EXHIBIT 99.8
AGREEMENT FOR CASH DISTRIBUTION
AND ELECTION OF SUCCESSOR GENERAL PARTNER
This Agreement for Cash Distribution and Election of Successor General
Partner ("Agreement"), dated as of July 15, 1998, is made by and among Syntek
Asset Management, L.P. ("Syntek"), the General Partner of National Realty, L.P.
(the "Partnership"), American Realty Trust, Inc. ("ART"), the Partnership and
the National Realty, L.P. Oversight Committee (the "Committee").
R E C I T A L S
- - - - - - - -
A. Pursuant to a Settlement Agreement, dated as of May 9, 1990, the
plaintiffs, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, et al., and defendants, the Partnership, National
Operating, L.P., Syntek, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, and Shearson ▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc., successor-in-interest to defendant
▇.▇. ▇▇▇▇▇▇ & Company, Inc. agreed to settle a class action litigation matter
filed in the Superior Court (the "Court") of the State of California in and for
the County of San Mateo, Case No. 322135, captioned as ▇▇▇▇▇▇▇, et al., v.
Southmark Corporation, et al.
B. In furtherance of the provisions set forth in the Settlement
Agreement, the parties to this Agreement desire to proceed with the election of
a Successor General Partner to Syntek, as general partner of the Partnership, on
the terms and conditions set forth in this Agreement.
C. The parties have agreed that if Syntek nominates an affiliate of
Syntek ("Syntek Affiliate") on the terms and conditions set forth in this
Agreement, the parties to the Agreement (i) will not oppose the election of the
Syntek Affiliate and (ii) will not propose, or otherwise assist, a candidate to
run against the Syntek Affiliate.
D. The Partnership has agreed to contribute, on the terms and conditions
set forth in this Agreement, $11,400,000 in cash for distribution to the former
holders of the Partnership's Warrants ("Former Warrantholders"). In addition,
the Partnership has agreed to pay certain expenses related to this Agreement, as
described herein.
E. The parties to this Agreement now desire to set forth their intentions
and agreements with respect to the terms and conditions relating to the election
of the Syntek Affiliate (or non-affiliate) as the successor general partner to
Syntek (the "Successor General Partner") and the distribution by the Partnership
of the cash to the Former Warrantholders.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
obligations contained herein and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties to this
Agreement hereby agree as follows:
AGREEMENT
1. Nomination of Successor General Partner.
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A. Upon the Court's final approval of this Agreement, Syntek shall
provide to the Committee the name of its nominee for Successor General Partner.
Syntek shall also state that such nominee is an Affiliate and shall provide (i)
the information required by Item 404 of Regulation S-K of the Securities and
Exchange Commission ("SEC"), as set forth in Section 6.3(b) of the Settlement
Agreement and (ii) such other information as reasonably necessary to enable the
Committee to determine that it has no objections to such nominee's holding the
office of general partner for reason other than such nominee's affiliate status.
If the Committee makes such an objection, the Committee shall be entitled to
petition the Supervising Judge. If the Supervising Judge finds that the
Committee's objections have merit, Syntek shall nominate a different nominee (as
its Affiliate nominee for Successor General Partner).
B. Subject to the Committee's right in Section 1A above, Syntek, for
and on behalf of the Partnership, shall promptly prepare and file with the SEC a
proxy statement under Regulation 14A and Schedule 14A of the Securities Exchange
Act of 1934, as amended (the "1934 Act").
C. The Committee, and the Committee's attorneys and agents, shall be
entitled to review and comment upon all documents submitted to the SEC or any
other regulatory agencies. However, the proxy statement shall specify that the
Committee:
i. Makes no representation regarding the information set forth
in the proxy statement;
ii. Has not participated in the preparation of the proxy
statement; and
iii. Assumes no legal responsibility for the information
contained in the proxy statement.
The Committee shall not have any prior approval rights regarding
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Syntek's decision to file any documents with the SEC or any other regulatory
agency. However, the Committee shall be entitled to petition the Supervising
Judge to prevent Syntek from making any filing with the SEC, or other applicable
regulatory agency. The Supervising Judge shall order Syntek not to make such
filing if the Supervising Judge finds that (i) the Committee's objections are
material to the solicitation of the unitholders or (ii) the Committee has not
had adequate time to review the documents to be filed.
