SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
_X_ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended November 30, 1999
OR
___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _____________ to ______________
Commission file number 0-11023
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
(Exact name of Registrant as specified in its charter)
Missouri 43-1250566
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1100 Main St, Ste 2100 Kansas City, Missouri 64105
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (816) 421- 4670
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
- ------------------- -----------------------------------------
None Not Applicable
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Interests
(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 ___.
_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.
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As of February 1, 2000, 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 $12,047,000. (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, 2000 by the General Partners or holders of 10%
or more of the Registrant's limited partnership Units. 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 limited partnership units 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).
PART I
ITEM 1: BUSINESS
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.
Maxus Real Property Investors-Four, L.P. (formerly known as 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 acquired five real property investments.
Between 1990 and 1993, the Registrant disposed of three properties, two by sale
and one by deed in lieu of foreclosure. Presently, the Registrant owns two
properties, Cobblestone Court Shopping Center in Burnsville, Minnesota and
Woodhollow Apartments in St. Louis County, Missouri. For information respecting
these assets and revenue and income therefrom, see Exhibit 99.2 Financial
Statements and Schedules, which is filed herewith and is incorporated by
reference. (See Item 14(a)(1)).
On November 19, 1999, Maxus Capital Corp. (formerly known as Nooney Capital
Corp.) amended its articles of incorporation to change its name. On December 21,
1999, Maxus Capital Corp., the Registrant's general partner, filed an amendment
to the Registrant's Certificate of Limited Partnership, changing (i) the name
and address of the managing general partner to Maxus Capital Corp., 1100 Main,
Suite 2100 Kansas City, MO 64105 and (ii) the Registrant's name to Maxus Real
Property Investors-Four, L.P.
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. 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
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Partners or, at the discretion of the managing 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.
As previously reported, the Registrant entered into contracts as of November 13,
1998 to sell both of the Registrant's properties to American Spectrum Realty,
Inc. ("ASR"), a former affiliate (prior to the change in control described
below) of the managing General Partner of the Registrant. Pursuant to a proxy
statement and majority vote, the limited partners approved the sale on January
21, 1999, at a special meeting held for that purpose.
Under the terms of the contracts, ASR was to have satisfied or waived all
contingencies contained in the contracts by April 6, 1999. Certain of the
contingencies were not satisfied or waived by that date and the managing General
Partner agreed to extend the contingency period for 30 days. Since the time
period for satisfying the contingencies was extended, no earnest money was
deposited by ASR. Subsequently, the contingency period was extended for two
additional 30-day periods, the final one expiring July 7, 1999. On July
7, 1999, certain contingencies remained unfulfilled and not waived. The managing
General Partner elected not to grant any further extensions and the sale
contracts have become null and void.
On June 25, 1999 a complaint was filed in the United States District Court for
the Eastern District of Missouri by Bond Purchase, L.L.C. ("Bond Purchase")
against the Registrant and its general partner, Nooney Capital Corp. The
complaint alleged that the defendants arranged for the sale of partnership
assets to ASR, at a price which was $1 million less than another entity
affiliated with the plaintiff was willing to pay. The complaint further alleged
that Nooney Capital Corp, as a general partner of the Registrant, filed a proxy
statement relating to the sale of partnership assets which omitted certain
unspecified material facts and which otherwise failed to provide complete
information to the limited partners. In addition, the complaint alleged that the
defendants refused to allow the plaintiff access to the books and records of the
partnership. The complaint sought injunctive relief against the proposed sale of
the partnership assets, damages for alleged violations of the Securities
Exchange Act, damages for alleged breaches of fiduciary duty, appointment of a
receiver for the partnership and an accounting. The Registrant and Nooney
Capital Corp. moved to dismiss the complaint on various grounds, including the
fact that the sale transaction did not take place. As a result of the settlement
described below, Bond Purchase dismissed its lawsuit against the Registrant and
Nooney Capital Corp.
On November 9, 1999, S-P properties, Inc., a wholly-owned subsidiary of CGS Real
Estate Company, Inc. ("CGS") sold all of the outstanding stock of Nooney Capital
Corp, the Registrant's managing General Partner, to Bond Purchase for $177,000
cash. David L. Johnson owns 86% of the outstanding equity interests in Bond
Purchase.
The sale was part of a larger agreement entered into by CGS and its affiliates
with Bond Purchase and certain affiliates, pursuant to which Bond Purchase and
CGS agreed (i) to stipulate to the dismissal of certain lawsuits among the
parties (including the complaint filed by Bond Purchase against the Registrant)
(ii) to settle certain disputes between CGS and Bond Purchase and (iii) to
transfer stock and/or partnership Units in various private and publicly-traded
entities controlled at that time by CGS.
3
<PAGE>
In connection with the sale, each of the members of the Board of Directors and
each of the officers of the managing General Partner resigned, effective as of
the closing under the settlement agreement. David L. Johnson, Daniel W. Pishny
and John W. Alvey were appointed as members of the Board of Directors.
Effective November 9, 1999, the new members of the Board of Directors elected
the following officers: David L. Johnson, Chairman and Executive Vice President;
Daniel W. Pishny, President; and John W. Alvey, Vice-President, Secretary and
Treasurer.
Nooney, Inc., a former affiliate (prior to the change of control described
above) of the managing General Partner, also terminated its management agreement
with the Partnership effective as of November 9, 1999. The Partnership entered
into a property management agreement with Maxus Properties, Inc. ("Maxus"), a
Missouri corporation that is an affiliate of Bond Purchase. David L. Johnson,
the principal equity holder of Bond Purchase, is also the majority shareholder
of Maxus.
On January 28, 2000, the Registrant entered into a contract to sell the
Cobblestone Court Shopping Center ("Cobblestone"), located at 14150 Nicollet
Avenue South in Burnsville, Minnesota, a suburb of Minneapolis, to an unrelated
third party, Farrington Properties, Inc., a Minnesota corporation. The sale
price is $5,100,000. The contract was subject to a fifteen (15) day due
diligence period pursuant to which Farrington had the right to terminate the
contract without liability to the Registrant. The due diligence period expired
February 12, 2000. The sale is tentatively scheduled to close on March 28, 2000
with the contract providing for one 45 day extension. The sale is subject to
certain conditions, including but not limited to delivery of satisfactory title
and delivery of satisfactory Subordination, non-disturbance and attornment
agreements and estoppel letters from all tenants of the Property.
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 Maxus. Maxus employs more
than 250 people to manage 49 commercial properties, including more than 8,000
apartment units and 700,000 square feet of retail and office space.
ITEM 2: PROPERTIES
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 61%
leased by seven tenants at year end.
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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 86% occupied at year end.
Reference is made to Note 2 to Notes to Financial Statements filed herewith as
Exhibit 99.2 in response to Item 8 for a description of the mortgage
indebtedness secured by the Registrant's real property investments.
The following table sets forth certain information as of November 30, 1999,
relating to the properties owned by the Registrant.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
AVERAGE
ANNUALIZED
EFFECTIVE
TOTAL BASE RENT PRINCIPAL TENANTS
SQUARE ANNUALIZED SQUARE PERCENT OVER 10% OF PROPERTY LEASE
PROPERTY FEET BASE RENT FOOT LEASED SQUARE FOOTAGE EXPIRATION
Cobblestone 97,718 $418,449 $ 7.02 61% T.J. Maxx (26.2%) 2001
Woodhollow 402 Units $2,298,232 $5,717/unit 86% None
</TABLE>
ITEM 3: LEGAL PROCEEDINGS
On June 25, 1999 a complaint was filed in the United States District Court for
the Eastern District of Missouri by Bond Purchase, L.L.C. against the Registrant
and its general partner, Nooney Capital Corp. The complaint alleged that the
defendants arranged for the sale of partnership assets to American Spectrum
Realty, Inc., an entity affiliated with Nooney Capital Corp., at a price which
was $1 million less than another entity affiliated with the plaintiff was
willing to pay. The complaint further alleged that Nooney Capital Corp, as a
general partner of the partnership, filed a proxy statement relating to the sale
of partnership assets which omitted certain unspecified material facts and which
otherwise failed to provide complete information to the limited partners. In
addition, the complaint alleged that the defendants refused to allow the
plaintiff access to the books and records of the partnership. The complaint
sought injunctive relief against the proposed sale of the partnership assets,
damages for alleged violations of the Securities Exchange Act, damages for
alleged breaches of fiduciary duty, appointment of a receiver for the
partnership and an accounting. The Registrant and its general partner moved to
dismiss the complaint on various grounds, including the fact that the sale
transaction did not take place. Pursuant to the settlement agreement described
below, Bond Purchase, L.L.C. dismissed its lawsuit against the Registrant and
Nooney Capital Corp.
On November 9, 1999, S-P properties, Inc., a wholly-owned subsidiary of CGS Real
Estate Company, Inc. ("CGS") sold all of the outstanding stock of Nooney Capital
Corp, the Registrant's managing General Partner, to Bond Purchase, L.L.C. for
$177,000 cash. David L. Johnson owns 86% of the outstanding equity interests
in Bond Purchase, L.L.C.
5
<PAGE>
The sale was part of a larger agreement entered into by CGS and its affiliates
with Bond Purchase and certain affiliates, pursuant to which Bond Purchase and
CGS agreed (i) to stipulate to the dismissal of certain lawsuits among the
parties (including the complaint filed by Bond Purchase against the Registrant)
(ii) to settle certain disputes between CGS and Bond Purchase and (iii) to
transfer stock and/or partnership units in various private and publicly-traded
entities currently controlled by CGS.
In connection with the sale, each of the members of the Board of Directors and
each of the officers of the managing General Partner resigned, effective as of
the closing under the settlement agreement. David L. Johnson, Daniel W. Pishny,
and John W. Alvey were appointed as members of the Board of Directors.
Effective November 9, 1999, the new members of the Board of Directors elected
the following officers: David L. Johnson, Chairman and Executive Vice President;
Daniel W. Pishny, President; and John W. Alvey, Vice-President, Secretary and
Treasurer.
Nooney, Inc, a former affiliate (prior to the change in control described above)
of the managing General Partner, also terminated its management agreement with
the Partnership effective as of November 9, 1999. The Partnership entered into a
property management agreement with Maxus Properties, Inc., a Missouri
corporation that is an affiliate of Bond Purchase. David L. Johnson, the
principal equity holder of Bond Purchase, is also the majority shareholder of
Maxus.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On July 15, 1999, Millenium Investors 2, LLC ("Millenium"), a California limited
liability company, commenced a solicitation of the Registrant's limited partners
seeking the approval by written consent (the "Consents") of the limited partners
to remove the general partners and to elect Millenium as the new general partner
of the Registrant, and to approve the liquidation of the Registrant and final
distribution of its assets to the limited partners. Millenium terminated its
solicitation of Consents as of November 30, 1999, in response to the recent
change of control of the Registrant.
Millenium filed a report with the Securities and Exchange Commission indicating
that it received Consents with respect to 6,317 limited partnership units
(approximately 47% of the outstanding units). According to Millenium, of the
Consents received, 95% were voted in favor of Millenium's proposals.
PART II
ITEM 5: MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
As of February 1, 2000, there were 1,148 record holders of Units in the
Registrant. There is no public market for the Units, and it is not anticipated
that a public market will develop.
There were no cash distributions paid to the Limited Partners during fiscal 1998
or fiscal 1999.
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ITEM 6: SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Year Ended November 30,
<S> <C> <C> <C> <C> <C>
1999 1998 1997 1996 1995
(Not covered by independent auditors' report)
Rental and other income $3,250,073 $ 3,287,570 $ 3,406,566 $ 3,505,163 $ 3,391,439
Loss before adjustment to (503,472) (401,699) (193,748) (18,733) (151,835)
liquidation basis
Data per limited partnership (36.56) (29.18) (14.07) (1.36) (11.03)
unit - loss before adjustment
to liquidation basis
Weighted average limited 13,529 13,529 13,529 13,529 13,529
partnership units outstanding
At year-end:
Total assets (1) 11,314,263 17,918,396 11,628,080 11,211,633 11,322,989
Investment property - net 10,983,890 17,585,000 11,110,241 10,678,208 10,705,962
Mortgage notes payable 13,825,996 13,500,465 12,871,393 12,529,484 12,268,720
Partners' deficit (1) (3,046,544) -- (1,687,945) (1,494,197) (1,475,464)
Net liabilities in -- (3,128,533) -- -- --
liquidation (1)
</TABLE>
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 were prepared on a liquidation basis of accounting. The planned liquidation
was not consummated and as such, the 1999 financial statements are no longer
presented on a liquidation basis of accounting.
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Liquidity and Capital Resources
Cash reserves as of November 30, 1999 are $21,021, a decrease of $206,352 from
the year ended November 30, 1998. The decrease in cash is due primarily to an
increase in operating loss of $101,773 caused by continued lower occupancy at
Cobblestone Court, an increase in accounts receivable of $82,556 and an
increase in prepaid expenses of $19,100. An increase of $334,937 in capital
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expenditures and a decrease of $152,652 in deferred expenses were offset by an
increase in proceeds from mortgage notes payable of $499,534.
On January 28, 2000, the Registrant entered into a contract to sell the
Cobblestone Court Shopping Center ("Cobblestone"), located at 14150 Nicollet
Avenue South in Burnsville, Minnesota, a suburb of Minneapolis, to an unrelated
third party, Farrington Properties, Inc., a Minnesota corporation. The sale
price is $5,100,000. The contract was subject to a fifteen (15) day due
diligence period pursuant to which Farrington had the right to terminate the
contract without liability to the Registrant. The due diligence period expired
February 12, 2000. The sale is tentatively scheduled to close on March 28, 2000
with the contract providing for one 45 day extension. The sale is subject to
certain conditions, including but not limited to delivery of satisfactory title
and delivery of satisfactory Subordination, non-disturbance and attornment
agreements and estoppel letters from all tenants of the Property.
The Cobblestone sales contract provides for a net sale price of $5,100,000. If
consummated as currently structured the transaction would result in a gain of
approximately $1,529,000. There is no assurance at this time, however, that the
transaction will be consummated or that the gain will be realized.
On November 30, 1998, the Registrant refinanced the debt on both of its
properties. A new loan agreement with an aggregate balance of $13,500,465
secured by both Cobblestone Court and Woodhollow Apartments was obtained. The
loan agreement includes two notes, which are at a floating interest rate of
LIBOR + 2.75% and call for monthly principal payments of $15,818. The notes
mature November 30, 2001. In 1999, additional funds of $499,534 were borrowed
on these notes.
Results of Operations
The results of operations for the Registrant's properties for the years ended
November 30, 1999, 1998, and 1997 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 potential liquidation of Cobblestone Court , see Item 7,
"Liquidity and Capital Resources". Expenses of the Registrant are excluded.
<TABLE>
<CAPTION>
<S> <C> <C>
Woodhollow Cobblestone
------------ -------------
1999
Revenues $ 2,452,272 $ 789,371
Expenses 2,717,191 1,013,190
--------- ---------
Net (Loss) from Operations $ (264,919) $ (223,819)
========= =========
1998
Revenues $ 2,372,154 $ 911,124
Expenses 2,564,351 1,126,982
--------- ---------
Net (Loss) from Operations $ (192,197) $ (215,858)
========= =========
</TABLE>
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<TABLE>
<CAPTION>
<S> <C> <C>
1997 Woodhollow Cobblestone
------------ -------------
Revenues $ 2,371,681 $ 1,036,061
Expenses 2,442,025 1,156,047
--------- ---------
Net (Loss) from Operations $ (70,344) $ (119,986)
========= =========
</TABLE>
1999 Property Comparisons
Cobblestone Court revenues declined $121,753 from 1998 to 1999 due to a decrease
in base rental revenue of $77,094 and common area maintenance income of $78,415,
partially offset by an increase in percentage rental income of $29,477. The
revenues decreased due to the decrease in average occupancy from 1998 to 1999.
Expenses decreased $104,360 in 1999 compared to 1998. The primary reason for the
decrease in expenses was a decrease in property operating expenses of $193,647,
including a decrease of $78,111 in management fees and a $77,950 decrease in
property taxes. The decrease in expense was partially offset by an increase in
professional service expense of $79,957.
At Woodhollow Apartments, revenues increased $80,118 from 1998 to 1999. Expenses
increased $166,632 in 1999 compared to 1998, due to an increase in repair and
maintenance expense of $69,846, depreciation of $14,592, interest expense of
$38,632 and professional services of $52,457. The increased expenses were
partially offset by a decrease in amortization expense of $16,493.
The occupancy levels at the Registrant's properties as of November 30 were:
Occupancy rates at November 30
1999 1998 1997
Woodhollow 87% 92% 92%
Cobblestone 61% 59% 69%
At Woodhollow, occupancy decreased when compared to 1998. A rental increase was
implemented on each floorplan during the year. There were a high number of
vacant one bedroom units at November 30, 1999. The rent on these units has since
been reduced in an effort to increase the demand for one bedroom rental
apartments.
Occupancy at Cobblestone Court increased from 59% at the beginning of the year
to 61% at the end of the year, although average occupancy percent for the year
decreased from 1998 to 1999. No tenants vacated their space during the year. No
tenants renewed their lease during the year. No new tenants were signed during
the year, with the exception of one seasonal tenant who occupied space for the
holiday season (October 25, 1999 through December 31, 1999), which accounted for
the increase in occupancy. A contract to sell the center was signed
January 28, 2000. For further discussion of the potential sale of Cobblestone
Court , see Item 7, "Liquidity and Capital Resources". 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.
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Year 2000 issues
Information Technology Systems
Subsequent to December 31, 1999, the Registrant has not experienced any material
information technology ("IT") or embedded ("non-IT") systems disruptions or
failures and anticipates no material systems problems at Cobblestone Court or
Woodhollow Apartments.
Material Third Parties' Systems Failures
Evaluation of material third parties' Year 2000 readiness status was essentially
complete as of December 31, 1999. The Registrant continues to monitor for any
additional information pertaining to these parties' Year 2000 readiness. The
Registrant has not experienced and does not anticipate any Year 2000 performance
issues related to its material third parties.
1999 Comparisons
For the year ended November 30, 1999, the Registrant's consolidated revenues are
$3,250,073 compared with $3,287,570 for the year ended November 30, 1998. The
decrease in revenues of $37,497 (1.1%) can be attributed primarily to the
decrease in revenue from Cobblestone Court due to the decrease in occupancy
previously discussed.
The Registrant's consolidated expenses were $3,753,545 for the year ended
November 30, 1999 as compared to $3,689,269 for the year ended November 30,
1998. The increase in expenses of $64,276 (1.7%) is mainly attributable to an
increase in repairs and maintenance of $32,663 and depreciation of $64,513,
offset partially by a decrease in interest expense of $44,606. An increase in
professional fees of $148,767, primarily as a result of litigation which has
been resolved, was offset by a decrease in management fees of $74,884, and real
estate taxes of $67,519.
The loss before adjustment to liquidation basis for the year ended 1999 was
$503,472 or $36.56 per limited partnership unit as compared to a loss before
adjustment to liquidation basis of $401,699 or $29.18 per limited partnership
unit for the year ended 1998. Cash flow provided by operating activities was
$327,711 for the year ended 1999 as compared to cash flow used in operating
activities of $204,952 for the year ended 1998.
1998 Comparisons
For the year ended November 30, 1998, the Registrant's consolidated revenues
were $3,287,570 compared to $3,406,566 for the year ended November 30, 1997. The
decrease in revenues of $118,996 (3.5%) can be attributed to the decrease in
revenue from Cobblestone Court due to the decrease in occupancy previously
discussed.
The Registrant's consolidated expenses were $3,689,269 for the year ended
November 30, 1998 as compared to $3,600,314 for the year ended November 30,
1997. The increase in expenses of $88,955 (2.5%) is mainly attributable to an
increase in depreciation and amortization of $66,310 and payroll expense of
$47,389, partially offset by decreases in other expenses of $26,477.
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<PAGE>
The loss before adjustment to liquidation basis for the year ended 1998 was
$401,699 or $29.18 per limited partnership unit as compared to a loss before
adjustment to liquidation basis 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.
Inflation
The effects of inflation did not have a material impact upon the Registrant's
operation in fiscal l999 and are not expected to materially affect the
Registrant's operation in 2000.
Interest Rates
The interest rate on floating rate debt fluctuated in 1999 and was 8.34% at
November 30, 1999. Future significant increases in LIBOR could adversely affect
the operations of the Registrant.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET 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, 1999. A review of the Registrant'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. Based on the Registrant's current outstanding
borrowings, at an average interest rate of 8.34 % per annum, a 100 basis point
increase in market interest rates would increase interest expense and decrease
earnings before income taxes by approximately $130,000.
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial Statements of the Registrant are filed herewith as Exhibit 99.2 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 ACCOUNTING
AND FINANCIAL DISCLOSURE
The Registrant dismissed Deloitte and Touche and appointed KPMG as the
Registrant's independent auditors for the year 1999, based on the recommendation
of the managing General Partner. For more information regarding the change in
auditors, refer to the Form 8-K filed January 25, 2000, as amended February 16,
2000 and the Form 8-K filed February 11, 2000.
11
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PART III
ITEM 10: DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Registrant has two General Partners. The background and experience of the
General Partners are as follows:
The managing General Partner of the Registrant responsible for all aspects of
the Registrant's operations is Maxus Capital Corp., a Missouri corporation
(formerly known as Nooney Capital Corp.). Maxus 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.
