SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
(Mark One)
_X_ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended November 30, 1998
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OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
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Commission file number 0-11023
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NOONEY REAL PROPERTY INVESTORS-FOUR, L.P
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(Exact name of Registrant as specified in its charter)
Missouri 43-1250566
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(State or other jurisdiction of (I.R.S. Employer)
incorporation or organization) Identification No.)
500 North Broadway, St. Louis, Missouri 63102
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 206-4600
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
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None Not Applicable
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Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests
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(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes _X_ No ___.
<PAGE>
_X_ Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.
As of February 1, 1999, the aggregate market value of the Registrant's units of
limited partnership interest (which constitute voting securities under certain
circumstances) held by non-affiliates of the Registrant was $13,529,000. (The
aggregate market value was computed on the basis of the initial selling price of
$1,000 per unit of limited partnership interest, using the number of units not
beneficially owned on February 1, 1999 by the General Partners or holders of 10%
or more of the Registrant's limited partnership interests. The initial selling
price of $1,000 per unit is not the current market value. Accurate pricing
information is not available because the value of the units of limited
partnership interests is not determinable since no active secondary market
exists. The characterization of such General Partners and 10% holders as
affiliates is for the purpose of this computation only and should not be
construed as an admission for any purpose that any such persons are, or other
persons not so characterized are not, in fact, affiliates of the Registrant).
Documents incorporated by reference:
Portions of the Prospectus of the Registrant dated April 8, l982, as
supplemented and filed pursuant to Rule 424(c) of the Securities Act of 1933,
are incorporated by reference in Part III of this Annual Report on Form 10-K.
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<PAGE>
PART I
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ITEM 1: BUSINESS
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It should be noted that this 10-K contains forward-looking information (as
defined in the Private Securities Litigation Reform Act of 1995) that involves
risk and uncertainty, including trends in the real estate investment market,
projected leasing and sales, and the future prospects for the Registrant. Actual
results could differ materially from those contemplated by such statements.
Nooney Real Property Investors-Four, L.P. (the "Registrant") is a limited
partnership formed under the Missouri Uniform Limited Partnership Law on
February 9, 1982, to invest, on a leveraged basis, in income-producing real
properties such as shopping centers, office buildings, apartment complexes,
office/warehouses and other commercial properties. The Registrant originally
invested in five real property investments. During fiscal 1990, one of the
Registrant's properties, Yankee Square I Office Building in Eagan, Minnesota,
was sold to an individual unaffiliated with the Registrant. During fiscal 1991,
one of the Registrant's properties, Courtyard Office Building in Creve Coeur,
Missouri, was conveyed by deed in lieu of foreclosure to Courtyard Office
Building, Inc., the assignee of Courtyard Associates, in order to satisfy the
default that existed under the mortgage note held by Courtyard Associates.
During fiscal 1993, Quad I Warehouse was sold to a party unaffiliated with the
Registrant.
The Registrant's primary investment objectives are to preserve and protect the
Limited Partners' capital and obtain long-term appreciation in the value of its
properties. The original term of the Registrant is until December 31, 2082. The
Registrant anticipates liquidating during 1999. For further discussion, see Item
7, "Liquidity and Capital Resources." It was originally anticipated that the
Registrant would sell or refinance its properties within approximately five to
ten years after their acquisition. The depression of real estate values
experienced nationwide from 1988 to 1993 lengthened this time frame in order to
achieve the goal of capital appreciation.
The Registrant is intended to be self-liquidating and proceeds, if any, from the
sale or refinancing of the Registrant's real property investments will not be
invested in new properties but will be distributed to the Partners or, at the
discretion of the General Partners, applied to capital improvements to, or the
payment of indebtedness with respect to, existing properties, the payment of
other expenses or the establishment of reserves. (See Item 7: Management's
Discussion and Analysis of Financial Condition and Results of Operations.)
At a Special Meeting of Limited Partners of Registrant held on January 21, 1999,
the limited partners approved an amendment to Section 5.2 of the Registrant's
Amended and Restated Agreement of Limited Partnership dated April 7, 1982, to
permit, among other things, the Registrant to sell one or more of its properties
to affiliates of the general partners of the Registrant under certain
circumstances.
The Limited Partners further approved the sale of Registrant's two remaining
properties to an affiliate of the Registrant at their appraised values (subject
to certain adjustments). The sale is subject to normal due diligence, i.e. title
approval, satisfactory environmental reports, approval of existing lender to
permit transfer of title subject to the present first mortgage financing, and
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<PAGE>
satisfactory reports on structural and other physical characteristics. There is
no assurance that the sale will be consummated since the closing is conditioned
upon contingencies beyond the control of the Registrant. If the sale goes
through, it will result in the dissolution of the Registrant.
The business in which the Registrant is engaged is highly competitive. The
Registrant's investment properties are located in or near major urban areas and
are subject to competition from other similar types of properties in such areas.
The Registrant competes for tenants for its properties with numerous other real
estate limited partnerships, as well as with individuals, corporations, real
estate investment trusts and other entities engaged in real estate investment
activities. Such competition is based on such factors as location, rent
schedules and services and amenities provided.
The Registrant has no employees. Property management services for the
Registrant's investment properties are provided by Nooney, Inc. an affiliate of
the General Partners.
Throughout the 10-K, references are made to the following companies listed in
Column A below. Please note that on January 28,1998, the names of said companies
were changed to the names listed in Column B below.
Column A Column B
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Nooney Company Brooklyn Street Properties, Inc.
Nooney Krombach Company Hanley Brokers, Inc.
ITEM 2: PROPERTIES
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On February 16, l982, the Registrant purchased the Cobblestone Court Shopping
Center ("Cobblestone"), located at 14150 Nicollet Avenue South in Burnsville,
Minnesota, a suburb of Minneapolis. Cobblestone, which contains approximately
98,000 net rentable square feet, was constructed in l980 of brick and concrete
with a wood facade covering a portion of an enclosed pedestrian walkway.
Cobblestone is located on an 11 acre site which provides paved parking for 605
cars. The purchase price of Cobblestone was $5,882,318. Cobblestone was 59%
leased by 7 tenants at year end.
On July 28, l982, the Registrant purchased the Woodhollow Apartments
("Woodhollow"), a 402- unit garden apartment complex located on Dorsett Road in
west St. Louis County, Missouri. The complex, which was constructed in phases in
l971 and l972, consists of 17 buildings containing one, two and three bedroom
apartments. The complex is located on a 26 acre site which provides paved
parking for 707 cars. The purchase price of Woodhollow was $12,665,147.
Woodhollow was 92% occupied at year end.
Reference is made to Note 3 to Notes to Financial Statements filed herewith as
Exhibit 99.3 in response to Item 8 for a description of the mortgage
indebtedness secured by the Registrant's real property investments.
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<PAGE>
The following table sets forth certain information as of November 30, 1998,
relating to the properties owned by the Registrant.
<TABLE>
<CAPTION>
AVERAGE
ANNUALIZED
EFFECTIVE
TOTAL BASE RENT PRINCIPAL TENANTS
SQUARE ANNUALIZED PER SQUARE PERCENT OVER 10% OF PROPERTY LEASE
PROPERTY FEET BASE RENT FOOT LEASED BASE RENT REVENUES (%) EXPIRATION
- -------- ------ ---------- ---------- ------- ----------------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Cobblestone 97,718 $ 435,774 $7.56 59% T.J. Maxx (23%) 2001
Old Country Buffet (16%) 2000
Woodhollow 402 Units $2,284,320 $5,682/unit 92% None
</TABLE>
ITEM 3: LEGAL PROCEEDINGS
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The Registrant is not a party to any material pending legal proceedings.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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There were no matters submitted to a vote of security holders during the fourth
quarter of fiscal 1998.
PART II
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ITEM 5: MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
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STOCKHOLDER MATTERS
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As of February 1, 1999, there were 1,199 record holders of Interests in the
Registrant. There is no public market for the Interests, and it is not
anticipated that a public market will develop.
There were no cash distributions paid to the Limited Partners during fiscal 1997
or fiscal 1998.
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<PAGE>
ITEM 6: SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Year Ended November 30,
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1998 1997 1996 1995 1994
(Not covered by independent auditors' report)
<S> <C> <C> <C> <C> <C>
Rental and other income $ 3,287,570 $ 3,406,566 $ 3,505,163 $ 3,391,439 $ 3,281,516
Net loss from operations (401,699) (193,748) (18,733) (151,835) (405,172)
Data per limited partnership unit - net loss (29.18) (14.07) (1.36) (11.03) (29.43)
Weighted average limited partnership units outstanding 13,529 13,529 13,529 13,529 13,529
At year-end:
Total assets 17,918,396 11,628,080 11,211,633 11,322,989 11,789,994
Investment property - net 17,585,000 11,110,241 10,678,208 10,705,962 11,170,661
Mortgage notes payable 13,500,465 12,871,393 12,529,484 12,628,720 12,721,302
Partners' deficiency in assets (1) (1,687,945) (1,494,197) (1,475,464) (1,323,629)
Net liabilities in liquidation (1) (3,128,533)
<FN>
See Item 7: Management's Discussion and Analysis for discussion of comparability of items.
(1) A plan of liquidation was approved effective January 21, 1999. As a result, the Partnership's financial statements as of and
for the year ended November 30,1998 have been prepared on a liquidation basis. For more information, see Notes 1 and 2 to the
financial statements for the year ended November 30, 1998.
</FN>
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</TABLE>
<PAGE>
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
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CONDITION AND RESULTS OF OPERATIONS
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Liquidity and Capital Resources
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Cash reserves as of November 30, 1998 are $227,373, a decrease of $100,537 from
the year ended November 30, 1997. The decrease in cash is due to lower occupancy
at Cobblestone Court and a decrease in the Registrant's real estate tax escrow
accounts as the real estate taxes were paid in November 1998 at the time of the
properties' refinancing. In the prior year, Cobblestone Court's real estate tax
escrow account had a balance of $105,227.
On January 21, 1999, a plan to sell the Registrant's Woodhollow Apartments
property and the Cobblestone Court Shopping Center property was approved by a
majority of the limited partners by proxy. The Registrant has entered into sales
contracts on both properties with American Spectrum Realty, Inc., an affiliate
of Nooney Capital Corp., which serves as a general partner of the Registrant.
The sales contracts provide that the purchase price will be at appraised value
and are subject to a 60-day due diligence period. Consummation of the sale will
result in the dissolution of the Registrant and require the General Partners to
liquidate the Registrant and distribute the proceeds therefrom to the Limited
Partners. There is no assurance that the sale will be consummated since the
closing is conditioned upon contingencies beyond the control of the Registrant.
The Cobblestone sales contract provides for a net sale price of $3,100,000.
Accordingly, a loss has been recognized of $753,428 to record the property at
its fair value less costs to sell as an adjustment in liquidation.
The Woodhollow sales contract provides for a sale price of $14,600,000. Because
the transaction is not closed at this time, the amount of the gain that may
ultimately be realized of $7,200,029, net of sales costs, is included as a
deferred gain as an adjustment in liquidation at November 30, 1998.
If the sale of the properties is consummated, management believes there will be
enough cash to discharge all liabilities and distribute the excess proceeds to
the limited partners. The Registrant will continue to manage the properties to
achieve its original investment objectives until the time of sale and
liquidation.
On November 30, 1998, the Registrant refinanced the debt on both of its
properties. A new note with a balance of $13,500,465 secured by both Cobblestone
Court and Woodhollow Apartments was obtained. The note is at an interest rate of
LIBOR + 2.75% and calls for monthly principal payments of $15,818. The loan
matures November 30, 2001.
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<PAGE>
Results of Operations
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The results of operations for the Registrant's properties for the years ended
November 30, 1998, 1997 and 1996 are detailed in the schedule below. The
information contained in the schedule are the results of operations for each
property prior to the proposed adjustment to liquidation basis. For further
discussion of the liquidation, see Item 7, "Liquidity and Capital Resources".
Expenses of the Registrant are excluded.
Woodhollow Cobblestone
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1998
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Revenues $ 2,373,612 $ 911,125
Expenses 2,565,806 1,126,982
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Net (Loss) from Operations $ (192,194) $ (215,857)
==============================
1997
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Revenues $ 2,375,142 $ 1,036,061
Expenses 2,446,486 1,156,046
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Net (Loss) from Operations $ (70,344) $ (119,985)
==============================
1996
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Revenues $ 2,368,763 $ 1,125,543
Expenses 2,397,699 1,043,807
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Net Income (Loss) from Operations $ (28,936) $ 81,736
==============================
1998 Property Comparisons
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Cobblestone revenues declined $124,936 from 1997 to 1998 due to a decrease in
base rental revenue ($107,043), real estate tax reimbursement ($40,168),
miscellaneous non-rental income ($16,896), and common area maintenance income
($31,650), partially offset by an increase in miscellaneous rental income
($22,064), and a decrease in bad debt expense of ($36,716). The revenues
decreased due to the decrease in occupancy when comparing 1998 to 1997. Expenses
decreased $29,064 when comparing 1998 to 1997. The main reason for the decrease
in expenses was a decrease in operating expenses of the property ($43,586),
partially offset by an increase in interest expense ($16,532).