D. If Syntek's Affiliate nominee as Successor General Partner fails
to be elected (due to the pro rata voting provisions in Section 3 below), Syntek
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shall promptly nominate a non-affiliate to be the candidate as Successor General
Partner. Syntek shall provide the Committee with the information required by
Section 6.3(b) of the Settlement Agreement, so that the Committee can determine
whether the Committee believes the nominee is a non-affiliate of Syntek. Syntek
shall also provide the Committee with such other information as reasonably
necessary to enable the Committee to determine that it has no objections to such
nominee's holding the office of general partner. If the Committee makes such an
objection, the Committee shall be entitled to petition the Supervising Judge.
If the Supervising Judge finds that the Committee's objections have merit,
Syntek shall nominate a different non-affiliate nominee. Syntek shall cause its
Affiliates, including the ART Group (as defined in Section 15), to vote all of
their units in favor of the election of the non-affiliate as Successor General
Partner. If Syntek's Affiliates control enough votes to ensure the election of
the non-affiliate as Successor General Partner, in lieu of
filing a proxy statement with the SEC, Syntek may prepare and file with the SEC
an information statement under Regulation 14C and Schedule 14C of the 1934 Act.
All of the terms and conditions set forth above related to the proxy statement
shall apply equally to the information statement.
2. Non-Opposition to Syntek Affiliate. Other than as expressly provided
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by this Agreement, the Committee shall not oppose the election of the Syntek
Affiliate nor will the Committee propose any candidate to run against the Syntek
Affiliate.
3. Pro Rata Voting Requirement. In connection with the vote on the
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Syntek Affiliate, all Units of the Partnership held by Syntek, or any affiliate
of Syntek, shall be voted pro rata (without regard to abstentions) to the votes
cast by the limited partners of the Partnership who are not affiliates of
Syntek, in accordance with Section 6.4 of the Settlement Agreement.
4. Transfer of General Partner Interests/Assumption of General Partner
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Obligations and Note. Upon the election and taking of office by the Successor
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General Partner, Syntek shall assign to the Successor General Partner all of
Syntek's rights as general partner under the Agreement of Limited Partnership of
the Partnership (the "Partnership Agreement"). At the same time, the Successor
General Partner shall assume all of Syntek's obligations as general partner
under the Partnership Agreement and shall assume all of Syntek's obligations
under the promissory note given to the Partnership by Syntek as partial
consideration for Syntek's general partnership interest in the Partnership
("Syntek's Capital Contribution Note"). As of June 30, 1998, Syntek's Capital
Contribution Note had a principal balance of $4,175,593 plus accrued interest of
approximately $7.8 million. The Successor General Partner shall also be subject
to the requirement to repay to the Partnership the amount of the Total Cash
Distributions and Fees as set forth in Section 10 of this Agreement and shall
assume the note obligations as set forth under Section 10 below.
5. Waiver of Exit Fee. Upon the election and taking of office of the
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Successor General Partner, Syntek shall, on its own behalf and its successors,
waive all of its rights to the payment of any fee which may be required to be
paid by the Partnership pursuant to Section 6.5 of the Settlement Agreement.
6. Amendment to Partnership Agreement. Prior to the election of the
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Successor General Partner, Syntek shall have caused an amendment to the
Partnership Agreement in the form attached hereto as Exhibit A to become
effective and shall have caused a similar amendment to the partnership agreement
of National Operating, L.P. to become effective. Such amendment shall prohibit
any payment by the Partnership to the Successor General Partner for the
repurchase of the Successor General Partner's interest in the Partnership under
Article 9 and Paragraphs 17.9 and 17.10 of the Partnership Agreement upon the
voluntary resignation or removal of the Successor General Partner. Such
amendment shall also limit the amount which may be paid by the Partnership under
the Partnership Agreement to any parties who may serve as general partner of the
Partnership at any time after the Successor General Partner ceases to serve as
general partner and has had its interest repurchased. (See paragraphs 9.17 and
17.9.6 of the amendment to the Partnership Agreement attached hereto as Exhibit
A and the examples to paragraph 9.17 and 17.9.)