On November 9, 1999, S-P Properties, Inc. sold all of the outstanding stock of
Nooney Capital Corp. (now known as Maxus Capital Corp.) to Bond Purchase,
L.L.C., a Missouri limited liability company.
The three members of the board of directors of Maxus Capital Corp. are David L.
Johnson, Daniel W. Pishny and John W. Alvey. The executive officers are Mr.
Johnson, Chairman and Executive Vice President; Mr. Pishny, President; and Mr.
Alvey, Vice President, Secretary and Treasurer.
Mr. Johnson, age 43, is a member of the Board of Trustees and Chairman of Nooney
Realty Trust, Inc., a publicly-traded real estate investment trust ("NRTI"). Mr.
Johnson also is Chairman, Chief Executive Officer, and majority shareholder of
Maxus Properties, Inc. ("Maxus"), a Missouri corporation located at 1100 Main,
Suite 2100, Kansas City, Missouri 64105, that specializes in commercial property
management for affiliated owners. Maxus employs more than 250 people to manage
49 commercial properties, including more than 8,000 apartment units and 700,000
square feet of retail and office space. Mr. Johnson is also currently Vice
President of KelCor, Inc. ("KelCor"), a Missouri corporation that specializes in
the acquisition of commercial real estate.
Mr. Pishny, age 37, is a member of the Board of Trustees and President of NRTI,
and is President and Chief Operating Officer of Maxus. Mr. Pishny is responsible
for the day-to-day operations of Maxus and its managed properties.
Mr. Alvey, age 41, is Vice President of NRTI, Executive Vice President and Chief
Financial Officer of Maxus and President of KelCor.
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.
The General Partners will continue to serve as General Partners until their
withdrawal or their removal from office by the Limited Partners.
ITEM 11: EXECUTIVE COMPENSATION
Pursuant to the Registrant's limited partnership agreement, the General Partners
are entitled to receive one percent (1%) of all of the net operating cash income
of the Registrant. In addition, the limited
12
<PAGE>
partnership agreement provides that the General Partners are entitled to
additional distributions in connection with net extraordinary cash income
generated by the Partnership. No cash distributions were paid to the General
Partners during the fiscal year 1999 because the Partnership did not generate
net operating cash income or net extraordinary cash income. In addition, no
direct compensation was paid or payable by the Registrant to directors or
officers (since it does not have any directors or officers) for the year ended
November 30, 1999, nor was any direct compensation paid or payable by the
Registrant to the General Partners or directors or officers of the corporate
general partner for the year ended November 30, 1999.
See Item 13 - Certain Relationships and Related Transactions for a discussion of
transactions between the Registrant and certain affiliates of the General
Partners.
ITEM 12: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security Ownership of Certain Beneficial Owners.
The table below sets forth each person or entity that has reported to the
Registrant beneficial ownership of more than 5% of the Registrant's limited
partner units as of January 31, 2000. The percentage of ownership is based on
13,529 limited partner units outstanding as of February 1, 2000.
Amount and Nature of
Name Beneficial Ownership Percentage
---- -------------------- ----------
Bond Purchase, L.L.C. 1,482 10.95%
1100 Main, Suite 2100
Kansas City, Missouri 64105
Chris B. Garlich 773 5.71%
1610 Des Peres Rd., #370
St. Louis, Missouri 63131
(b) Security Ownership of Management.
The table shown below sets forth the number of the Registrant's limited partner
units beneficially owned as of January 31, 2000, directly or indirectly, by each
general partner and executive officer and all general partners and executive
officers as a group. securities shown.
Amount and Nature of
Name Beneficial Ownership (1) Percentage(2)
John J. Nooney (3).................... -0- -
David L. Johnson (4).................. 1,482 10.95%
Daniel W. Pishny .................... -0- -
John W. Alvey ........................ -0- -
All general partners and officers..... 1,482 10.95%
________________
(1) A beneficial owner of a security includes a person who, directly or
indirectly, has or
13
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shares voting or investment power with respect to such security. Voting
power is the power to vote or direct the voting of the security and
investment power is the power to dispose or direct the disposition of the
security. Each person listed has stated that he, either alone or with his
spouse, has sole voting power and sole investment power with respect to
the units shown as beneficially owned, except as otherwise indicated.
(2) The percentages represent the total number of limited partner units in the
adjacent column divided by 13,529, the number of issued and outstanding
units of the Registrant on February 1, 2000.
(3) Mr. Nooney, Special General Partner of the Registrant, is not known to the
Registrant to be the beneficial owner, either directly or indirectly, of
any limited partner units of the Registrant.
(4) Represents units held by Bond Purchase, L.L.C. of which Mr. Johnson is
approximately an 86% owner.
(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
(a) Transactions with Management and Others.
Nooney, Inc., the former manager of the Registrant's properties, is a
wholly-owned subsidiary of CGS Real Estate Company, a former affiliate of the
managing General Partner. Nooney, Inc. was entitled to receive monthly
compensation from the Registrant for property management and leasing services,
plus administrative expenses through November 9, 1999. During fiscal 1999 the
Registrant paid property management fees of $89,627 to Nooney, Inc.. No amounts
were paid as reimbursement for indirect expenses incurred in connection with
management of the Registrant. 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.
Effective November 10, 1999, Maxus Properties, Inc., an affiliate of the
managing General Partner, became the management company for the Registrant's
properties. Pursuant to the current management contract for Cobblestone Court,
Maxus is entitled to receive monthly compensation of Five and Four Tenths
percent (5.4%) of the monthly gross receipts from the operation of Cobblestone
Court, for property management and leasing services, plus reimbursement for
administrative expenses. Pursuant to the current management contract for
Woodhollow Apartments, Maxus is entitled to receive monthly compensation of
Four and one half percent (4.5%) of the monthly gross receipts from the
operation of Woodhollow Apartments, for property management and leasing
services, plus reimbursement for administrative expenses. During fiscal 1999 the
Registrant paid property management fees of $11,781 to Maxus.
See Item 11 above for a discussion of cash distributions paid to the General
Partners during fiscal l999.
14
<PAGE>
(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 1999.
(c) Indebtedness of Management.
Not Applicable.
(d) Transactions with promoters.
Not Applicable.
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 99.2):
Independent auditors' reports
Balance sheet as of November 30, 1999
Statement of net liabilities in liquidation as of November 30, 1998
Statements of operations for the years ended November 30, 1999 and 1997
Statement of loss in liquidation for the year ended November 30, 1998
Statements of partners' deficit for the years ended November 30, 1999 and
1997
Statement of changes in net liabilities in liquidation for the year ended
November 30, 1998
Statements of cash flows for the years ended November 30, 1999 and 1997
Statement of cash flows in liquidation for the year ended November 30, 1998
Notes to financial statements
15
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(2) Financial Statement Schedules (filed herewith as Exhibit 99.2):
Schedule 1 (Schedule I) - Reconciliation of partners' equity (deficit)
Schedule 2 (Schedule III) - Real estate and accumulated depreciation
All other schedules are omitted because they are inapplicable or not
required under the instructions.
(3) Exhibits:
A list of exhibits required to be filed as part of this report on Form 10-K
is set forth in the Exhibit Index, which immediately precedes such exhibits,
and is incorporated herein by reference.
(b) Reports on Form 8-K
The following reports on Form 8-K were filed by the Registrant since the end of
the third quarter of 1999, each of which are incorporated herein by reference
(File No. 000-11023):
On November 10, 1999, the Registrant filed a Form 8-K reporting a change in
control of the Registrant.
On January 21, 2000, the Registrant filed a Form 8-K reporting the change of
the Registrant's name and the change of its general partner's name.
On January 25, 2000, the Registrant filed a Form 8-K reporting the dismissal
of Deloitte and Touche LLP as its certifying accountant. On February 16,
2000, the Registrant filed Amendment No. 1 to this Form 8-K.
On February 11, 2000, the Registrant filed a report on Form 8-K reporting
the appointment of KPMG as its certfifying accountant.
On February 17, 2000, the Registrant filed a Form 8-K reporting an agreement
entered into by the Registrant to sell Cobblestone Court Shopping Center.
(c) Exhibits:
A list of exhibits required to be filed as part of this report on Form 10-K
is set forth in the Exhibit Index, which immediately precedes such exhibits,
and is incorporated herein by reference.
(d) Not Applicable
16
<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.
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Maxus Capital Corp.
General Partner
Date: February 28, 2000 By:/s/ David L. Johnson
David L. Johnson
Chairman of the Board
and Executive Vice President
By:/s/ Daniel W. Pishny
Daniel W. Pishny
Director and President
By:/s/ John W. Alvey
John W. Alvey
Director , Vice President
Secretary and Treasurer
17
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
2.1 Contract for the sale of Cobblestone Court Shopping Center dated January
28, 2000 is incorporated by reference to the Form 8-K filed by the
Registrant under the Securities Act of 1933 (File No. 000-11023).
3.1 Amended and Restated Agreement and Certificate of Limited N/A Partnership
dated April 7, 1982.
3.2 Amendment of Certificate of Limited Partnership dated December 21, 1999 is
incorporated by reference to the Form 8-K filed by the Registrant under
the Securities Act of 1933 (File No. 000-11023).
10.1 Management Contract between Maxus Real Property Investors-Four, L.P. and
Maxus Properties, Inc. for the management of Cobblestone Court.
10.2 Management Contract between Maxus Real Property Investors-Four, L.P. and
Maxus Properties, Inc. for the management of Woodhollow Apartments.
27 Maxus Real Property Investors-Four, L.P. Financial Data Schedule at
November 30, 1999 for the year then ended.
99.1 List of Directorships filed in response to Item 10.
99.2 Financial Statements and Schedules.
18
<PAGE>
EXHIBIT 3.1
NOONEY REAL PROPERTY INVESTORS--FOUR
(a Missouri Limited Partnership)
AMENDED AND RESTATED AGREEMENT AND
CERTIFICATE OF LIMITED PARTNERSHIP
This Amended and Restated Agreement and Certificate of Limited Partnership
entered into this 7th day of April, 1982, by and among G. J. NOONEY, GREGORY J.
NOONEY, JR., JOHN J. NOONEY, JAMES J. FINN, JAMES J. O'CONNOR III, GREGORY J.
NOONEY III and NOONEY CAPITAL CORP., a Missouri corporation, as General
Partners, GRANT A. Grimes as the Initial Limited Partner, and those persons who
shall hereafter be admitted as Limited Partners, as provided herein.
W I T N E S S E T H:
WHEREAS, the parties hereto formed a limited partnership under the Uniform
Limited Partnership Law of the State of Missouri, pursuant to an Agreement and
Certificate of Limited Partnership dated February 9, 1982, and now desire to
amend in certain respects and restate in full the Agreement and Certificate of
Limited Partnership;
NOW, THEREFORE, pursuant to the terms, covenants and conditions set forth
herein and the mutual promises contained herein, the parties hereto agree as
follows:
ARTICLE ONE
DEFINED TERMS
The defined terms used in this Agreement shall have the meanings specified
below:
"Acquisition Expenses" means expenses including but not limited to legal
fees and expenses, travel and communications expenses, costs of appraisals,
non-refundable option payments on property not acquired, accounting fees and
expenses, title insurance and miscellaneous expenses related to selection and
acquisition of properties, whether or not acquired.
"Acquisition Fees" means the total of all fees and commissions paid by any
party in connection with the purchase or development of Properties by the
Partnership, except a development fee paid to a person not affiliated with the
General Partners, in connection with the actual development of a project after
acquisition of the land by the Partnership. Included in the computation of such
fees or commissions shall be any real estate commission, selection fee,
development fee, nonrecurring management fee, or any fee similar in nature,
however designated.
"Additional Limited Partners" means any of those Persons admitted to the
Partnership pursuant to Section 3.3 hereof.
"Adjusted Capital Contribution" means a Partner's Capital Contribution as
reduced from time to time by all distributions of Net Extraordinary Cash Income
made to a Partner or made to any predecessor holder of the partnership interest
of the then Partner.
"Affiliate" means (1) any Person directly or indirectly controlling,
controlled by or under common control with another Person, (2) any Person owning
or controlling ten percent (l0%) or more of the outstanding voting securities of
such other Person, (3) any officer, director or partner of such Person, and (4)
if such other Person is an officer, director or partner, any company for which
such Person acts in any such capacity.
"Agreement" means this Amended and Restated Agreement and Certificate of
Limited Partnership as amended from time to time.
"Capital Contribution" means the total amount of cash originally
contributed to the Partnership by each Partner pursuant to the terms of this
Agreement, reduced by any return of cash to the Partners pursuant to Section
4.2C or Section 3.2B hereof. Any reference in this Agreement to the Capital
Contribution of a Partner shall include the Capital Contribution made by any
predecessor bolder of the partnership interest of the then Partner.
A-1
"Certificate of Limited Partnership" means this Agreement, as amended from
time to time, if it is filed as a Certificate of Limited Partnership or such
other document filed as a Certificate of Limited Partnership under the State
Uniform Limited Partnership Law.
"Code" means the Internal Revenue Code of 1954, as amended.
"Consent of the Limited Partners" means the written consent or vote to do
the act or to do the thing for which the consent or vote is solicited of so many
of the Limited Partners whose combined Capital Contributions represent at least
a majority of the total Capital Contributions of the Limited Partners.
"Corporate General Partner" means Nooney Capital Corp., a Missouri
corporation or any other corporation which succeeds it in such capacity.
"Development Fee" means a fee for the packaging of a Partnership property
including negotiating and approving plans, and undertaking to assist in
obtaining zoning and necessary variances and necessary financing for the
specified property, either initially or at a later date.
"Effective Date" means the date on which the public offering referred to in
Section 4.2 hereof commences.
"Front-End Fees" means fees and expenses paid by any party for any services
rendered during the Partnership's organizational and/or acquisition phase
including Organizational and Offering Expenses, Acquisition Expenses,
Acquisition Fees and any other similar fees, however designated by the General
Partners or the Partnership.
"General Partners" means G. J. Nooney, Gregory J. Nooney, Jr., John J.
Nooney, James J. Finn, James J. O'Connor III, Gregory J. Nooney III and Nooney
Capital Corp. or any other Person who becomes a successor or additional General
Partner of the Partnership as provided herein (including the Successor General
Partner), in such Person's capacity as a General Partner of the Partnership.
"Individual General Partners" means G. J. Nooney, Gregory J. Nooney, Jr.,
John J. Nooney, James J. Finn, James J. O'Connor III and Gregory J. Nooney III
or any other person who succeeds any of them in such capacity.
"Initial Limited Partner" means Grant A. Grimes.
"Investment in Properties" means the amount of Capital Contributions
actually paid or allocated to the purchase, development, construction or
improvement of the Properties acquired by the Partnership (including the
purchase of properties, working capital reserves allocable thereto (except that
working capital reserves in excess of 5% shall not be included), and other cash
payments such as interest and taxes but excluding Front-End Fees and any
Acquisition Fees paid by a seller of a Property to the Partnership.
"Limited Partner" means the Initial Limited Partner prior to the time of
his withdrawal, and any Additional Limited Partner or any Substituted Limited
Partner, in such Person's capacity as a Limited Partner of the Partnership.
"Major Capital Event" means any Partnership transaction not in the ordinary
course of its business including, without limitation, sales of real or personal
property, condemnations, recoveries of damage awards and insurance proceeds, and
mortgage refinancing or borrowings, unless any such event shall be deemed
insignificant in the good faith determination of the General Partners.
"Net Extraordinary Cash Income" means all cash receipts arising from Major
Capital Events less (1) the amount of cash disbursed or to be disbursed in
connection with expenses relating to such Major Capital Event; (2) the amount
necessary for the payment of all debts and obligations (other than a mortgage(s)
remaining after the Major Capital Event) of the Partnership related to the
particular Major Capital Event; and (3) the amount considered appropriate by the
General Partners to provide reserves to pay taxes, insurance, debt service,
repairs, replacements or renewals, and/or other costs and expenses incident to
the ownership or operation of the Properties.
"Net Operating Cash Income" means, with respect to any fiscal period, all
revenues during such period not arising from Major Capital Events, determined in
accordance with the Partnership's method of accounting, less Operating Expenses.
"Notice" means a writing, containing the information required by this
Agreement to be communicated to a party, sent by registered or certified mail,
postage prepaid, to such party at the last known address of such party as shown
on the records of the Partnership, the date of registry thereof or the date of
the certification receipt therefor being deemed the date of receipt thereof.
A-2
"Operating Expenses" means, with respect to any fiscal period, (1) to the
extent paid other than with cash withdrawn from reserves therefor, the amount of
cash disbursed (except cash disbursed in connection with a Major Capital Event)
in such period in order to operate the Partnership and to pay expenses of the
Partnership (including the management fees as provided for in Section 5.7 hereof
and expenditures for debt service and capital improvements with respect to the
Properties) and (2) amounts set aside (except amounts set aside related to a
Major Capital Event or reserves for depreciation) for such period to maintain an
adequate level of working capital and to pay taxes, insurance, debt service,
repairs, replacements or renewals, and/or other costs and expenses incident to
the ownership or operation of the Properties.
"Organizational and Offering Expenses" means those expenses incurred in
connection with and in preparing the Partnership for registration and
subsequently offering and distributing the Units to the public, including sales
commissions paid to broker-dealers in connection with the distribution of the
Units and all advertising expenses.
"Partner" means any General Partner or Limited Partner.
"Partnership" means the limited partnership formed by this Agreement by the
parties hereto, as said limited partnership may from time to time be
constituted.
"Person" means any individual, partnership, corporation, trust or other
entity.
"Profits and Losses For Tax Purposes" means, for Partnership accounting and
tax purposes, the various items set forth in Section 702(a) of the Code and all
applicable regulations or any successor law, and shall include, but not be
limited to, items such as capital gain or loss, tax preferences, credits,
depreciation, other deductions and depreciation recapture.
"Properties" means all real properties which are purchased out of
Capital Contributions or financing proceeds, and all improvements thereon and
all repairs, replacements or renewals thereof, together with all personal
property acquired which is from time to time located thereon or specifically
used in connection therewith.
"Purchase Price of Property" means the price paid upon the purchase or sale
of a particular property, including the amount of Acquisition Fees and all liens
and mortgages on the property, but excluding points and prepaid interest.
"State Uniform Limited Partnership Law" means the Uniform Limited
Partnership Law of the State of Missouri.
"7% Cumulative Return" means a cumulative amount which shall be allocable
or distributable to each Partner as provided herein in an amount equal to a
seven percent (7%) per annum return (cumulative, but not compounded) on the
amount of his respective Adjusted Capital Contribution, such return to begin not
later than the end of the calendar month in which the Capital Contribution is
made.
"Substituted Limited Partner" means any Person admitted to the Partnership
as a Limited Partner pursuant to the provisions of Section 7.2 hereof.
"Successor General Partner" means anyone designated as a General Partner by
Nooney Capital Corp. pursuant to this Agreement.
"Termination Date" means the date on which the public offering referred to
in Section 4.2 hereof terminates.
"Unit" means the interest of a Limited Partner in the capital of the
Partnership representing a Capital Contribution of One Thousand Dollars
($1,000).
"Withdrawal" means, as to a General Partner, the occurrence of death,
adjudication of insanity or incompetence, bankruptcy, dissolution, or voluntary
or involuntary removal or withdrawal from the Partnership for any reason.
ARTICLE TWO
FORMATION, NAME AND OFFICE, PURPOSES, TERM AND DISSOLUTION
2.1 Formation
The parties hereto hereby form a Limited Partnership pursuant to the
provisions of the State Uniform Limited Partnership Law.
2.2 Name, Place of Business and Office
The Partnership shall be conducted under the name of "Nooney Real Property
Investors-Four." The principal office and place of business shall be 7701
Forsyth Boulevard, St. Louis, Missouri 63105.
A-3
The General Partners may at any time change the location of such principal
office. Notice of any such change shall be given to the Limited Partners on or
before the date of any such change.
2.3 Purposes
The purposes of the Partnership shall be to acquire, own, finance, develop,
improve, lease, operate, manage, dispose of, sell and otherwise invest in and
deal with the Properties for profit, and to engage in any other activities
related or incidental thereto. The Partnership shall not engage in any other
business or activity.
2.4 Term and Dissolution
A. The Partnership shall continue in full force and effect until December
31, 2082 or until dissolution prior thereto upon the happening of any of the
following events:
(i) The sale of all the Properties of the Partnership including
notes received from sales of real estate, or
(ii) The Withdrawal of a General Partner if no General Partner
remains, or
(iii) The Consent of the Limited Partners (subject to the provisions
of Section 10.11 hereof) to dissolve the Partnership.
B. Upon dissolution of the Partnership, the General Partners shall cause
the cancellation of the Partnership's Certificate of Limited Partnership,
liquidate the Partnership assets and apply and distribute the proceeds thereof
in accordance with Section 8.4 hereof.
ARTICLE THREE
PARTNERS AND CAPITAL
3.1 General Partners
A. The Capital Contribution to the Partnership of each of the General
Partners shall be in cash, payable as follows:
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Capital Contribution
Capital at the Time
Contribution at the Additional Limited
Time of the Partners are First
Formation of the Admitted to the Total Capital
Partnership Partnership Contribution
-------------------- ---------------------- --------------
G. J. Nooney...................... $ 100 $ 100 $ 200
Gregory J. Nooney, Jr............. 100 100 200
John J. Nooney.................... 100 100 200
James J. Finn..................... 100 100 200
James J. O'Connor III............. 100 100 200
Gregory J. Nooney III............. 100 100 200
Nooney Capital Corp............... 1 99,999 100,000
--- ------- -------
Total.............. $ 601 $100,599 $101,200
</TABLE>
B. A General Partner, in addition to being a General Partner, may, if he so
chooses, also become an Additional Limited Partner by complying with the
provisions of Section 3.3 hereof or a Substituted Limited Partner by complying
with the provisions of Article Seven hereof. In such event, said General Partner
shall have all the rights and powers and be subject to all the restrictions of a
General Partner, except that, in respect to his Capital Contribution as a
Limited Partner, he shall have the rights against the other Partners which he
would have had if he were not also a General Partner.
