 (b) Purchaser shall have performed and complied with all agreements, obligations and conditions required by this Agreement to be performed or complied with by them on or before the date of the Closing; and (c) Purchaser delivering to Seller the Purchase Price, together with all amounts due pursuant to Section 1.02 (ii) above. ARTICLE 6 MISCELLANEOUS 6.01 STANDSTILL BY SELLER. Upon the execution of this Agreement and continuing for a period of two (2) years from the date hereof, so long as Purchaser is in compliance with the terms and conditions set forth herein, Seller shall agree not to purchase, directly or indirectly, through their owners, officers, directors, shareholders, and general partners, employees, agents and representatives, any security issued by ARL, Transcontinental Realty Investors, Inc. and Income Opportunity Realty Investors, Inc. The standstill set forth in this Section 6.01 shall terminate and shall be of no further force or effect before the end of the two-year period referred to above if Purchaser does not deliver the $1.50 Option Payment on or before December 15, 2000; does not exercise the Option in accordance with Section 1.04 above; fails to pay the Purchase Price when due; or, otherwise breaches any of its obligations under this Agreement. 6.02 ISSUANCE OF REVOCABLE PROXY BY THE SELLER. Upon the execution of this Agreement and continuing through the Option Period, Seller agrees to execute and deliver upon the execution of this Agreement its proxy for the Seller's Shares in favor of Purchaser to attend the Annual Shareholders' Meeting of Transcontinental Realty Investors, Inc. to be held at 1800 Valley View Lane, Suite 300, Dallas, Texas, on or before October 19, 2000 at 11:00 a.m. (CST), and any continuation or adjournment of that Shareholders' Meeting to act on behalf of Seller and to represent, vote, execute consents and otherwise to act for Seller only in approving proposal one (to elect five Directors); proposal two (to approve the Director Stock Option Plan); proposal three (to approve the 2000 Stock Option Plan); and, proposal four (to approve an amendment to the Articles of Incorporation to increase the number of authorized shares of common and preferred stock); all as more fully set forth in the Proxy Statement for such Annual Meeting attached hereto as Exhibit "A" and made a part hereof (the "Proxy Statement"). The proxy shall be in the form attached hereto as Exhibit "B". Such proxy shall be for no other or additional matters and shall be limited to proposals one through four as described in the Proxy Statements, without taking into account any amendments or supplements thereto. 6.03 NOTICES. Any notice, request, instruction or other document to be given under this Agreement after the date hereof by any party hereto to any party shall be in writing and shall be delivered via hand delivery, facsimile, electronic mail, U.S. mail, U.S. mail via certified, first class U.S. mail, return receipt requested or other appropriate method, to the addresses reflected below, or to such other address or person as any party may designate by written notice to the other: 7 8 "PURCHASER" If to: American Realty Investors, Inc. Suite 300 1800 Valley View Lane Dallas, Texas 75234 Attention: Karl L. Blaha, President Telephone No.: (469)522-4200 If to: Income Opportunity Realty Investors, Inc. Suite 300 1800 Valley View Lane Dallas, Texas 75234 Attention: Karl L. Blaha, President Telephone No.: (469)522-4200 With a Copy to: Basic Capital Management, Inc. Suite 300 1800 Valley View Lane Dallas, Texas 75234 Attention: Robert A. Waldman, General Counsel Telephone No.: (469)522-4200 With a Copy to: Basic Capital Management, Inc. Suite 300 1800 Valley View Lane Dallas, Texas 75234 Attention: Ken F. Nye, Corporate Counsel Telephone No.: (469)522-4200 With a Copy to: Friedman, Driegert & Hsueh, L.L.C. Attorneys at Law 8117 Preston Road 570 Preston Commons West Dallas, Texas 75225 Attention: Lawrence J. Friedman, Esq. Telephone No.: (972)788-1400 "SELLER" If to: Gotham Partners, L.P. 110 East 42nd Street, 18th Floor New York, New York 10017 Attention: William A. Ackman Telephone No.: (212)286-0300 8 9 If to: Gotham Partners III, L.P. 110 East 42nd Street, 18th Floor New York, New York 10017 Attention: William A. Ackman Telephone No.: (212)286-0300 If to: Gotham Partners International, LTD. 110 East 42nd Street, 18th Floor New York, New York 10017 Attention: William A. Ackman Telephone No.: (212)286-0300 With a Copy to: Fried, Frank, Harris, Shriver & Jacobson One New York Plaza New York, New York 10004 Attention: Stephen Fraidin, Esq. Telephone No.: (212)859-8140 6.04 TERMINATION. (a) Anything contained in this Agreement to the contrary notwithstanding, this Agreement may be terminated and the transactions contemplated herein abandoned at any time prior to the Closing: (i) By mutual written consent signed by Seller and Purchaser; or (ii) By Purchaser, after April 5, 2001, if any condition to its obligations as set forth in this Agreement have not been met and have not been waived; or (iii) By Seller, after April 5, 2001, if any condition to its obligations as set forth in this Agreement have not been met and have not been waived. (b) In the event of the termination of this Agreement pursuant to the provisions hereof, this Agreement shall immediately become void and have no effect, without any liability on the part of any party hereto, and all expenses related hereto shall be borne by the party incurring them. 6.05 RELIANCE ON COUNSEL. The Parties agree that no representations have been made by either party or their respective attorneys on their behalf, inducing the making of this Agreement, other than as set forth herein, and the Parties rely entirely upon their own judgment and the advice of their representative attorneys in making this Agreement. 