At Woodhollow Apartments, revenues were steady when comparing 1998 to 1997.
Expenses increased $119,320 when comparing 1998 to 1997 due to an increase in
depreciation ($31,809), amortization ($36,526), payroll of maintenance personnel
($42,109), professional services-other ($22,792), partially offset by decreases
in swimming pool expense ($9,794), and interest expense ($2,518).
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<PAGE>
The occupancy levels at the Registrant's properties as of November 30 were:
Occupancy rates at November 30
1998 1997 1996
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Woodhollow 92% 92% 95%
Cobblestone 59% 69% 84%
At Woodhollow, occupancy remained steady during the fourth quarter of 1998 at
92%. The Registrant believes that the overall occupancy of the apartments will
rebound once spring arrives and the demand for rental apartments improves.
Occupancy at Cobblestone decreased from 69% at the beginning of the year to 59%
at the end of the year. During the year, one tenant renewed its space for 4,304
square feet and seven tenants vacated who occupied 10,373 square feet. No new
tenants were signed during the year. The main focus has been on finding a new
anchor tenant for the East end of the Mall which was not accomplished during
1998. The center has one major tenant who occupies approximately 26% of the
available space under a lease which expires in January 2001. A second major
tenant occupies approximately 9% of the available space under a lease which
expires April 2000.
Year 2000 issues
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Information Technology Systems
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The Registrant utilizes computer software for its corporate and real property
accounting records and to prepare its financial statements, as well as for
internal accounting purposes. The vendor of the Registrant's software has
informed the Registrant that it is Year 2000 compliant. The Registrant believes
after reasonable investigation that its information technology hardware is Year
2000 compliant. However, in the event that such systems should fail, as a
contingency plan, the Registrant could prepare all required accounting entries
manually, without incurring material additional operating expenses.
Non-Information Technology Systems
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At the request of the Registrant, its property managers have completed their
review of the major date- sensitive non-information technology systems such as
the elevators, heating, ventilating, air conditioning and cooling ("HVAC")
systems, locks, and other like systems in the Registrant's properties and have
determined that such systems are materially Year 2000 compliant. In some of the
Registrant's properties, its property managers have utilized the services of
third-party consultants in making this determination, while in other properties,
the property managers have internally made such determinations. The Registrant
does not separately track the internal costs incurred for its Year 2000 project.
The Registrant does not believe that the Year 2000 issue will pose significant
problems to the Registrant's information technology and non-information
technology systems, or that resolution of any potential problems with respect to
such systems will have a material effect on the Registrant's financial condition
or results of operations.
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<PAGE>
Material Third Parties' Systems Failures
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The most reasonably likely worst case scenario facing the Registrant as a result
of the Year 2000 problem would be the inability of its tenants to pay rent as a
result of a breakdown in such tenants' (or their financial service providers')
computer systems or the refusal of such tenants to pay their rent as a result of
the Registrant's inability to provide services due to non-Information technology
systems failure. Failure in a tenant's computer systems may cause delays in such
tenant's ability to process its accounting records and to make timely rent
payments. However, any such delays in rent payments, whether caused by systems
failure of tenant, property manager or a combination of the two, should not have
a materially adverse effect on the Registrant's business or results of
operations.
Risks
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While delays caused by failure of the tenants' or the property managers'
accounting or supply systems would likely not adversely affect the Registrant's
business or results of operations, non-information technology systems failure in
the Registrant's properties could lead to tenants attempting to withhold their
rent payments, which could materially adversely effect the Registrant's
business, results of operations and financial condition as a result of increased
legal costs. The Registrant believes that such material effect is primarily
limited to items of a utility nature furnished by third parties to the
Registrant and a wide universe of other customers. Included are items such as
electricity, natural gas, telephone service and water, all of which are not
readily susceptible to alternate sources and which in all likelihood should be
available in some form. The Registrant has been unable to obtain assurances from
such utility companies as to their Year 2000 compliance, and does not expect
that such assurances will be forthcoming.
Such non-information technology systems failure could force tenants to use the
stairs in such properties, rather than the elevators. However, none of the
properties owned by the Registrant is a high-rise building where such an
elevator failure could cause a material adverse effect to the operations of its
tenants, although such failure could make it impossible for any disabled tenants
or any disabled customers to access such properties. Moreover, as previously
discussed, the Registrant may suffer adverse effects in its results of
operations and financial condition as a result of utility or HVAC failures, for
example. Such events could lead the tenants of the Registrant to withhold rent,
in the event that the Registrant's properties are not usable for their intended
purposes. The Registrant does not believe that rent abatement would be a lawful
tenant remedy for short-term obligations unless such failures extend for a
period of 30 consecutive days. The Registrant intends to pursue its remedies for
any such breach of its rent obligations by a Tenant expeditiously and to the
full extend permitted by law.
1998 Comparisons
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For the year ended November 30, 1998, the Registrant's consolidated revenues are
$3,291,338 compared to $3,412,192 for the year ended November 30, 1997. The
decrease in revenues of $120,854 can be attributed to the decrease in revenue
from Cobblestone Court due to the decrease in occupancy previously discussed.
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<PAGE>
The Registrant's consolidated expenses were $3,693,037 for the year ended
November 30, 1998 as compared to $3,605,940 for the year ended November 30,
1997. The increase in expenses was 2.4% or $87,097. The increase is mainly
attributable to an increase in depreciation and amortization ($66,310), payroll
($47,389), partially offset by decreases in other operating expenses ($14,715),
and real estate taxes ($14,554).
The net loss from operations for the year ended 1998 was $401,699 or $29.18 per
limited partnership unit as compared to a net loss from operations of $193,748
or $14.07 per limited partnership unit for the year ended 1997. Cash flow used
in operating activities was $204,952 for the year ended 1998 as compared to cash
flow provided by operating activities of $672,300 for the year ended 1997. The
main reasons for the significant decrease is an adjustment for accruals to the
liquidation basis net of the write down of investment property (see potential
liquidation of the Registrant in Item 7 "Liquidity and Capital Resources" and
Note 2 to Notes to Financial Statements), and a decrease in accounts payable and
accrued expenses of ($378,280).
1997 Comparisons
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For the year ended November 30, 1997, the Registrant's consolidated revenues are
$3,412,192 compared to $3,512,832 for the year ended November 30, 1996. This
decrease in revenues is $100,640 or 3% and can be attributable to the decrease
in revenues at Cobblestone due to the decrease in occupancy.
The Registrant's consolidated expenses for the year ended November 30, 1997 and
1996 were $3,605,940 and $3,531,565 respectively. The increase in expenses is
$74,375 or 2% which can be mainly attributable to an increase in other operating
expenses ($82,274), partially offset by a decrease in depreciation and
amortization ($16,464).
The decrease in consolidated revenues combined with the increase in consolidated
expenses produced the Registrant's net loss of $193,748 for the year ended
November 30, 1997 versus net loss of $18,733 for the year ended November 30,
1996. The net loss per limited partnership unit dropped to $14.07 in 1997
compared to a loss of $1.36 in 1996. Cash flow provided by operating activities
was $672,300 in 1997 compared to $443,959 in 1996. The increase is mainly
attributable to the non-payment of real estate taxes on Cobblestone in 1997.
Operating cash flow along with the capital reserve escrow for Woodhollow and
additional borrowings of $376,216 enabled the Registrant to fund capital
expenditures of $898,139.
Inflation
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The effects of inflation did not have a material impact upon the Registrant's
operation in fiscal l998 and are not expected to materially affect the
Registrant's operation in l999.
Interest Rates
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Interest rates on floating rate debt went down in 1997 and fluctuated in 1998,
but increased slightly overall. Future increases in LIBOR can adversely affect
the operations of the Registrant.
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<PAGE>
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
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RISK
----
The Registrant considered the provision of Financial Reporting Release No. 48
"Disclosure of Accounting Policies for Derivative Financial Instruments and
Derivative Commodity Instruments, and Disclosure of Quantitative and Qualitative
Information about Market Risk Inherent in Derivative Financial Instruments,
Other Financial Instruments and Derivative Commodity Instruments". The
Registrant had no holdings of derivative financial or commodity instruments at
November 30, 1998. A review of the Company's other financial instruments and
risk exposures at that date revealed that the Registrant had exposure to
interest rate risk. The Registrant utilized sensitivity analyses to assess the
potential effect of this risk and concluded that near-term increases in the
interest rate will negatively affect the Registrant as all of the debt on its
properties is on a floating rate. However, the current plans are to liquidate
the Registrant which would mitigate any interest rate risk of the debt.
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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Financial Statements of the Registrant are filed herewith as Exhibit 99.3 and
are incorporated herein by reference (see Item 14(a)(1)). The supplementary
financial information specified by Item 302 of Regulation S-K is provided in
Item 7.
ITEM 9: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
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ACCOUNTING AND FINANCIAL DISCLOSURE
-----------------------------------
None
PART III
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ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
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The Registrant has two General Partners. The background and experience of the
General Partners are as follows:
The General Partner of the Registrant responsible for all aspects of the
Registrant's operations is Nooney Capital Corp., a Missouri corporation. Nooney
Capital Corp. was formed in February 1982 for the purpose of being a general
and/or limited partner in the Registrant and other limited partnerships.
John J. Nooney is a Special General Partner of the Partnership and as such, does
not exercise control of the affairs of the Partnership. John J. Nooney joined
Nooney Company in 1958 and was President and Treasurer until he resigned in
1992.
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<PAGE>
The General Partners will continue to serve as General Partners until their
withdrawal or their removal from office by the Limited Partners.
Certain of the General Partners act as general partners of limited partnerships
and hold directorships of companies with a class of securities registered
pursuant to Section 12(g) of the Securities Exchange Act of 1934 or subject to
the requirements of Section 15(d) of the Act. A list of such directorships, and
the limited partnerships for which the General Partners serve as general
partners, is filed herewith as Exhibit 99.1 and incorporated herein by
reference.
On October 31, 1997, Nooney Company sold its wholly-owned subsidiary, Nooney
Capital Corp., the corporate general partner of the Partnership to S-P
Properties, Inc., a California corporation, which in turn is a wholly-owned
subsidiary of CGS Real Estate Company, Inc., a Texas corporation.
Simultaneously, Gregory J. Nooney, Jr., an individual general partner and PAN,
Inc., a corporate general partner, sold their economic interests to S-P
Properties, Inc. and resigned as general partners.
ITEM 11: EXECUTIVE COMPENSATION
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The General Partners are entitled to a share of distributions and a share of
profits and losses as more fully described under the headings "Compensation to
General Partners and Affiliates" on pages 9-11 and "Profits and Losses for Tax
Purposes; Distributions; and Expenses of General Partners" on pages A-16 to A-19
of the Prospectus of the Registrant dated April 8, 1982, as supplemented and
filed pursuant to Rule 424(c) of the Securities Act of 1933 (the "Prospectus"),
which are incorporated herein by reference.
During fiscal l998 there were no cash distributions paid to the General Partners
by the Registrant.
See Item 13 below for a discussion of transactions between the Registrant and
certain affiliates of the General Partners.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
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MANAGEMENT
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(a) Security Ownership of Certain Beneficial Owners.
No person is known to the Registrant to be the beneficial owner of more than 5%
of the outstanding Interests of the Registrant.
(b) Security Ownership of Management.
None of the General Partners is known to the Registrant to be the beneficial
owner, either directly or indirectly, of any Interests in the Registrant.
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(c) Changes in Control.
There are no arrangements known to the Registrant, the operation of which may at
a subsequent date result in a change in control of the Registrant.
ITEM 13: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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(a) Transactions with Management and Others.
Certain affiliates of the General Partners are entitled to certain fees and
other payments from the Registrant in connection with certain transactions of
the Registrant as more fully described under the headings "Compensation to
General Partners and Affiliates" on pages 9-11 and "Management" on pages 26-28
of the Prospectus, which are incorporated herein by reference.
Nooney, Inc., the manager of the Registrant's properties, is a wholly-owned
subsidiary of CGS Real Estate Company, an affiliate of the General Partner.
Nooney, Inc. is entiled to receive monthly compansation from the Registrant for
property management and leasing services, plus administrative expenses. During
fiscal 1998 the Registrant paid property management fees of $176,292 to Nooney,
Inc., and $40,000 as reimbursement for indirect expenses incurred in connection
with management of the Registrant.
See Item 11 above for a discussion of cash distributions paid to the General
Partners during fiscal l998.
(b) Certain Business Relationships.
The relationship of certain of the General Partners to certain of their
affiliates is set forth in Item 13(a) above. Also see Item 13(a) above for a
discussion of amounts paid by the Registrant to the General Partners or their
affiliates during fiscal 1998.
(c) Indebtedness of Management.
Not Applicable.