3.2 Initial Limited Partner
A. The capital contributed by the Initial Limited Partner shall be $7 in
cash, payable at the time of the formation of the Partnership.
B. At such time as the General Partners shall, in their sole discretion,
determine or at such time Additional Limited Partners are admitted to the
Partnership, the initial Limited Partner shall withdraw from the Partnership in
consideration of the payment to him of $7 and neither the General Partners, any
Limited Partner nor the Partnership shall have any further obligations to the
Initial Limited Partner.
A-4
C. This Agreement shall be amended to reflect such withdrawal by the
Initial Limited Partner and the requirement of filing an amendment to the
Certificate of Limited Partnership under the State Uniform Limited Partnership
Law shall be complied with.
3.3 Admission of Additional Limited Partners
A. The General Partners are authorized to admit to the Partnership
Additional Limited Partners until the total Capital Contributions from the
Additional Limited Partners equals Sixteen Million Dollars ($16,000,000).
B. The Capital Contributions of the Additional Limited Partners shall be
made as specified in Section 4.1 hereof.
C. Each Additional Limited Partner shall agree, as a condition of receiving
any interest in the Partnership, to be bound by the terms and provisions of this
Agreement. Each Additional Limited Partner shall become a signatory hereof by
signing a counterpart of this Agreement in such manner as the General Partners
shall determine. By so signing, such Additional Limited Partner shall be deemed
to have adopted, and to have agreed to be bound by all the provisions of, this
Agreement; provided, however, that no such counterpart shall be binding until it
has been signed by the General Partners and the admission of such Additional
Limited Partner has been set forth in an amendment (which shall include the
name, place of residence and the amount of cash contributed by such Additional
Limited Partner) to this Agreement and the requirement of filing an amendment to
the Certificate of Limited Partnership under the State Uniform Limited
Partnership Law has been complied with.
3.4 Partnership Capital
A. The total capital of the Partnership shall be the aggregate amount of
the Capital Contributions of the Partners as provided for herein.
B. Except as otherwise determined by the General Partners, no Partner shall
be paid interest on any Capital Contribution to the Partnership.
C. Except as provided in Section 5.9 hereof, prior to dissolution of the
Partnership, no Partner shall have the right to demand the return of his Capital
Contribution. No Limited Partner shall have the right to demand or receive
property other than cash in return for his Capital Contribution.
3.5 Liability of Limited Partners
A. A Limited Partner shall only be liable to make the payment of his
Capital Contribution. No Limited Partner shall be liable for any obligations of
the Partnership; provided, however, to the extent required by the State Uniform
Limited Partnership Law, any Limited Partner receiving the return in whole or in
part of his Capital Contribution shall be liable to the Partnership for any sum,
not in excess of such returned Capital Contribution with interest, necessary to
discharge the Partnership's liabilities to all creditors who extended credit, or
whose claims arose, before such Capital Contribution was returned. After his
Capital Contribution shall be paid, no Limited Partner shall be required to make
any further Capital Contribution or lend any funds to the Partnership. No
General Partner shall have any personal liability for the repayment of the
Capital, Contribution of any Limited Partner.
B. No distribution of Net Operating Cash Income made to any Partner shall
be determined a return or withdrawal of a Capital Contribution, and no Partner
shall be obligated to pay any such amount to or for the account of the
Partnership or any creditor of the Partnership.
C. No Partner with a negative balance in his capital account shall have any
obligation to the Partnership or any other Partner to restore said negative
balance to zero.
3.6 Participation in Partnership Business by Limited Partners
No Limited Partner (except one who may also be a General Partner, and then
only in his capacity as General Partner) shall participate in or have any
control over the Partnership business (except as required by law) or shall have
any authority or right to act for or bind the Partnership. The Limited Partners
hereby consent to the exercise by the General Partners of the powers conferred
on them by this Agreement.
3.7 Priority Among Limited Partners
No Limited Partner shall have priority over any other Limited Partner as to
Capital Contributions, distributions or any other rights under this Agreement.
A-5
ARTICLE FOUR
CAPITAL CONTRIBUTIONS OF ADDITIONAL LIMITED PARTNERS
AND METHOD OF OFFERING
4.1 Capital Contributions of Additional Limited Partners
Capital Contributions of the Additional Limited Partners shall be in the
maximum amount of $16,000,000, payable in cash on admission to the Partnership.
No Additional Limited Partner may purchase less than five (5) Units, except that
Individual Retirement Accounts ("IRA") may purchase a minimum of two (2) Units.
4.2 Method of Offering
A. The General Partners are hereby authorized to raise capital for the
Partnership by offering and selling to the public not more than sixteen thousand
(16,000) Units, and by admitting the purchasers of said Units as Limited
Partners in the Partnership. No sale of Units shall be consummated unless the
Partnership has received subscriptions for the purchase of at least one thousand
two hundred and fifty (1,250) Units. Pending the receipt of subscriptions for
not less than one thousand two hundred and fifty (1,250) Units, all subscription
proceeds shall be kept by the General Partners separate and apart from all other
funds, and shall be deposited in an interest-bearing escrow account. At such
time as subscriptions for not less than one thousand two hundred and fifty
(1,250) Units have been received and accepted by the General Partners, the
proceeds from such subscriptions may be utilized by the General Partners to pay
expenses incurred in connection with the organization of the Partnership, the
public offering and for such other proper Partnership purposes as the General
Partners may determine. If for any reason whatsoever the Partnership does not
receive subscriptions to purchase one thousand two hundred and fifty (1,250) or
more Units, the General Partners shall terminate the offering and all monies
theretofore deposited by each subscriber shall be promptly refunded in full to
each subscriber.
B. Except as otherwise provided in Section 4.2A, the General Partners shall
have sole and complete discretion in determining the terms and conditions of the
public offering and sale of Units, and the General Partners are authorized and
directed to do all things which they deem to be necessary, convenient,
appropriate or advisable in connection therewith, including, but not limited to,
the preparation and filing on behalf of the Partnership of a registration
statement with the Securities and Exchange Commission and the securities
commissions (or similar agencies or offices) of such jurisdictions as the
General Partners shall determine, the payment of interest by the Partnership on
subscribers' funds and Partners' Capital Contributions, the guarantee of an
initial cash return to the limited Partners, and the execution or performance of
agreements with dealer-managers and others concerning the marketing of Units on
such basis and upon such terms as the General Partners shall determine.
C. Except for funds utilized to pay expenses of the Partnership and to
establish working capital reserves, as determined by the General Partners, all
net proceeds of the offering referred to in Section 4.2A hereof which have not
been invested or committed for investment within two (2) years after the
Effective Date shall be distributed pro rata to the Limited Partners so long as
the Partnership is in compliance with Section 5.2D(vi) hereof.
ARTICLE FIVE
RIGHTS, POWERS AND DUTIES OF THE GENERAL PARTNERS
5.1 Authorized Acts; Management and Control
A. The General Partners shall have the exclusive right to manage the
business of the Partnership and are hereby authorized to take any action
(including, but not limited to the acts authorized by this Section 5.1) of any
kind and to do anything and everything in accordance with the provisions of this
Agreement.
B. Except to the extent otherwise provided herein, the General Partners
for, in the name and on behalf of, the Partnership are hereby authorized:
(i) To acquire by purchase, lease or otherwise, any real or personal
property which may be necessary, convenient or incidental to the
accomplishment of the purposes of the Partnership.
(ii) To execute, sign, seal and deliver in the name and on behalf of
the Partnership any deed, lease, mortgage, mortgage note, bill of sale,
contract or other instrument purporting to convey, lease or encumber the
real or personal property of the Partnership.
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(iii) To execute, sign, seal and deliver in the name and on behalf of
the Partnership any and all agreements, contracts, leases, documents,
certifications and instruments whatsoever involving the purchase,
construction, development, management, maintenance, operation and sale of
the Properties.
(iv) To construct, operate, maintain, finance, improve, own, sell,
dispose of, convey, assign, mortgage or lease any real estate and any
personal property necessary, convenient or incidental -to the
accomplishment of the purposes of the Partnership.
(v) To borrow money and issue evidences of indebtedness in furtherance
of any or all of the purposes of the Partnership, and to secure the same by
mortgage, pledge or other lien on the assets of the Partnership.
(vi) To prepay in whole or in part, refinance, recast, increase,
modify or extend any mortgages affecting the assets of the Partnership and
in connection therewith to execute any extensions, renewals, or mortgages
on the assets of the Partnership.
(vii) To invest in short-term debt obligations (including obligations
of federal and state governments and their agencies, commercial paper, and
certificates of deposit of commercial banks, savings banks or savings and
loan associations) such funds as are temporarily not required for the
purpose of the Partnership.
(viii) To engage in any kind of activity and to perform and carry out
contracts of any kind necessary to, or in connection with, or incidental to
the accomplishment of the purposes of the Partnership, so long as said
activities and contracts may be lawfully carried on or performed by a
limited partnership under the State Uniform Limited Partnership Law.
(ix) To employ, when and if in their sole discretion the same is
deemed necessary or advisable, brokers, consultants, agents, accountants or
attorneys, notwithstanding the fact that a party to this Agreement or an
Affiliate thereof may have an interest in, or be one of, the brokers,
consultants, agents, accountants or attorneys.
(x) To sell or otherwise dispose of, at one time, all or substantially
all of the assets of the Partnership in compliance with Section 5.2B hereof
or to dissolve the Partnership in compliance with Section 5.2B hereof.
(xi) To issue certificates representing Units of interest in the
Partnership; provided, however, that such certificates shall only evidence
the holders' rights to receive distributions from the Partnership.
C. A majority vote of the General Partners (with each General Partner
having one vote) shall control the management of all matters of Partnership
business, and no General Partner shall exercise any authority herein conferred
upon him without such approval so that in all cases where any action is to be
taken by the General Partners, including actions concerning admissions of
Substituted or Additional Limited Partners, and transfers and other matters
affecting limited partnership interests, such action shall be determined by the
foregoing majority vote, except in cases where a specific provision to the
contrary shall be made in this Agreement; and the vote of a General Partner upon
a matter in which he has a personal interest shall not be disqualified for that
reason; provided, however, that this limitation on the authority of the General
Partners shall apply only in respect to the General Partners, inter se, and when
authority is herein conferred upon the General Partners, any person other than a
General Partner dealing with the Partnership may rely conclusively on the
authority and signature of any one (1) General Partner to exercise such
authority without determining that such General Partner is acting with the
approval of the required majority of the General Partners.
D. The General Partners shall observe the following policies in connection
with Partnership operations:
(i) The Partnership shall 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 may invest in real properties which are
recently completed, under construction or under contract for development
and properties which may require additional leasing activity or
refurbishing. The interests in real property to be acquired by the
Partnership shall normally take the form of fee title or of leasehold
estates having a term, including renewal periods, of at least 45 years.
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(ii) The Partnership shall not be limited as to the geographical area
in which it may conduct its operations.
(iii) The maximum amount of aggregate mortgage indebtedness which may
be incurred by the Partnership in connection with the purchase of all of
its Properties shall not exceed eighty percent (80%) of the independent
appraised value of all of its Properties on a combined basis; provided,
however, that this Section 5.1D(iii) shall not be applicable to the General
Partners or the Partnership until the Termination Date.
(iv) The Partnership may incur substantial indebtedness in connection
with the purchase, improvement, development and refinancing of Properties
and the operation of the Partnership. Such indebtedness may be in the form
of purchase money obligations to the sellers of Properties or in the form
of temporary or permanent loans from banks, institutional investors and
other lenders which indebtedness may be secured by mortgages or other
interests in the Properties owned by the Partnership (including
"wrap-around" or "all-inclusive" mortgages) and may involve final or
interim principal payments substantially greater than the regular monthly
payments. However, "wrap-around" or "all-inclusive" notes to Affiliates, if
any shall not permit the payment to Affiliates of interest on the amount of
such notes in excess of that payable to the lenders on the underlying
encumbrances.
(v) Where "wrap-around" or "all-inclusive" financing is utilized, the
Partnership shall include in its agreements provisions for regular
principal and interest payments on its note and mortgage to be made either
directly to the holder of the underlying note and mortgage or to a
financial institution or escrow company which shall collect payments from
the Partnership and apply them to the underlying note and mortgage; in
which events the Partnership shall receive credit on its note for such
payments made directly on the underlying note and mortgage.
(vi) The Partnership shall receive an independent appraisal for each
Property it purchases and the purchase price for each such Property will
not exceed its appraised value. Such appraisals will be retained at the
office of the Partnership for at least five years and will be available for
inspection and duplication by any Limited Partner.
(vii) Except as otherwise provided in this Section 5.1D(vii), the Net
Extraordinary Cash Income resulting from the sale, financing or refinancing
of any of the Properties shall not be invested in new acquisitions, but
shall either be distributed to the Partners or applied to such capital
improvements in or additions to, or payment of indebtedness with respect
to, existing Properties or the purchase of land underlying any existing
Property or the payment of any other expenses or the establishment of any
reserves, all as the General Partners, in their sole discretion, deem
necessary and appropriate; provided, however, that Net Extraordinary Cash
Income resulting from the sale, financing or refinancing of any of the
Properties may be reinvested in new acquisitions in those situations where
the Net Extraordinary Cash Income is both (1) obtained within the first
twenty-four (24) months after the Termination Date, and (2) reinvested or
committed for re-investment within the first twenty-four (24) months after
the Termination Date.
(viii) The Partnership will not make loans to any person or invest in
junior trust deeds or similar obligations except that the Partnership may
(1) advance a portion of the purchase price of a Property to a seller in
the form of a loan secured by a trust deed, a junior trust deed or a
similar obligation, and (2) in connection with the sale of a Property by
the Partnership take back from the purchaser of such Property a trust deed,
a junior trust deed or a similar obligation.
(ix) The Partnership may invest in other partnerships or joint
ventures as a general (but not limited) partner with real estate
developers, owners and others (including Affiliates of the General Partners
having identical investment objectives), for the purpose of owning a
particular property or properties; provided, however, that (1) the
Partnership or such Affiliate or both, considered together, have or acquire
a controlling interest in such other partnership or venture, (2) there are
no duplicate property management or other fees, (3) the Partnership's
investment is on substantially the same terms and conditions as the
investment of such Affiliate, (4) the Partnership shall have a right of
first refusal to buy the interest of an Affiliate if the Affiliate desires
to sell its interest in the joint venture, (5) the compensation to the
General Partners in affiliate partnerships engaged in the joint venture
must be substantially identical, (6) the purchase price of the
Partnership's investment has been confirmed by independent appraisal as not
greater than the fair market value of such investment, (7) such investment
shall not result in the impairment, abrogation or circumvention of
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any of the terms or provisions of this Agreement and (8) the investments
are not in public limited partnerships or other public real estate
investment entities.
5.2 Restrictions on Authority
A. Without the prior written consent of one hundred percent (100%) of the
Limited Partners, the General Partners shall not have the authority to:
(i) Do any act in contravention of this Agreement.
(ii) Do any act which would make it impossible to carry on the
ordinary business of the Partnership.
(iii) Confess a judgment against the Partnership.
(iv) Possess Partnership property, or assign their rights in specific
Partnership property, for other than a Partnership purpose.
(v) Admit a Person as a General Partner, except as provided in this
Agreement.
(vi) Admit a Person as a Limited Partner, except as provided in this
Agreement.
B. Without the Consent of the Limited Partners (subject to the provisions
of Section 10.11 hereof), the General Partners shall not have the authority:
(i) to sell or otherwise dispose of, at one time, all or substantially
all of the assets of the Partnership (except for the disposition of the
Partnership's final Property), or
(ii) to dissolve the Partnership (except pursuant to Section 2.4
hereof).
For purposes of this Section 5.2B the term "substantially all" shall be
deemed to mean either (i) sixty-six and two-thirds percent (66 2/3%) or more in
number of the Properties then owned by the Partnership, or (ii) a Property or
Properties representing sixty-six and two-thirds percent (66 2/3%) or more of
the net book value of all of the Partnership's Properties as of the end of the
most recently completed calendar quarter.
C. The Partnership interests of the General Partners may not be assigned,
sold, or transferred except in accordance with Article Six hereof.
D. The General Partners shall not cause or permit the Partnership to:
(i) Make any loans to the General Partners or their Affiliates.
(ii) Acquire or lease any properties from or sell or lease any
properties to the General Partners or their Affiliates; provided, however,
that the Partnership may purchase property from the General Partners or
their Affiliates if (1) the property was acquired by such General Partner
or Affiliate for the purpose of facilitating its acquisition by the
Partnership, facilitating the borrowing of money or the obtaining of
financing for the Partnership or any other purpose related to the business
of the Partnership and (2) the property is purchased by the Partnership for
a cash payment no greater than the cost of the property to such General
Partner or Affiliate; provided further, however, that any option to
purchase a property taken in the name of the General Partners or their
Affiliates may be assigned to the Partnership at the price paid by such
General Partner or such Affiliate for such option; provided further,
however, that the Partnership may, if the proceeds of the Partnership's
sales of Units (as described in Section 4.2 hereof) are insufficient to
make (or repay indebtedness incurred to make) required cash payments in
connection with the acquisition of any Property or Properties acquired
prior to the termination of the offering (as described in Section 4.2
hereof), sell to the General Partners or their Affiliates such Property or
Properties, but only on terms which provide for cash payments to the
Partnership equal to the Partnership's cash payments made and the
assumption of all indebtedness incurred in connection with the acquisition
of such Property or Properties.
(iii) Acquire any properties in exchange for Units.
(iv) Commingle the Partnership's funds with those of any other person
(except to the extent that funds are temporarily retained by property
managers).
(v) Reimburse the General Partners or their Affiliates for expenses
incurred except (a) for the Partnership's Organization and Offering
Expenses and (b) as provided for in Section 8.5.
(vi) Commit less than a Substantial Portion of the Capital
Contributions of the Partners toward Investment in Properties. As used
herein, a Substantial Portion of the Capital Contributions of the Partners
shall equal the greater of 80% of the total Capital Contributions reduced
by .1625% for each 1% of indebtedness encumbering Partnership Properties or
67% of the total Capital Contributions. The remaining Capital Contributions
may be used to pay Front-End Fees.
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(vii) Pay total real estate commissions to all persons for the sale of
any of the Properties in excess of a Competitive Real Estate Commission, as
defined below, or 6% of the contract price for the sale of the property
whichever is less, nor pay to the General Partners or their Affiliates more
than one-half of such commissions, not to exceed 3%. The General Partners
or their Affiliates may be paid a real estate commission for sale of any of
the Properties as above limited only if such General Partners or their
Affiliates provide a substantial amount of services in the sales effort and
only after payment of the amounts specified in Sections 8.2B(i) through
8.2B(iii) or Sections 8.4A(iv) (1) through 8.4A(iv) (6) hereof (whichever
are then applicable) have been made or provided for. If and to the extent
commissions otherwise payable to the General Partners or their Affiliates
have been subordinated as set forth above, the amount so subordinated shall
be added to the commissions which may be otherwise paid to the General
Partners or their Affiliates in connection with subsequent sales of
Partnership properties, subject to the limitations set forth above
regarding subordination. In no event shall the General Partners or any
Affiliate thereof have an exclusive listing in connection with sales of
Properties of the Partnership. Competitive Real Estate Commission as used
herein means that real estate or brokerage commission paid for the purchase
or sale of property which is reasonable, customary and competitive in light
of the size, type and location of the property.
(viii) Pay to the General Partners or their Affiliates any
compensation, price or fee which is not comparable and competitive with the
compensation, price or fee of any other person who is rendering comparable
services or goods which could be reasonably made available to the
Partnership.
(ix) Grant to any creditor who makes a non-recourse loan to the
Partnership any right to have or to acquire, at any time, as a result of
making the loan, any direct or indirect interest in the profits, capital,
or property of the Partnership other than as a secured creditor.
(x) Enter into any contract to construct a building without such
contract being guaranteed at the price contracted by an adequate completion
bond or other satisfactory arrangements, or purchase any property on which
improvements are under construction unless the completion of such
construction is guaranteed at the price contracted by an adequate
completion bond or other satisfactory arrangements. E. No rebates or
"give-ups" may be received by the General Partners or their Affiliates, nor
may the General Partners or their Affiliates participate in any reciprocal
business arrangements which would have the effect of circumventing any
provisions of this Agreement.
5.3 Salary; Time and Effort, Independent Activities
A. The General Partners shall not, in their capacity as General Partners,
receive any salary but shall be entitled to the Profits and Losses For Tax
Purposes and distributions to which they may be entitled as provided in Article
Eight hereof. The General Partners shall not be required to devote full time to
the business of the Partnership but shall devote whatever time, effort and skill
may be necessary to the conduct of the Partnership's business. The General
Partners as such shall not manage the Properties, but such duties shall be
carried out by a manager which shall be engaged by the Partnership and may be a
General Partner or Affiliate of any General Partner. Any Partner may engage
independently or with others in other business ventures of every nature and
description, including, without limitation, the ownership, operation,
management, syndication and development of business ventures related to or
competitive with the business of the Partnership; neither the Partnership nor
any other Partner shall have any rights in and to such independent ventures or
the income or profits derived therefrom.