7. Resolution of Disputes. This Agreement resolves any and all disputes
----------------------
or claims arising under the Settlement Agreement among the parties to this
Agreement. As consideration for the waiver by Syntek of any fees owed under
Section 5 above, and its performance of this Agreement, Syntek shall have no
obligation to pay any sums to the Partnership, the Former Warrantholders or the
Class Members.
8. Cash Distribution. Immediately prior to the taking of office by the
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Successor General Partner, the Partnership shall contribute $11,400,000 in cash
(plus interest from the date of the Court's Order granting final approval of
this Agreement), pursuant to the Court order referred to in this paragraph 8 for
distribution to the Former Warrantholders (the "Total Cash Distribution"). The
interest shall be equal to 90 day LIBOR (the "LIBOR Rates") plus 2% per annum,
based on such LIBOR Rates in effect at the time of the Court's Order, and then
every 90 days thereafter. The Total Cash Distribution shall be distributed to
the Former Warrantholders on a pro rata basis based on the number of Warrants
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held by the Former Warrantholders on the date the Warrants expired on the terms
approved by the Court pursuant to an order of the Court.
9. No Additional Fees from Total Cash Distribution. The Total Cash
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Distribution shall not be subject to any set-off. Any fees awarded by the Court
directly or indirectly related to this Agreement shall be paid by the
Partnership (the "Fees").
10. Repayment of Total Cash Distribution. The Successor General Partner
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shall be required to repay the amount of the Total Cash Distribution (plus the
amount of any Fees) plus interest (on the amount of the outstanding unpaid
principal balance of the Total Cash Distribution and the Fees) from the date of
the Total Cash Distribution to the Former Warrantholders. The interest shall be
equal to the LIBOR Rate plus 2% per annum, based on such LIBOR Rate in effect at
the time of the Total Cash Distribution, and then every 90 days thereafter.
Such repayment shall be made by the Successor General Partner's assumption of a
promissory note from Syntek payable to the Partnership ("Syntek Cash
Distribution Repayment Note") with the following terms:
(i) Due date of 10 years from payment of the Total Cash
Distribution;
(ii) Mandatory principal payments as follows:
(a)First, Second and third anniversary --$500,000;
(b)Fourth, fifth and sixth anniversary -- $750,000;
(c)Seventh, eighth and ninth anniversary --$1,000,000; and
(d)Tenth anniversary -- balance due.
(iii) Automatic acceleration upon the following events:
(a)Resignation or removal of the general partner;
(b)Merger of the Partnership into another entity; and
(c)Liquidation of the Partnership.
Any repayments shall be credited first to accrued and unpaid interest,
and then to reduce the principal balance of the unpaid Total Cash Distribution
and Fees amount. If the total amount required to be repaid by the Successor
General Partner has not been repaid upon the Successor General Partner ceasing
to be general partner for any reason, including upon (i) the resignation or
removal of the Successor General Partner, (ii) the merger of the Partnership
into another entity, or (iii) the liquidation of the Partnership, the Successor
General Partner shall be required to repay such outstanding amounts. In the
case of such a merger or liquidation, the amounts owed by the Successor General
Partner shall be repaid prior to the closing of the merger
and prior to the final distribution of liquidation proceeds to the partners of
the Partnership. ART shall guarantee the full repayment of all amounts owed by
the Successor General Partner pursuant to this Section 10. The Partnership shall
not be entitled to release ART from its guaranty, unless ART provides for the
full satisfaction of the underlying obligation through payment.
11. Termination of the Settlement Agreement. (a) Upon the later to occur
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of (i) the distribution of the cash to the Former Warrantholders as contemplated
by Section 8 hereof, after approval by the Court, and (ii) the selection and
taking of office of the Successor General Partner of the Partnership on the
terms and conditions set forth in this Agreement, the Settlement Agreement and
the Settlement Plan thereunder shall terminate.
(b) The Partnership shall enter into separate, but identical,
indemnification agreements with each member of the Committee ("Indemnification
Agreements"). The Indemnification Agreements shall be drafted to be as favorable
as possible to the members of the Committee and shall indemnify the members of
the Committee, the Committee's agents and attorneys. The Indemnification
Agreements shall contain terms similar but not limited to those contained in
Section 21 of the Partnership Agreement, including, but not limited to, the
fullest indemnity possible and the advancement of expenses.