(d) Transactions with promoters.
Not Applicable.
-14-
<PAGE>
PART IV
-------
ITEM 14: EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
- ----------------------------------------------------------
AND REPORTS ON FORM 8-K
-----------------------
(a) The following documents are filed as a part of this report:
(1) Financial Statements (filed herewith as Exhibit 99.3):
Independent auditors' report
Statement of net liabilities in liquidation as of November 30,
1998 and balance sheet as of November 30, 1997
Statement of loss in liquidation for the year ended November
30, 1998 and statements of operations for the years ended
November 30, 1997 and 1996
Statement of changes in net liabilities in liquidation for the
year ended November 30, 1998 and Statements of partners'
equity (deficiency in assets) for the years ended November 30,
1997 and 1996
Statement of cash flows in liquidation for the year ended
November 30, 1998 and statements of cash flows for the years
ended November 30, 1997 and 1996
Notes to financial statements
(2) Financial Statement Schedules (filed herewith as Exhibit 99.3):
Schedule - Reconciliation of partners' equity (deficiency in
assets)
Schedule III - Real estate and accumulated depreciation
All other schedules are omitted because they are inapplicable
or not required under the instructions.
(3) Exhibits:
See Exhibit Index on Page 17.
(b) Reports on Form 8-K
On February 10, 1999, the Registrant filed a report on Form 8-K which
reported an Item 5. Other Events.
(c) Exhibits:
See Exhibit Index on Page 17.
(d) Not Applicable
-15-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) under the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
Nooney Capital Corp.
General Partner
Date: February 26, 1999 By: /s/ William J. Carden
----------------------------- -------------------------
William J. Carden
Chairman of the Board
By: /s/ Patricia A. Nooney
--------------------------
Patricia A. Nooney
President and Secretary
-16-
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit Page
Number Description Number
- ------- ----------- ------
<S> <C> <C>
2.1 Contract for the sale of Woodhollow Apartments (without Exhibits). 18-32
2.2 Contract for the sale of Cobblestone Court Shopping Center
(without Exhibits). 33-47
3.1 Amended and Restated Agreement and Certificate of Limited N/A
Partnership dated April 7, 1982, is incorporated by
reference to the Prospectus contained in the Registration
Statement on Form S-11 under the Securities Act of 1933
(File No. 2-76046).
10 Management Contract between Nooney Real Property Investors- N/A
Four, L.P. and Nooney Company is incorporated by reference to
Exhibit 10 to the Registration Statement on Form S-11 under the
Securities Act of 1933 (File No. 2-76046). The Management Contract
was assigned by Nooney Krombach Company, a wholly-owned subsidiary
of Nooney Company, on October 31, 1997, to Nooney, Inc. a
wholly-owned subsidiary of CGS Real Estate Company, Inc., and is
identical in all material respects to the management contract
referred to above.
99.1 List of Directorships filed in response to Item 10. 48
99.2 Pages 9-11, 26-28 and A-16 - A-19 to the Prospectus N/A
of the Registrant dated April 8, 1982, as supplemented
and filed pursuant to Rule 424(c) of the Securities Act of 1933
are incorporated by reference.
99.3 Financial Statements and Schedules. 49-62
</TABLE>
-17-
Exhibit 2.1
SALE CONTRACT
THIS SALE CONTRACT is made and entered into as of this 13th
day of November, 1998, by and between AMERICAN SPECTRUM REALTY INC., a Maryland
Corporation, as Purchaser and NOONEY REAL PROPERTY INVESTORS-FOUR, L.P., a
Missouri limited partnership, as Seller,
WITNESSETH:
WHEREAS, Seller is the owner of an apartment complex known as
Woodhollow Apartments, consisting of 402 units located on Dorsett Road, in St.
Louis County, Missouri, which is described on Exhibit A, attached hereto and
incorporated herein by reference (the "Property"),
WHEREAS, Seller has agreed to sell to Purchaser and Purchaser
has agreed to purchase from Seller the Property on the terms and conditions set
forth herein,
NOW THEREFORE, for and in consideration of the foregoing and
of the mutual covenants hereof, the parties hereto stipulate, covenant, and
agree as follows:
1. Seller agrees to sell to Purchaser and Purchaser hereby
agrees to purchase from Seller the fee simple title to the Property for Fourteen
Million Six Hundred Thousand Dollars ($14,600,000.00) paid on the Closing Date
plus the amount of capital paid by Seller for certain capital expenditures
listed in the appraisal by C. B. Richard Ellis dated May 19, 1998 from the date
of the appraisal to Closing Date and not to exceed Eight Hundred Eighty Thousand
Dollars ($880,000.00) (this amount is referred to herein as the "Purchase
Price"). The Purchaser shall take title to the Property subject to first lien
financing in favor of NationsBank, N.A. in the face amount of Fourteen Million
Dollars ($14,000,000.00), which encumbers the Property and other property known
as Cobblestone Court Shopping Center, in Burnsville, Minnesota ("Cobblestone
-18-
<PAGE>
Court"), which Purchaser is contracting to purchase pursuant to another Sale
Contract of even date herewith (the "NationsBank Loan"). The Purchaser shall
receive a credit at Closing for the unpaid principal balance of the Nine Million
Three Hundred Ninety-three Thousand Dollars ($9,393,000.00) of the NationsBank
Loan attributable to the Property.
2. Closing ("Closing") shall be at the offices of Commonwealth
Land Title Insurance Company, 7980 Clayton Road, St. Louis, MO 63117
("Commonwealth Title"). Possession of the Property shall be delivered to Seller
at Closing subject to the rights of tenants described on the rent roll attached
hereto as Exhibit B, and incorporated herein by reference. The "Closing Date"
shall be a date designated by Purchaser in written notice to Seller waiving the
final contingencies set forth in paragraph 6 hereof, which date must be no
earlier than ten (10) days from date of said notice and no later than thirty
(30) days from the date of said notice, provided that Purchaser shall have the
right, at Purchaser's option, to extend the Closing Date for two additional
periods of thirty (30) days each upon giving to Seller written notice of each
such extension, at least five (5) days prior to the previously scheduled Closing
Date, each of which notices in order to be valid and effective, must be
accompanied by an additional nonrefundable Earnest Money deposit to Commonwealth
Title in the amount of One Hundred Thousand Dollars ($100,000.00).
3. On the Closing Date Seller will deliver to Purchaser a
Special Warranty Deed for the Property, together with a Bill of Sale, an
Assignment of Leases, an Assignment of Contracts, an Assignment of Trade Name,
and a Non-Foreign Affidavit, the form of all of said documents being attached
hereto as Exhibits C, C-1, D, E, F and G and incorporated herein by reference.
Purchaser shall simultaneously deliver to Seller a Federal Reserve Wire Transfer
in the amount of the Purchase Price subject to adjustments as provided herein.
-19-
<PAGE>
At closing, Seller shall pay in full all deeds of trust encumbering the Property
and shall deliver to Purchaser an updated rent roll updating the rent roll
attached hereto as Exhibit B.
4. The parties shall make Closing Adjustments in accordance
with the Closing Practices of the Real Estate Board of Metropolitan St. Louis.
Any delinquent rents, common area payments or real estate tax or insurance
payments will not be prorated at Closing, but if collected by Purchaser will be
paid to Seller when received by Purchaser. All amounts collected by Purchaser
from tenants shall first be applied to all amounts due and payable with respect
to the period from and after Closing. Any excess shall be promptly paid to
Seller to the extent of any delinquent amounts due Seller from tenants. Seller
shall have the right to bring action against the tenants in question for any
such delinquencies provided Seller shall have no right to commence any eviction
action against any tenant without Purchaser's prior written consent. All
security deposits paid by tenants under leases affecting the Property shall be
paid by Seller to Purchaser at Closing. At Closing and only on condition that
Closing is actually consummated, Seller shall reimburse Purchaser for the costs
of an Owner's Policy of Title Insurance, a Mortgagee's Policy of Title
Insurance, an ALTA Survey of the Property, title company closing and escrow
fees, environmental and engineering studies, tests, and reports with respect to
the Property, other reasonable expense of Purchaser's due diligence exclusive of
legal expense and cost of Purchaser's employees and officers, said reimbursement
not to exceed the sum of Fifty Thousand Dollars ($50,000.00) in the aggregate.
In the event that, for any reason, Closing is not actually consummated, Seller
shall have no obligation to reimburse Purchaser for any of the foregoing
expenses. Each party shall pay the fees and other charges of its own legal
counsel.
5. Upon fulfillment or waiver of the contingencies specified
in paragraph 6 of this Sale Contract, Purchaser shall deposit with Commonwealth
Title nonrefundable Earnest Money in the amount of Two Hundred Fifty Thousand
-20-
<PAGE>
Dollars ($250,000.00) in an interest bearing account with interest to be paid to
Purchaser prior to Closing. The aforesaid deposit and all additional deposits of
Earnest Money are herein in the aggregate called the "Earnest Money," as shall
be held in escrow by Commonwealth Title and paid by Commonwealth Title to the
party entitled thereto hereunder. If sale be closed, the Earnest Money shall be
applied to the Purchase Price. If sale be not closed due and owing to the fault
of Purchaser, the Earnest Money shall be paid over to Seller as liquidated
damages because the parties have stipulated and agreed that actual damages would
be very difficult to ascertain. If Seller fails or refuses to close hereunder,
Purchaser shall be entitled to have all nonrefundable Earnest Money returned to
Purchaser, and Purchaser shall be entitled to terminate this Sale Contract or to
specific performance of this Sale Contract but not to any damages. In all other
events wherein Purchaser is obligated to close hereunder, all Earnest Money is
not to be refunded to Purchaser, but is to be paid to Seller and retained by
Seller as Seller's own property. Seller shall not be entitled to specific
performance or to any remedy at law or in equity for breach of this Sale
Contract other than the aforesaid liquidated damages.
6. The obligation of Purchaser to close under this Sale
Contract is expressly contingent upon compliance with each of the following
conditions and occurrence of each of the following events on or before the
respective Contingency Date shown hereinafter for each contingency. In the event
that on or before the Contingency Dates shown hereinafter, there has not been
compliance with any of the following conditions or any of the following events
have not occurred, then Purchaser may, at its option, terminate this Sale
Contract or waive the unfulfilled contingencies. On or before each Contingency
Date, Purchaser shall notify Seller in writing (i) that the contingencies in
question have been fulfilled or waived, or (ii) that this Sale Contract is
-21-
<PAGE>
terminated by reason of unfulfilled contingencies. Failure to give notice within
the times set forth herein shall be deemed an election to terminate this Sale
Contract because of unfulfilled contingencies, and failure to make the Earnest
Money deposit upon waiver of contingencies shall render this Sale Contract null
and void and of no further force and effect. In the event Purchaser exercises
said option to terminate this Sale Contract, this Sale Contract shall be of no
further force and effect, and neither party shall have any further rights,
obligations, or liability hereunder.
a. Purchaser, at Purchaser's expense, shall have
obtained from Commonwealth Title a Commitment for an ALTA Form B
Owner's policy of Title Insurance on the Property with exception only
for such items as are satisfactory to Purchaser in Purchaser's sole
judgment. Seller shall furnish such reasonable affidavits and evidence
of payment of bills for labor and materials as may be necessary for
Purchaser to obtain an ALTA form Owner's Policy of Title Insurance in
accordance with said Commitment and with the standard exceptions for
mechanics' liens and parties in possession (other than the tenants
shown on the rent roll attached hereto as Exhibit B) deleted.
(Contingency Date: 60 days after the date on which Purchaser receives
written notice from Seller of the fulfillment of the approval condition
specified in paragraph 11 hereof, the "Partner Approval Date").
b. Purchaser shall have received, at Purchaser's
expense, a survey and physical inspection report for the Property which
are satisfactory to Purchaser, in Purchaser's sole judgment and
discretion. Seller agrees to provide access to the Property as
reasonably required by Purchaser to complete said survey and physical
inspection report. Seller shall deliver to Purchaser within five (5)
-22-
<PAGE>
days after the Acceptance Date copies of any and all surveys which
Seller may have of the Property. (Contingency Date: 60 days after the
Partner Approval Date).
c. Purchaser having obtained, at Purchaser's expense,
written environmental reports, satisfactory to Purchaser in Purchaser's
sole judgment, confirming that the Property and adjacent properties are
free of all hazardous materials which might cause the Property to be in
violation of any applicable environmental laws or governmental
regulations. Seller agrees to provide access to the Property as
reasonably required by Purchaser to complete said environmental report,
said access to be provided in accordance with paragraph 15 hereof.