6.06 COMPLIANCE WITH LAWS. Each of the Parties hereto shall be solely responsible for being in compliance with all applicable statutes, rules, and regulations promulgated by any federal or state governmental authority in connection with the execution, delivery and performance of this Agreement. 9 10 6.07 EXPENSES. Whether or not this Agreement is consummated, each of the Parties hereto shall bear their own expenses in connection with due diligence, execution, delivery and performance of this Agreement, including without limitation, all fees and expenses of its agents, representatives and counsel. 6.08 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and warranties contained in this Agreement shall expressly survive the Closing of this Agreement. 6.09 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement, and all other documents executed contemporaneously herewith and therewith, constitutes the entire contract and understanding between the Parties, hereto and supersedes all prior agreements, arrangements and understandings relating to the subject matter hereof. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective heirs, legal representatives, successors and assigns of the Parties hereto. This Agreement and the rights and obligations hereunder shall not be assignable. Nothing in this Agreement, expressed or implied, is intended to confer upon any person, other than the Parties hereto, and their respective heirs, legal representatives, successors and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement. This Agreement may be amended only in writing signed by the Parties. 6.10 APPLICABLE LAW AND VENUE. This Agreement shall be deemed to have been made, and is to be performed in New York County, New York, and shall be governed by and conditioned in accordance with the laws of the State of New York. Courts within the State of New York shall have jurisdiction over all disputes whether in law or in equity between the Parties to this Agreement, with respect to this Agreement. Venue of any such dispute, whether in Federal or State Court, shall be solely and exclusively in New York County, New York. 6.11 SEVERABILITY. Should any phrase, clause, sentence or section of this Agreement be judicially declared to be invalid, unenforceable or void, such decision will not have the effect of invalidating or voiding the remainder of this Agreement, and such part of this Agreement will be deemed to have been stricken from the Agreement and the remainder will have the same force and effect as if such part or parts had never been included herein. 6.12 MUTUAL COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. 6.13 FURTHER ASSURANCES. Upon the request of either of the Parties hereto at any time and without further consideration, each of the Parties agrees to execute and deliver such additional instruments of transfer and to take such other action as reasonably may be required in the interests of Seller and Purchaser, as contemplated herein. 10 11 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first above written. PURCHASER: AMERICAN REALTY INVESTORS, INC. a Nevada corporation Date: 10/02/00 By: /s/ Karl L. Blaha -------- -------------------------- Karl L. Blaha, President STATE OF TEXAS ) ) COUNTY OF DALLAS ) Before me, a Notary Public, on this day personally appeared Karl L. Blaha, known to me to be the person whose name is subscribed to the Stock Option Agreement, dated October 3, 2000, and known to me to be the President of American Realty Investors, Inc., a Nevada corporation, and acknowledged to me that he executed said instrument for the purposes and consideration therein expressed, and as the act of said Corporation. Given under my hand and seal of office on this 2nd day of October, 2000. SEAL /s/ Marty Stephens ----------------------------- Notary Public, State of Texas INCOME OPPORTUNITY REALTY INVESTORS, INC., a Nevada corporation Date: 10/02/00 By Karl L. Blaha -------- -------------------------- Karl L. Blaha, President 11 12 STATE OF TEXAS ) ) COUNTY OF DALLAS ) Before me, a Notary Public, on this day personally appeared Karl L. Blaha, known to me to be the person whose name is subscribed to the Stock Option Agreement dated October 3, 2000, and known to me to be the President of Income Opportunity Realty Investors, Inc., a Texas corporation, and acknowledged to me that he executed said instrument for the purposes