(c) Pursuant to separate but identical releases, Syntek, the ART
Group, the Partnership, ▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇ shall release the
members of the Committee from any claims known or unknown, effective the date of
the termination of the Settlement Agreement.
12. Binding Agreement: Supervising Judge's Powers. The parties intend for
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this Agreement to be binding upon the parties upon the terms and conditions set
forth herein. However, the Parties acknowledge that the parties and certain
other persons are also parties to an Amendment and Restatement of Agreement for
Establishment of Class Distribution Fund and Election of Successor General
Partner, dated as of May 19, 1998 (the "Resolution Agreement"). The parties
intend for the Court to grant final approval to either this Agreement or the
Resolution Agreement. If the Court grants final approval to the Resolution
Agreement, this Agreement shall be void. This Agreement shall not be binding on
any party hereto until it is executed by at least two of the members of the
Oversight Committee and by each other party hereto. If any dispute under this
Agreement arises among the Parties, the dispute shall be resolved by the
Supervising Judge. The Supervising Judge's decision shall be final and binding
upon the parties.
13. Additional Agreements. The following documents (and all other
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necessary documents) shall be prepared:
A. The Proxy Statement/Consent Solicitation;
B. The Assignment of Interests to Successor General Partner;
C. The Assumption of Syntek's Capital Contribution Note by Successor
General Partner;
D. The Assumption of the Syntek Cash Distribution Repayment Note;
E. Notice of Hearing to Class Members, Former Warrantholders and
current limited partners;
F. Amendment to the Partnership Agreement (Exhibit A) and the
amendment to the partnership agreement of National Operating, L.P.;
G. The Committee Indemnification Agreements;
H. The releases related to the Committee;
I. The Syntek Cash Distribution Repayment Note; and
J. The ART guaranty of the payment of the Syntek Cash Distribution
Note.
14. Representations and Warranties. Syntek, for and on behalf of the
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Partnership, and ART each hereby represent and warrant to the other parties
hereto that:
A. The execution, delivery, and performance of this Agreement has
been duly executed and delivered by Syntek, the Partnership and ART and
constitutes the legal and valid binding obligation of Syntek, the Partnership
and ART, enforceable against Syntek, the Partnership and ART in accordance with
its terms, except as such enforcement may be subject to bankruptcy, insolvency,
reorganization, or other similar laws now or hereinafter in effect, and subject
to the equitable powers of the Court which has jurisdiction over the underlying
litigation.
B. Neither Syntek, the Partnership, ART, nor the ART Group, or any
of their affiliates were the beneficial owners of any of the Warrants as of the
expiration date of the Warrants, and neither Syntek, the Partnership, ART, nor
the ART Group has any right to receive any proceeds from the Total Cash
Distribution.
15. Definitions. All terms not defined herein shall have the meaning set
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forth in the Partnership Agreement or ▇▇▇▇▇▇▇ Settlement Agreement, as
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applicable, except that the ART Group shall mean (i) Syntek, (ii) Syntek Asset
Management, Inc., a Texas corporation, (iii) ART, (iv) Basic Capital Management,
Inc., (v) BCM Holdings, Inc., (vi) ART Holdings, Inc., (vii) Messrs. ▇▇▇▇▇▇▇▇
and ▇▇▇▇▇▇▇▇, and (viii) any other person or persons listed, or required to be
listed, on the Schedule 13D filings made by ART related to ownership in the
Partnership.
16. Authorization. The signatories of this Agreement represent and
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warrant that their respective execution, delivery, and performance of this
Agreement has been duly authorized.
17. Miscellaneous.
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A. Governing Law. This Agreement shall be governed by and construed
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in accordance with the laws of the State of California applicable
to contracts between California residents entered into and to be
performed entirely within the State of California, without regard
to the principles of conflict of laws, provided, however, the
internal governance of the Amended and Restated Partnership
Agreement and other Partnership documents shall be governed by the
laws of Delaware.
