SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarter period ended March 31, 2000
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 0-13754
MAXUS REALTY TRUST, INC.
(Exact name of small business issuer as specified in its charter)
Missouri 43-1339136
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1100 Main St., Ste 2100 Kansas City, Missouri 64105
(Address of principal executive offices) (Zip Code)
Trust's telephone number, including area code (816) 421-4670
Indicate by check mark whether the Trust (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 Trust was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes [X] No [ ]
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INDEX
Page
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS:
Balance Sheet 3
Statements of Operations 4
Statements of Cash Flows 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS 6
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 11
ITEM 2. CHANGES IN SECURITIES 11
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 11
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 11
ITEM 5. OTHER INFORMATION 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13
SIGNATURES 15
EXHIBIT INDEX 16
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PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MAXUS REALTY TRUST, INC.
BALANCE SHEET
(UNAUDITED)
March 31, 2000
ASSETS:
Investment property
Land $ 2,080,000
Buildings and improvements 13,716,000
------------
15,796,000
Less accumulated depreciation (5,951,000)
9,845,000
Investment property held for sale 3,279,000
-------------
Total investment property 13,124,000
Cash 41,000
Accounts receivable 269,000
Prepaid expenses and other assets 216,000
Deferred expenses, less accumulated amortization 387,000
------------
Total assets $ 14,037,000
===========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
Mortgage notes payable $ 4,510,000
Accounts payable and accrued expenses 263,000
Real estate taxes payable 268,000
Refundable tenant deposits 64,000
------------
Total liabilities 5,105,000
Shareholders' equity:
Common stock, $1 par value: authorized 5,000,000 shares
866,624 shares issued and outstanding 867,000
Additional paid-in-capital 14,252,000
Distributions in excess of accumulated earnings (6,187,000)
------------
Total shareholders' equity 8,932,000
$ 14,037,000
============
See accompanying notes to financial statements.
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MAXUS REALTY TRUST, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
March 31 March 31
2000 1999
Revenues:
Rental $ 657,000 664,000
Other 68,000 81,000
------ ------
Total revenues 725,000 745,000
------- -------
Expenses:
Depreciation and amortization 178,000 191,000
Repairs and maintenance, including common
area maintenance 88,000 88,000
Real estate taxes 129,000 146,000
Interest, net 95,000 93,000
Professional fees 103,000 174,000
General and administrative 31,000 130,000
Utilities 68,000 56,000
Property management fees - related parties 25,000 51,000
Other operating expenses 44,000 20,000
-------- ---------
Total expenses 761,000 949,000
------- -------
Net loss $ (36,000) (204,000)
======== =========
Per share data (basis and diluted):
Net loss $ (.04) (.24)
=========== =========
Distributions:
Paid in current year:
Taxable to shareholders $ ---- ----
Return of capital ---- ----
----------- ---------
Total paid in current year ---- ----
=========== =========
Weighted average shares outstanding 866,624 866,624
======= =========
See accompanying notes to financial statements.
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MAXUS REALTY TRUST, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
March 31 March 31
2000 1999
Cash flows from operating activities:
Net loss (36,000) (204,000)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 178,000 191,000
Changes in accounts affecting operations:
Accounts receivable (19,000) 50,000
Prepaid expenses and other assets (47,000) (113,000)
Accounts payable and other liabilities (207,000) 11,000
Deferred compensation ---- 61,000
--------- ----------
Net cash used in operating activities (131,000) (4,000)
--------- ----------
Cash flows from investing activities:
Capital expenditures (8,000) (74,000)
----------- ----------
Cash flows from financing activities:
Principal payments on mortgage notes payable (28,000) (26,000)
----------- ----------
Net decrease in cash (167,000) (104,000)
Cash, beginning of period 208,000 505,000
------- -------
Cash, end of period $ 41,000 401,000
========= =======
Supplemental disclosure of cash flow information -
cash paid during the quarter for interest $ 95,000 97,000
========= =======
See accompanying notes to financial statements
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MAXUS REALTY TRUST, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2000 AND MARCH 31, 1999
(1) Summary of Significant Accounting Policies
Refer to the financial statements of Maxus Realty Trust, Inc. (formerly Nooney
Realty Trust, Inc.) (the "Trust") for the year ended December 31, 1999, which
are contained in the Trust's Annual Report on Form 10-K, for a description of
the accounting policies which have been continued without change except as noted
below. Also, refer to the footnotes to those statements for additional details
of the Trust's financial condition. The details in those notes have not changed
except as a result of normal transactions in the interim or as noted below. In
the opinion of management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position, results of
operations and changes in financial position at March 31, 2000 and for all
periods presented have been made. The results for the three-month period ended
March 31, 2000 are not necessarily indicative of the results which may be
expected for the entire year.