B. Neither the General Partners nor any Affiliate of any General Partner
shall be obligated to present any particular investment opportunity to the
Partnership even if such opportunity is of a character which, if presented to
the Partnership, could be taken by the Partnership and each of them shall have
the right to take for its own account and to recommend to others any such
particular investment opportunity.
5.4 Duties and Obligations
A. The General Partners shall prepare and file such amendments to this
Agreement or any certificate of limited partnership as required by law or as
they deem necessary to cause this Agreement or any certificate of limited
partnership to reflect accurately the agreement of the Partners, the identity of
the Limited Partners or the General Partners and the amounts of their respective
Capital Contributions.
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B. The General Partners shall prepare (or cause to be prepared) and file
such tax returns and other documents, as required by law or as they deem
necessary, for the operation of the Partnership.
5.5 Liability for Acts and Omissions; Indemnification; Provision of Insurance
The General Partners shall not be liable, responsible or accountable in
damages or otherwise to any of the Partners for, and the Partnership shall
indemnify and save harmless the General Partners from any loss or damage
incurred by reason of, any act or omission performed or omitted by them in good
faith on behalf of the Partnership and in a manner reasonably believed by them
to be within the scope of the authority granted to them by this Agreement and in
the best interests of the Partnership, provided that the General Partners shall
not have been guilty of negligence or misconduct with respect to such acts or
omissions and, further, provided that the satisfaction of any indemnification
and any saving harmless shall be paid out of and limited to Partnership assets
and no Limited Partner shall have any personal liability on account thereof. The
Partnership shall provide and pay for insurance for the General Partners
covering all risks which the Partnership may indemnify the General Partners as
provided herein.
5.6 Dealing with an Affiliate or a General Partner
The General Partners may for, in the name of and on behalf of, the
Partnership enter into such agreements, contracts or the like with any Affiliate
of any General Partner or with any General Partner, in an independent capacity,
as distinguished from his or its capacity (if any) as a Partner, to undertake
and carry out the business of the Partnership as if such Affiliate or General
Partner were an independent contractor; and the General Partners may obligate
the Partnership to pay for and on account of any such services reasonable
compensation. The compensation provided for in such contracts shall be
competitive in price and terms with non-affiliated persons rendering comparable
services. All such contracts shall be written and precisely describe the
services to be rendered and all compensation to be paid. All such contracts
shall contain a clause allowing termination by the Partnership without penalty
on sixty (60) days notice. Subject to the provisions of Section 10.11 hereof,
all such contracts shall be subject to termination by a vote or written consent
of the Limited Partners whose combined Capital Contributions represent at least
a majority of the total Capital Contributions of the Limited Partners following
sixty (60) days prior notice thereof to the Limited Partners.
5.7 Management Contract
The Partnership is authorized to enter into a management contract with
respect to the Properties with Nooney Company (of which certain General Partners
are officers, directors and/or shareholders) on the following terms and
conditions. Such management contract shall provide that Nooney Company will
provide property management services to the Partnership with respect to the
Properties and Nooney Company will receive compensation for such services equal
to (i) in the case of the Partnership's residential properties, for all services
(including all rent-up, leasing, and re-leasing fees and bonuses and leasing
related services paid to any person), five percent (5%) of the gross revenues
from such properties (ii) in the case of the Partnership's industrial and
commercial properties, (1) six percent (6%) of the gross revenues from such
properties where the General Partners or their Affiliates provide the leasing,
releasing and leasing related services with respect to the property and (2)
three percent (3%) of the gross revenues where the General Partners or their
Affiliates do not perform the leasing, releasing and leasing related services
with respect to the property and (iii) in the case of the Partnership's
industrial and commercial properties which are leased on a long term (ten or
more years) net (or similar) bases, one percent (1%) of the gross revenues from
such properties, except for a one time initial leasing fee of three percent (3%)
of the gross revenues on each lease for the first full five years of the
original term of the lease, plus in all cases, out-of-pocket expenses; provided,
however, that the Nooney Company, at its expense, may employ any agent or third
party to provide such property management services with respect to any of the
Properties; further provided, however, that such out-of-pocket expenses shall
not include bookkeeping services or fees paid to non-related persons for
property management services. In no event shall the fees paid by the Partnership
for property management services exceed the amounts which are competitive for
similar services in the same geographic area. Such management contract shall
also provide that the Partnership will pay for all advertising expenses,
commissions, if any, due outside leasing brokers, the cost of all rent
collection suits, and additional fees due Nooney Company if the Partnership
requests Nooney Company to perform any extraordinary repairs or other
extraordinary services. All direct out-of-pocket expenses incurred by Nooney
Company in connection with the operation of the Properties (including salaries
and fringe benefits of its employees (except officers,
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directors or controlling persons) directly engaged in the full time leasing,
servicing, operation or maintenance of the Properties) will be charged to the
Partnership. The management contract shall be for an initial term of five years,
provided that the Partnership or Nooney Company may terminate the contract
without penalty on sixty (60) days prior written notice any time.
5.8 Real Estate Commissions on Purchase of Property; Limitation on Front-End
Fees and Reimbursement Payments
A. The General Partners or any Affiliate thereof may receive fees and
commissions ("Real Estate Commissions") from the Partnership or others on
purchases of Property by the Partnership; however, such fees and Real Estate
Commissions shall not exceed nine and one-half percent (9.5%) of the gross
proceeds received by the Partnership from the offering of the Units as set forth
in Section 4.2A hereof.
B. The total of all Real Estate Commissions, all Reimbursement Payments (as
defined in Section 8.5) and all other Front End Fees shall be limited to the
gross proceeds of the offering of the Units less the Investment in Properties
required by Section 5.2D(vi).
C. The Partnership shall not pay, directly or indirectly, fees or
commissions (except fees or commissions permitted as Front-End Fees) to the
General Partners or any Affiliate thereof in connection with the reinvestment or
distribution of the proceeds of the sale, exchange, financing or refinancing of
a Property.
5.9 Purchase of Units by Partnership
A. After the Termination Date, upon the death of a Limited Partner, the
Partnership shall, if requested, purchase the Units held by such deceased
Limited Partner's estate (or the surviving joint tenant or tenant by the
entirety of such deceased limited Partner) at the price specified in Section
5.9C hereof up to twenty-five (25) Units ($25,000 original offering price) per
deceased Limited Partner, and up to a maximum amount of such purchases of fifty
(50) Units ($50,000 original offering price) per Partnership fiscal year, on a
non-cumulative basis. In addition to purchasing Units from the estates of
deceased Limited Partners, commencing December 1, 1985 and ending November 30,
1986, the Partnership shall purchase, if requested, Units held by limited
Partners, other than the estates of deceased Limited Partners, at the price
specified in Section 5.9C hereof up to twenty-five (25) Units ($25,000 original
offering price) per Limited Partner and up to a maximum amount of such purchases
of one hundred-fifty (150) Units ($150,000 original offering price). Only full
Units shall be purchased by the Partnership.
B. All purchases shall be made on a first requested-first purchased basis
with the order of priority of requests received simultaneously being determined
by lot. All requests for purchases of Units from estates of deceased Limited
Partners (or from the surviving joint tenant or tenant by the entirety of such
deceased Limited Partner) shall be in writing by the personal representative (or
the surviving joint tenant or tenant by the entirety), and shall include
appropriate evidence of death, and if made by the personal representative,
appropriate evidence of authority. Units of deceased Limited Partners not
purchased in any Partnership fiscal year because of the fifty (50) Unit
limitation shall retain their priority for purchase in succeeding Partnership
fiscal years and shall be purchased in the first fiscal year in which additional
Units may be purchased, unless the request is earlier withdrawn. No requests for
purchases of Units from Limited Partners, other than estates of deceased Limited
Partners, will be accepted prior to September 1, 1985 or after November 30,
1986. Units held by such Limited Partners will be purchased commencing December
1, 1985 in order of receipt- of requests for purchase in writing on or after
September 1, 1985. Units of such Limited Partners not purchased during the
December 1, 1985 through November 30, 1986 period because of the one
hundred-fifty (150) Unit limitation shall not be purchased by the Partnership
pursuant to this Section 5.9A, B and C.
C. The purchase price for all Units shall be equal to the original offering
price of the Unit ($1,000) less $100 per Unit (the approximate pro rata share
for such Unit of all organizational and offering expenses) and less any cash
distributions made with respect to such Unit (including payments made to the
current and all predecessor holders of such Unit), and shall be paid in cash at
the offices of the Partnership within 60 days after the acceptance by the
General Partners of the written request to purchase.
D. Notwithstanding any of the foregoing provisions of this Section 5.9, no
Units shall be purchased by the Partnership unless
(i) the Partnership has sufficient cash to make the purchase;
(ii) the purchase will not be in violation of applicable legal
requirements;
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(iii) the purchase will not impair the capital or operation of the
Partnership, and;
(iv) the purchase of such Units will not result in more than fifteen
percent (15%) of the outstanding Units being purchased in any year.
E. The General Partners may, but are not obligated to, purchase additional
Units from the Limited Partners upon the same terms and conditions as the
Partnership and according to the same order of priority. The Partnership may not
purchase any Unit held by any General Partner.
F. Any Unit purchased by the Partnership pursuant to this Section 5.9 shall
thereafter, for all purposes, be considered to be retired.
ARTICLE SIX
WITHDRAWAL OF A GENERAL PARTNER; ADDITIONAL GENERAL PARTNERS
6.1 Voluntary Withdrawal; Additional General Partners
An Individual General Partner shall have the right to retire or voluntarily
withdraw from the Partnership with the prior written consent of the other
General Partners, provided that the Partnership has received an opinion of
counsel (which counsel may be counsel to the Partnership) to the effect that
such withdrawal will not affect the classification of the Partnership as a
partnership by the Internal Revenue Service under the Code, Treasury Regulations
thereunder or administrative guidelines or interpretations related thereto. In
the event that there is only one General Partner, he or it shall not have the
right to retire or withdraw voluntarily from the Partnership without the prior
consent of all the Limited Partners. A General Partner shall not retire or
voluntarily withdraw from the Partnership without ninety (90) days' prior notice
thereof to the Limited Partners.
6.2 Effect of Withdrawal
Upon the Withdrawal of a General Partner the business of the Partnership
shall be continued by the remaining General Partner(s) unless there shall be no
remaining General Partner.
6.3 Designation of Financial Successor in Interest to Withdrawing General
Partner
Except as provided in Section 6.9 hereof with respect to a removed General
Partner, upon the Withdrawal of a General Partner and the continuance of the
Partnership as provided for in Section 6.2 hereof, his financial interest (i.e.,
a General Partner's Adjusted Capital Contribution to the Partnership and a
General Partner's interest in the Net Operating Cash Income, Net Extraordinary
Cash Income, Proceeds of Liquidation, and Profits and Losses For Tax Purposes of
the Partnership) in the Partnership shall be transferred to such financial
successor in interest as shall be designated by such withdrawn General Partner.
Such designation of a financial successor in interest shall be in writing, shall
be signed by the withdrawn General Partner and shall make specific reference to
this Section 6.3. Such designation shall not be effective until a copy thereof
shall be delivered to the Partnership. Such financial successor in-interest
shall not become an additional General Partner unless and until the provisions
of Section 6.4, 6.5 and 6.6 shall be complied with.
6.4 Designation of Additional General Partners
The General Partners may, upon receiving the written consent of one hundred
percent (100%) of the Limited Partners, at any time designate additional General
Partner(s) with such interest in the General Partners' interest in the
Partnership as the General Partners and such additional General Partner(s) may
agree upon. Each such designee shall become an additional General Partner upon
compliance with Sections 6.5 and 6.6 hereof.
Except as set forth in Section 6.9 hereof, no assignee or transferee of all
or any part of the general partner interest of a General Partner shall have any
right to become an additional General Partner except as provided in this Section
6.4.
6.5 New General Partner's Agreement
Any successor or additional General Partner shall agree to be bound by the
provisions of this Agreement to the same extent and on the same terms as any
other General Partner.
6.6 Amendment of Agreement
This Agreement shall be amended to reflect the admission of an additional
or successor General Partner, and the requirements of filing an amendment to the
Certificate of Limited Partnership under the State Uniform Limited Partnership
Law shall be complied with.
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6.7 Liability of a Withdrawn General Partner
If on the Withdrawal of a General Partner the business of the Partnership
shall continue, the General Partner who shall have withdrawn or shall have been
removed shall be and remain liable for all obligations and liabilities incurred
by him as General Partner prior to such Withdrawal, but he shall be free of any
obligation or liability incurred on account of the activities of the Partnership
from and after the time of such Withdrawal.
6.8 Applicability of Section 7.1A
Notwithstanding anything to the contrary in this Article Six, a General
Partner interest in the Partnership shall at all times be subject to the
restrictions on transfer set forth in Section 7.lA hereof pertaining to a
Limited Partner interest.
6.9 Removal of a General Partner
A. Subject to the provisions of Section 10.11 hereof, the Limited Partners
whose combined Capital Contributions represent at least a majority of the total
Capital Contributions of the Limited Partners may remove a General Partner. If
such removal would result in the removal of the sole remaining General Partner,
then such removal shall not become effective until the Limited Partners whose
combined Capital Contributions represent at least a majority of the total
Capital Contributions of the Limited Partners elect (subject to the provisions
of Section 10.11 hereof) a new General Partner and the provisions of Sections
6.5 and 6.6 shall have been complied with.
B. In the event a General Partner is removed, the removed General Partner's
interest in the Partnership shall be transferred to any remaining or successor
General Partner(s) and shall be purchased by the Partnership in the manner and
for the purchase price as set forth below in Section 6.9C hereof.
C. (i) Within sixty (60) days after removal of a General Partner, two
independent appraisers, one selected by the removed General Partner and one by
the Limited Partners, shall appraise the Partnership's net assets; in the event
that such two appraisers are unable to agree on said value, they shall promptly
appoint a third independent appraiser whose determination shall be final and
binding. The Partnership shall pay all fees and expenses incurred with respect
to such appraisal. In making such appraisal, the appraisers shall assume that
the Partnership's assets were sold on the date the General Partner was removed
and shall assume that the Partnership was liquidated on said date in accordance
with the provisions of Section 8.4 hereof.
(ii) The amount due the removed General Partner from the Partnership shall
be the sum of the amounts, if any, which would have been due such General
Partner (assuming a liquidation of the Partnership) pursuant to Sections
8.4A(iv)(3), (4), (5), (7) and (8) hereof, subject to the provisions set out
below.
(iii) The amounts, if any, due the removed General Partner pursuant to
Sections 8.4A(iv)(3). (4), (5),(7) and (8) hereof shall be paid to the removed
General Partner as set out in Section 6.9C(iv) hereof.
(iv) The Partnership shall pay the removed General Partner all amounts due
to such removed General Partner by delivering to said removed General Partner a
promissory note, bearing interest at the rate of 8% per annum, payable on the
180th day from the date the General Partner was removed and secured by a
mortgage on the Properties. In addition, during said 180 day period, the
Partnership shall discharge all debts owing to any Affiliate of the removed
General Partner, and if the removed General Partner is a guarantor on any debts
of the Partnership, the Partnership shall have the removed General Partner
released from such guarantees.
6.10 Successor General Partners.
Upon the death of an Individual General Partner, a majority of the
Individual General Partners shall have the right to appoint a Successor General
Partner (who shall be an officer or director of Nooney Capital Corp. or an
officer or director of an Affiliate of Nooney Capital Corp., or a corporation
which shall be an Affiliate of Nooney Capital Corp.). Any Successor General
Partner appointed pursuant to this Section 6.10 shall have such interest in the
General Partners' interest in the Partnership as the General Partners and such
Successor General Partner may agree upon. Each such Successor General Partner
shall become a Successor General Partner upon compliance with Section 6.5 and
6.6 hereof. The provisions of this Section 6. 10 are hereby expressly consented
to by each Limited Partner as an express condition to becoming a Limited
Partner.
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ARTICLE SEVEN
TRANSFERABILITY OF LIMITED PARTNER INTERESTS
7.1 Restrictions on Transfer
A. Each Limited Partner agrees that he will not sell or exchange any of his
interest in the Partnership if the interest sought to be sold or exchanged, when
added to the total of all other General Partner and Limited Partner interests
sold or exchanged within the period of twelve (12) consecutive months prior
thereto, would, in the opinion of counsel for the Partnership, result in the
Partnership being considered to have been terminated within the meaning of
Section 708 of the Code.
B. Each Limited Partner agrees that he will not sell, exchange, transfer or
assign any of his interest in the Partnership unless, if required by the
Partnership, the Partnership has received an opinion of counsel, satisfactory to
the Partnership, that such transfer or assignment may be effected under any
applicable state securities or "blue sky" law (including any investment
suitability standards).
C. Each Limited Partner agrees that he will not sell, exchange, transfer or
assign less than five (5) full units ($5,000) (two (2) full Units ($2,000) for
an IRA) of his interest in the Partnership without the express written consent
of the General Partners and that no partial sale, exchange, transfer or
assignment may result in any Limited Partner holding less five (5) full units
($5,000) (two (2) full Units ($2,000) for an IRA) in interest in the Partnership
without the express written consent of the General Partners.
D. Any sale, exchange, assignment or other transfer in contravention of any
of the provisions of this Section 7.1 shall be void and ineffectual and shall
not bind or be recognized by the Partnership.
7.2 Substituted Limited Partners
A. No Limited Partner shall have the right to substitute an assignee as a
Limited Partner in his place. Subject to the provisions of Section 7.1 hereof,
the General Partners shall, however, have the right, in their sole discretion,
to permit such assignee to become a Substituted Limited Partner, and any such
permission by the General Partners shall be binding and conclusive without the
consent or approval of any Limited Partner. Any Substituted Limited Partner
shall, as a condition of receiving any interest in the Partnership, agree to be
bound by the provisions of this Agreement. Each such Substituted Limited Partner
shall be obligated to pay the Partnership's reasonable legal and accounting fees
and filing and recording costs in connection with his substitution as a Limited
Partner.
B. After compliance with the provisions of Section 7.2A hereof, the
Substituted Limited Partner shall be admitted after this Agreement shall be
amended to reflect the name, resident address and the Capital Contribution
attributable to such Substituted Limited Partner and to eliminate the name,
address and the Capital Contribution attributable to the assigning Limited
Partner, and the requirement of filing an amendment to the Certificate of
Limited Partnership under the State Uniform Limited Partnership Law shall be
complied with. Each such Substituted Limited Partner shall execute such
instruments as shall be required by the General Partners to signify his
agreement to be bound by all the provisions of this Agreement and all other
documents reasonably required by the General Partners to effect the substitution
of the assignee as a Limited Partner. In no event shall Substituted Limited
Partners be admitted to the Partnership less frequently than quarterly, after
compliance with Section 7.2A hereof.
C. Subject to the provisions of Section 8.3 hereof, a Substituted Limited
Partner shall be treated as having made the Capital Contribution attributable to
his predecessor in interest.
7.3 Assignees
A. Subject to the provisions of Section 8.3 hereof, an assignee of a
Limited Partner who does not become a Substituted Limited Partner as provided
aforesaid shall only have the right to receive the distributions of the
Partnership to which the assigning Limited Partner would have been entitled if
no such assignment had been made by such Limited Partner. In particular, an
assignee, who does not become a Substituted Limited Partner, shall have no right
(i) to require any information from the Partnership or (ii) to require any
accounting of Partnership transactions or (iii) to inspect the Partnership books
or (iv) to exercise any privilege or right of a Limited Partner which is not
specifically granted to an assignee of a limited partner interest under the
State Uniform Limited Partnership Law.
B. Any Limited Partner who shall assign all his interest in the Partnership
shall cease to be a Limited Partner of the Partnership and shall no longer have
any rights or privileges of a Limited Partner, except that unless and until a
Substituted Limited Partner is admitted in his stead, such
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assigning Limited Partner shall retain the statutory rights of an assignor of a
limited partner interest specifically granted to an assignor under the State
Uniform Limited Partnership Law.
C. Subject to the provisions of Section 7.1 hereof, in the event any
assignment of the interest of a Limited Partner shall be made, there shall be
filed with the Partnership a duly executed counterpart of the instrument making
such assignment in form and substance reasonably acceptable to the Partnership;
such instrument must evidence the written acceptance by the assignee of all the
terms and provisions of this Agreement and must represent that such assignment
was made in accordance with all applicable laws and regulations (including
investment suitability standards); and if such an instrument is not so filed and
if the assignor shall not have paid the Partnership's reasonable legal and
accounting fees in connection with such assignment, the Partnership need not
recognize any such assignment for any purpose. All such assignments will be
effective as of the close of business on the last day of the calendar month in
which the assignment occurs (and the provisions of this Section 7.3C have been
complied with) or, at the General Partners' election, as of 7:00 o'clock A.M. on
the following day.
D. An assignee of the interest of a Limited Partner who does not become a
Substituted Limited Partner as provided aforesaid and who desires to make a
further assignment of his interest shall be subject to all the provisions of
this Article Seven to the same extent and in the same manner as any Limited
Partner desiring to make an assignment of his interest.
E. If a Limited Partner dies, his executor, administrator or trustee, or,
if he is adjudicated incompetent, his guardian, shall have all the rights of a
Limited Partner for the purpose of settling or managing his estate and such
power as the decedent or incompetent possessed to assign all or any part of his
interest in the Partnership and to join with such assignee in satisfying
conditions precedent to such assignee becoming a Substituted Limited Partner.