Seller shall deliver to Purchaser within five (5) days after the
Acceptance Date copies of any and all environmental reports relating to
the Property which Seller may have or which may be reasonably available
to Seller. (Contingency Date: 60 days after the Partner Approval Date).
d. Purchaser's review and approval of all existing
leases and financial information provided by Seller. Seller has
delivered to Purchaser copies of Seller's internally generated
statements of income and expenses of the Property for fiscal years
1996, 1997 and 1998 to date. (Contingency Date: 60 days from the
Partner Approval Date).
e. Purchaser's review and approval of all
maintenance, service agreements, and other contracts affecting the
Property, copies of which Seller shall deliver to Purchaser within five
(5) days after the Acceptance Date. (Contingency Date: 60 days from the
Partner Approval Date).
f. Purchaser shall have received evidence
satisfactory to Purchaser in its sole discretion that the Property is
constructed and operated in accordance with all applicable zoning,
-23-
<PAGE>
building code and other similar laws and ordinances. (Contingency Date:
60 days from the Partner Approval Date).
g. Purchaser shall have approved, in Purchaser's sole
judgment and discretion, all terms and conditions of the NationsBank
Loan and all loan documents with respect to the NationsBank Loan and
Purchaser shall be satisfied, in Purchaser's sole judgment and
discretion, that Purchaser can take title to the Property subject to
the NationsBank Loan without assumption of any personal liability and
with all agreements between NationsBank and Purchaser being
satisfactory to Purchaser in Purchaser's sole judgment and discretion.
(Contingency Date: 60 days from the Partner Approval Date).
Purchaser hereby agrees to indemnify and hold harmless Seller, from all claims
for liens against the Property and damage to the Property arising from any
activity authorized by Purchaser and from all claims of third parties for
personal injury and property damage arising from any activity authorized by
Purchaser. The foregoing indemnification by Purchaser shall automatically
survive any termination of this Sale Contract, notwithstanding provisions herein
to the effect that neither party shall have any rights or obligations hereunder,
after any termination under certain specified circumstances.
The obligation of Purchaser to close under this Sale Contract is expressly
conditioned upon there having occurred no material adverse change between the
date of Purchaser's notice waiving the contingencies contained in paragraphs 6a
and 6c hereof and Closing Date in the condition of title to the Property or the
environmental condition of the Property and upon all of Seller's representations
and warranties set forth in paragraph 7 below remaining true and complete in all
respects as of Closing.
-24-
<PAGE>
7. In order to induce Purchaser to purchase the Property,
Seller makes to Purchaser the following representation and warranties, which
shall be considered made as of the date hereof and as of Closing Date, and which
shall not survive Closing and shall lapse and terminate and be of no further
force or effect as of the consummation of Closing.
a. Seller has no knowledge of any actions or
proceedings pending in any court or before any governmental agency by
any tenant or by any other person affecting the Property except those
covered by insurance which are specifically described on Exhibit H
attached hereto.
b. Seller has received no notice of any alleged
violation of any fire, zoning, building, health laws or regulations, or
of any other alleged violations which affect the Property.
c. Seller has no knowledge of any latent structural
defects in the improvements on the Property.
d. All commissions due brokers for existing leases
have been paid in full; there are no future commission obligations
existing on current leases or renewals or options. All amounts payable
with respect to tenant finish, rent abatement or any offsetting credit,
charge or adjustment of any sort relating to any lease or tenant have
been paid in full. All tenants have accepted possession of their leased
premises and have commenced paying rent in accordance with the terms of
their leases.
e. The rent roll attached hereto a Exhibit B is true
and complete as of the date shown thereon.
f. There are no tenancies or occupancies affecting
the Property or persons in possession of any part of the Property
except as shown on Exhibit B hereto.
-25-
<PAGE>
g. Seller has no knowledge of any pollutants or
contaminants on the Property which would make the Property in violation
of any environmental laws, ordinances, or governmental regulations, and
the Property is not, to the best of Seller's knowledge, in any manner
causing or contributing to any pollution or contamination in violation
of any such environmental laws, ordinances, or governmental
regulations.
h. No voluntary proceeding under any bankruptcy or
insolvency laws have been commenced by the Seller nor have there been
any involuntary proceedings against the Seller. No general assignment
for the benefit of creditors has been made by Seller and no trustee or
receiver of Seller's property has been appointed.
i. The leases which have been delivered to Purchaser
are true and complete copies of all leases affecting the Property and
of all amendments thereto.
j. The service contracts which have been delivered to
Purchaser are true and complete copies of all service contracts
affecting the Property and of all amendments thereto.
k. As of Closing Date, Seller shall have legal
authority to sell the Property to Purchaser.
In the event of a breach of any of the above
representations, warranties or covenants, which Purchaser discovers
prior to Closing, Purchaser shall have the right, as its exclusive
remedy, of canceling this Sale Contract by giving written notice
thereof to Seller, whereupon all Earnest Money deposited hereunder
shall be promptly returned to Purchaser and neither party shall have
any further rights or obligations hereunder. In the event of breach of
the above representations, warranties or covenants, which Purchaser
discovers after Closing, Seller shall have no responsibility
-26-
<PAGE>
whatsoever, it being stipulated and agreed that Purchaser is relying
upon Purchaser's own knowledge and due diligence, in the event Closing
is consummated, and that all of the foregoing representations,
warranties, and covenants are waived and extinguished as of the
consummation of Closing.
8. Purchaser represents that as of Closing Date Purchaser
shall have full power and authority to enter into this Sale Contract and to
effect the transaction contemplated herein.
9. Each party hereto hereby represents to the other that said
party has dealt with no real estate broker or other person in such a manner as
to give rise to a claim for real estate commission or finders' fees against the
other party. Each party hereto hereby agrees to indemnify and hold harmless the
other party against any claims for real estate commission and/or finders' fees
arising from the transaction contemplated hereby and the conduct of the
indemnifying party.
10. If the date specified for any action in this Sale Contract
shall fall on a weekend or state or national holiday, then the date specified
for such action shall be deemed to be extended to the next business day
following.
11. Seller hereby advises Purchaser that it is necessary for
Seller to obtain the consent of Seller's limited partners in order to sell the
Property to Purchaser as herein provided. Seller shall endeavor to obtain such
consent. If, for any reason, the consent of Seller's limited partners to this
Sale Contract and to Closing hereunder has not been obtained within ninety (90)
days after Purchaser has received a fully executed copy of the Sale Contract,
(the "Acceptance Date"), then either party may, at any time thereafter,
terminate this Sale Contract by giving written notice of termination to the
other party, in which event, neither party shall have any further rights or
-27-
<PAGE>
obligations under this Sale Contract. Seller shall promptly give Purchaser
written notice after Seller has obtained the written consent of its limited
partners as aforesaid, so that Purchaser may commence its due diligence pursuant
to paragraph 6 hereof.
12. Seller shall make available to Purchaser such financial
and other information concerning the Property as Purchaser may reasonably
require.
13. Notices to be given hereunder shall be in writing and
shall be deemed conclusively to have been given when sent by United States
certified or registered mail, postage prepaid, or by a recognized messenger
service, addressed as follows or to such other address as either party may
furnish to the other in writing:
Purchaser
AMERICAN SPECTRUM REALTY, INC.
2424 S.E. Bristol
Suite 200
Newport Beach, CA 92660
Attn: William J. Carden
Seller
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
c/o Nooney Capital Corp., General Partner
500 N. Broadway
Suite 1200
St. Louis, Missouri 63102
Attn: Gregory J. Nooney, Jr. Vice Chairman
14. At or prior to Closing Date, Seller shall deliver to
Purchaser original leases and whatever plans and specifications for the Property
are in Seller's possession. Copies of all such leases, plans and specifications
in Seller's possession shall be delivered to Seller within five (5) days after
the Acceptance Date.
-28-
<PAGE>
15. Purchaser may assign this Sale Contract at any time prior
to Closing, provided that Purchaser shall notify Seller in writing at least five
(5) days prior to Closing Date of the correct name and signature block of any
assignee of this Sale Contract. No assignment shall relieve Purchaser from any
of Purchaser's obligations hereunder.
16. If, for any reason, Closing hereunder is not consummated,
Purchaser shall promptly deliver to Seller copies of Purchaser's physical
inspection report, environmental report, survey and title commitment.
17. The Property is being sold and transferred in "as is"
condition, without any warranties or representations except for those expressly
set forth in paragraph 7 of this Sale Contract which automatically lapse and
terminate at Closing and in the documents to be executed by Seller and delivered
to Purchaser at Closing, being the Special Warranty Deed. Notwithstanding any
past, present, or future disclosures, if any, of Seller or of Seller's books and
records, Purchaser shall be conclusively deemed to have relied solely on the
independent investigations, examinations, and business judgment of Purchaser and
Purchaser's advisers and consultants, and not upon any representation or
warranties of Seller (except those in the Special Warranty Deed).
18. Seller shall not enter into any new leases affecting the
Property nor shall Seller modify or extend any existing leases affecting the
Property between the date hereof and Closing Date, without the prior written
consent of Purchaser, provided that Seller may, without consent of Purchaser,
extend existing leases for up to one (1) year beyond Closing (including renewal
terms, if any) and enter into new leases to extend no more than one (1) year
beyond Closing (including renewal terms, if any) in accordance with the rent
Schedule attached hereto as Exhibit I, and incorporated herein by reference.
Said new leases and modified leases shall be assigned to Purchaser and assumed
-29-
<PAGE>
by Purchaser pursuant to the Assignment of Leases attached hereto as Exhibit D.
Seller shall not enter into any new service contracts affecting the Property nor
shall Seller modify or extend any existing service contracts affecting the
Property between the date hereof and the Closing Date without the prior written
consent of Purchaser, provided that Seller may extend existing Service Contracts
and enter into new contracts if not more than one (1) year from Closing in a
commercially reasonable manner and said new and extended Service Contracts shall
be assigned to Purchaser and assumed by Purchaser pursuant to the Assignment for
Contracts attached hereto as Exhibit E.
19. In the event that all or any substantial portion of the
Property becomes subject to an appropriation proceeding or bona fide threat
thereof by an authority having power of eminent domain, Seller shall promptly
notify Purchaser thereof in writing. In such event, within five (5) business
days of receipt of Seller's notice, Purchaser shall (a) elect to terminate this
Sale Contract, in which event Purchaser shall be entitled to the return of all
non-refundable Earnest Money or (b) elect to proceed with the transaction, in
which event Purchaser shall be entitled to the proceeds of any award or payment
in lieu thereof resulting from such proceedings or threat thereof and Seller
shall execute and deliver to Purchaser at Closing an assignment of all of
Seller's interest in such proceeds, subject to the terms and provisions of the
leases described in Exhibit B hereto. Failure to give a notice shall be deemed
an election to proceed with the transaction.
20. In the event of any casualty damage to the Property prior
to Closing Date, which Seller does not repair prior to Closing Date, Purchaser
may, at Purchaser's option, terminate this Sale Contract, or proceed with
Closing. In the event of termination, all non-refundable Earnest Money shall be
returned to Purchaser and neither party shall have any further rights or
obligations hereunder. In the event of Closing, all insurance proceeds shall be
-30-
<PAGE>
assigned to Purchaser. In the event of any such casualty damage, Seller shall
have the right, at Seller's option but only with Purchaser's consent, to extend
the Closing Date for up to ninety (90) days in order to repair the casualty
damage.
21. Anything herein to the contrary notwithstanding, Seller's
obligation to close hereunder is contingent upon a simultaneous Closing
occurring under a certain Sale Contract of even date herewith between Purchaser
and Seller providing for the purchase and sale of the Cobblestone Court. If for
any reason other than Seller's breach of contract, said Closing does not occur
simultaneously with Closing hereunder, Seller may, at Seller's option, terminate
this Sale Contract by giving written notice of termination to Purchaser, in
which event, all Earnest Money shall be returned to Purchaser and neither party
shall have any further rights or obligations hereunder.
22. In the event that as of Closing Date, there is an action
pending to enjoin this transaction, then neither party shall be obligated to
close while such action is pending, and if Closing is delayed by reason of such
action for more than ten (10) days, then in such event either party may
terminate this Sale Contract by giving written notice of termination to the
other party, in which event all Earnest Money shall be returned to Purchaser,
and neither party shall have any further rights or obligations hereunder.
23. This Sale Contract may be executed in counterparts and
facsimile signatures shall constitute genuine signatures for purposes of this
Sale Contract.
-31-
<PAGE>
IN WITNESS WHEREOF, Purchaser and Seller have executed this
Sale Contract, or caused this Sale Contract to be executed by their officers
thereunto duly authorized, as of the day and year first above written.
AMERICAN SPECTRUM REALTY, INC.
(a Maryland corporation)
by /s/ Thomas N. Thurber
-------------------------
Thomas N. Thurber
President
Purchaser
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(a Missouri limited partnership)
by NOONEY CAPITAL CORP.
(a Missouri corporation)
General Partner
by /s/ Gregory J. Nooney, Jr.
--------------------------
Gregory J. Nooney, Jr.