B. Successors and Assigns. Except as expressly set forth herein, no
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part of this Agreement or any rights, duties, or obligations
described herein shall be assigned or delegated without the express
written consent of the parties hereto. Except as otherwise provided
herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors and assigns of the parties hereto.
C. Entire Agreement: No Oral Agreements. This Agreement, including
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the documents referred to herein, constitutes the full and entire
understanding and agreement among the parties with regard to the
subject hereof.
D. Notices. All notices and other communications hereunder shall be
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in writing and shall be deemed given if delivered personally or
mailed by registered or certified mail or commercial overnight
courier (e.g., Federal Express, etc.), return receipt or
confirmation of delivery required, or by facsimile transmission
with voice confirmation of receipt, to the parties at the following
addresses (or at such other address for a party as shall be
specified by like notice):
i. Syntek:
c/o Syntek Asset Management, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Basic Capital Management, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
ii. ART:
c/o American Realty Trust, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Basic Capital Management, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
iii. Partnership:
c/o Syntek (listed above)
iv. Committee:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chair
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇▇, Holland and ▇▇▇▇▇
A Professional Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
E. Cooperation. All parties agree to execute and deliver such other
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documents, certificates, agreements, and other writings and to take such other
actions as may be necessary or desirable in order to expeditiously consummate or
implement the transactions contemplated by this Agreement.
F. Interpretation. The headings contained in this Agreement are for
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reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
G. Delays or Omissions. No delay or omission to exercise any right,
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power,
or remedy accruing to any party to this Agreement, upon any breach or default of
another party under this Agreement, shall impair any such right, power or remedy
of such party nor shall it be construed to be a waiver of any such breach or
default, or any acquiescence therein. Any waiver, permit, consent or approval of
any kind or character on the part of any party of any breach or default under
this Agreement, or any waiver on the part of any party of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement, or by law or otherwise afforded to any party, shall be
cumulative and not alternative (except as expressly set forth).
H. Counterparts. This Agreement may be executed in counterparts,
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each of which shall be enforceable against the party actually executing such
counterpart, and all of which together shall constitute one instrument.
I. Severability. In case any provision of this Agreement shall be
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invalid, illegal, or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
J. Ambiguities. The provisions of this Agreement shall be
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interpreted without regard to the drafting source and as if all parties drafted
this Agreement in a reasonable manner to effect the purposes of the parties.
[The rest of this page left intentionally blank.]
Syntek, American Realty Trust, Inc., the Partnership and the Committee
indicate their agreement to be bound by the terms of this Agreement by this
signature of their authorized representatives below.
NATIONAL REALTY, L.P., a Delaware limited THE NATIONAL REALTY, L.P.
partnership OVERSIGHT COMMITTEE
By Syntek Asset Management, L.P., a Delaware
Limited Partnership, as General Partner By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
Committee Chair
By Syntek Asset Management, Inc., a
Texas Corporation, as Managing By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
General Partner -----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Committee Member
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ AMERICAN REALTY TRUST, INC.,
---------------------------------- a Georgia Corporation
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
President
And /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇, President
By SYNTEK ASSET MANAGEMENT, L.P., a
Delaware Limited Partnership
By SYNTEK ASSET MANAGEMENT,
INC., a Texas Corporation, as
Managing General Partner
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Exhibit A
Certificate of Amendment
of
Limited Partnership Agreement
of
National Realty, L.P.,
A Delaware Limited Partnership
SYNTEK ASSET MANAGEMENT, L.P., a Delaware limited partnership (hereinafter
"Syntek"), the sole general partner of NATIONAL REALTY, L.P., a Delaware limited
partnership (hereinafter the "Partnership"), pursuant to the authority granted
to Syntek by Paragraph 15.2.19(i) of the Limited Partnership Agreement, dated as
of January 29, 1987, as amended as of May 14, 1990 (hereinafter the "Partnership
Agreement"), hereby amends the Partnership Agreement in the following respects:
(i) A new definition to Paragraph 2 is added to read as follows:
"ART Group" means (a) Syntek, (b) Syntek Asset Management,
Inc., a Texas corporation, (c) American Realty Trust, Inc., a Georgia
corporation, (d) Basic Capital Management, Inc., a Nevada corporation, (e) BCM
Holdings, Inc., a Nevada corporation, (f) ART Holdings, Inc., a Nevada
corporation, (g) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, (h) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and (i) any other
person or persons listed, or required to be listed, on Schedule 13D filings made
by American Realty Trust, Inc. related to ownership in the Partnership.