The death of a Limited Partner shall not dissolve the Partnership.
ARTICLE EIGHT
PROFITS AND LOSSES FOR TAX PURPOSES, DISTRIBUTIONS;
AND EXPENSES OF GENERAL PARTNERS
8.1 Allocation of Profits and Losses For Tax Purposes
A. Except as otherwise provided in Section 8.lD hereof, all Profits and
Losses For Tax Purposes of the Partnership, other than those arising from a
Major Capital Event, shall be allocated as follows: ninety-nine percent (99%) to
the Partners, with each Partner sharing in such Profits and Losses For Tax
Purposes in the ratio that his Capital Contribution bears to the total Capital
Contributions of all Partners; and one percent (1%) to the Individual General
Partners, with each Individual General Partner sharing in such Profits and
Losses For Tax Purposes in the ratio that his Capital Contribution as an
Individual General Partner bears to the total Capital Contributions of all
Individual General Partners.
B. Except as otherwise provided in Section 8.lD hereof, all Profits and
Losses For Tax Purposes arising from a Major Capital Event shall be allocated as
follows:
(i) First, gain equal to the depreciation deductions previously
allocated among the Partners with respect to any Property subject to a
particular Major Capital Event shall be allocated among the Partners in
accordance with this Section 8.lB(i); provided that the amount of gain
allocated under this Section 8.lB(i) with respect to any Major Capital
Event shall not be greater than the excess of (1) the total gain arising
from such Major Capital Event over (2) the total cash distributable to the
Partners (other than in the repayment of loans from the Partners) with
respect to such Major Capital Event. Such gain shall be allocated among the
Partners in proportion to the aggregate depreciation deductions previously
allocated to each such Partner, or his predecessor in interest.
(ii) Second, to the Limited Partners in an amount equal to their
Adjusted Capital Contributions.
(iii) Third, to the General Partners in an amount equal to their
Adjusted Capital Contributions.
(iv) Fourth, to the Limited Partners in an amount equal to the excess
of (1) their 7% Cumulative Return, over (2) all prior distributions to the
Limited Partners, other than those pursuant to Section 8.2B(i).
(v) Fifth, to the General Partners in an amount equal to the excess of
(1) their 7% Cumulative Return, over (2) all prior distributions to the
General Partners, other than those pursuant to Section 8.2B(ii).
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(vi) Sixth, the balance (1) eighty percent (80%) to the Partners and
(2) twenty percent (20%) to the General Partners.
C. Except as otherwise provided in this Section 8.1C, all Profits and
Losses For Tax Purposes allocated to the Limited Partners with respect to any
Major Capital Event shall be shared by each Limited Partner in the ratio of his
Capital Contribution to the total Capital Contributions of all Limited Partners.
Except as otherwise provided in this Section 8.lC, all Profits and Losses For
Tax Purposes allocated to the General Partners with respect to any Major Capital
Event shall be shared by each General Partner in the ratio of his Capital
Contribution to the total Capital Contributions of all General Partners;
provided, however, all Profits and Losses For Tax Purposes allocated to the
General Partners pursuant to Section 8.lB(vi)(2) hereof shall be allocated to
the General Partners as agreed among themselves. All Profits and Losses For Tax
Purposes allocated to the Partners pursuant to Section 8.1B(vi)(1) hereof shall
first be shared by each General Partner in the ratio of his Capital Contribution
to the total Capital Contributions of all Partners and the balance shall be
allocated to each Limited Partner in the ratio which the number of Units owned
by such Limited Partner times the number of months (or such lesser unit of time
as determined by the Partnership) such Units were owned by such Limited Partner
(and his predecessors in interest) during the life of the Partnership bears to
the total number of Units owned by all Limited Partners times the total number
of months (or such lesser unit of time as determined by the Partnership) such
Units were owned by all Limited Partners (and their predecessors in interest)
during the life of the Partnership, all calculated as of the end of the
preceding fiscal year.
D. Notwithstanding any other provision of this Agreement to the contrary,
the interest of all of the General Partners, taken together, in each material
item of Partnership, income, gain, loss, deduction or credit (i.e., Profits and
Losses For Tax Purposes) shall be equal to at least one percent (1%) of each
such item at all times during the existence of the Partnership. In determining
the General Partners' interest in such item, limited partnership interests owned
by the General Partners shall not be taken into account.
8.2 Cash Distributions Prior to Dissolution
A. All Net Operating Cash Income of the Partnership for each fiscal year
shall be distributed quarterly as follows: ninety-nine percent (99%) to the
Partners, with each Partner sharing in such Net Operating Cash Income in the
ratio that his Capital Contribution bears to the total Capital Contributions of
all Partners; and one percent (1%) to the Individual General Partners, with each
Individual General Partner sharing in such Net Operating Cash Income in the
ratio that his Capital Contribution as an Individual General Partner bears to
the total Capital Contributions of all Individual General Partners.
B. Prior to dissolution, all Net Extraordinary Cash Income (except cash
generated by any Major Capital Event described in Section 2.4 hereof) shall be
distributed as follows:
(i) First, to the Limited Partners in an amount equal to their
Adjusted Capital Contributions.
(ii) Second, to the General Partners in an amount equal to their
Adjusted Capital Contributions.
(iii) Third, to the Limited Partners in an amount equal to the excess
of (1) their 7% Cumulative Return, over (2) all prior distributions to the
Limited Partners, other than those pursuant to Section 8.2B(i) hereof.
(iv) Fourth, to the General Partners in an amount equal to the excess
of (1) their 7% Cumulative Return, over (2) all prior distributions to the
General Partners, other than those pursuant to Section 8.2B(ii) hereof.
(v) Fifth, the balance (1) eighty percent (80%) to the Partners and
(2) twenty percent (20%) to the General Partners.
C. Except as otherwise provided in this Section 8.2C, all Net Extraordinary
Cash Income distributed to the Limited Partners shall be distributed to each
Limited Partner in the ratio of his Capital Contribution to the total Capital
Contributions of all Limited Partners. Except as otherwise provided in this
Section 8.2C, all Net Extraordinary Cash Income distributed to the General
Partners shall be distributed to each General Partner in the ratio of his
Capital Contribution to the total Capital Contributions of all General Partners;
provided, however, all Net Extraordinary Cash Income distributed to the General
Partners pursuant to Section 8.2B(v)(2) hereof shall be distributed to the
General Partners as agreed among themselves. All Net Extraordinary Cash Income
distributed to the Partners pursuant to Section 8.2B(v)(1) hereof shall first be
distributed to each General Partner in the ratio of his Capital Contribution to
the total Capital Contributions of all Partners and the balance shall be
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distributed to each Limited Partner in the ratio which the number of Units owned
by such Limited Partner times the number of months (or such lesser unit of time
as determined by the Partnership) such Units were owned by such Limited Partner
(and his predecessors in interest) during the life of the Partnership bears to
the total number of Units owned by all Limited Partners times the total number
of months (or such lesser unit of time as determined by the Partnership) such
Units were owned by all Limited Partners (and their predecessors in interest)
during the life of the Partnership, all calculated as of the end of the
preceding fiscal year.
8.3 Persons Entitled to Allocations and Distributions
All allocations of Profits and Losses For Tax Purposes and distributions of
Net Operating Cash Income and Net Extraordinary Cash Income to the Partners
under Sections 8.1 and 8.2 hereof shall be made to the Persons shown on the
records of the Partnership to be entitled thereto as of the first day of the
fiscal quarter next following the quarter for which such allocation or
distribution is to be made unless the assignor and assignee of any interest in
the Partnership otherwise agree in writing to a different allocation and such
allocation is consented to in writing by the General Partners and is consistent
with the provisions of the Code and the regulations promulgated thereunder;
provided, however, that with respect to any period during which Partners are
admitted to the Partnership or in which an assignee of the interest of a Limited
Partner is first entitled to a share of the Profits and Losses For Tax Purposes,
the Partnership shall, with respect to such Profits and Losses For Tax Purposes,
allocate such items among the Persons who were entitled to such items on a basis
consistent with the provisions of the Code and the regulations promulgated
thereunder.
8.4 Cash Distributions Upon Dissolution
A. Upon the dissolution of the Partnership as a result of the occurrence of
any of the events set forth in Section 2.4, the General Partners shall proceed
to liquidate the Partnership, and the proceeds of liquidation, including the
proceeds of any Major Capital Event described in Section 2.4 hereof, (the
"Proceeds of Liquidation") shall be applied and distributed in the following
order of priority:
(i) First, to the payment of debts and liabilities of the Partnership
(other than any loans or advances that may have been made by any of the
Partners to the Partnership) and the expenses of liquidation.
(ii) Second, to the establishment of any reserve which the General
Partners may deem reasonably necessary for any contingent or unforeseen
liabilities or obligations of the Partnership. Such reserve may be paid
over by the General Partners to any attorney at law, or other acceptable
party, as escrow agent to be held for disbursement in payment of any of the
aforementioned liabilities and, at the expiration of such period as shall
be deemed advisable by the General Partners, for distribution of the
balance, in the manner hereinafter provided in this Section.
(iii) Third, to the repayment of any loans or advances that may have
been made by any of the Limited Partners to the Partnership but, if the
amount available for such repayment shall be insufficient, then pro rata on
account thereof.
(iv) Finally, the balance of any funds then remaining shall be
distributed to the Partners in the following order of priority:
(1) Pro rata to each Limited Partner in an amount equal to any
previously undistributed share of the Net Operating Cash Income and
Net Extraordinary Cash Income of the Partnership due such Limited
Partner.
(2) Pro rata to each Limited Partner in an amount equal to his
Adjusted Capital Contribution.
(3) To the General Partners in an amount equal to any loans or
advances that have been made by the General Partners to the
Partnership but, if the amount available for such repayment shall be
insufficient, then pro rata on account thereof.
(4) Pro rata to each General Partner in an amount equal to any
previously undistributed share of the Net Operating Cash Income and
Net Extraordinary Cash Income of the Partnership due such General
Partner.
(5) Pro rata to each General Partner in an amount equal to his
Adjusted Capital Contribution.
(6) Pro rata to each Limited Partner in an amount equal to the
excess of (a) an amount equal to his 7% Cumulative Return, over (b)
all prior distributions made to such Limited Partner, other than those
pursuant to Sections 8.2B(i), 8.4A(iii) or 8.4A(iv)(2) hereof.
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(7) Pro rata to each General Partner in an amount equal to the
excess of (a) an amount equal to his 7% Cumulative Return, over (b)
all prior distributions made to such General Partner, other than those
pursuant to Sections 8.2B(ii), 8.4A(iv)(3) or 8.4A(iv)(5) hereof.
(8) The balance (a) eighty percent (80%) to the Partners and (b)
twenty percent (20%) to the General Partners. All Proceeds of
Liquidation distributed to the Partners pursuant to Section
8.4A(iv)(8)(a) hereof shall first be distributed to each General
Partner in the ratio of his Capital Contribution to the total Capital
Contributions of all Partners and the balance shall be distributed to
each Limited Partner in the ratio which the number of Units owned by
such Limited Partner times the number of months (or such lesser unit
of time as determined by the Partnership) such Units were owned by
such Limited Partner (and his predecessors in interest) during the
life of the Partnership bears to the total number of Units owned by
all Limited Partners times the total number of months (or such lesser
unit of time as determined by the Partnership) such Units were owned
by all Limited Partners (and their predecessors in interest) during
the life of the Partnership, all calculated as of the end of the
preceding fiscal year. All Proceeds of Liquidation distributed to the
General Partners pursuant to Section 8.4A(iv)(8)(b) hereof shall be
distributed to the General Partners as agreed among themselves.
B. Notwithstanding the foregoing, in the event the General Partners
shall determine that an immediate sale of part or all of the Partnership assets
would cause undue loss to the Partners, the General Partners, in order to avoid
such loss, may, after having given Notice to all the Limited Partners and having
obtained the Consent of the Limited Partners (subject to the provisions of
Section 10.11 hereof), either defer liquidation of, and withhold from
distribution for a reasonable time, any assets of the Partnership except those
necessary to satisfy the Partnership debts and obligations, or distribute the
assets to the Partners in kind.
8.5 Expenses of Partnership and of General Partners
All expenses of the Partnership shall be billed directly to and paid by the
Partnership. All direct out-of-pocket expenses incurred by the General Partners
in connection with the Partnership's business shall be paid by the Partnership
or reimbursed to the General Partners by the Partnership. Any such
reimbursements shall not exceed the actual cost to the General Partners of
goods, materials, and services used by or for the Partnership and obtained from
entities unaffiliated with the General Partners. The Partnership shall reimburse
the General Partners or their Affiliates for the actual out-of-pocket travel
expenses of the General Partners, their Affiliates or their employees incurred
in connection with the acquisition, management or improvement of the Properties,
and the Partnership shall pay to the General Partners (or to such Affiliates of
the General Partners designated by the General Partners) the sum of $10,000 per
calendar quarter as reimbursement (collectively the "Reimbursement Payments")
for management services and indirect expenses in connection with the management
of the Partnership; provided, however, that such Reimbursement Payments shall
not exceed the limits imposed by Section 5.8 hereof.
ARTICLE NINE
BOOKS, RECORDS AND REPORTS, ACCOUNTING, TAX ELECTIONS, ETC.
9.1 Books, Records and Reports
A. Proper and complete records and books of account shall be kept by the
General Partners in which shall be entered all transactions and other matters
relative to the Partnership's business. The Partnership's books and records
shall be prepared in accordance with generally accepted accounting principles,
consistently applied. The books and records shall at all times be maintained at
the principal office of the Partnership and shall be open for examination and
inspection by the Partners or by their duly authorized representatives during
reasonable business hours. The Partnership shall furnish a list of names and
addresses of and Units held by all Partners to any Limited Partner who requests
such a list in writing for any proper purpose, such costs to be borne by the
requesting Limited Partner.
B. The General Partners shall have prepared at least annually, at the
Partnership's expense, financial statements (balance sheet, statement of income
or loss, partners' equity, and changes in financial position) prepared in
accordance with generally accepted accounting principles and accompanied by a
report thereon containing an opinion of the Partnership's certified public
accountants. Copies of such statements and report shall be distributed to each
Limited Partner within 120 days after the close of each taxable year of the
Partnership.
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C. The General Partners shall have prepared at least annually, at the
Partnership's expense, a report containing: (i) a statement of cash flow, (ii)
Partnership information necessary in the preparation of the Limited Partners'
Federal income tax returns, (iii) a report of the business of the Partnership,
(iv) a statement as to all transactions with the General Partners or their
Affiliates and the fees, commissions, compensation and other benefits paid or
accrued to the General Partners or their Affiliates during the year from the
Partnership, which statement shall set forth the services rendered or to be
rendered and the amount paid or accrued to each recipient, and (v) a report
identifying distributions from: (a) Net Operating Cash Income of that year, (b)
Net Operating Cash Income of prior years which had been held as reserves, and
(c) Net Extraordinary Cash Income. Copies of such report shall be distributed to
each Limited Partner within 120 days after the close of each taxable year of the
Partnership; provided, however, all Partnership information necessary in the
preparation of the Limited Partners' Federal income tax returns shall be
distributed to each Limited Partner within 75 days after the close of each
taxable year of the Partnership.
D. The General Partners shall have prepared, at the Partnership's expense,
a report, for each of the first three fiscal quarters of each year, containing
(i) a statement as to the compensation received by the General Partners or their
Affiliates during such quarter from the Partnership which statement shall set
forth the services rendered or to be rendered by the General Partners or their
Affiliates and the amount of fees received, (ii) unaudited financial statements
of the Partnership (balance sheet, statement of income or loss for said
quarterly period and a statement of Net Operating Cash Income for said quarterly
period) and (iii) a statement of other pertinent information regarding the
Partnership and its activities during the quarterly period covered by such
report. Copies of such report shall be distributed to each Limited Partner
within 60 days after the close of the quarterly period covered by such report.
E. The General Partners shall have prepared, at the Partnership's expense,
as of the end of each fiscal quarter in which a Property is acquired, a special
report which shall describe therein: (i) each Property so acquired, (ii) the
geographic area in which such Property is located, (iii) the market upon which
the General Partners are relying in projecting successful operation of the
Property, and (iv) facts which reasonably appear to the General Partners to
materially influence the value of the Property. These special reports shall
include, by way of illustration and not of limitation, a statement regarding the
appraised value, if applicable, a statement of the actual purchase price
including terms of the purchase, a statement of the total amount of cash
expended by the Partnership to acquire each Property, and a statement regarding
the amount of proceeds in the Partnership which remain unexpended or
uncommitted. (This unexpended or uncommitted amount shall be stated in terms of
both dollar amount and percentage of the total amount of the gross offering
proceeds of the Partnership.) Copies of each such report shall be distributed to
each Limited Partner within 60 days after the end of any such quarter. If deemed
appropriate by the General Partners, such special report may be prepared and
distributed to each Limited Partner more frequently than quarterly.
9.2 Bank Accounts
The bank accounts of the Partnership shall be maintained in such banking
institutions as the General Partners shall determine, and withdrawals shall be
made only in the regular course of Partnership business on such signature or
signatures as the General Partners may determine.
9.3 Accountants
The accountants for the Partnership shall be Touche Ross & Co. or such
other firm of independent certified public accountants as shall be engaged by
the General Partners. The accountants shall prepare for execution by the General
Partners all tax returns of the Partnership and shall audit and certify all
annual financial statements of the Partnership in accordance with generally
accepted auditing standards.
9.4 Depreciation and Elections
A. With respect to all depreciable assets of the Partnership, the
Partnership shall elect to use, as permitted by the provisions of the Code,
straight line depreciation methods; however, on the advice of the certified
public accountants then serving the Partnership pursuant to Section 9.3 hereof,
the Partnership may change to or elect some other method of depreciation so long
as such other method is, in the opinion of the certified public accountants,
most advantageous to Limited Partners representing a majority in interest of the
Capital Contributions of the Limited Partners.
B. All other elections required or permitted to be made by the Partnership
under the Code shall be made by the General Partners in such manner as will in
the opinion of the certified public accountants
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be most advantageous to Limited Partners representing at least a majority in
interest of the Capital Contributions of the Limited Partners.
C. Notwithstanding anything to the contrary in this Section 9.4, the
General Partners shall not be responsible for initiating any change in
accounting methods from the methods initially chosen. Further, the General
Partners shall not incur any liability for any election which is made upon the
advice of the certified public accountants.
9.5 Accrual Basis and Fiscal Year
The books of the Partnership shall be kept on the accrual basis. The fiscal
year of the Partnership shall be from December 1 to November 30.
ARTICLE TEN
GENERAL PROVISIONS
10.1 Appointment of General Partners as Attorneys-in-Fact
A. Each Limited Partner, by the execution hereof, hereby irrevocably
constitutes and appoints the General Partners and each of them, under this
Agreement, his true and lawful attorney-in-fact, with full power and authority
in his name, place and stead, to execute and acknowledge under oath, swear to,
deliver, file and record at the appropriate public offices such documents as may
be necessary or appropriate to carry out the provisions of this Agreement
including:
(i) All certificates and other instructions (including this Agreement
or any Certificate of Limited Partnership and any amendment thereof) which
the General Partners deem appropriate to qualify or continue the
Partnership as a limited partnership under the State Uniform Limited
Partnership Law (or a partnership in which the Limited Partners will have
limited liability comparable to that provided by the State Uniform Limited
Partnership Law) or under the laws of any other jurisdiction in which the
Partnership may conduct business;
(ii) All amendments to this Agreement or any Certificate of Limited
Partnership which are required to be filed or which the General Partners
deem to be advisable to file;
(iii) All instruments which the General Partners deem appropriate to
reflect a change or modification of the Partnership in accordance with the
terms of this Agreement;
(iv) All conveyances and other instruments which the General Partners
deem appropriate to reflect the dissolution and termination of the
Partnership; and
(v) All other instruments, documents or contracts requisite to
carrying out the intent and purpose of this Agreement and the business of
the Partnership.
B. The appointment by all Limited Partners of the General Partners and each
of them as attorneys-in-fact shall be deemed to be a power coupled with an
interest in recognition of the fact that each of the Partners under this
Agreement will be relying upon the power of the General Partners to act as
contemplated by this Agreement in any filing and other action by them on behalf
of the Partnership. The foregoing power of attorney shall survive the death or
incompetency of a Limited Partner or the assignment by any Limited Partner of
the whole or any part of his interest hereunder.
10.2 Word Meanings
The words such as "herein", "hereinafter", "hereof", and "hereunder" refer
to this Agreement as a whole and not merely to a subdivision in which such words
appear unless the context otherwise requires. The singular shall include the
plural and the masculine gender shall include the feminine and neuter, and vice
versa, unless the context otherwise requires.
10.3 Binding Provisions
The covenants and agreements contained herein shall be binding upon, and
inure to the benefit of the heirs, executors, administrators, successors and
assigns of the respective parties hereto.
10.4 Applicable Law
This Agreement shall be construed and enforced in accordance with the laws
of the State of Missouri.
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10.5 Counterparts
This Agreement may be executed in several counterparts, all of which
together shall constitute one agreement binding on all parties hereto,
notwithstanding that all the parties have not signed the same counterpart,
except that no counterpart shall be binding unless signed by the General
Partners.
10.6 Entire Agreement
This Agreement contains the entire agreement between the parties and
supersedes all prior writings or representations.