Certain reclassifications have been made to the prior quarter amounts to conform
to the current quarter presentation.
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
This 10-QSB 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 future prospects for the Trust. Actual results could differ
materially from those contemplated by such statements.
DESCRIPTION OF BUSINESS
Maxus Realty Trust, Inc., a Missouri corporation (formerly Nooney Realty Trust,
Inc.), was formed on June 14, 1984 for the purpose of making equity investments
in income-producing real properties, primarily commercial and light industrial
properties. The Trust's portfolio is comprised of Atrium at Alpha Business
Center, a multi-tenant office building located in Bloomington, Minnesota
("Atrium at Alpha"); Applied Communications, Inc. Office Building, a
single-tenant office building located in Omaha, Nebraska ("ACI Building"); and
Franklin Park Distribution Center, a warehouse and distribution facility in
Franklin Park, Illinois ("Franklin Park"). These properties generated 44%, 40%,
and 16% of total revenues, respectively, for the quarter ended March 31, 2000.
On May 3, 2000, the Trust entered into a letter of intent to sell Franklin Park
to an unrelated third party, Chicago Industrial Partners, L.L.C. ("CIP"). The
sale price is $4,525,000 payable in cash at the closing, subject to any
prorations. The Trust must pay the independent real estate broker a commission
of five (5) percent of the total purchase price excluding any prorations or
offsets. Franklin Park is one of three properties that the Trust currently owns.
The letter of intent is non-binding and is subject to a sale contract being
fully signed by May 22, 2000. The letter of intent provides that the sale
contract will make the sale subject to certain conditions, including but not
limited to, CIP having a thirty (30) day due diligence period after the
execution of the sale contract pursuant to which CIP will have the right to
terminate the contract in its sole discretion without liability to the Trust.
Although there can be no assurance that this transaction will ultimately be
consummated, the closing is tentatively scheduled to occur within fifteen (15)
business days after the end of the due diligence period.
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LIQUIDITY AND CAPITAL RESOURCES
Cash on hand as of March 31, 2000, was $41,000, a decrease of $167,000 from
December 31, 1999. The decrease in cash is attributable mainly to a reduction in
accounts payable and other liabilities of $207,000. Management believes the
Trust's current cash position and the properties' ability to provide operating
cash flow should enable the Trust to fund anticipated capital expenditures and
service debt in 2000. Expenditures for leasing capital are dependent on the
timing and actual dollars negotiated for leases. The anticipated capital
expenditures by property for 2000 are as follows:
OTHER LEASING
CAPITAL CAPITAL TOTAL
Atrium at Alpha............ $18,000 $282,000 $300,000
Franklin Park.............. --- 225,000 225,000
ACI Building............... --- 350,000 350,000
--------- ---------- ----------
$18,000 $857,000 $875,000
The leasing capital expenditures at Atrium at Alpha include tenant alterations
and lease commissions for new and renewal tenants. In addition, the Trust
anticipates spending capital funds for HVAC and minor roof replacements. At
Franklin Park, leasing capital for tenant alterations and lease commissions upon
the leasing of the vacant space is budgeted. At the ACI Building, the single
occupant in the building renewed their lease in 1998. The funds to reimburse the
tenant for certain tenant alterations up to a maximum of $350,000 may be paid
during 2000 or deferred until 2001 depending on when the tenant elects to
perform the work.
The debt on the Trust's properties matures in the year 2001. Management believes
that the Trust will be able to refinance the debt on similar terms at that time.
CONTINGENCIES
The Trust's multi-tenant office building located in Bloomington, Minnesota has
been classified in the Minneapolis Airport Committee's (the "MAC") Safety Zone A
in the future expansion of the Minneapolis Airport. The expansion runway is
anticipated to be completed in 2003. The MAC began buying out impacted buildings
during 1999. Safety Zone A is adjacent to the Federal Aviation Authority's noise
buy out zone. The MAC has not indicated whether or not it will buy out the
Trust's building. The Trust is monitoring whether the increased noise from the
new runway will have an impact on future leasing of the building. If the Trust
determines there is a negative impact, the Trust will petition the MAC to buy
the building. If the building continues to be classified in Safety Zone A, it
will be classified as nonconforming use. Given the preliminary state of the
future expansion, management is unable at this time to determine what impact, if
any, this matter will have on the Trust.