and consideration therein expressed, and as the act of said Corporation. Given under my hand and seal of office on this 2nd day of October, 2000. SEAL /s/ Marty Stephens -------------------------------- Notary Public, State of Texas SELLER: GOTHAM PARTNERS, L.P., a New York Limited Partnership By: Section H Partners, L. P., its general partner By: Karenina Corporation, a general partner of Section H Partners, L.P. Date 10/03/00 By: /s/ William Ackerman -------- ----------------------------- William Ackerman, President STATE OF NEW YORK ) ) COUNTY OF NEW YORK ) On the 3rd day of October, 2000, before me, personally came William Ackerman, to me known, who, being by me duly sworn, did depose and say that he is a President of Karenina Corporation, a general partner of Section H Partners, L.P., the general partner of Gotham Partners, L.P. described in and which executed the Stock Option Agreement, dated, October 3, 2000; and that he signed his name thereto by authority of said corporation. SEAL /s/ David S. Keafter -------------------------------- Notary Public, State of New York 12 13 GOTHAM PARTNERS III, L.P., a New York Limited Partnership By: Section H Partners, L. P., its general partner By: Karenina Corporation, a general partner of Section H Partners, L.P. Date 10/03/00 By: /s/ William Ackerman -------- -------------------------------------- William Ackerman, President ---------------- -------------------- STATE OF NEW YORK ) ) COUNTY OF NEW YORK ) On the 3rd day of October, 2000, before me, personally came William Ackerman, to me known, who, being by me duly sworn, did depose and say that he is the President of Karenina Corporation, a general partner of Section H Partners, L.P., the general partner Gotham Partners III, L.P., described in and which executed the Stock Option Agreement, dated, October 3, 2000; and that he signed his name thereto by authority of said corporation. SEAL /s/ David S. Keafter ----------------------------------------- Notary Public, State of New York GOTHAM PARTNERS INTERNATIONAL, LTD., a Cayman Island Company By: Gotham International Advisors, L.L.C. Date 10/03/00 By: /s/ William Ackerman -------- -------------------------------------- William Ackerman, Sr. Managing Member 13 14 STATE OF NEW YORK ) ) COUNTY OF NEW YORK ) On the 3rd day of October, 2000, before me, personally came William Ackerman, to me known, who, being by me duly sworn, did depose and say that he is the Senior Managing Member of Gotham International Advisors, L.L.C., the Agent of Gotham Partners International, LTD., described in and which executed the Stock Option Agreement, dated, October 3, 2000; and that he signed his name thereto by authority of said limited liability company. SEAL /s/ David S. Keafter -------------------------------- Notary Public, State of New York 14 EX-99.2 3 d80997aex99-2.txt REVOCABLE PROXY OF GOTHAM PARTNERS, LP 1 EXHIBIT 2 REVOCABLE PROXY OF GOTHAM PARTNERS, L.P., A NEW YORK LIMITED PARTNERSHIP 1,376,000 SHARES OF COMMON STOCK OF TRANSCONTINENTAL REALTY INVESTORS, INC. Gotham Partners, L.P., a New York Limited Partnership, as holder of the shares described above, revokes any previously executed proxies and appoints American Realty Investors, Inc. and Income Opportunity Realty Investors, Inc. as our proxy to act jointly to attend the Annual Shareholders' Meeting of Transcontinental Realty Investors, Inc. to be held at 1800 Valley View Lane, Suite 300, Dallas, Texas, on October 19, 2000, at 11:00 a.m. (CST), and any continuation or adjournment of that Shareholders' Meeting (the "Shareholders' Meeting") for the sole purpose of approving proposal one (to elect five Directors); proposal two (to approve the Director Stock Option Plan); proposal three (to approve the 2000 Stock Option Plan); and proposal four (to approve an amendment to the Articles of Incorporation to increase the number of authorized shares of common and preferred stock); all as more fully set forth in the Proxy Statement for such Annual Meeting attached hereto and made a part hereof (the "Proxy Statement"). This proxy shall be for no other or additional matters and shall be limited to proposals one through four as described in the Proxy Statement, without taking into account any amendments or supplements thereto. This proxy shall act in our stead and on our behalf to represent, vote, execute consents and otherwise to act for Gotham Partners, L.P. (only as described above) in the same manner and with the same effect as if we were personally present. We authorize the proxy to substitute any other person to act under this proxy, to revoke any substitution, and to file this proxy and any substitution or revocation with the corporation. This proxy and the authority represented by this proxy may be revoked at any time by the undersigned. Unless revoked, this proxy shall terminate on October 20, 2000, the day after the Shareholders' Meeting, or if the meeting is continued or adjourned, the day after the continuation or adjournment. GOTHAM PARTNERS, L.P., A NEW YORK LIMITED PARTNERSHIP By: Section H Partners, L.P., its general partner By: Karenina Corporation, a