10.7 Separability of Provisions
Each provision of this Agreement shall be considered separable and if for
any reason any provision or provisions herein are determined to be invalid or
unenforceable such invalidity or unenforceability shall not impair the operation
of or affect any other portion of this Agreement and this Agreement shall be
construed in all respects as if such invalid or unenforceable provision was
omitted.
10.8 Representation
Each person who becomes a Limited Partner hereunder does hereby represent
and warrant by the signing of a counterpart of this Agreement that he has relied
solely on the advice of his personal tax, investment or other advisor(s) in
making his investment decision. The General Partners have not made and hereby
make no warranties or representations other than those set forth in this
Agreement.
10.9 Section Titles
Section titles are for descriptive purposes only and shall not control or
alter the meaning of this Agreement as set forth in the text.
10.10 Amendments
A. In addition to the amendments otherwise authorized herein, this
Agreement may be amended, from time to time, by (i) the General Partners with
the prior Consent of the Limited Partners or (ii) by the Limited Partners
(subject to the provisions of Section 10.11 hereof) whose combined Capital
Contributions represent at least a majority of the total Capital Contributions
of the Limited Partners; provided, however, that without the prior written
consent of all the Partners, this Agreement may not be amended so as to (i)
convert the interest of a Limited Partner into the interest of a General
Partner; (ii) modify the limited liability of a Limited Partner; (iii) alter the
interest of a Partner in the Profits and Losses For Tax Purposes, Net Operating
Cash Income, Net Extraordinary Cash Income or other distributions of the
Partnership; (iv) extend the term of the Partnership as set forth in Section 2.4
hereof, or (v) reduce the percentage of the Limited Partners' interests required
to approve any act provided for herein. If this Agreement shall be amended as a
result of adding or substituting a Limited Partner, the amendment to this
Agreement shall be signed by the General Partners and by the person to be
substituted or added and, if a Limited Partner is to be substituted, by the
assigning Limited Partner. If this Agreement shall be amended to reflect the
designation of an additional General Partner, such amendment shall be signed by
the other General Partner(s) and by such additional General Partner. If this
Agreement shall be amended to reflect the Withdrawal of a General Partner and
the business of the Partnership is continued, such amendment shall be signed by
the remaining or successor General Partner(s).
B. In addition to any amendments otherwise authorized herein, amendments
may be made to this Agreement from time to time by the General Partners, without
the consent of any of the Limited Partners, (i) to cure any ambiguity or to
correct or supplement any provision herein which may be inconsistent with any
other provision herein or (ii) to delete or add any provision of this Agreement
required to be so deleted or added by the Securities and Exchange Commission,
the Internal Revenue Service, or other Federal agency or by a state "blue sky"
commissioner or other similar official, which addition or deletion is deemed by
such Commission, Service, agency or official to be for the benefit or protection
of the Limited Partners; provided, however, that no amendment shall be adopted
pursuant to this Section 10.10B unless the adoption thereof (i) is for the
benefit of or not adverse to the interests of the Limited Partners; (ii) does
not convert the interest of a Limited Partner into the interest of a General
Partner; (iii) does not modify the limited liability of a Limited Partner; (iv)
does not alter the interest of a Partner in the Profits and Losses For Tax
Purposes, Net Operating Cash Income, Net Extraordinary Cash Income or other
distributions of the Partnership; (v) does not extend the term of the
Partnership as set forth in Section 2.4 herein; (vi) does not reduce the
percentage of the Limited Partners' interest
A-22
required to approve any act provided for herein; or (vii) does not affect the
status of the Partnership as a partnership for Federal income tax purposes.
10.11 Restrictions on Vote of Limited Partners
Notwithstanding any other provision of this Agreement, the rights provided
to the Limited Partners under Sections 2.4A (iii), 5.2B, 5.6, 6.9A and 8.4B
hereof and the rights provided to the Limited Partners to amend this Agreement
without the approval of the General Partners under Section 10.10 hereof shall be
null and void and of no effect and shall not come into existence and shall not
be exercisable in any manner by the Limited Partners unless and until either (a)
a court of competent jurisdiction in the State of Missouri shall have previously
determined in an action for declaratory judgment or similar relief brought on
behalf of the Limited Partners that the exercise of such rights will not result
in the loss of any Limited Partner's limited liability or violate the State
Uniform Limited Partnership Law or (b) counsel for the Limited Partners (other
than counsel for the General Partners) shall have delivered an opinion to the
same effect satisfactory to the Limited Partners seeking to exercise such
rights. Until the General Partners have received Notice that the requirements of
clause (a) or clause (b) of this Section 10.11 have been complied with, the
General Partners shall have the authority to sell or otherwise dispose of, at
one time, all or substantially all (as defined in Section 5.2B hereof) of the
assets of the Partnership; provided, however, that prior to any such sale or
disposition of, at one time, all or substantially all (as defined in Section
5.2B hereof) of the assets of the Partnership (except for the disposition of the
Partnership's final property), the General Partners shall give sixty (60) days'
prior notice thereof to the Limited Partners and if during such sixty (60) day
period the General Partners receive Notice that the requirements of clause (a)
or clause (b) of this Section 10.11 have been complied with, then the General
Partners shall not have the authority to sell or otherwise dispose of, at one
time, all or substantially all (as defined in Section 5.2B hereof) of the assets
of the Partnership (except for the disposition of the Partnership's final
property) without the Consent of the Limited Partners.
10.12 Meetings and Voting
The General Partners may at any time call a meeting of the Limited Partners
and shall call such meeting following written request therefor of Limited
Partners whose combined Capital Contributions represent ten percent (10%) or
more of the total Capital Contributions of the Limited Partners. Within ten (10)
days after the receipt of said request, the General Partners shall give Notice
to all Limited Partners as to the time and place of the Partnership meeting and
the general nature of the business to be transacted thereat. Any such
Partnership meeting shall be held not less than fifteen (15) nor more than sixty
(60) days following mailing of such Notice by the General Partners. All expenses
of such meeting shall be borne by the Partnership. A Limited Partner shall be
entitled to cast one vote for each Unit he owns on the date of such meeting.
Each Limited Partner may authorize any person to act for him by proxy in all
matters in which a Limited Partner is entitled to participate whether by waiving
notice of any meeting, or voting or participating at a meeting. Every proxy must
be signed by the Limited Partner or his attorney-in-fact. No proxy shall be
valid after the expiration of eleven (11) months from the date thereof unless
otherwise provided in the proxy. Each proxy shall be revocable at the pleasure
of the Limited Partner executing it. In addition, following written request
therefor of Limited Partners whose combined Capital Contributions represent ten
percent (10%) or more of the total Capital Contributions of the Limited
Partners, the General Partners shall submit any matter (upon which the Limited
Partners are entitled to act) to the Limited Partners for a vote thereon in
accordance with the terms of this Agreement.
10.13 Partition
The Partners agree that the Partnership's Properties are not and will not
be suitable for partition. Accordingly, each of the Partners hereby irrevocably
waives any and all right he may have to maintain any action for partition of any
of the Partnership's Properties.
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<PAGE>
WITNESS the execution hereof as of the day and year first above written by
the following General Partners and Initial Limited Partner, whose respective
residence addresses are set forth opposite their respective signatures.
GENERAL PARTNERS
Address: G. J. Nooney*
900 South Hanley *By /s/ Gregory J. Nooney, Jr.
St. Louis, Missouri 63105 Gregory J. Nooney, Jr.
Attorney-in-Fact
Address:
900 South Hanley
St. Louis, Missouri 63105 /s/ Gregory J. Nooney, Jr.
Gregory J. Nooney, Jr.
Address:
410 Steeplechase Lane
St. Louis, Missouri 63131 /s/ John J. Nooney
John J. Nooney
Address:
612 Lampadaire Drive
St. Louis, Missouri 63123 /s/ James J. Finn
James J. Finn
Address:
7945 Park Drive
St. Louis, Missouri 63117 /s/ James J. O'Connor III
James J. O'Connor III
Address:
113 Northarm Drive
St. Louis, Missouri 63122 /s/ Gregory J. Nooney III
Gregory J. Nooney III
A-24
<PAGE>
NOONEY CAPITAL CORP.,
a Missouri Corporation
Address:
7701 Forsyth Boulevard
St. Louis, Missouri 63105 By /s/ Gregory J. Nooney III
[SEAL] Gregory J. Nooney III
President
INITIAL LIMITED PARTNER
Address:
656 Twigwood /s/ Grant A. Grimes
Ballwin, Missouri 63011 Grant A. Grimes
STATE OF MISSOURI )
) SS:
COUNTY OF ST. LOUIS )
On this 7th day of April, 1982, before me personally appeared GREGORY J.
NOONEY, JR., to me known to be the person described in and who executed the
foregoing instrument, and he swore under oath that the statements made in said
instrument are true and correct to the best of his knowledge and belief and he
acknowledged that he executed said instrument as his free act and deed as
Attorney-in-Fact for G. J. Nooney.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official
seal in the County and State aforesaid, the day and year first above written.
/s/ Dorothy M. Eshleman
Notary Public
DOROTHY M. ESHLEMAN
My term expires June 15, 1984 NOTARY PUBLIC -- STATE OF MISSOURI
COUNTY OF ST. LOUIS
MY COMMISSION EXPIRES JUNE 15, 1984
STATE OF MISSOURI )
) SS:
COUNTY OF ST. LOUIS )
On this 7th day of April, 1982, before me personally appeared GREGORY J.
NOONEY, JR., JOHN J. NOONEY, JAMES J. FINN, JAMES J. O'CONNOR III and GREGORY J.
NOONEY III, to me known to be the persons described in and who executed the
foregoing instrument, and each swore under oath that the statements made in said
instrument are true and correct to the best of his knowledge and belief and each
acknowledged that he executed said instrument as his free act and deed, as a
General Partner.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official
seal in the County and State aforesaid, the day and year first above written.
/s/ Dorothy M. Eshleman
Notary Public
DOROTHY M. ESHLEMAN
My term expires June 15, 1984 NOTARY PUBLIC -- STATE OF MISSOURI
COUNTY OF ST. LOUIS
MY COMMISSION EXPIRES JUNE 15, 1984
A-25
<PAGE>
STATE OF MISSOURI )
)SS:
COUNTY OF ST. LOUIS )
On this 7th day of April, 1982, before me appeared GREGORY J. NOONEY, JR.,
to me personally known, who, being by me duly sworn, did say that he is the
President of NOONEY CAPITAL CORP., a corporation of the State of Missouri, and
that the seal affixed to the foregoing instrument is the corporate seal of said
corporation, and that said instrument was signed and sealed in behalf of said
corporation, by authority of its Board of Directors; and said Gregory J. Nooney,
Jr. swore under oath that the statements made in said instrument are true and
correct to the best of his knowledge and belief and acknowledged said instrument
to be the free act and deed of said corporation, as a General Partner.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official
seal in the County and State aforesaid, the day and year first above written.
/s/ Dorothy M. Eshleman
Notary Public
DOROTHY M. ESHLEMAN
My term expires June 15, 1984 NOTARY PUBLIC -- STATE OF MISSOURI
COUNTY OF ST. LOUIS
MY COMMISSION EXPIRES JUNE 15, 1984
STATE OF MISSOURI )
) SS:
COUNTY OF ST. LOUIS )
On this 7th day of April, 1982, before me personally appeared GRANT A.
GRIMES, to me known to be the person described in and who executed the foregoing
instrument, and he swore under oath that the statements made in said instrument
are true and correct to the best of his knowledge and belief and he acknowledged
that he executed said instrument as his free act and deed, as the Initial
Limited Partner.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official
seal in the County and State aforesaid, the day and year first above written.
/s/ Dorothy M. Eshleman
Notary Public
DOROTHY M. ESHLEMAN
My term expires June 15, 1984 NOTARY PUBLIC -- STATE OF MISSOURI
COUNTY OF ST. LOUIS
MY COMMISSION EXPIRES JUNE 15, 1984
A-26
EXHIBIT 10.1
M A N A G E M E N T A G R E E M E N T
OWNER: Nooney Real Property Investors-Four, L.P.
AGENT: Maxus Properties, Inc.
PREMISES: Cobblestone Court Shopping Center
14150 Nicollet Avenue South
Burnsville, MN 55337
BEGINNING: November 10, 1999
ENDING: November 10, 2002
<PAGE>
IN CONSIDERATION of the covenants herein contained, Nooney Real Property
Investors-Four, L.P., (hereinafter called "Owner"), and Maxus Properties, Inc.
(hereinafter called "Agent"), agree as follows:
1. The Owner hereby employs the Agent exclusively to rent and manage the
property known as Cobblestone Court Shopping Center (hereinafter the "Premises")
upon the terms and conditions hereinafter set forth, for a term of 3 years
beginning on November 10, 1999 and ending on November 10, 2002, and thereafter
for yearly periods from time to time, unless on or before 60 days prior to the
date last above mentioned or on or before 60 days prior to the expiration of any
such renewal period, either party hereto shall notify the other in writing that
it elects to terminate this Agreement, in which case this Agreement shall be
thereby terminated on said last mentioned date. (See also Paragraph 6.3 below.)
2. THE AGENT AGREES:
2.1 To accept the management of the Premises, to the extent, for the
period, and upon the terms herein provided and agrees to furnish the services of
its organization for the rental operation and management of the Premises.
2.2 To prepare a monthly statement of receipts and disbursements and to
remit, on a monthly basis, the net cash flow generated by the Premises after
payment of all operating expenses, debt service and escrow payments if
applicable, to the following party:
Nooney Real Property Investor-Four, L.P.
c/o David L. Johnson
P.O. Box 26730
Kansas City, MO 64196
In the event total monthly disbursements are in excess of total monthly
receipts, the Owner shall promptly provide funds to cover such shortfalls.
Nothing contained herein shall obligate the Agent to advance its own funds on
behalf of the Owner to cover any shortfalls.
2.3 To cause all employees of the Agent who handle or are responsible for
the safekeeping of any monies of the Owner to be covered by a fidelity bond in
an amount and with a company determined by the Agent.
2
<PAGE>
3. THE OWNER AGREES:
To give the Agent the following authority and powers (all or any of which
may be exercised in the name of the Owner) and agrees to assume all expenses in
connection therewith:
3.1 To advertise the Premises or any part thereof; to display signs thereon
and to rent the same; to cause references of prospective tenants to be
investigated; to sign leases for terms not in excess of one year and to renew
and/or cancel the existing leases and prepare and execute the new leases without
additional charge to the Owner; provided; however, that the Agent may collect
from tenant all or any of the following: a late rent administrative charge, a
non-negotiable check charge, credit report fee, a subleasing administrative
charge and/or broker's commission and need not account for such charges and/or
commission to the Owner; to terminate tenancies and to sign and serve such
notices as are deemed needful by the Agent; to institute and prosecute actions
to oust tenants and to recover possession of the Premises; to sue for and
recover rent; and, when expedient, to settle, compromise, and release such
actions or suits, or reinstate such tenancies. Owner shall reimburse Agent for
all expenses of litigation including attorneys' fees, filing fees, and court
costs which Agent does not recover from tenants. Agent may select the attorney
of its choice to handle such litigation.
3.2 To hire, discharge, and pay all managers, engineers, janitors and other
employees; to make or cause to be made all ordinary repairs and replacements
necessary to preserve the Premises in its present condition and for the
operating efficiency thereof and all alterations required to comply with lease
requirements, and to do decorating on the Premises; to negotiate contracts for
nonrecurring items not exceeding $5,000 and to enter into agreements for all
necessary repairs, maintenance, minor alterations and utility services; and to
purchase supplies and pay bills. Agent shall secure the approval of the Owner
for items, except monthly or recurring operating charges and emergency repairs
in excess of the maximum, if, in the opinion of the Agent, such repairs are
necessary to protect the property from damage or to maintain services to the
tenants as called for by their tenancy.
3.3 To collect rents and/or assessments and other items due or to become
due and give receipts therefor and to deposit all funds collected hereunder in
the Agent's custodial account.
3.4 Agent agrees to collect all tenant security deposits. Owner instructs
Agent to deposit all security deposits in the general operating accounts of the
property. Agent is not to segregate the security deposits into a separate
account or into an escrow account.
3.5 To execute and file all returns and other instruments and do and
perform all acts required of the Owner as an employer with respect to the
Premises under the Federal Insurance Contributions Acts, the Federal
Unemployment Tax Act and Subtitle C of the Internal Revenue Code of 1954 with
respect to wages paid by the Agent on behalf of the Owner and under any similar
federal and state law now or hereafter in force (and in connection therewith the
Owner agrees upon request to promptly execute and deliver to the Agent all
necessary powers of attorney, notices of appointment, and the like).
3
<PAGE>
3.6 The Agent shall not be required to advance any monies for the care or
management of said property, and the Owner agrees to advance all monies
necessary therefor. If the Agent shall elect to advance any money in connection
with the property, the Owner agrees to reimburse the Agent forthwith and hereby
authorizes the Agent to deduct such advances from any monies due the Owner. The
Agent, shall, upon instruction from the Owner, impound reserves each month for
the payment of real estate taxes, insurance, or any other special expenditure.
4. THE OWNER FURTHER AGREES:
4.1 To indemnify, defend and save the Agent harmless from all suits in
connection with the Premises and from liability for damage to property and
injuries to or death of any employee or other person whomsoever, and to carry at
his (its) own expense public liability, elevator liability (if elevators are
part of the equipment of the Premises), and workmen's compensation insurance
naming the Owner and Agent, adequate to protect their interests in form,
substance, and amounts reasonably satisfactory to the Agent, and to furnish to
the Agent certificates evidencing the existence of such insurance. Unless the
Owner shall provide such insurance and furnish such certificate within 30 days
from the date of this Agreement, the Agent may, but shall not be obligated to,
place said insurance and charge the cost thereof to the account of the Owner.
All such insurance policies shall provide that the Agent shall receive thirty
(30) days' written notice prior to cancellation of the policy.
4.2 To pay all expenses incurred by the Agent, including, but not limited
to, reasonable attorneys' fees and Agent's costs and time in connection with any
claim, proceeding, or suit involving an alleged violation by the Agent or the
Owner, or both, of any law pertaining to fair employment, fair credit reporting,
environmental protection, rent control, taxes, or fair housing, including, but
not limited to, any law prohibiting, or making illegal, discrimination on the
basis of race, sex, creed, color, religion, national origin, or mental or
physical handicap, provided, however, that the Owner shall not be responsible to
the Agent for any such expenses in the event the Agent is finally adjudicated to
have personally, and not in a representative capacity, violated any such law.
Nothing contained herein shall obligate the Agent to employ counsel to represent
the Owner in any such proceeding or suit, and the Owner may elect to employ
counsel to represent the Owner in any such proceeding or suit. The Owner also
agrees to pay reasonable expenses (or an apportioned amount of such expenses
where other employers of Agent also benefit from the expenditure) incurred by
the Agent in obtaining legal advice regarding compliance with any law affecting
the premises or activities related thereto.
4.3 To indemnify, defend, and save the Agent harmless from all claims,
investigations, and suits, or from actions or failures to act of the Owner, with
respect to any alleged or actual violation of state or federal labor laws, it
being expressly agreed and understood that as between the Owner and the Agent,
all persons employed in connection with the Premises are employees of the Owner,
not the Agent. However, it shall be the responsibility of the Agent to comply
with all applicable state or federal labor laws. The Owner's obligation under
this paragraph 4.3 shall include the payment of all settlements, judgements,
damages, liquidated damages, penalties, forfeitures, back pay awards, court
costs, litigation expense, and attorneys' fees.
4
<PAGE>
4.4 To give adequate advance written notice to the Agent if the Owner
desires that the Agent make payment, out of the proceeds from the premises, or
mortgage indebtedness, general taxes, special assessments, or fire, steam
boiler, or any other insurance premiums. In no event shall the Agent be required
to advance its own money in payment of any such indebtedness, taxes,
assessments, or premiums.
5. THE OWNER AGREES TO PAY THE AGENT EACH MONTH:
5.1 MANAGEMENT: Owner agrees to pay Agent for the ordinary management of
the Premises Five and Four Tenths percent (5.4%) of the monthly gross receipts
from the operation of the Premises during the period this Agreement remains in
full force and effect. Gross receipts are all amounts received from the
operation of the Premises including, but not limited to, rents, parking fees,
deposits, laundry income and fees.
5.2 OTHER ITEMS OF MUTUAL AGREEMENT: In the event Owner requests and Agent
agrees to perform services outside the scope of ordinary management of the
Premises, the parties will agree to a fee and payment structure for these
services prior to commencement of the work.
6. IT IS MUTUALLY AGREED THAT:
6.1 The Owner expressly withholds from the Agent any power or authority to
make any structural changes in any building or to make any other major
alterations or additions in or to any such building or equipment therein, or to
incur any expense chargeable to Owner other than expenses related to exercising
the express powers above vested in Agent without the prior written direction of
an authorized representative of Owner. Agent is granted the authority to make
structural changes or major alterations if such actions are required because of
danger to life or which are immediately necessary for the preservation and
safety of the Premises or the safety of the occupants thereof or are required to
avoid the suspension of any necessary service to the Premises.
6.2 The Agent does not assume and is given no responsibility for compliance
of any building on the Premises or any equipment therein with the requirements
of any statute, ordinance, law or regulation of any governmental body or of any
public authority or official thereof having jurisdiction, except to notify the
Owner promptly or forward to the Owner promptly any complaints, warnings,
notices, or summonses received by it relating to such matters. The Owner
represents that to the best of his (its) knowledge the Premises and such
equipment comply with all such requirements and authorizes the Agent, its
representatives, servants, and employees, of and from all loss, cost, expense,
and liability whatsoever which may be imposed on them or any of them by reason
of any present or future violation or alleged violation of such laws,
ordinances, statutes, or regulations.