Vice Chairman
Seller
-32-
Exhibit 2.2
SALE CONTRACT
THIS SALE CONTRACT is made and entered into as of this 13th
day of November, 1998, by and between AMERICAN SPECTRUM REALTY INC., a Maryland
Corporation, as Purchaser and NOONEY REAL PROPERTY INVESTORS-FOUR, L.P., a
Missouri limited partnership, as Seller,
WITNESSETH:
WHEREAS, Seller is the owner of an shopping center known as
Cobblestone Court Shopping Center, consisting of eleven (11) acres of land and
approximately 98,000 rentable square feet, located at 14150 Nicollet Avenue
South, in Burnsville, Minnesota, which is described on Exhibit A, attached
hereto and incorporated herein by reference (the "Property"),
WHEREAS, Seller has agreed to sell to Purchaser and Purchaser
has agreed to purchase from Seller the Property on the terms and conditions set
forth herein,
NOW THEREFORE, for and in consideration of the foregoing and
of the mutual covenants hereof, the parties hereto stipulate, covenant, and
agree as follows:
1. Seller agrees to sell to Purchaser and Purchaser hereby
agrees to purchase from Seller the fee simple title to the Property for Three
Million Four Hundred Thousand Dollars ($3,400,000.00) paid on the Closing Date
(this amount is referred to herein as the "Purchase Price"). The Purchaser shall
take title to the Property subject to first lien financing in favor of
NationsBank, N.A. in the face amount of Fourteen Million Dollars
($14,000,000.00), which encumbers the Property and other property known as
Woodhollow Apartments, in St. Louis County, Missouri ("Woodhollow Apartments"),
which Purchaser is contracting to purchase pursuant to another Sale Contract of
even date herewith (the "NationsBank Loan"). The Purchaser shall receive a
credit at Closing for the unpaid principal balance of the Four Million Six
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<PAGE>
Hundred Seven Thousand Dollars ($4,607,000.00) of the NationsBank Loan
attributable to the Property.
2. Closing ("Closing") shall be at the offices of Commonwealth
Land Title Insurance Company, 7980 Clayton Road, St. Louis, MO 63117
("Commonwealth Title"). Possession of the Property shall be delivered to Seller
at Closing subject to the rights of tenants described on the rent roll attached
hereto as Exhibit B, and incorporated herein by reference. The "Closing Date"
shall be a date designated by Purchaser in written notice to Seller waiving the
final contingencies set forth in paragraph 6 hereof, which date must be no
earlier than ten (10) days from date of said notice and no later than thirty
(30) days from the date of said notice, provided that Purchaser shall have the
right, at Purchaser's option, to extend the Closing Date for two additional
periods of thirty (30) days each upon giving to Seller written notice of each
such extension, at least five (5) days prior to the previously scheduled Closing
Date, each of which notices in order to be valid and effective, must be
accompanied by an additional nonrefundable Earnest Money deposit to Commonwealth
Title in the amount of Fifty Thousand Dollars ($50,000.00).
3. On the Closing Date Seller will deliver to Purchaser a
Special Warranty Deed for the Property, together with a Bill of Sale, an
Assignment of Leases, an Assignment of Contracts, an Assignment of Trade Name,
and a Non-Foreign Affidavit, the form of all of said documents being attached
hereto as Exhibits C, C-1, D, E, F and G and incorporated herein by reference.
Purchaser shall simultaneously deliver to Seller a Federal Reserve Wire Transfer
in the amount of the Purchase Price subject to adjustments as provided herein.
At closing, Seller shall pay in full all deeds of trust encumbering the Property
and shall deliver to Purchaser an updated rent roll updating the rent roll
attached hereto as Exhibit B.
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<PAGE>
4. The parties shall make Closing Adjustments in accordance
with the customary closing practices in Burnsville, Minnesota. Any delinquent
rents, common area payments or real estate tax or insurance payments will not be
prorated at Closing, but if collected by Purchaser will be paid to Seller when
received by Purchaser. All amounts collected by Purchaser from tenants shall
first be applied to all amounts due and payable with respect to the period from
and after Closing. Any excess shall be promptly paid to Seller to the extent of
any delinquent amounts due Seller from tenants. Seller shall have the right to
bring action against the tenants in question for any such delinquencies provided
Seller shall have no right to commence any eviction action against any tenant
without Purchaser's prior written consent. All security deposits paid by tenants
under leases affecting the Property shall be paid by Seller to Purchaser at
Closing. At Closing and only on condition that Closing is actually consummated,
Seller shall reimburse Purchaser for the costs of an Owner's Policy of Title
Insurance, a Mortgagee's Policy of Title Insurance, an ALTA Survey of the
Property, title company closing and escrow fees, environmental and engineering
studies, tests, and reports with respect to the Property, other reasonable
expense of Purchaser's due diligence exclusive of legal expense and cost of
Purchaser's employees and officers, said reimbursement not to exceed the sum of
Fifty Thousand Dollars ($50,000.00) in the aggregate. In the event that, for any
reason, Closing is not actually consummated, Seller shall have no obligation to
reimburse Purchaser for any of the foregoing expenses. Each party shall pay the
fees and other charges of its own legal counsel.
5. Upon fulfillment or waiver of the contingencies specified
in paragraph 6 of this Sale Contract, Purchaser shall deposit with Commonwealth
Title nonrefundable Earnest Money in the amount of One Hundred Fifty Thousand
Dollars ($150,000.00) in an interest bearing account with interest to be paid to
Purchaser prior to Closing. The aforesaid deposit and all additional deposits of
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<PAGE>
Earnest Money are herein in the aggregate called the "Earnest Money," as shall
be held in escrow by Commonwealth Title and paid by Commonwealth Title to the
party entitled thereto hereunder. If sale be closed, the Earnest Money shall be
applied to the Purchase Price. If sale be not closed due and owing to the fault
of Purchaser, the Earnest Money shall be paid over to Seller as liquidated
damages because the parties have stipulated and agreed that actual damages would
be very difficult to ascertain. If Seller fails or refuses to close hereunder,
Purchaser shall be entitled to have all nonrefundable Earnest Money returned to
Purchaser, and Purchaser shall be entitled to terminate this Sale Contract or to
specific performance of this Sale Contract but not to any damages. In all other
events wherein Purchaser is obligated to close hereunder, all Earnest Money is
not to be refunded to Purchaser, but is to be paid to Seller and retained by
Seller as Seller's own property. Seller shall not be entitled to specific
performance or to any remedy at law or in equity for breach of this Sale
Contract other than the aforesaid liquidated damages.
6. The obligation of Purchaser to close under this Sale
Contract is expressly contingent upon compliance with each of the following
conditions and occurrence of each of the following events on or before the
respective Contingency Date shown hereinafter for each contingency. In the event
that on or before the Contingency Dates shown hereinafter, there has not been
compliance with any of the following conditions or any of the following events
have not occurred, then Purchaser may, at its option, terminate this Sale
Contract or waive the unfulfilled contingencies. On or before each Contingency
Date, Purchaser shall notify Seller in writing (i) that the contingencies in
question have been fulfilled or waived, or (ii) that this Sale Contract is
terminated by reason of unfulfilled contingencies. Failure to give notice within
the times set forth herein shall be deemed an election to terminate this Sale
Contract because of unfulfilled contingencies, and failure to make the Earnest
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<PAGE>
Money deposit upon waiver of contingencies shall render this Sale Contract null
and void and of no further force and effect. In the event Purchaser exercises
said option to terminate this Sale Contract, this Sale Contract shall be of no
further force and effect, and neither party shall have any further rights,
obligations, or liability hereunder.
a. Purchaser, at Purchaser's expense, shall have
obtained from Commonwealth Title a Commitment for an ALTA Form B
Owner's policy of Title Insurance on the Property with exception only
for such items as are satisfactory to Purchaser in Purchaser's sole
judgment. Seller shall furnish such reasonable affidavits and evidence
of payment of bills for labor and materials as may be necessary for
Purchaser to obtain an ALTA form Owner's Policy of Title Insurance in
accordance with said Commitment and with the standard exceptions for
mechanics' liens and parties in possession (other than the tenants
shown on the rent roll attached hereto as Exhibit B) deleted.
(Contingency Date: 60 days after the date on which Purchaser receives
written notice from Seller of the fulfillment of the approval condition
specified in paragraph 11 hereof, the "Partner Approval Date").
b. Purchaser shall have received, at Purchaser's
expense, a survey and physical inspection report for the Property which
are satisfactory to Purchaser, in Purchaser's sole judgment and
discretion. Seller agrees to provide access to the Property as
reasonably required by Purchaser to complete said survey and physical
inspection report. Seller shall deliver to Purchaser within five (5)
days after the Acceptance Date copies of any and all surveys which
Seller may have of the Property. (Contingency Date: 60 days after the
Partner Approval Date).
-37-
<PAGE>
c. Purchaser having obtained, at Purchaser's expense,
written environmental reports, satisfactory to Purchaser in Purchaser's
sole judgment, confirming that the Property and adjacent properties are
free of all hazardous materials which might cause the Property to be in
violation of any applicable environmental laws or governmental
regulations. Seller agrees to provide access to the Property as
reasonably required by Purchaser to complete said environmental report,
said access to be provided in accordance with paragraph 15 hereof.
Seller shall deliver to Purchaser within five (5) days after the
Acceptance Date copies of any and all environmental reports relating to
the Property which Seller may have or which may be reasonably available
to Seller. (Contingency Date: 60 days after the Partner Approval Date).
d. Purchaser's review and approval of all existing
leases and financial information provided by Seller. Seller has
delivered to Purchaser copies of Seller's internally generated
statements of income and expenses of the Property for fiscal years
1996, 1997 and 1998 to date. (Contingency Date: 60 days from the
Partner Approval Date).
e. Purchaser's review and approval of all
maintenance, service agreements, and other contracts affecting the
Property, copies of which Seller shall deliver to Purchaser within five
(5) days after the Acceptance Date. (Contingency Date: 60 days from the
Partner Approval Date).
f. Purchaser shall have received evidence
satisfactory to Purchaser in its sole discretion that the Property is
constructed and operated in accordance with all applicable zoning,
building code and other similar laws and ordinances. (Contingency Date:
60 days from the Partner Approval Date).
-38-
<PAGE>
g. Purchaser shall have approved, in Purchaser's sole
judgment and discretion, all terms and conditions of the NationsBank
Loan and all loan documents with respect to the NationsBank Loan and
Purchaser shall be satisfied, in Purchaser's sole judgment and
discretion, that Purchaser can take title to the Property subject to
the NationsBank Loan without assumption of any personal liability and
with all agreements between NationsBank and Purchaser being
satisfactory to Purchaser in Purchaser's sole judgment and discretion.
(Contingency Date: 60 days from the Partner Approval Date).
Purchaser hereby agrees to indemnify and hold harmless Seller, from all claims
for liens against the Property and damage to the Property arising from any
activity authorized by Purchaser and from all claims of third parties for
personal injury and property damage arising from any activity authorized by
Purchaser. The foregoing indemnification by Purchaser shall automatically
survive any termination of this Sale Contract, notwithstanding provisions herein
to the effect that neither party shall have any rights or obligations hereunder,
after any termination under certain specified circumstances.
The obligation of Purchaser to close under this Sale Contract is expressly
conditioned upon there having occurred no material adverse change between the
date of Purchaser's notice waiving the contingencies contained in paragraphs 6a
and 6c hereof and Closing Date in the condition of title to the Property or the
environmental condition of the Property and upon all of Seller's representations
and warranties set forth in paragraph 7 below remaining true and complete in all
respects as of Closing.
7. In order to induce Purchaser to purchase the Property,
Seller makes to Purchaser the following representation and warranties, which
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<PAGE>
shall be considered made as of the date hereof and as of Closing Date, and which
shall not survive Closing and shall lapse and terminate and be of no further
force or effect as of the consummation of Closing.
a. Seller has no knowledge of any actions or
proceedings pending in any court or before any governmental agency by
any tenant or by any other person affecting the Property except those
covered by insurance which are specifically described on Exhibit H
attached hereto.
b. Seller has received no notice of any alleged
violation of any fire, zoning, building, health laws or regulations, or
of any other alleged violations which affect the Property.
c. Seller has no knowledge of any latent structural
defects in the improvements on the Property.
d. All commissions due brokers for existing leases
have been paid in full; there are no future commission obligations
existing on current leases or renewals or options except as disclosed
to Purchaser and approved by Purchaser. All amounts payable with
respect to tenant finish, rent abatement or any offsetting credit,
charge or adjustment of any sort relating to any lease or tenant have
been paid in full. All tenants have accepted possession of their leased
premises and have commenced paying rent in accordance with the terms of
their leases. It is contemplated that prior to Closing, Seller may
present to Purchaser, for Purchaser's written approval, opportunities
for lease extensions, modifications, and renewals and opportunities for
new leases, all of which, if approved in writing by Purchaser, may
involve payment by Purchaser after Closing of lease commission and
tenant finish costs.