(ii) A new Paragraph 9.17 shall be added to the Partnership
Agreement to read as follows:
9.17 Adjustment in Fee Calculations for Fees Paid to Prior
General Partners. Notwithstanding anything else in this Paragraph 9
or this Agreement, no General Partner shall be entitled to a fee if a
prior General Partner already received such fee or had its general
partner interest under Paragraphs 17.9 and 17.10 repurchased based on
the inclusion of such fee. In such case, the General Partner shall
only be entitled to fees based on the amount of the increase over the
amount for which fees were already paid to the prior General Partner.
For purposes of determining the amount owed under Paragraph 17.10 of
this Agreement, prior to the set-off required by Paragraph 17.9.6 of
this Agreement, this Paragraph 9.17 shall be ignored. An example of
this Paragraph 9.17 is set forth below:
A prior General Partner is involuntarily removed as General
Partner. Upon such removal, such General Partner's interest is
purchased by the Partnership for $25,000,000 under the calculations
made in Paragraph 17.10. The components included in such calculation
were as follows:
Paragraph 9.4 fees $ 7,000,000
Paragraph 9.8.1 fees 12,000,000
Repurchase of 1.99% interest 6,000,000
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in the Partnership
and National
Operating, L.P.
Total $25,000,000
===========
Provided that the successor General Partner upon taking office
has purchased its 1.99% interest in the Partnership and National
Operating, L.P. from the Partnership and National Operating, L.P.,
then, the successor General Partner shall not receive any fees under
either Paragraphs 9.4 and 9.8.1 until the Partnership's activities
have resulted (through actual sales or actual distributions and not
through deemed sales or deemed distributions) in $19,000,000 of fees
that would have been paid to the General Partner under Paragraphs 9.4
and 9.8.1, but for this Paragraph 9.17. Once the $19,000,000
threshold (the "Threshold Amount") has been met, the successor General
Partner shall be entitled to receive fees under Paragraphs 9.4 and
9.8.1 on a current basis based on actual sales and actual
distributions for amounts above the Threshold Amount.
Assume further that at the time of the General Partner's
removal above, the General Partner owed the Partnership $30,000,000,
such that at the time of removal, the General Partner was required to
repay the Partnership $5,000,000 ($25,000,000 owed by the Partnership
to the General Partner under Paragraph 17.10 minus $30,000,000 owed by
the General Partner to the Partnership). The fact that the General
Partner owed the Partnership $5,000,000 shall not reduce the Threshold
Amount.
(iii) Paragraph 17.9 of the Partnership Agreement shall be amended
in its entirety to read as follows:
17.9 Purchase of General Partner's Interest
17.9.1 Upon Syntek's ceasing to be General Partner, Syntek shall not
have its interest in the Partnership repurchased.
17.9.2 If, after Syntek ceases to be General Partner, a General
Partner of the Partnership voluntarily ceases to be General Partner (e.g.,
by resignation or through the merger of the Partnership into another entity
in which the ART Group, or the ART Group's affiliates, are the beneficial
owners, as defined in Rule 13d-3 of the Securities Exchange Act of 1934, of
more than 10% of such entity prior to such merger or 25% or more of the
entity immediately after such merger ["Voluntary Merger"]), such General
Partner shall not have its interest in the Partnership repurchased.
17.9.3 If, after Syntek ceases to be General Partner, a General
Partner of the Partnership involuntarily ceases to be General Partner
(e.g., by court order, by removal by the limited partners or by merger,
other than a Voluntary Merger), such General Partner shall have its
interest in the Partnership repurchased. In such a case, such General
Partner's interest in (i) the Partnership, as set forth in Paragraph 11 of
this Agreement; and (ii) the fees and other compensation to be paid under
Paragraph 9 of this Agreement, shall both be purchased by the Partnership
for a purchase price equal to the aggregate fair market value of such
General Partner's interest in such items determined according to the
provisions of Paragraph 17.10 of this Agreement. The purchase price of
such interest, after the offsets required by Paragraph 17.9.5 (the "Net
Amount"), shall be paid by the Partnership to such General Partner in the
form of an unsecured promissory note in the principal amount of the Net
Amount, with interest at 10 percent per annum payable monthly and principal
and interest amortized over a period of 36 months in equal consecutive
installments.