6.3 In the event it is alleged or charged that any building on the Premises
or any equipment therein or any act or failure to act by the Owner with respect
to the Premises or the sale, rental or other disposition thereof fails to comply
with, or is in violation of, any of the requirements of a constitutional
provision, statute, ordinance, law or regulation of any governmental body or any
5
<PAGE>
order or ruling of any public authority or official thereof having or claiming
to have jurisdiction thereover, and the Agent, in its sole and absolute
discretion, considers that the action or position of the Owner or registered
managing Agent with respect thereto may result in damage or liability to the
Agent, the Agent shall have the right to cancel this Agreement at any time by
written notice to the Owner of its election so to do, which cancellation shall
be effective upon the service of such notice. Such notice may be served
personally or by registered mail, on or to the person named to receive the
Agent's monthly statement at the address designated for such person as provided
in Paragraph 2.2 above, and if service by mail shall be deemed to have been
served when deposited in the U.S. Mail. Such cancellation shall not release the
indemnities of the Owner set forth in Paragraph 4 and 6.2 above and shall not
terminate any liability or obligation of the Owner to the Agent for any payment,
reimbursement, or other sum of money then due and payable to the Agent
hereunder.
7. This Agreement may be canceled by Owner before the termination date
specified in Paragraph 1 on not less than 60 days' prior written notice to the
Agent.
8. The Owner shall pay or reimburse the Agent for any sums of money due it
under this Agreement for service for actions prior to termination,
notwithstanding any termination of this Agreement. All provisions of this
Agreement that require the Owner to have insured or to defend, reimburse, or
indemnify the Agent (including, but not limited to, Paragraphs 4.1, 4.2, and
4.3) shall survive any termination and, if Agent is or becomes involved in any
proceeding or litigation by reason of having been the Owner's agent, such
provisions shall apply as if this Agreement were still in effect. The parties
understand and agree that the Agent may withhold funds for thirty (30) days
after the end of the month in which the Agreement is terminated to pay bills
previously incurred but not yet invoiced and to close accounts.
This Agreement shall be binding upon the successors and assigns of the
Agent and their heirs, administrators, executors, successors, and assigns of the
Owner.
6
<PAGE>
IN WITNESS THEREOF, the parties hereto have affixed or caused to be affixed
their respective signatures effective this 10th day of November, 1999.
OWNER: Nooney Real Property Investors-Four, L.P.
By: /s/ David L. Johnson
David L. Johnson,
Chairman, Nooney Capital Corp.
General Partner of
Nooney Real Property Investors-Four, L.P.
AGENT: Maxus Properties, Inc.
By: /s/ Daniel W. Pishny
Daniel W. Pishny
President
7
EXHIBIT 10.2
M A N A G E M E N T A G R E E M E N T
OWNER: Nooney Real Property Investors-Four, L.P.
AGENT: Maxus Properties, Inc.
PREMISES: Woodhollow Apartments
1871 McKelvey Hill Dr.
Maryland Heights, MO 63043
BEGINNING: November 10, 1999
ENDING: November 10, 2002
<PAGE>
IN CONSIDERATION of the covenants herein contained, Nooney Real Property
Investors-Four, L.P., (hereinafter called "Owner"), and Maxus Properties, Inc.
(hereinafter called "Agent"), agree as follows:
1. The Owner hereby employs the Agent exclusively to rent and manage the
property known as Woodhollow Apartments (hereinafter the "Premises") upon the
terms and conditions hereinafter set forth, for a term of 3 years beginning on
November 10, 1999 and ending on November 10, 2002, and thereafter for yearly
periods from time to time, unless on or before 60 days prior to the date last
above mentioned or on or before 60 days prior to the expiration of any such
renewal period, either party hereto shall notify the other in writing that it
elects to terminate this Agreement, in which case this Agreement shall be
thereby terminated on said last mentioned date. (See also Paragraph 6.3 below.)
2. THE AGENT AGREES:
2.1 To accept the management of the Premises, to the extent, for the
period, and upon the terms herein provided and agrees to furnish the services of
its organization for the rental operation and management of the Premises.
2.2 To prepare a monthly statement of receipts and disbursements and to
remit, on a monthly basis, the net cash flow generated by the Premises after
payment of all operating expenses, debt service and escrow payments if
applicable, to the following party:
Nooney Real Property Investors-Four, L.P.
c/o David L. Johnson
P.O. Box 26730
Kansas City, MO 64196
In the event total monthly disbursements are in excess of total monthly
receipts, the Owner shall promptly provide funds to cover such shortfalls.
Nothing contained herein shall obligate the Agent to advance its own funds on
behalf of the Owner to cover any shortfalls.
2.3 To cause all employees of the Agent who handle or are responsible for
the safekeeping of any monies of the Owner to be covered by a fidelity bond in
an amount and with a company determined by the Agent.
2
<PAGE>
3. THE OWNER AGREES:
To give the Agent the following authority and powers (all or any of which
may be exercised in the name of the Owner) and agrees to assume all expenses in
connection therewith:
3.1 To advertise the Premises or any part thereof; to display signs thereon
and to rent the same; to cause references of prospective tenants to be
investigated; to sign leases for terms not in excess of one year and to renew
and/or cancel the existing leases and prepare and execute the new leases without
additional charge to the Owner; provided; however, that the Agent may collect
from tenant all or any of the following: a late rent administrative charge, a
non-negotiable check charge, credit report fee, a subleasing administrative
charge and/or broker's commission and need not account for such charges and/or
commission to the Owner; to terminate tenancies and to sign and serve such
notices as are deemed needful by the Agent; to institute and prosecute actions
to oust tenants and to recover possession of the Premises; to sue for and
recover rent; and, when expedient, to settle, compromise, and release such
actions or suits, or reinstate such tenancies. Owner shall reimburse Agent for
all expenses of litigation including attorneys' fees, filing fees, and court
costs which Agent does not recover from tenants. Agent may select the attorney
of its choice to handle such litigation.
3.2 To hire, discharge, and pay all managers, engineers, janitors and other
employees; to make or cause to be made all ordinary repairs and replacements
necessary to preserve the Premises in its present condition and for the
operating efficiency thereof and all alterations required to comply with lease
requirements, and to do decorating on the Premises; to negotiate contracts for
nonrecurring items not exceeding $5,000 and to enter into agreements for all
necessary repairs, maintenance, minor alterations and utility services; and to
purchase supplies and pay bills. Agent shall secure the approval of the Owner
for items, except monthly or recurring operating charges and emergency repairs
in excess of the maximum, if, in the opinion of the Agent, such repairs are
necessary to protect the property from damage or to maintain services to the
tenants as called for by their tenancy.
3.3 To collect rents and/or assessments and other items due or to become
due and give receipts therefor and to deposit all funds collected hereunder in
the Agent's custodial account.
3.4 Agent agrees to collect all tenant security deposits. Owner instructs
Agent to deposit all security deposits in the general operating accounts of the
property. Agent is not to segregate the security deposits into a separate
account or into an escrow account.
3.5 To execute and file all returns and other instruments and do and
perform all acts required of the Owner as an employer with respect to the
Premises under the Federal Insurance Contributions Acts, the Federal
Unemployment Tax Act and Subtitle C of the Internal Revenue Code of 1954 with
respect to wages paid by the Agent on behalf of the Owner and under any similar
federal and state law now or hereafter in force (and in connection therewith the
Owner agrees upon request to promptly execute and deliver to the Agent all
necessary powers of attorney, notices of appointment, and the like).
3
<PAGE>
3.6 The Agent shall not be required to advance any monies for the care or
management of said property, and the Owner agrees to advance all monies
necessary therefor. If the Agent shall elect to advance any money in connection
with the property, the Owner agrees to reimburse the Agent forthwith and hereby
authorizes the Agent to deduct such advances from any monies due the Owner. The
Agent, shall, upon instruction from the Owner, impound reserves each month for
the payment of real estate taxes, insurance, or any other special expenditure.
4. THE OWNER FURTHER AGREES:
4.1 To indemnify, defend and save the Agent harmless from all suits in
connection with the Premises and from liability for damage to property and
injuries to or death of any employee or other person whomsoever, and to carry at
his (its) own expense public liability, elevator liability (if elevators are
part of the equipment of the Premises), and workmen's compensation insurance
naming the Owner and Agent, adequate to protect their interests in form,
substance, and amounts reasonably satisfactory to the Agent, and to furnish to
the Agent certificates evidencing the existence of such insurance. Unless the
Owner shall provide such insurance and furnish such certificate within 30 days
from the date of this Agreement, the Agent may, but shall not be obligated to,
place said insurance and charge the cost thereof to the account of the Owner.
All such insurance policies shall provide that the Agent shall receive thirty
(30) days' written notice prior to cancellation of the policy.
4.2 To pay all expenses incurred by the Agent, including, but not limited
to, reasonable attorneys' fees and Agent's costs and time in connection with any
claim, proceeding, or suit involving an alleged violation by the Agent or the
Owner, or both, of any law pertaining to fair employment, fair credit reporting,
environmental protection, rent control, taxes, or fair housing, including, but
not limited to, any law prohibiting, or making illegal, discrimination on the
basis of race, sex, creed, color, religion, national origin, or mental or
physical handicap, provided, however, that the Owner shall not be responsible to
the Agent for any such expenses in the event the Agent is finally adjudicated to
have personally, and not in a representative capacity, violated any such law.
Nothing contained herein shall obligate the Agent to employ counsel to represent
the Owner in any such proceeding or suit, and the Owner may elect to employ
counsel to represent the Owner in any such proceeding or suit. The Owner also
agrees to pay reasonable expenses (or an apportioned amount of such expenses
where other employers of Agent also benefit from the expenditure) incurred by
the Agent in obtaining legal advice regarding compliance with any law affecting
the premises or activities related thereto.
4.3 To indemnify, defend, and save the Agent harmless from all claims,
investigations, and suits, or from actions or failures to act of the Owner, with
respect to any alleged or actual violation of state or federal labor laws, it
being expressly agreed and understood that as between the Owner and the Agent,
all persons employed in connection with the Premises are employees of the Owner,
not the Agent. However, it shall be the responsibility of the Agent to comply
with all applicable state or federal labor laws. The Owner's obligation under
this paragraph 4.3 shall include the payment of all settlements, judgements,
damages, liquidated damages, penalties, forfeitures, back pay awards, court
costs, litigation expense, and attorneys' fees.
4
<PAGE>
4.4 To give adequate advance written notice to the Agent if the Owner
desires that the Agent make payment, out of the proceeds from the premises, or
mortgage indebtedness, general taxes, special assessments, or fire, steam
boiler, or any other insurance premiums. In no event shall the Agent be required
to advance its own money in payment of any such indebtedness, taxes,
assessments, or premiums.
5. THE OWNER AGREES TO PAY THE AGENT EACH MONTH:
5.1 MANAGEMENT: Owner agrees to pay Agent for the ordinary management of
the Premises Four and one half percent (4.5%) of the monthly gross receipts from
the operation of the Premises during the period this Agreement remains in full
force and effect. Gross receipts are all amounts received from the operation of
the Premises including, but not limited to, rents, parking fees, deposits,
laundry income and fees.
5.2 OTHER ITEMS OF MUTUAL AGREEMENT: In the event Owner requests and Agent
agrees to perform services outside the scope of ordinary management of the
Premises, the parties will agree to a fee and payment structure for these
services prior to commencement of the work.
6. IT IS MUTUALLY AGREED THAT:
6.1 The Owner expressly withholds from the Agent any power or authority to
make any structural changes in any building or to make any other major
alterations or additions in or to any such building or equipment therein, or to
incur any expense chargeable to Owner other than expenses related to exercising
the express powers above vested in Agent without the prior written direction of
an authorized representative of Owner. Agent is granted the authority to make
structural changes or major alterations if such actions are required because of
danger to life or which are immediately necessary for the preservation and
safety of the Premises or the safety of the occupants thereof or are required to
avoid the suspension of any necessary service to the Premises.
6.2 The Agent does not assume and is given no responsibility for compliance
of any building on the Premises or any equipment therein with the requirements
of any statute, ordinance, law or regulation of any governmental body or of any
public authority or official thereof having jurisdiction, except to notify the
Owner promptly or forward to the Owner promptly any complaints, warnings,
notices, or summonses received by it relating to such matters. The Owner
represents that to the best of his (its) knowledge the Premises and such
equipment comply with all such requirements and authorizes the Agent, its
representatives, servants, and employees, of and from all loss, cost, expense,
and liability whatsoever which may be imposed on them or any of them by reason
of any present or future violation or alleged violation of such laws,
ordinances, statutes, or regulations.
6.3 In the event it is alleged or charged that any building on the Premises
or any equipment therein or any act or failure to act by the Owner with respect
to the Premises or the sale, rental or other disposition thereof fails to comply
with, or is in violation of, any of the requirements of a constitutional
provision, statute, ordinance, law or regulation of any governmental body or any
5
<PAGE>
order or ruling of any public authority or official thereof having or claiming
to have jurisdiction thereover, and the Agent, in its sole and absolute
discretion, considers that the action or position of the Owner or registered
managing Agent with respect thereto may result in damage or liability to the
Agent, the Agent shall have the right to cancel this Agreement at any time by
written notice to the Owner of its election so to do, which cancellation shall
be effective upon the service of such notice. Such notice may be served
personally or by registered mail, on or to the person named to receive the
Agent's monthly statement at the address designated for such person as provided
in Paragraph 2.2 above, and if service by mail shall be deemed to have been
served when deposited in the U.S. Mail. Such cancellation shall not release the
indemnities of the Owner set forth in Paragraph 4 and 6.2 above and shall not
terminate any liability or obligation of the Owner to the Agent for any payment,
reimbursement, or other sum of money then due and payable to the Agent
hereunder.
7. This Agreement may be canceled by Owner before the termination date
specified in Paragraph 1 on not less than 60 days' prior written notice to the
Agent.
8. The Owner shall pay or reimburse the Agent for any sums of money due it
under this Agreement for service for actions prior to termination,
notwithstanding any termination of this Agreement. All provisions of this
Agreement that require the Owner to have insured or to defend, reimburse, or
indemnify the Agent (including, but not limited to, Paragraphs 4.1, 4.2, and
4.3) shall survive any termination and, if Agent is or becomes involved in any
proceeding or litigation by reason of having been the Owner's agent, such
provisions shall apply as if this Agreement were still in effect. The parties
understand and agree that the Agent may withhold funds for thirty (30) days
after the end of the month in which the Agreement is terminated to pay bills
previously incurred but not yet invoiced and to close accounts.
This Agreement shall be binding upon the successors and assigns of the
Agent and their heirs, administrators, executors, successors, and assigns of the
Owner.
6
<PAGE>
IN WITNESS THEREOF, the parties hereto have affixed or caused to be affixed
their respective signatures effective this 10th day of November, 1999.
OWNER: Nooney Real Property Investors-Four, L.P.
By: /s/ David L. Johnson
David L. Johnson,
Chairman, Nooney Capital Corp.
General Partner of
Nooney Real Property Investors-Four, L.P.
AGENT: Maxus Properties, Inc.
By: /s/ Daniel W. Pishny
Daniel W. Pishny
President
7
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements for Maxus Real Property Investors-Four, L.P. and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000700720
<NAME> MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-START> DEC-01-1998
<PERIOD-END> NOV-30-1999
<CASH> 21,021
<SECURITIES> 0
<RECEIVABLES> 188,579
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 11,314,263
<CURRENT-LIABILITIES> 0
<BONDS> 13,825,996
<COMMON> 0
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 2,817,943
<TOTAL-REVENUES> 3,250,073
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,651,655
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,101,890
<INCOME-PRETAX> 81,989
<INCOME-TAX> 0
<INCOME-CONTINUING> 81,989
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 81,989
<EPS-BASIC> 5.96
<EPS-DILUTED> 0
</TABLE>
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.
<PAGE>
EXHIBIT 99.2
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Financial Statements and Schedules
November 30, 1999 and 1998
(With Independent Auditors' Report Thereon)
<PAGE>
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Table of Contents
Page
Independent Auditors' Reports
KPMG LLP 1
Deloitte & Touche LLP 2
Balance Sheet and Statement of Net Liabilities in Liquidation 3
Statements of Operations and Loss in Liquidation 4
Statements of Partners' Deficit and Net Liabilities in Liquidation 5
Statements of Cash Flows 6
Notes to Financial Statements 7
Schedules
1 Reconciliation of Partners' Deficit 16
2 Real Estate and Accumulated Depreciation 17
<PAGE>
Independent Auditors' Report
To the Partners of
Maxus Real Property Investors-Four, L.P.:
We have audited the accompanying balance sheet of Maxus Real Property
Investors-Four, L.P. (formerly known as Nooney Real Property Investors-Four,
L.P.) (the Partnership) as of November 30, 1999, and the related statements of
operations, partners' deficit, and cash flows for the year then ended. Our audit
also included the 1999 information included in the financial statement schedules
listed in the accompanying table of contents. 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 1999
financial statements and financial statement schedules based on our audit.
We conducted our audit 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 partner, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
As discussed in note 1, the Partnership discontinued the plan of liquidation
previously approved by the partners of the Partnership. As a result, the
Partnership's 1999 financial statements are no longer on the liquidation basis
of accounting.
In our opinion, the 1999 financial statements referred to above present fairly,
in all material respects, the financial position of Maxus Real Property
Investors-Four, L.P. as of November 30, 1999 and the results of its operations
and its cash flows for the year then ended, in conformity with generally
accepted accounting principles. Also, in our opinion, the 1999 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.
/s/ KPMG LLP
February 11, 2000
<PAGE>
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 statements 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 statements of operations
(going-concern basis), partners' deficit (going-concern basis) and cash flows
(going-concern basis) of Nooney Real Property Investors-Four, L.P. for the year
ended November 30, 1997. Our audits also included the financial statement
schedules for 1998 and 1997 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 statements of
operations (going-concern basis), partnership deficit (going-concern basis) and
cash flows (going-concern basis) for the year ended November 30, 1997, in
conformity with generally accepted accounting principles. Also, in our opinion,
such 1998 and 1997 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.
/s/ DELOITTE & TOUCHE LLP
St. Louis, Missouri
January 22, 1999
2
<PAGE>
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Balance Sheets as of November 30, 1999 and
Statements of Net Liabilities in Liquidation as of November 30, 1998
<TABLE>
<CAPTION>
<S> <C> <C>
Assets 1999 1998
---------- ----------
Investment property (note 2):
Land $ 1,013,858 ----
Buildings and improvements 15,225,310 ----
---------- ----------
16,239,168 ----
Less accumulated depreciation 8,655,278 ----
7,583,890 ----
Investment property held for sale 3,400,000 17,585,000
---------- ----------
Total investment property 10,983,890 17,585,000
Cash 21,021 227,373
Accounts receivable, less allowance for doubtful accounts 188,579 106,023
Prepaid expenses 19,100 ----
Deferred expenses, less accumulated amortization 101,673 ----
---------- ----------
$11,314,263 17,918,396
========== ==========
Liabilities and Partners' Deficit
Liabilities:
Mortgage notes payable (note 2) $13,825,996 13,500,465
Accounts payable and accrued expenses 465,484 263,459
Refundable tenant deposits 69,327 72,976
Deferred gain on investment property held for sale (note 1) ---- 7,200,029
Reserve for estimated costs during the period
of liquidation (note) ---- 10,000
---------- ----------
Total liabilities 14,360,807 21,046,929
Partners' deficit (3,046,544) ----
---------- ----------
Total liabilities and partners' deficit $11,314,263 ----
========== ----------
Net liabilities in liquidation $(3,128,533)
==========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Statements of Operations for the years ended November 30, 1999 and 1997
and Loss in Liquidation for the year ended November 30, 1998
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1999 1998 1997
---------- --------- ---------
Revenues
Rental (note 3) $ 2,817,943 2,793,517 2,873,818
Other
432,130 494,053 532,748
---------- --------- ---------
Total revenues 3,250,073 3,287,570 3,406,566
---------- --------- ---------
Expenses:
Depreciation and amortization 611,674 547,161 480,851
Repairs and maintenance, including common
area maintenance 499,533 466,870 433,263
Real estate taxes 377,545 445,064 459,618
Interest, net 1,101,890 1,146,496 1,130,602
Professional fees 352,598 203,831 156,971
General and administrative 210,751 232,710 241,728
Utilities 181,553 178,500 197,538
Property management fees -- related parties 101,408 176,292 180,921
Other 316,593 292,345 318,822
--------- --------- ---------
Total expenses 3,753,545 3,689,269 3,600,314
--------- --------- ---------
Loss before adjustment to liquidation basis (503,472) (401,699) (193,748)
Adjustment to liquidation basis (note 1) 585,461 (1,038,889) ----
--------- --------- ---------
Net income (loss) $ 81,989 (1,440,588) (193,748)
========= ========= =========
Net income (loss) allocation:
General partners $ 1,423 (24,995) (3,357)
Limited partners 80,566 (1,415,593) (190,391)
--------- --------- ---------
81,989 (1,440,588) (193,748)
========= ========= =========
Limited partners' data:
Net income (loss) per unit:
Loss before adjustment to liquidation basis $ (36.56) (29.18) (14.07)
Adjustments to liquidation basis 42.52 (75.45) ----
--------- --------- ---------
Total $ 5.96 (104.63) (14.07)
========= ========= =========
Weighted average limited partnership units outstanding 13,529 13,529 13,529
========= ========= =========
</TABLE>
See accompanying notes to financial statements
4
<PAGE>
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Statements of Partners" Deficit for the years ended November 30, 1999 and 1997
and Statements of Changes in Net Liabilities in Liquidation for the year ended
November 30, 1998
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Limited General
partners partners Total
-------- -------- -----
Balance at November 30, 1996 $(1,201,711) (292,486) (1,494,197)
Net loss (190,391) (3,357) (193,748)
---------- -------- ----------
Balance at November 30, 1997 (1,392,102) (295,843) (1,687,945)
Net loss (1,415,593) (24,995) (1,440,588)
---------- -------- ----------
Balance at November 30, 1998 (2,807,695) (320,838) (3,128,533)
Net income 80,566 1,423 81,989
---------- -------- ----------
Balance at November 30, 1999 $(2,727,129) (319,415) (3,046,544)
=========== ======== ==========
</TABLE>
See accompanying notes to financial statements
5
<PAGE>
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Statements of Cash Flows for the years ended November 30, 1999
and 1997 and Statements of Cash Flows in Liquidation
for the year ended November 30, 1998
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1999 1998 1997
---- ---- ----
Cash flows from operating activities:
Net income (loss) $ 81,989 (1,440,588) (193,748)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Adjustment to liquidation basis (585,461) 1,038,889 ---
Depreciation and amortization 611,674 547,161 480,851
Changes in accounts affecting operations:
Accounts receivable (82,556) 5,330 88,004
Prepaid expenses 55,832 (47,160) 28,907
Deferred expenses 47,857 (200,387) ---
Accounts payable and accrued expenses 202,025 (100,886) 277,394
Refundable tenant deposits (3,649) (7,311) (9,108)
-------- ---------- -------
Net cash provided by (used in)
operating activities 327,711 (204,952) 672,300
Cash flows from investing activities -- capital
expenditures (859,594) (524,657) (898,139)
-------- -------- --------
Cash flows from financing activities
Principal payments on mortgage notes payable (174,003) (12,871,393) (34,307)
Proceeds from mortgage notes payable 499,534 13,500,465 376,216
------- ---------- -------
Net cash provided by financing activities 325,531 629,072 341,909
------- ------- -------
Net (decrease) increase in cash (206,352) (100,537) 116,070
Cash, beginning of year 227,373 327,910 211,840
------- ------- -------
Cash, end of year $ 21,021 227,373 327,910
=========== ======= =======
Supplemental disclosure of cash flow information --
cash paid during the year for interest $ 1,004,663 1,150,263 1,183,922
=========== ========= =========
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Notes to Financial Statements
November 30, 1999 and 1998
(1) Summary of Significant Accounting Policies
(a) Description of Business
Maxus Real Property Investors-Four, L.P. (formerly known as 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 76% of total revenues for the year ended November
30, 1999, and a retail shopping center (Cobblestone Court) located
in Burnsville, Minnesota, a suburb of Minneapolis, which generated
the remaining 24% of total revenues for the year ended November
30, 1999. On December 21, 1999, the Partnership's Certificate of
Limited Partnership was amended to change the name of the
Partnership to Maxus Real Property Investors-Four, L.P.