RESULTS OF OPERATIONS
The results of operations for the Trust's properties for the quarters ended
March 31, 2000 and 1999 are detailed in the schedule below. Administrative
expenses, including professional fees, of the Trust are excluded.
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FUNDS FROM OPERATIONS
The white paper on Funds from Operations approved by the board of governors of
NAREIT in March 1999 defines funds from operations as net income (loss)(computed
in accordance with GAAP), excluding gains (or losses) from sales of property,
plus real estate related depreciation and amortization, and after adjustments
for unconsolidated partnerships and joint ventures. Adjustment for
unconsolidated partnerships and joint ventures are calculated to reflect funds
from operations on the same basis. In 1999, NAREIT clarified the definition of
Funds from Operations to include non-recurring events, except for those that are
defined as "extraordinary items" under GAAP and gains and losses from sales of
depreciable operating property.
The Trust computes Funds from Operations in accordance with the guidelines
established by the white paper which may differ from the methodology for
calculating Funds from Operations utilized by other equity REITs, and,
accordingly, may not be comparable to such other REITs. Funds from Operations do
not represent amounts available for management's discretionary use because of
needed capital replacement or expansion, debt service obligations, distributions
or other commitments and uncertainties. Funds from Operations should not be
considered as an alternative to net income (determined in accordance with GAAP)
as an indication of the Trust's financial performance or to cash flows from
operating activities (determined in accordance with GAAP) as a measure of the
Trust's liquidity, nor is it indicative of funds available to fund the Trust's
cash needs including its ability to make distributions. The Trust believes Funds
from Operations is helpful to investors as a measure of the performance of the
Trust because, along with cash flows from operating activities, financing
activities and investing activities, it provides investors with an understanding
of the ability of the Trust to incur and service debt and make capital
expenditures.
ATRIUM AT ALPHA FRANKLIN PARK ACI BUILDING
(in thousands)
2000 Revenues $ 312.6 113.5 $ 298.9
Expenses 274.9 140.7 204.5
------ ------- ------
Net Income (loss) 37.7 (27.2) 94.4
Depreciation and Amortization 95.3 36.3 44.9
------ ------- ------
Funds from Operations 133.0 9.1 139.3
====== ======= ======
1999 Revenues $ 347.3 $ 97.6 $ 300.3
Expenses 283.5 153.2 234.9
------ ------ -------
Net Income (loss) 63.8 (55.6) 65.4
Depreciation and Amortization 95.1 36.4 55.8
------- ------- -------
Funds from Operations 158.9 (19.2) 121.2
======= ======= ======
COMPARISONS BY PROPERTY
Revenues at the Atrium at Alpha for the quarter ended March 31, 2000 decreased
$34,700 compared to the same period in 1999. The decrease in revenues was
primarily due to a decrease in rental income of $16,000 and a decrease in
miscellaneous income of $16,000. Operating expense for the quarter ended March
31, 2000 decreased $8,600 compared to the same period in 1999. The decrease in
operating expense was primarily due to a decrease in management fees of $9,000.
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COMPARISONS BY PROPERTY- CONTINUED
At Franklin Park, revenues for the quarter ended March 31, 2000 increased
$15,900 compared to the same period in 1999. Operating expense for the quarter
ended March 31, 2000 decreased $12,500 compared to the same period in 1999. The
decrease in operating expense was primarily due to a decrease in management fees
of $10,200.
Revenues at the ACI Building for the quarter ended March 31, 2000 decreased
slightly compared to the same period in 1999. Operating expense for the quarter
ended March 31, 2000 decreased $30,400 compared to the same period in 1999. The
decrease in operating expense was primarily due to a decrease in amortization
expense of $11,000. Management fees decreased by $7,000 and the remainder of the
decrease was due to decreases in a number of expense categories, none of which
was significant.