-40-
<PAGE>
e. The rent roll attached hereto a Exhibit B is true
and complete as of the date shown thereon.
f. There are no tenancies or occupancies affecting
the Property or persons in possession of any part of the Property
except as shown on Exhibit B hereto.
g. Seller has no knowledge of any pollutants or
contaminants on the Property which would make the Property in violation
of any environmental laws, ordinances, or governmental regulations, and
the Property is not, to the best of Seller's knowledge, in any manner
causing or contributing to any pollution or contamination in violation
of any such environmental laws, ordinances, or governmental
regulations.
h. No voluntary proceeding under any bankruptcy or
insolvency laws have been commenced by the Seller nor have there been
any involuntary proceedings against the Seller. No general assignment
for the benefit of creditors has been made by Seller and no trustee or
receiver of Seller's property has been appointed.
i. The leases which have been delivered to Purchaser
are true and complete copies of all leases affecting the Property and
of all amendments thereto.
j. The service contracts which have been delivered to
Purchaser are true and complete copies of all service contracts
affecting the Property and of all amendments thereto.
k. As of Closing Date, Seller shall have legal
authority to sell the Property to Purchaser.
In the event of a breach of any of the above
representations, warranties or covenants, which Purchaser discovers
prior to Closing, Purchaser shall have the right, as its exclusive
remedy, of canceling this Sale Contract by giving written notice
-41-
<PAGE>
thereof to Seller, whereupon all Earnest Money deposited hereunder
shall be promptly returned to Purchaser and neither party shall have
any further rights or obligations hereunder. In the event of breach of
the above representations, warranties or covenants, which Purchaser
discovers after Closing, Seller shall have no responsibility
whatsoever, it being stipulated and agreed that Purchaser is relying
upon Purchaser's own knowledge and due diligence, in the event Closing
is consummated, and that all of the foregoing representations,
warranties, and covenants are waived and extinguished as of the
consummation of Closing.
8. Purchaser represents that as of Closing Date Purchaser
shall have full power and authority to enter into this Sale Contract and to
effect the transaction contemplated herein.
9. Each party hereto hereby represents to the other that said
party has dealt with no real estate broker or other person in such a manner as
to give rise to a claim for real estate commission or finders' fees against the
other party. Each party hereto hereby agrees to indemnify and hold harmless the
other party against any claims for real estate commission and/or finders' fees
arising from the transaction contemplated hereby and the conduct of the
indemnifying party.
10. If the date specified for any action in this Sale Contract
shall fall on a weekend or state or national holiday, then the date specified
for such action shall be deemed to be extended to the next business day
following.
11. Seller hereby advises Purchaser that it is necessary for
Seller to obtain the consent of Seller's limited partners in order to sell the
Property to Purchaser as herein provided. Seller shall endeavor to obtain such
consent. If, for any reason, the consent of Seller's limited partners to this
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<PAGE>
Sale Contract and to Closing hereunder has not been obtained within ninety (90)
days after Purchaser has received a fully executed copy of the Sale Contract,
(the "Acceptance Date"), then either party may, at any time thereafter,
terminate this Sale Contract by giving written notice of termination to the
other party, in which event, neither party shall have any further rights or
obligations under this Sale Contract. Seller shall promptly give Purchaser
written notice after Seller has obtained the written consent of its limited
partners as aforesaid, so that Purchaser may commence its due diligence pursuant
to paragraph 6 hereof.
12. Seller shall make available to Purchaser such financial
and other information concerning the Property as Purchaser may reasonably
require.
13. Notices to be given hereunder shall be in writing and
shall be deemed conclusively to have been given when sent by United States
certified or registered mail, postage prepaid, or by a recognized messenger
service, addressed as follows or to such other address as either party may
furnish to the other in writing:
Purchaser
AMERICAN SPECTRUM REALTY, INC.
2424 S.E. Bristol
Suite 200
Newport Beach, CA 92660
Attn: William J. Carden
Seller
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
c/o Nooney Capital Corp., General Partner
500 N. Broadway
Suite 1200
St. Louis, Missouri 63102
Attn: Gregory J. Nooney, Jr. Vice Chairman
-43-
<PAGE>
14. At or prior to Closing Date, Seller shall deliver to
Purchaser original leases and whatever plans and specifications for the Property
are in Seller's possession. Copies of all such leases, plans and specifications
in Seller's possession shall be delivered to Seller within five (5) days after
the Acceptance Date.
15. Purchaser may assign this Sale Contract at any time prior
to Closing, provided that Purchaser shall notify Seller in writing at least five
(5) days prior to Closing Date of the correct name and signature block of any
assignee of this Sale Contract. No assignment shall relieve Purchaser from any
of Purchaser's obligations hereunder.
16. If, for any reason, Closing hereunder is not consummated,
Purchaser shall promptly deliver to Seller copies of Purchaser's physical
inspection report, environmental report, survey and title commitment.
17. The Property is being sold and transferred in "as is"
condition, without any warranties or representations except for those expressly
set forth in paragraph 7 of this Sale Contract which automatically lapse and
terminate at Closing and in the documents to be executed by Seller and delivered
to Purchaser at Closing, being the Special Warranty Deed. Notwithstanding any
past, present, or future disclosures, if any, of Seller or of Seller's books and
records, Purchaser shall be conclusively deemed to have relied solely on the
independent investigations, examinations, and business judgment of Purchaser and
Purchaser's advisers and consultants, and not upon any representation or
warranties of Seller (except those in the Special Warranty Deed).
18. Seller shall not enter into any new leases affecting the
Property nor shall Seller modify or extend any existing leases affecting the
Property between the date hereof and Closing Date, without the prior written
consent of Purchaser, provided that Seller may, without consent of Purchaser,
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<PAGE>
extend existing leases for up to one (1) year beyond Closing (including renewal
terms, if any) and enter into new leases to extend no more than one (1) year
beyond Closing (including renewal terms, if any) in accordance with the rent
Schedule attached hereto as Exhibit I, and incorporated herein by reference.
Said new leases and modified leases shall be assigned to Purchaser and assumed
by Purchaser pursuant to the Assignment of Leases attached hereto as Exhibit D.
Seller shall not enter into any new service contracts affecting the Property nor
shall Seller modify or extend any existing service contracts affecting the
Property between the date hereof and the Closing Date without the prior written
consent of Purchaser, provided that Seller may extend existing Service Contracts
and enter into new contracts if not more than one (1) year from Closing in a
commercially reasonable manner and said new and extended Service Contracts shall
be assigned to Purchaser and assumed by Purchaser pursuant to the Assignment for
Contracts attached hereto as Exhibit E.
19. In the event that all or any substantial portion of the
Property becomes subject to an appropriation proceeding or bona fide threat
thereof by an authority having power of eminent domain, Seller shall promptly
notify Purchaser thereof in writing. In such event, within five (5) business
days of receipt of Seller's notice, Purchaser shall (a) elect to terminate this
Sale Contract, in which event Purchaser shall be entitled to the return of all
non-refundable Earnest Money or (b) elect to proceed with the transaction, in
which event Purchaser shall be entitled to the proceeds of any award or payment
in lieu thereof resulting from such proceedings or threat thereof and Seller
shall execute and deliver to Purchaser at Closing an assignment of all of
Seller's interest in such proceeds, subject to the terms and provisions of the
leases described in Exhibit B hereto. Failure to give a notice shall be deemed
an election to proceed with the transaction.
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<PAGE>
20. In the event of any casualty damage to the Property prior
to Closing Date, which Seller does not repair prior to Closing Date, Purchaser
may, at Purchaser's option, terminate this Sale Contract, or proceed with
Closing. In the event of termination, all non-refundable Earnest Money shall be
returned to Purchaser and neither party shall have any further rights or
obligations hereunder. In the event of Closing, all insurance proceeds shall be
assigned to Purchaser. In the event of any such casualty damage, Seller shall
have the right, at Seller's option but only with Purchaser's consent, to extend
the Closing Date for up to ninety (90) days in order to repair the casualty
damage.
21. Anything herein to the contrary notwithstanding, Seller's
obligation to close hereunder is contingent upon a simultaneous Closing
occurring under a certain Sale Contract of even date herewith between Purchaser
and Seller providing for the purchase and sale of the Woodhollow Apartments. If
for any reason other than Seller's breach of contract, said Closing does not
occur simultaneously with Closing hereunder, Seller may, at Seller's option,
terminate this Sale Contract by giving written notice of termination to
Purchaser, in which event, all Earnest Money shall be returned to Purchaser and
neither party shall have any further rights or obligations hereunder.
22. In the event that as of Closing Date, there is any action
pending to enjoin this transaction, then neither party shall be obligated to
close while such action is pending, and if Closing is delayed by reason of such
action for more than ten (10) days, then in such event either party may
terminate this Sale Contract by giving written notice of termination to the
other party, in which event all Earnest Money shall be returned to Purchaser and
neither party shall have any further rights or obligations hereunder.
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<PAGE>
23. This Sale Contract may be executed in counterparts and
facsimile signatures shall constitute genuine signatures for purposes of this
Sale Contract.
IN WITNESS WHEREOF, Purchaser and Seller have executed this
Sale Contract, or caused this Sale Contract to be executed by their officers
thereunto duly authorized, as of the day and year first above written.
AMERICAN SPECTRUM REALTY, INC.
(a Maryland corporation)
by /s/ Thomas N. Thurber
-------------------------
Thomas N. Thurber
President
Purchaser
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(a Missouri limited partnership)
by NOONEY CAPITAL CORP.
(a Missouri corporation)
General Partner
by /s/ Gregory J. Nooney, Jr.
--------------------------
Gregory J. Nooney, Jr.
Vice Chairman
Seller
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EXHIBIT 99.1
Below each General Partner's name is a list of the limited partnerships, other
than the Registrant, for which the General Partner serves as a general partner
and the companies for which the General Partner serves as a director. The list
includes only those limited partnerships and companies which have a class of
securities registered pursuant to Section 12(g) of the Securities Exchange Act
of 1934 or are subject to the requirements of Section 15(d) of the Act.
John J. Nooney
Limited Partnerships:
Nooney Real Property Investors-Two, L.P. Nooney Income Fund Ltd., L.P.
Nooney Income Fund Ltd.II, L.P.
-48-
Exhibit 99.3
INDEPENDENT AUDITORS' REPORT
To the Partners of
Nooney Real Property Investors-Four, L.P.:
We have audited the accompanying statement of net liabilities in liquidation of
Nooney Real Property Investors-Four, L.P. (a limited partnership) as of November
30, 1998, and the related statement of loss in liquidation, changes in net
liabilities in liquidation and cash flows in liquidation for the year then
ended. In addition, we have audited the accompanying balance sheet
(going-concern basis) of Nooney Real Property Investors-Four, L.P. as of
November 30, 1997, and the related statements of operations (going-concern
basis), partners' equity (deficiency in assets) (going-concern basis) and cash
flows (going-concern basis) for the two years in the period ended November 30,
1997. Our audits also included the financial statement schedules listed in the
index at Item 14(a)2. These financial statements and financial statement
schedules are the responsibility of the Partnership's general partners. Our
responsibility is to express an opinion on these financial statements and
financial statement schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the
Partnership's general partners, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
As discussed in Note 1 to the financial statements, the partners of Nooney Real
Property Investors-Four, L.P. approved a plan of liquidation on January 21,
1999. As a result, the Partnership has changed its basis of accounting from the
going-concern basis to the liquidation basis.
In our opinion, such financial statements present fairly, in all material
respects, the net liabilities in liquidation of Nooney Real Property
Investors-Four, L.P., a partnership as of November 30, 1998, and the related
statements of loss in liquidation, changes in net liabilities in liquidation and
cash flows in liquidation for the year then ended and the balance sheet
(going-concern basis) as of November 30, 1997 and the related statements of
operations (going-concern basis), partnership equity (deficiency in assets
(going-concern basis) and cash flows (going-concern basis) for the two years
then ended, in conformity with generally accepted accounting principles. Also,
in our opinion, such financial statement schedules, when considered in relation
to the basic financial statements taken as a whole, present fairly in all
material respects the information set forth therein.
DELOITTE & TOUCHE LLP
Saint Louis, Missouri
January 22, 1999
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<PAGE>
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
STATEMENT OF NET LIABILITIES IN LIQUIDATION
AS OF NOVEMBER 30, 1998 (LIQUIDATION BASIS) AND
BALANCE SHEET AS OF NOVEMBER 30, 1997 (GOING-CONCERN BASIS)
- --------------------------------------------------------------------------------
ASSETS 1998 1997
CASH (Note 2) $ 227,373 $ 327,910
ACCOUNTS RECEIVABLE - No allowance for doubtful
accounts considered necessary 106,023 111,353
PREPAID EXPENSES AND DEPOSITS - 27,772
INVESTMENT PROPERTY (Note 3):
Land - 1,013,858
Buildings and improvements - 13,841,059
------------ ------------
- 14,854,917
Less accumulated depreciation (7,598,733)
------------ ------------
7,256,184
Investment property held for sale 17,585,000 3,854,057
------------ ------------
Total investment property 17,585,000 11,110,241
DEFERRED EXPENSES - At amortized cost - 50,804
------------ ------------
TOTAL $ 17,918,396 $ 11,628,080
============ ============
LIABILITIES AND PARTNERS' EQUITY (DEFICIENCY IN ASSETS)
LIABILITIES:
Deferred gain on real estate assets (Note 1) $ 7,200,029 $ -
Reserve for estimated costs during the period
of liquidation (Note 2) 10,000
Accounts payable and accrued expenses 263,459 364,345
Refundable tenant deposits 72,976 80,287
Mortgage notes payable (Note 3) 13,500,465 12,871,393
------------ ------------
Total liabilities 21,046,929 13,316,025
PARTNERS' EQUITY (DEFICIENCY IN ASSETS) - (1,687,945)
------------ ------------
TOTAL LIABILITIES AND PARTNERS' EQUITY $ - $ 11,628,080
============ ============
NET LIABILITIES IN LIQUIDATION $ (3,128,533)
============
See notes to financial statements.