general partner of Section H Partners, L.P. Date: 10/03/00 By: /s/ William Ackerman --------- -------------------------- Name: William Ackerman Title: President EX-99.3 4 d80997aex99-3.txt REVOCABLE PROSY OF GOTHAM PARTNERS III, LP 1 EXHIBIT 3 REVOCABLE PROXY OF GOTHAM PARTNERS III, L.P., A NEW YORK LIMITED PARTNERSHIP 35,860 SHARES OF COMMON STOCK OF TRANSCONTINENTAL REALTY INVESTORS, INC. Gotham Partners III, L.P., a New York Limited Partnership, as holder of the shares described above, revokes any previously executed proxies and appoints American Realty Investors, Inc. and Income Opportunity Realty Investors, Inc. as our proxy to act jointly to attend the Annual Shareholders' Meeting of Transcontinental Realty Investors, Inc. to be held at 1800 Valley View Lane, Suite 300, Dallas, Texas, on October 19, 2000, at 11:00 a.m. (CST), and any continuation or adjournment of that Shareholders' Meeting (the "Shareholders' Meeting") for the sole purpose of approving proposal one (to elect five Directors); proposal two (to approve the Director Stock Option Plan); proposal three (to approve the 2000 Stock Option Plan); and proposal four (to approve an amendment to the Articles of Incorporation to increase the number of authorized shares of common and preferred stock); all as more fully set forth in the Proxy Statement for such Annual Meeting attached hereto and made a part hereof (the "Proxy Statement"). This proxy shall be for no other or additional matters and shall be limited to proposals one through four as described in the Proxy Statement, without taking into account any amendments or supplements thereto. This proxy shall act in our stead and on our behalf to represent, vote, execute consents and otherwise to act for Gotham Partners III, L.P. (only as described above) in the same manner and with the same effect as if we were personally present. We authorize our proxy to substitute any other person to act under this proxy, to revoke any substitution and to file this proxy and any substitution or revocation with the corporation. This proxy and the authority represented by this proxy may be revoked at any time by the undersigned. Unless revoked, this proxy shall terminate on October 20, 2000, the day after the Shareholders' Meeting, or if the meeting is continued or adjourned, the day after the continuation or adjournment. GOTHAM PARTNERS III, L.P., A NEW YORK LIMITED PARTNERSHIP By: Section H Partners, L.P., its general partner By: Karenina Corporation, a general partner of Section H Partners, L.P. Date: 10/03/00 By: /s/ William Ackerman --------- ------------------------------ William Ackerman, President EX-99.4 5 d80997aex99-4.txt REVOCABLE PROXY OF GOTHAM PARTNERS INTERNATIONAL 1 EXHIBIT 4 REVOCABLE PROXY OF GOTHAM PARTNERS INTERNATIONAL, LTD., A CAYMAN ISLAND COMPANY 447,040 SHARES OF COMMON STOCK OF TRANSCONTINENTAL REALTY INVESTORS, INC. Gotham Partners International, LTD., a Cayman Island Company, as holder of the shares described above, revokes any previously executed proxies and appoints American Realty Investors, Inc. and Income Opportunity Realty Investors, Inc. as its proxy to act jointly to attend the Annual Shareholders' Meeting of Transcontinental Realty Investors, Inc. to be held at 1800 Valley View Lane, Suite 300, Dallas, Texas, on October 19, 2000, at 11:00 a.m. (CST), and any continuation or adjournment of that Shareholders' Meeting (the "Shareholders' Meeting") for the sole purpose of approving proposal one (to elect five Directors); proposal two (to approve the Director Stock Option Plan); proposal three (to approve the 2000 Stock Option Plan); and proposal four (to approve an amendment to the Articles of Incorporation to increase the number of authorized shares of common and preferred stock); all as more fully set forth in the Proxy Statement for such Annual Meeting attached hereto and made a part hereof (the "Proxy Statement"). This proxy shall be for no other or additional matters and shall be limited to proposals one through four as described in the Proxy Statement, without taking into account any amendments or supplements thereto. This proxy shall act in its stead and on its behalf to represent, vote, execute consents and otherwise to act for Gotham Partners International, LTD. (only as described above) in the same manner and with the same effect as if we were personally present. We authorize the proxy to substitute any other person to act under this proxy, to revoke any substitution and to file this proxy and any substitution or revocation with the corporation. This proxy and the authority represented by this proxy may be revoked at any time by the undersigned. Unless revoked, this proxy shall terminate on October 20, 2000, the day after the Shareholders' Meeting, or if the meeting is continued or adjourned, the day after the continuation or adjournment. GOTHAM PARTNERS INTERNATIONAL, LTD., A CAYMAN ISLAND COMPANY By: Gotham International Advisors, L.L.C. Date: 10/03/00 By: /s/ William Ackerman --------- ---------------------------------------- William Ackerman, Sr. Managing Member -----END PRIVACY-ENHANCED MESSAGE-----