The occupancy levels at March 31 were as follows:
OCCUPANCY LEVELS AT MARCH 31,
2000 1999
Atrium at Alpha 83% 92%
Franklin Park 57% 57%
ACI Building 100% 100%
During the quarter ended March 31, 2000, the occupancy level at Atrium at Alpha
decreased from 86% at December 31, 1999 to 83% at March 31, 2000. One tenant's
lease expired in 1999 which occupied 3,451 square feet. In 1999,the tenant
agreed to a month to month extension and vacated March 5, 2000. One tenant
vacated which occupied 1,255 square feet. One tenant renewed their lease for
1,536 square feet . The property has one major tenant occupying 16% of the
building. The lease for this tenant expires in December 2003.
Franklin Park has one tenant occupying 57% of the building. The lease expires in
December 2004.
The ACI Building has a single tenant occupying 100% of the building. The lease
expires in August 2008.
The Trust reviews long-lived assets for impairment whenever events or changes in
circumstances indicate that the carrying amount of a property may not be
recoverable. The Trust considers a history of operating losses or a change in
occupancy to be primary indicators of potential impairment. The Trust deems the
property to be impaired if a forecast of undiscounted future operating cash
flows directly related to a property, including disposal value, if any, is less
than its carrying amount. If the property is determined to be impaired, the loss
is measured as the amount by which the carrying amount of the property exceeds
its fair value. Fair value is based on quoted market prices in active markets,
if available. If quoted market prices are not available, an estimate of fair
value is based on the best information available, including prices for similar
properties or the results of valuation techniques such as discounting estimated
future cash flows. Considerable management judgment is necessary to estimate
fair value. Accordingly, actual results could vary significantly from such
estimates.
COMPARISON OF CONSOLIDATED RESULTS
For the quarter ended March 31, 2000, the Trust's consolidated revenues were
$725,000 compared to $745,000 for the quarter ended March 31, 1999. Revenues
decreased $20,000 (2.7%). The decrease in consolidated revenues relates
primarily to a decrease in rental revenue and common area maintenance
reimbursement at the Atrium at Alpha of $32,000. This decrease was offset in
part by an increase in revenue at Franklin Park of $16,000.
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COMPARISON OF CONSOLIDATED RESULTS - CONTINUED
For the quarter ended March 31, 2000, the Trust's consolidated expenses were
$761,000 compared to $949,000 for the quarter ended March 31, 1999. The decrease
in expense of $188,000 (19.8%) is due primarily to a decrease in general and
administrative expenses of $99,000, professional fees of $71,000, and property
management fees-related party of $26,000. The decrease in administrative
expenses was primarily due to a reduction in payroll expense paid to previous
management of $90,000. Current management does not charge payroll expense to the
Trust.
The net loss for the quarter ended March 31, 2000 was $36,000 or $.04 per share.
The net loss for the quarter ended March 31, 1999 was $204,000 or $.24 per
share.
Cash flow used in operating activities was $131,000 for the quarter ended March
31, 2000 compared to $4,000 for 1999. The decrease in cash flow provided by
operating activities was due primarily to decreases in accounts payable and
other liabilities of $207,000. Cash flow used in investing activities was $8,000
for the quarter ended March 31, 2000 compared to $74,000 in 1999. The decrease
in cash flow used in investing activities was due primarily to a decrease in
capital expenditures. Cash flow used in financing activities was $28,000 for the
quarter ended March 31, 2000 compared to $26,000 in 1999. Reduction of the
principal balance on the mortgage note was the sole use of cash flow for
financing activities for the quarter ended March 31, 2000 and 1999.
MARKET RISK
The Trust has 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 Trust had
no holdings of derivative financial or commodity instruments at March 31, 2000
The Trust does not believe that it has any material exposure to interest rate
risk. The Debt on the Trust's properties matures in the year 2001. Management
believes that the Trust will be able to refinance the debt on similar terms at
that time.
INFLATION
The effects of inflation did not have a material impact upon the Trust's
operations in the quarter ended March 31, 2000 or in fiscal 1999 or 1998.
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PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
On May 11, 2000, the Trust sold 173,000 shares of its common stock, par value
$1.00 per share, at a price of $8.00 per share, solely to accredited investors
(as such term is defined in Rule 501 of Regulation D) pursuant to a private
placement in accordance with Rule 506 of Regulation D. Each investor executed a
subscription agreement pursuant to which each investor represented and warranted
that such investor met the requirements of an accredited investor. The Trust did
not engage in any form of general solicitation or general advertising in selling
the shares. The shares sold pursuant to the private placement have not been
registered under the Securities Act of 1933, as amended, and may not be offered
or sold in the United States absent registration or an applicable exemption from
registration, and the stock certificates representing such shares will contain a
legend with this restriction.