17.9.4 For the purposes of this Paragraph 17.9, if the General
Partner is an affiliate of Syntek or the ART Group and Syntek or the ART
Group control the vote on the removal of the General Partner, the removal
of the General Partner by the limited partners of the Partnership shall be
considered "voluntary" rather than "involuntary" and therefore, upon such
removal, such affiliate General Partner shall not have its interest in the
Partnership repurchased.
17.9.5 Nothing in this Paragraph 17.9 shall remove the General
Partner's obligations, either under (i) Paragraph 5.1.2 of this Agreement
or (ii) to repay any other loans to the Partnership, including, but not
limited to the promissory note to be assumed by the successor General
Partner to Syntek related to repayment of the amounts set forth in
paragraph 10 of that Agreement for Cash Distribution and Election of
Successor General Partner, dated as of July 15, 1998, among Syntek, the
Partnership and the National Realty L.P. Oversight Committee (finally
approved by the Court on __________________________, 1998).
17.9.6 A successor General Partner that succeeds to the office of
General Partner after one or more prior General Partner(s) have had such
General Partner(s)' interest in the Partnership purchased under this
Paragraph 17.9, shall be entitled to have such successor General Partner's
interest purchased on the terms set forth in Paragraphs 17.9.1 through
17.9.5 above; however, the amount owed to any successor General Partner
shall be set-off by any amounts paid by the Partnership to any prior
General Partner(s). An example is set forth below:
A prior General Partner unaffiliated with Syntek or the ART Group is
removed by the limited partners. Upon such removal, such General Partner's
interest is purchased by the Partnership for $25,000,000 under the
calculations made in Paragraph 17.10. However, the General Partner owed
the Partnership $13,000,000 pursuant to Paragraph 5.1.2 of this Agreement
and $12,000,000 pursuant to the amounts set forth in Paragraph 17.9.5(ii)
above, for a total of $25,000,000. Accordingly, upon such removal, such
amounts were netted, resulting in neither a payment from the Partnership
nor the General Partner. Two years later, a new General Partner is
involuntarily removed and under the new calculations in Paragraph 17.10,
the payment for the purchase of the new General Partner's interest is
calculated to be $30,000,000, prior to the set-off in Paragraph 17.9.6.
Therefore, upon the new General Partner involuntarily ceasing to be the
General Partner, the new General Partner's interest shall be repurchased by
the Partnership for a payment of $5,000,000 ($30,000,000 Paragraph 17.10
calculation minus a $25,000,000 set off for the amounts previously paid to
the prior General Partner) minus the amount of any outstanding loans from
the Partnership to the General Partner.
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IN WITNESS WHEREOF, Syntek has executed this Certificate of Amendment of
Limited Partnership Agreement as of the __________ day of
______________________, 199___.
SYNTEK ASSET MANAGEMENT, L.P., a
Delaware limited partnership
By: SYNTEK ASSET MANAGEMENT, INC.,
a Texas corporation, as managing general
partner
By__________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
By_________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Partner
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On this ________ day of _______________________, in the year 199____,
before me ____________________________________, a Notary Public in and for the
State of Texas, personally appeared ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, personally known to me,
or proved to me on the basis of satisfactory evidence, to be the person whose
name is subscribed to the within instrument on behalf of Syntek Asset
Management, L.P., and acknowledged to me that said partnership executed it.
______________________________________
Notary Public, State of Texas
My Commission Expires:
_____________________
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
On this ________ day of _______________________, in the year 199____,
before me ____________________________________, a Notary Public in and for the
State of Texas, personally appeared ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, personally known to me, or
proved to me on the basis of satisfactory evidence, to be the person whose name
is subscribed to the within instrument on behalf of Syntek Asset Management,
L.P., and acknowledged to me that said partnership executed it.
______________________________________
Notary Public, State of Texas
My Commission Expires:
_____________________