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<PAGE>
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
STATEMENT OF LOSS IN LIQUIDATION
YEAR ENDED NOVEMBER 30, 1998 (LIQUIDATION BASIS) AND
STATEMENTS OF OPERATIONS
YEARS ENDED NOVEMBER 30, 1997 AND 1996 (GOING-CONCERN BASIS)
- --------------------------------------------------------------------------------
1998 1997 1996
REVENUES:
Rental and other income (Note 4) $ 3,287,570 $ 3,406,566 $ 3,505,163
Interest 3,768 5,626 7,669
----------- ----------- -----------
Total revenues 3,291,338 3,412,192 3,512,832
----------- ----------- -----------
EXPENSES:
Interest 1,150,263 1,136,228 1,135,573
Depreciation and amortization 547,161 480,851 497,315
Real estate taxes 445,064 459,618 457,460
Payroll 312,175 264,786 256,960
Repairs and maintenance 263,486 270,225 267,239
Property management fees - related
party 176,292 180,921 185,981
Other operating expenses (includes
$40,000 in each year to related
party) 798,596 813,311 731,037
----------- ----------- -----------
Total expenses 3,693,037 3,605,940 3,531,565
----------- ----------- -----------
NET LOSS FROM OPERATIONS (401,699) $ (193,748) $ (18,733)
=========== ===========
DEFICIENCY IN ASSETS, BEGINNING OF
YEAR (1,687,945)
Plus: Adjustment to liquidation
basis (Note 2) (1,038,889)
-----------
NET LIABILITIES IN LIQUIDATION,
END OF YEAR $(3,128,533)
===========
NET LOSS FROM OPERATIONS ALLOCATION:
General partners $ (6,970) $ (3,357) $ (325)
Limited partners (394,729) (190,391) (18,408)
LIMITED PARTNERSHIP DATA:
Net loss from operations per unit $ (29.18) $ (14.07) $ (1.36)
=========== =========== ===========
Weighted average limited partnership
units outstanding 13,529 13,529 13,529
=========== =========== ===========
See notes to financial statements.
-51-
<PAGE>
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
STATEMENT OF CHANGES IN NET LIABILITIES IN LIQUIDATION
YEAR ENDED NOVEMBER 30, 1998 (LIQUIDATION BASIS) AND
STATEMENTS OF PARTNERS' EQUITY (DEFICIENCY IN ASSETS)
YEARS ENDED NOVEMBER 30, 1997 AND 1996 (GOING-CONCERN BASIS)
- --------------------------------------------------------------------------------
Limited General
Partners Partners Total
BALANCE (DEFICIENCY IN ASSETS),
DECEMBER 1, 1995 $(1,183,303) $ (292,161) $(1,475,464)
Net loss (18,408) (325) (18,733)
----------- ----------- -----------
BALANCE (DEFICIENCY IN ASSETS),
NOVEMBER 30, 1996 (1,201,711) (292,486) (1,494,197)
Net loss (190,391) (3,357) (193,748)
----------- ----------- -----------
BALANCE (DEFICIENCY IN ASSETS),
NOVEMBER 30, 1997 (1,392,102) (295,843) (1,687,945)
Net loss (394,729) (6,970) (401,699)
Adjustment to liquidation basis (1,020,864) (18,025) (1,038,889)
----------- ----------- -----------
NET LIABILITIES IN LIQUIDATION,
NOVEMBER 30, 1998 $(2,807,695) $ (320,838) $(3,128,533)
=========== =========== ===========
See notes to financial statements.
-52-
<PAGE>
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS IN LIQUIDATION
YEAR ENDED NOVEMBER 30, 1998 (LIQUIDATION BASIS) AND
STATEMENTS OF CASH FLOWS FOR THE
YEARS ENDED NOVEMBER 30, 1997 AND 1996 (GOING-CONCERN BASIS)
- --------------------------------------------------------------------------------------------
1998 1997 1996
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss from operations $ (401,699) $ (193,748) $ (18,733)
Adjustments to reconcile net loss from
operations to net cash (used in) provided
by operating activities:
Adjustment to liquidation basis (1,038,889)
Write-down of investment property 753,428
Depreciation 496,499 466,106 436,460
Amortization of deferred expenses 50,662 14,745 60,855
Changes in accounts affecting operations:
Accounts receivable 5,330 88,004 (12,988)
Prepaid expenses and deposits 27,772 28,907 12,460
Deferred expenses 142 (40,708)
Reserve for estimated costs of
liquidation 10,000
Accounts payable and accrued expenses (100,886) 277,394 12,316
Refundable tenant deposits (7,311) (9,108) (5,703)
------------ ------------ ------------
Net cash (used in) provided by
operating activities (204,952) 672,300 443,959
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES -
Net additions to investment property (524,657) (898,139) (408,706)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on mortgage notes payable (12,871,393) (34,307) (99,236)
Additional borrowings on mortgage
notes payable 13,500,465 376,216
------------ ------------ ------------
Net cash provided by (used in)
financing activities 629,072 341,909 (99,236)
------------ ------------ ------------
NET (DECREASE) INCREASE IN CASH (100,537) 116,070 (63,983)
CASH, BEGINNING OF YEAR 327,910 211,840 275,823
------------ ------------ ------------
CASH, END OF YEAR $ 227,373 $ 327,910 $ 211,840
============ ============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION - Cash paid during the year
for interest $ 1,150,263 $ 1,183,922 $ 1,087,879
============ ============ ============
<FN>
See notes to financial statements.
</FN>
</TABLE>
-53-
<PAGE>
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED NOVEMBER 30, 1998 (LIQUIDATION BASIS),
1997 (GOING-CONCERN BASIS) AND 1996 (GOING-CONCERN BASIS)
- --------------------------------------------------------------------------------
1. BUSINESS
Nooney Real Property Investors-Four, L.P. (the "Partnership") is a limited
partnership organized under the laws of the State of Missouri on February
9, 1982. The Partnership was organized to invest primarily in
income-producing real properties such as shopping centers, office
buildings and other commercial properties, apartment buildings, warehouses
and light industrial properties. The Partnership's portfolio is comprised
of an apartment building located in West St. Louis County, Missouri
(Woodhollow Apartments) which generated 71% of rental and other income for
the year ended November 30, 1998; and a retail shopping center
(Cobblestone Court) located in Burnsville, Minnesota, a suburb of
Minneapolis, which generated the remaining 29% of rental and other income
for the year ended November 30, 1998.
Sale of Partnership Properties and Plan of Liquidation - On January 21,
1999, a plan to sell the Partnership's Woodhollow Apartments property and
the Cobblestone Court Shopping Center property was approved by a majority
of the limited partners by proxy. The Partnership has entered into sales
contracts on both properties with American Spectrum Realty, Inc., an
affiliate of Nooney Capital Corporation, which serves as a general partner
of the Partnership. The sales contracts provide that the purchase price
will be at appraised value and are subject to a 60-day due diligence
period. Consummation of the sale will result in the dissolution of the
Partnership and require the General Partners to liquidate the Partnership
and distribute the proceeds therefrom to the limited partners. There is no
assurance that the sale will be consummated since the closing is
conditioned upon contingencies beyond the control of the Registrant. If
the sale goes through, it will result in the dissolution of the
Registrant.
The Cobblestone sales contract provides for a net sale price of
$3,100,000. Accordingly, a loss has been recognized of $753,428 to record
the property at its fair value less costs to sell as an adjustment in
liquidation.
The Woodhollow sales contract provides for a sale price of $14,600,000.
Because the transaction is not closed at this time the amount of the gain
that may ultimately be realized of $7,200,029, net of sales costs, is
included as a deferred gain as an adjustment in liquidation at November
30, 1998.
-54-
<PAGE>
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - As a result of the partners approval to sell the
properties and liquidate the Partnership, the Partnership's financial
statements as of November 30, 1998, and for the year then ended have been
prepared on a liquidation basis. Accordingly, assets have been valued at
estimated net realizable value and liabilities include estimated costs
associated with carrying out the plan of liquidation. Adjustments to
convert from the going-concern (historical cost) basis to the liquidation
basis of accounting are as follows:
Write down to net realizable value of property,
plant and equipment $ (753,428)
Increase to reflect net realizable value of
property, plant and equipment 7,200,029
Deferral of gain on increase in net realizable
value of property, plant and equipment (7,200,029)
Estimated liabilities associated with the
liquidation of the Partnership (10,000)
Write-off of deferred debt costs and
prepaid expenses (275,461)
-----------
Net decrease in net assets $(1,038,889)
===========
The accompanying 1997 and 1996 financial statements have been prepared on
a going-concern (historical cost) basis.
The financial statements include only those assets, liabilities and
results of operations of the partners which relate to the business of the
Partnership. The statements do not include any assets, liabilities,
revenues or expenses attributable to the partners' individual activities.
No provision has been made for federal and state income taxes since these
taxes are the personal responsibility of the partners.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
Prior to October 31, 1997, the corporate general partner was a 75%-owned
subsidiary of Nooney Company. One of the individual general partners was
an officer, director and shareholder of Nooney Company. The other
individual general partners' spouse was a shareholder of Nooney Company.
Nooney Krombach Company, a wholly owned subsidiary of Nooney Company,
managed the Partnership's real estate for a management fee. Property
management fees paid to Nooney Krombach Company were $166,624 and $185,981
for the years ended November 30, 1997 and 1996, respectively.
Additionally, the Partnership paid Nooney Krombach Company $36,667 in 1997
and $40,000 in 1996 as reimbursement for management services and indirect
expenses in connection with the management of the Partnership.
On October 31, 1997, Nooney Company sold its 75% interest in Nooney
Capital Corp., the corporate general partner of the Registrant to S-P
Properties, Inc., a California corporation, which in turn is a wholly
owned subsidiary of CGS Real Estate Company, Inc., a Texas corporation.
Simultaneously, Gregory J. Nooney, Jr., an individual general partner and
PAN, Inc., a corporate general partner, sold their economic interests to
S-P Properties, Inc. and resigned as general partners subject to a ninety
day notification to the limited partners. CGS Real Estate also purchased
the real estate management business of Nooney Krombach Company and formed
Nooney, Inc. to perform the management of the Partnership. Property
management fees paid to Nooney, Inc. were $176,292 and $14,297 for the
-55-
<PAGE>
years ended November 30, 1998 and 1997, respectively. Additionally, the
Partnership paid Nooney, Inc. $40,000 in 1998 and $3,333 in 1997 as
reimbursement for management services and indirect expenses in connection
with the management of the Partnership.
Cash at November 30, 1998 and 1997 includes restricted amounts
representing tenant deposits and a capital improvement escrow. Total
amounts restricted were $96,299 and $117,142 at November 30, 1998 and
1997, respectively.
Investment property is recorded at the lower of cost or fair market value.
Impairment is determined if the sum of the expected future cash flows
(undiscounted and without interest charges) is less than the carrying
amount of the property. Investment property that is held for sale is
recorded at the lower of its net book value or fair value less cost to
sell.
Apartment buildings are depreciated over their estimated useful lives
using the 125% declining balance method. All other buildings are
depreciated over their estimated useful lives (30 years) using the
straight-line method. Tenant alterations are depreciated over the term of
the lease on a straight-line basis.
Deferred expenses consist primarily of lease fees and financing costs and
are amortized over the terms of their respective leases or notes.
Lease agreements are accounted for as operating leases and rentals from
such leases are reported as revenues ratably over the terms of the leases.
Included in rental and other income are amounts received from tenants
under provisions of lease agreements which require the tenants to pay
additional rent equal to specified portions of certain expenses such as
real estate taxes, insurance, utilities and common area maintenance. The
income is recorded in the same period that the related expense is
incurred.
Pursuant to the terms of the Partnership Agreement, losses from operations
and cash distributions are allocated l% to the individual general partners
and the remainder pro rata to all general and limited partners based upon
the relationship of original capital contributions.
Limited partnership per unit computations are based on the weighted
average number of limited partnership units outstanding during the year.