(b) Basis of Accounting
On January 21, 1999, a plan to sell the Partnership's Woodhollow
Apartments property and Cobblestone Court property was approved by a
majority of the limited partners by proxy. The Partnership entered
into sales contracts on both properties with American Spectrum
Realty, Inc., an affiliate of Nooney Capital Corporation, corporate
general partner of the Partnership at that time.
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 were prepared on a
liquidation basis. Accordingly, assets were valued at estimated net
realizable value and liabilities included estimated costs associated
with carrying out the plan of liquidation. The Cobblestone sales
contract provided for a net sale price of $3,100,000. Accordingly, a
loss of $753,428 was recognized in 1998 to reduce the carrying value
of the property to its fair value less costs to sell. The Woodhollow
sales contract provided for a sale price of $14,600,000. The
expected gain of $7,200,029, net of sales costs, was included as a
deferred gain at November 30, 1998. Adjustments to convert to the
liquidation basis of accounting in 1998 are summarized as follows:
<TABLE>
<CAPTION>
<S> <C>
Writedown to net realizable value of Cobblestone $ (753,428)
Increase to reflect net realizable value of Woodhollow 7,200,029
Deferral of gain on increase in net realizable value of
Woodhollow (7,200,029)
Write-off of deferred debt costs and prepaid expenses (275,461)
Estimated liabilities associated with the liquidation of the
Partnership (10,000)
-------
$(1,038,889)
==========
</TABLE>
7 (Continued)
<PAGE>
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Notes to Financial Statements
November 30, 1999 and 1998
In 1999, certain contingencies of the sale contracts were not
fulfilled and the sale contracts were rendered null and void. As a
result of the cancellation of the planned liquidation and the
partners' intent to continue operations of the Woodhollow property,
the 1999 financial statements are no longer presented on the
liquidation basis of accounting. The cost of liquidation and other
accruals made in 1998 when adopting the liquidation basis were
reversed in 1999 as follows:
Commission payables related to sale of Cobblestone $300,000
Write-off of deferred debt costs and prepaid expenses 275,461
Estimated liabilities associated with liquidation of
the Partnership 10,000
------
$585,461
========
As discussed in note 7, the Cobblestone property is under contract
to be sold in 2000.
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.
(c) Ownership and Management
Prior to October 31, 1997, Nooney Capital Corp., the corporate
general partner, was a 75% owned subsidiary of Nooney Company.
Gregory J. Nooney, Jr., one of the individual general partners, was
an officer, director and shareholder of Nooney Company. The spouse
of John J. Nooney, the other individual general partner, 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 for the year ended November 30, 1997.
Additionally, the Partnership paid Nooney Krombach Company $36,667
in 1997 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. to S-P Properties, Inc., which in turn is a wholly
owned subsidiary of CGS Real Estate Company, Inc. (CGS).
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. CGS 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 $89,627, $176,292, and $14,297 for the years ended
November 30, 1999, 1998, and 1997, respectively. Additionally, the
Partnership paid Nooney, Inc. $0, $40,000, and $3,333 in 1999, 1998,
and 1997, respectively, as reimbursement for management services and
indirect expenses in connection with the management of the
Partnership.
8 (Continued)
<PAGE>
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Notes to Financial Statements
November 30, 1999 and 1998
On June 25, 1999, a complaint was filed by Bond Purchase, L.L.C.
(Bond Purchase) against the Partnership and its general partner,
Nooney Capital Corp. The complaint alleged that the defendants
arranged for the sale of Partnership assets at a price which was
less than another entity affiliated with the plaintiff was willing
to pay. The complaint further alleged that Nooney Capital Corp., as
a general partner of the Partnership, filed a proxy statement
relating to the sale of Partnership assets which omitted certain
unspecified material facts and which otherwise failed to provide
completed information to the limited partners. In addition, the
complaint alleged that the defendants refused to allow the plaintiff
access to the books and records of the Partnership. The complaint
sought injunctive relief against the proposed sale of the
Partnership assets, damages for alleged violations of the Securities
Exchange Act, damages for alleged breaches of fiduciary duty,
appointment of a receiver for the Partnership, and an accounting.
The Partnership and the general partner moved to dismiss the
complaint on various grounds, including the fact that the sale
transaction did not take place. Plaintiff has dismissed its federal
securities law claim and claim for injunction against the sale.
On November 9, 1999, S-P Properties, Inc. sold all outstanding stock
of Nooney Capital Corp. to Bond Purchase, L.L.C. for $177,000. In
connection with the sale, Nooney Capital Corp. changed its name to
Maxus Capital Corp., Nooney, Inc. terminated its management
agreement with the Partnership, and the Partnership entered into a
property management agreement with Maxus Properties, Inc., an
affiliate of Bond Purchase. Property management fees payable to
Maxus Properties, Inc. were $11,781 for 1999.
The sale was part of a larger agreement entered into by CGS and its
affiliates with Bond Purchase and certain affiliates, pursuant to
which Bond Purchase and CGS agreed (i) to stipulate to the dismissal
of certain lawsuits among the parties (including the complaint filed
by Bond Purchase against the Partnership, (ii) to settle certain
disputes between CGS and Bond Purchase, and (iii) to transfer stock
and/or Partnership units in various private and publicly traded
entities controlled at that time by CGS.
(d) Partnership Interests
Pursuant to the terms of the Partnership Agreement, net income
(loss) and cash distributions are allocated l% to the general
partners and the remainder pro rata to the general and limited
partners based upon the relationship of their original capital
contributions.
Limited partnership per unit computations are based on the weighted
average number of limited partnership units outstanding during the
year.
9 (Continued)
<PAGE>
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Notes to Financial Statements
November 30, 1999 and 1998
(e) Investment Property
Investment property is carried at cost less accumulated
depreciation. Investment property held for sale is carried at the
lower of cost or fair value less cost to sell. The Partnership
applies Statement of Financial Accounting Standards (SFAS) No. 121,
Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of, for the recognition and
measurement of impairment of long-lived assets to be held and used
and assets to be disposed of. Management reviews each property for
impairment whenever events or changes in circumstances indicate that
the carrying value of a property may not be recoverable. The review
of recoverability is based on an estimate of undiscounted future
cash flows expected to result from its use and eventual disposition.
If impairment exists due to the inability to recover the carrying
value of a property, an impairment loss is recorded to the extent
that the carrying value of the property exceeds its estimated fair
value.
The properties are depreciated over their estimated useful lives of
thirty years using the straight-line method. Tenant alterations are
depreciated over the term of the lease on a straight-line basis.
Depreciation is not recorded on investment property held for sale.
(f) Deferred Expenses
Deferred expenses consist of financing costs and are amortized over
the terms of the respective notes payable.
(g) Revenues
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 other revenues 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.
(h) Use of Estimates
Management of the Partnership has made a number of estimates and
assumptions relating to the reporting of assets and liabilities and
the disclosure of contingent assets and liabilities to prepare these
financial statements in conformity with generally accepted
accounting principles. Actual results could differ from those
estimates.
10 (Continued)
<PAGE>
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Notes to Financial Statements
November 30, 1999 and 1998
(2) Mortgage Notes Payable
Mortgage notes payable as of November 30, 1999 and 1998 consist of
the following:
<TABLE>
<CAPTION>
<S> <C> <C>
1999 1998
---- ----
Cobblestone Court Shopping Center mortgage note
payable in monthly principal payments of $4,697,
plus interest payments at LIBOR plus 2.75%
(8.34% at November 30, 1999), with final payment
of $4,494,261 due November 30, 2001, secured
by real property with a carrying value of $3,400,000 $ 4,555,328 4,607,000
Woodhollow Apartments mortgage note payable in
monthly principal payments of $11,121, plus interest
payments at LIBOR plus 2.75% (8.34% at
November 30, 1999), with final payment of $9,126,094
due November 30, 2001, secured by real property
with depreciated cost of $7,583,890 9,270,668 8,893,465
--------- ----------
$13,825,996 13,500,465
=========== ==========
</TABLE>
The mortgage notes are collateralized by deeds of trust and
assignments of rents on all investment properties. The aggregate
annual maturities of mortgage notes payable subsequent to November
30, 1999 are as follows: 2000, $205,641 and 2001, $13,620,355.
(3) Rental Revenues Under Operating Leases
Minimum future rental revenues under noncancelable operating leases
on properties other than apartment units in effect as of November
30, 1999 are as follows:
2000 $327,742
2001 110,140
2002 67,857
2003 69,638
2004 59,746
Thereafter 186,865
-------
Total $ 821,988
===========
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
$266,000, $368,000, and $387,000 for the years ended November 30,
1999, 1998, and 1997, respectively. Contingent rentals were not
significant for the years ended November 30, 1999, 1998, and 1997.
11 (Continued)
<PAGE>
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Notes to Financial Statements
November 30, 1999 and 1998
(4) Federal Income Tax Status
The general partners believe, based upon opinion of legal counsel,
that Maxus 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' basis.
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 of.
The comparison of financial statement and income tax reporting is as
follows:
Financial Income
statement tax
----------- -----------
1999:
Net income $ 81,989 (49,413)
Partners' deficit (3,046,544) (6,677,324)
========== ==========
1998:
Net loss $ 1,440,588 (124,725)
Net liabilities in liquidation (3,128,533) ----
Partners' deficit ---- (6,627,911)
========== ==========
1997:
Net loss $ (193,748) (307,511)
Partners' deficit (1,687,945) (6,503,186)
========== ==========
(5) Fair Value of Financial Instruments
SFAS No. 107, Disclosures About Fair Value of Financial Instruments,
requires the Partnership to disclose fair value information of all
financial instruments, whether or not recognized in the balance
sheet, for which it is practicable to estimate fair value. The
Partnership's financial instruments, other than debt, are generally
short-term in nature and contain minimal credit risk. These
instruments consist of cash, accounts receivable, accounts payable,
accrued liabilities, and refundable security deposits. The carrying
value of these assets and liabilities in the balance sheet are
assumed to be at fair value.
The Partnership's mortgage notes payable are at a variable rate,
which results in a carrying value that approximates its fair value.
12 (Continued)
<PAGE>
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Notes to Financial Statements
November 30, 1999 and 1998
(6) Segment Reporting
During 1999, the Partnership adopted SFAS No. 131, Disclosure About
Segments of an Enterprise and Related Information, which establishes
standards for the way that public business enterprises report
information about operating segments in financial statements, as
well as related disclosures about products and services, geographic
areas, and major customers.
The accounting policies of the segments are the same as those
described in note 1.
The Partnership has two reportable operating segments--Cobblestone
Court and Woodhollow Apartments. The Partnership's management
evaluates performance of each segment based on profit or loss from
operations before allocation of general and administrative expenses,
unusual and extraordinary items, and interest.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1999 1998 1997
---- ---- ----
Revenues:
Cobblestone Court $ 789,371 911,124 1,036,061
Woodhollow Apartments 2,452,272 2,372,154 2,371,681
Reconciling items -- corporate
and other 8,430 4,292 (1,176)
---------- --------- ---------
$3,250,073 3,287,570 3,406,566
========== ========= =========
Depreciation and amortization:
Cobblestone Court $ 17,522 1,240 3,265
Woodhollow Apartments 593,990 545,677 477,342
Reconciling items -- corporate 162 244 244
and other ---------- --------- ------
$ 611,674 547,161 480,851
========== ========= =======
Loss before adjustment to
liquidation basis:
Cobblestone Court $ (223,819) (215,858) (119,986)
Woodhollow Apartments (264,919) (192,197) (70,344)
Reconciling items -- corporate
and other (14,734) 6,356 (3,418)
---------- --------- --------
$ (503,472) (401,699) (193,748)
========== ========= ========
</TABLE>
13 (Continued)
<PAGE>
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Notes to Financial Statements
November 30, 1999 and 1998
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1999 1998 1997
---- ---- ----
Interest expense, net:
Cobblestone Court $ 368,451 378,137 361,584
Woodhollow Apartments 733,495 772,126 774,644
Reconciling items -- interest
income (56) (3,767) (5,626)
----------- --------- ---------
$ 1,101,890 1,146,496 1,130,602
========== ========= =========
Capital expenditures
Cobblestone Court $ ---- ---- 376,218
Woodhollow Apartments 859,594 524,657 521,921
---------- --------- ---------
$ 859,594 524,657 898,139
========== ========= =========
Assets:
Cobblestone Court $3,511,619 3,257,061
Woodhollow Apartments 7,789,732 14,520,859
Reconciling items -- corporate
and other 12,912 140,476
---------- ---------
$11,314,263 17,918,396
=========== ==========
</TABLE>
Two major tenants occupied 35%, 35%, and 34% of Cobblestone's
rentable square footage in 1999, 1998, and 1997, respectively. These
tenants' leases expire in 2000 and 2001.
(7) Subsequent Event
On January 28, 2000, a sales agreement was signed on the Cobblestone
property that provides for a sale price of $5,100,000. The sale is
subject to a due diligence period and, if completed, is expected to
close by the end of the second quarter of 2000.
14 (Continued)
<PAGE>
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Notes to Financial Statements
November 30, 1999 and 1998
(8) Supplementary Quarterly Data (Unaudited)
<TABLE>
<CAPTION>
1999
-----------------------------------------------------
<S> <C> <C> <C> <C>
February 28 May 31 August 31 November 30
----------- ------ --------- -----------
Total revenues $ 814,662 845,093 802,586 787,732
Adjustment to liquidation basis ---- 585,461 ---- ----
Net income (loss) 103,744 566,801 (486,947) (101,609)
Net income (loss) per limited
partnership unit 7.54 41.17 (35.37) (7.38)
======= ======= ======= =======
1998
-----------------------------------------------------
February 28 May 31 August 31 November 30
----------- ------ --------- -----------
Total revenues $ 848,737 829,782 842,513 766,538
Adjustment to liquidation basis ---- ---- ---- (1,038,889)
Net income (loss) 2,371 (73,607) (63,815) (1,305,537)
Net income (loss) per limited
partnership unit 0.17 (5.35) (4.64) (94.81)
======= ======= ======= =========
</TABLE>
15
<PAGE>
Schedule 1
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Reconciliation of Partners' Equity (Deficit)
Years ended November 30, 1999, 1998 and 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Limited General
partners partners Total
------------ --------- -----------
1999:
Balance per statement of partners' deficit $(2,727,129) (319,415) (3,046,544)
Add:
Selling commissions and other offering costs not deductible for
income tax purposes 1,732,908 --- 1,732,908
Bad debt expense not deductible for income tax purposes 30,837 545 31,382
Prepaid rents included in income for income tax purposes 69,214 1,222 70,436
Writedown of investment property not recognized for income tax purposes 1,491,100 26,328 1,517,428
--------- ------ ---------
596,930 (291,320) 305,610
Less
Excess depreciation deducted for income tax purposes 6,779,531 190,491 6,970,022
Rent concessions not recognized for income tax purposes 12,688 224 12,912
--------- -------- ---------
Partners' deficit per tax return $(6,195,289) (482,035) (6,677,324)
=========== ======== =========
1998:
Balance per statement of partners" deficit $(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
--------- -------- ---------
Partners' deficit per tax return $(6,146,914) (480,997) (6,627,911)
=========== ======== =========
1997:
Balance per statement of partners' deficit $(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
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
--------- -------- ---------
Partners' deficit per tax return $(6,024,353) (478,833) (6,503,186)
=========== ======== =========
See accompanying independent auditors' reports.
</TABLE>
16
<PAGE>
Schedule 2
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Real Estate and Accumulated Depreciation
November 30, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Column C
----------------------------------------------------- Column D
Initial cost to Partnership ---------------
----------------------------------------------------- Costs
Column B Buildings and capitalized
-------------- subsequent to
Column A Encumbrances Land Improvements Total acquisition
- --------------------------------- -------------- --------- ------------ ---------- -------------
Cobblestone Court Shopping Center
Burnsvile, Minnesota $ 4,555,328 1,205,378 4,676,940 5,882,318 199,828(1)
Woodhollow Apartments,
Maryland Heights, Missouri 9,270,668 1,013,858 11,651,289 12,665,147 4,149,020
--------- --------- --------- ---------- ---------
Total $ 13,825,996 2,219,236 16,328,229 18,547,465 4,348,848
============= ========= ========== ========== =========
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C>
Column I
Column E ---------------
---------------------------------- Life on which
Gross amount at which Column F Column G Column H depreciation in
carried at close of period ------------ ------------ -------- latest income
Buildings and Accumulated Date of Date statement is
Land Improvements Total depreciation construction acquired computed
---- ------------ ----- ------------ ------------ -------- --------
Cobblestone Court Shopping Center
Burnsvile, Minnesota 1,205,378 4,876,768 6,082,146(2) 2,682,146(2) 1980 02/16/82 30 years
Woodhollow Apartments,
Maryland Heights, Missouri 1,013,858 15,225,310 16,239,168 8,655,278 1971-1972 07/28/82 30 years
--------- ---------- ---------- ---------
Total 2,219,236 20,102,078 22,321,314 11,337,424
========= ========== ========== ==========
</TABLE>
(1) Amount is net of $942,428 in writedowns to reflect the minimum recoverable
value to the Partnership.
(2) Amount is shown net in the financial statements as investment property held
for sale.
17 (Continued)
<PAGE>
MAXUS REAL PROPERTY INVESTORS-FOUR, L.P.
Real Estate and Accumulated Depreciation, Continued
Years ended November 30, 1999, 1998, and 1997
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1999 1998 1997
------------ ---------- ----------
Reconciliation of amounts in Column E:
Balance at beginning of period $ 28,361,748 21,395,024 20,556,298
Add cost of improvements 859,594 524,657 898,139
Less adjustment of net realizable value (6,900,028) 6,446,601 ---
Less cost of disposals --- (4,534) (59,413)
---------- ---------- ----------
Balance at end of year $ 22,321,314 28,361,748 21,395,024
============ ========== ==========
Reconciliation of amounts in Column F:
Balance at beginning of period $ 10,776,748 10,284,783 9,878,090
Add depreciation expense 560,676 496,499 466,106
Less accumulated depreciation on disposals --- (4,534) (59,413)
---------- ---------- ----------
Balance at end of year $ 11,337,424 10,776,748 10,284,783
============ ========== ==========
The aggregate cost of real estate owned for federal
income tax purposes $ 23,838,742 22,979,147 22,459,024
============ ========== ==========
</TABLE>
See accompanying independent auditors' reports.
18
<PAGE>