-56-
<PAGE>
3. MORTGAGE NOTES PAYABLE
Mortgage notes payable as of November 30, 1998 and 1997 and the related
collateral book values consist of the following:
<TABLE>
<CAPTION>
1998 1997
<S> <C> <C>
Cobblestone Court Shopping Center
---------------------------------
(Book value of $3,100,000 at November 30, 1998)
Mortgage note payable to bank, due in
monthly principal payments of $4,697,
plus interest payments at LIBOR plus 2.75%
(7.92% at November 30, 1998), commencing
on December 30, 1998 and on the 30th day
of each month until November 30, 2001,
when the entire principal balance is due. $ 4,607,000 $ -
Mortgage note payable, 8.53%, due in
monthly interest only payments of $18,438
at LIBOR plus 2.75%, paid in full under
refinancing on November 30, 1998. 2,602,432
Note payable to bank, interest only due
monthly at LIBOR plus 2.75%, paid in full
under refinancing on November 30, 1998. 1,689,571
Woodhollow Apartments
---------------------
(Book value of $14,485,000 at November 30, 1998)
Mortgage note payable to bank, due in
monthly principal payments of $11,121 plus
interest payments at LIBOR plus 2.75%
(7.92% at November 30, 1998), commencing
on December 30, 1998 and on the 30th day
of each month until November 30, 2001,
when the entire principal is due. 8,893,465
Mortgage note payable, 9.125%, due in
monthly payments of $70,170, consisting
of both principal and interest, paid in
full under refinancing on November
30, 1998. 8,255,105
Cobblestone Court Shopping Center and Woodhollow Apartments
---------------------------------------------------------------
Note payable to bank, due in monthly
principal payments of $1,000 plus
interest at 1% over the bank's prime
rate, paid in full under refinancing
on November 30, 1998. 199,601
Note payable to bank, interest only
due monthly at LIBOR plus 2.75%, paid
in full under refinancing on November
30, 1998. 124,684
----------- -----------
Total debt of above properties $13,500,465 $12,871,393
=========== ===========
</TABLE>
The mortgage notes are collateralized by deeds of trust and assignments of
rents on all investment properties. Principal payments required during the
next five years are as follows:
1999 $ 189,816
2000 189,816
2001 13,120,833
In accordance with Statement of Financial Accounting Standards No. 107,
Disclosures About Fair Value of Financial Instruments, the estimated fair
value of mortgage notes payable with maturities greater than one year is
-57-
<PAGE>
determined based on rates currently available to the Partnership for
mortgage notes with similar terms and remaining maturities. The estimated
fair value of mortgage notes payable with maturities of less than one year
are valued at their carrying amounts included in the balance sheet, which
are reasonable estimates of fair value due to the relatively short period
to maturity of the instruments. The carrying amount and estimated fair
value of the Partnership's debt at November 30, 1998 and 1997 are
summarized as follows:
1998 1997
------------------------ -----------------------
Carrying Estimated Carrying Estimated
Amount Fair Value Amount Fair Value
Mortgage Notes Payable $13,500,465 $13,500,465 $12,871,393 $12,968,000
Fair value estimates are made at a specific point in time, are subjective
in nature and involve uncertainties and matters of significant judgment.
Settlement of the Partnership's debt obligations at fair value may not be
possible and may not be a prudent management decision.
4. RENTAL REVENUES UNDER OPERATING LEASES
Minimum future rental revenues under noncancelable operating leases on
properties other than apartment buildings in effect as of November 30,
1998 are as follows:
1999 $ 391,000
2000 306,000
2001 87,000
2002 43,000
2003 45,000
Thereafter 234,000
----------
Total $1,106,000
==========
In addition, certain lease agreements require tenant participation in
certain operating expenses and additional contingent rentals based upon
percentages of tenant sales in excess of minimum amounts. Tenant
participation in expenses included in revenues approximated $368,000,
$387,000 and $416,000 for the years ended November 30, 1998, 1997 and
1996, respectively. Contingent rentals were not significant for the years
ended November 30, 1998, 1997 and 1996.
5. FEDERAL INCOME TAX STATUS
The general partners believe, based upon opinion of legal counsel, that
Nooney Real Property Investors-Four, L.P. is considered a partnership for
income tax purposes.
Selling commissions and offering expenses incurred in connection with the
sale of limited partnership units are not deductible for income tax
purposes and therefore increase the partners' bases. Investment properties
are depreciated for income tax purposes using rates which differ from
rates used for computing depreciation for financial statement reporting.
Rents received in advance are includable in taxable income in the year
received. Rent concessions, recognized ratably over lease terms for
financial statement purposes, are includable in taxable income in the year
rents are received. Insurance premiums are deductible for tax purposes in
the year paid. Gains and losses in connection with the write-up and
write-down of investment property are not recognized for income tax
purposes until the property is disposed.
-58-
<PAGE>
The comparison of financial statement and income tax reporting is as
follows:
Financial Income
Statement Tax
1998:
Net loss from operations $ (401,699) $ (124,725)
Net liabilities in liquidation (3,128,533)
Partners' deficiency in assets (6,627,911)
1997:
Net loss $ (193,748) $ (307,511)
Partners' deficiency in assets (1,687,945) (6,503,186)
1996:
Net loss $ (18,733) $ (631,020)
Partners' deficiency in assets (1,494,197) (6,195,675)
* * * * * *
-59-
<PAGE>
<TABLE>
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
SCHEDULE - RECONCILIATION OF PARTNERS' EQUITY (DEFICIENCY IN ASSETS)
YEARS ENDED NOVEMBER 30, 1998 (LIQUIDATION BASIS) AND 1997 AND 1996 (GOING-CONCERN BASIS)
- -------------------------------------------------------------------------------------------------------------------
The reconciliation of partners' equity (deficiency in assets) between financial statements and income tax reporting
is as follows:
<CAPTION>
1998
----------------------------------------
Limited General
Partners Partners Total
<S> <C> <C> <C>
Balance (deficiency) per statement of partners' equity $(2,807,695) $ (320,838) $(3,128,533)
Add:
Selling commissions and other offering costs not deductible for income
tax purposes 1,732,907 1,732,907
Adjustment to liquidation basis not deducted for income tax purposes 280,487 4,974 285,461
Prepaid rents included in income for income tax purposes 9,898 175 10,073
Writedown of investment property not recognized for income tax purposes 1,785,931 31,497 1,817,428
----------- ----------- -----------
1,001,528 (284,192) 717,336
Less:
Excess depreciation deducted for income tax purposes 7,103,298 196,010 7,299,308
Rent concessions not recognized for income tax purposes 4,406 77 4,483
Insurance premiums deducted for income tax purposes 40,738 718 41,456
----------- ----------- -----------
Balance (deficiency) per tax return $(6,146,914) $ (480,997) $(6,627,911)
=========== =========== ===========
1997
----------------------------------------
Limited General
Partners Partners Total
Balance (deficiency) per statement of partners' equity $(1,392,102) $ (295,843) $(1,687,945)
Add:
Selling commissions and other offering costs not deductible for income
tax purposes 1,732,907 1,732,907
Adjustment to liquidation basis not deducted for income tax purposes
Prepaid rents included in income for income tax purposes 3,985 70 4,055
Writedown of investment property not recognized for income tax purposes 1,045,565 18,435 1,064,000
----------- ----------- -----------
1,390,355 (277,338) 1,113,017
Less:
Excess depreciation deducted for income tax purposes 7,395,960 201,166 7,597,126
Rent concessions not recognized for income tax purposes 190 2 192
Insurance premiums deducted for income tax purposes 18,558 327 18,885
----------- ----------- -----------
Balance (deficiency) per tax return $(6,024,353) $ (478,833) $(6,503,186)
=========== =========== ===========
1996
----------------------------------------
Limited General
Partners Partners Total
Balance (deficiency) per statement of partners' equity $(1,201,711) $ (292,486) $(1,494,197)
Add:
Selling commissions and other offering costs not deductible for income
tax purposes 1,732,907 1,732,907
Adjustment to liquidation basis not deducted for income tax purposes
Prepaid rents included in income for income tax purposes 9,911 174 10,085
Writedown of investment property not recognized for income tax purposes 1,045,565 18,435 1,064,000
----------- ----------- -----------
1,586,672 (273,877) 1,312,795
Less:
Excess depreciation deducted for income tax purposes 7,289,299 199,285 7,488,584
Rent concessions not recognized for income tax purposes 1,508 27 1,535
Insurance premiums deducted for income tax purposes 18,034 317 18,351
----------- ----------- -----------
Balance (deficiency) per tax return $(5,722,169) $ (473,506) $(6,195,675)
=========== =========== ===========
</TABLE>
-60-
<PAGE>
<TABLE>
<CAPTION>
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
NOVEMBER 30, 1998 (LIQUIDATION BASIS)
- --------------------------------------------------------------------------------------------------------------------
Column A Column B Column C
-------- -------- --------
Initial Cost to Partnership
-----------------------------------------
Buildings and
Description Encumbrances Land Improvements Total
<S> <C> <C> <C> <C>
Cobblestone Court Shopping Center, Burnsville, Minnesota $ 4,607,000 $ 1,205,378 $ 4,676,940 $ 5,882,318
Woodhollow Apartments, St. Louis, Missouri 8,893,465 1,013,858 11,651,289 12,665,147
----------- ----------- ----------- -----------
Total $13,500,465 $ 2,219,236 $16,328,229 $18,547,465
=========== =========== =========== ===========
Column D Column E
-------- --------
Gross Amount at Which
Costs Carried at Close of Period
Capitalized -----------------------------------------
Subsequent to Buildings and
Description Acquisition Land Improvements Total
Cobblestone Court Shopping Center, Burnsville, Minnesota $ (100,172)(1) $ 1,205,378 $ 4,576,768 $ 5,782,146 (2)
Woodhollow Apartments, St. Louis, Missouri 9,914,455 (1) 1,013,858 21,565,744 22,579,602 (2)
----------- ----------- ----------- -----------
Total $ 9,814,283 $ 2,219,236 $26,142,512 $28,361,748
=========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Column F Column G Column H Column I
-------- -------- -------- --------
Life on
which Depreciation
Accumulated Date of Date in Latest Income
Depreciation Construction Acquired Statement is Computed
<S> <C> <C> <C> <C>
Cobblestone Court Shopping Center, Burnsville, Minnesota $ 2,682,146 (2) 1980 2/16/82 30 years
Woodhollow Apartments, St. Louis, Missouri 8,094,602 (2) 1971-1972 7/28/82 30 years
-----------
Total $10,776,748
===========
<FN>
(1) Amount is net of the following building write-ups (write-downs) to reflect the minimum recoverable value to the Partnership:
Cobblestone Court $(1,242,428)
Woodhollow Apartments 6,625,029
(2) Amount is shown net in the financial statements $(17,585,000).
</FN>
(Continued)
</TABLE>
-61-
<PAGE>
<TABLE>
<CAPTION>
NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
(A LIMITED PARTNERSHIP)
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
YEARS ENDED NOVEMBER 30, 1998, 1997 AND 1996
- -------------------------------------------------------------------------------------------------
1998 1997 1996
<S> <C> <C> <C>
(A) Reconciliation of amounts in Column E:
Balance at beginning of period $ 21,395,024 $ 20,556,298 $ 20,150,890
Add - Cost of improvements 6,971,258 (1) 898,139 408,706
Less - Cost of disposals (4,534) (59,413) (3,298)
------------ ------------ ------------
Balance at end of period $ 28,361,748 $ 21,395,024 $ 20,556,298
============ ============ ============
(B) Reconciliation of amounts in Column F:
Balance at beginning of period $ 10,284,783 $ 9,878,090 $ 9,444,928
Add - Provision during the period 496,499 466,106 436,460
Less - Depreciation on disposals (4,534) (59,413) (3,298)
------------ ------------ ------------
Balance at end of period $ 10,776,748 $ 10,284,783 $ 9,878,090
============ ============ ============
(C) The aggregate cost of real estate owned for
federal income tax purposes $ 22,979,147 $ 22,459,024 $ 21,620,298
============ ============ ============
<FN>
(1) Amount includes $7,200,029 write-up of buildings and improvements at Woodhollow and a
write-down of $753,428 of buildings and improvements at Cobblestone.
</FN>
(Concluded)
</TABLE>
-62-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR NOONEY REAL PROPERTY INVESTORS -FOUR, L.P. AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000700720
<NAME> NOONEY REAL PROPERTY INVESTORS-FOUR, L.P.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> DEC-01-1997
<PERIOD-END> NOV-30-1998
<CASH> 227,373
<SECURITIES> 0
<RECEIVABLES> 106,023
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 333,396
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 17,918,396
<CURRENT-LIABILITIES> 263,459
<BONDS> 13,500,465
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 3,287,570
<TOTAL-REVENUES> 2,291,338
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,542,774
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,150,263
<INCOME-PRETAX> (401,699)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (401,699)
<EPS-PRIMARY> (29.18)
<EPS-DILUTED> 0
</TABLE>