The Trust sold the shares to comply with the listing rules of the Nasdaq
National Market ("Nasdaq"). Nasdaq had previously notified the Trust that the
Trust was not in compliance with two Nasdaq listing requirements. Those listing
requirements require (1) the Trust to maintain in excess of 750,000 shares that
are publicly held and (2) that the market value of the public float of the
Trust's shares exceed $5,000,000. Nasdaq is requiring the Trust to demonstrate a
market value of public float of at least $5,000,000 on or before May 11, 2000;
immediately thereafter, the Trust must evidence a market value of public float
of at least $5,000,000 for a minimum of ten consecutive trading days.
There can be no assurance that the issuance of the 173,000 shares will
successfully remedy these deficiencies. If the requirements are not met, Nasdaq
may determine to transfer the Trust's common stock to the Nasdaq SmallCap Market
or delist it, either of which could make it more difficult for shareholders to
sell their stock.
The Trust intends to use the proceeds of the private placement, less legal and
administrative fees incurred in connection with the private placement, to fund
capital improvements, dividends and potential future acquisitions.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 9, 2000, the Trust held its Annual Meeting of Shareholders. At the
meeting, the following matters were voted upon by the shareholders:
1. A proposal to amend Article Eight of the Trust's Articles of Incorporation,
Section 6.1 of Article VI of the Trust's Bylaws and Section 10.8(b) of
Article X of the Trust's Bylaws to eliminate the Trust's "self-liquidating"
policy.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - CONTINUED
2. A proposal to amend provisions of the Trust's Bylaws to eliminate certain
investment and borrowing restrictions on the Trust. The proposal was to
A. amend Section 6.2 of the Trust's Bylaws by deleting the text of
paragraph (d) thereof; as a result, the Trust would be permitted to
acquire equity securities of other companies;
B. amend Section 6.2 of the Trust's Bylaws by deleting the text of
paragraph (i) thereof; as a result the Trust would be permitted to
exchange its common stock for real estate investments;
C. amend Section 3.1(e) of the Trust's Bylaws by deleting clauses (ii)
and (iii) thereof, and amend Section 3.4 of the Trust's Bylaws by
deleting paragraph (e) thereof; as a result, existing provisions that
restrict (1) total indebtedness of the Trust from exceeding 300% of
the net asset value of the Trust's assets and unsecured borrowings
that result in an asset coverage of less than 300% and (2) require the
Independent Trustees to monitor such coverages, would be eliminated;
and
D. amend the second paragraph of Section 9.4 of the Trust's Bylaws by
adding a new paragraph (d) thereto that allows the Trust to purchase
or sell property from or to affiliates of the Trust if approved by the
unanimous vote of the disinterested Independent Trustees.
3. A proposal to amend Article One of the Trust's Articles of Incorporation
and Section 1.1 of Article I of the Trust's Bylaws to change the name of
the Trust to Maxus Realty Trust, Inc.
4. To elect five trustees to hold office until the next Annual Meeting of
Shareholders and until their successors are elected and qualify.
The total votes for Proposal 1 were cast as follows: 491,697 voted "for",
67,506 voted "against" and 8,689 "abstentions".
The total votes for Proposal 2A were cast as follows: 493,105 voted "for",
65,485 voted "against" and 9,303 "abstentions".
The total votes for Proposal 2B were cast as follows: 490,214 voted "for",
68,344 voted "against" and 9,335 "abstentions".
The total votes for Proposal 2C were cast as follows: 488,480 voted "for",
71,093 voted "against" and 8,320 "abstentions".
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - CONTINUED
The total votes for Proposal 2D were cast as follows: 489,424 voted "for",
69,725 voted "against" and 8,744 "abstentions".
The total votes for Proposal 3 were cast as follows: 629,011 voted "for",
61,302 voted "against" and 11,472 "abstentions".
Each of the proposals received the necessary votes for approval by the
shareholders of the Trust.
The following were the nominees of management voted upon and elected by the
shareholders of the Trust: David L. Johnson, Monte McDowell, Daniel W. Pishny,
Robert B. Thomson and Chris Garlich. There were 681,256 votes "for" Mr. Johnson
and 20,529 votes "withheld." There were 686,334 votes "for" Mr. McDowell and
15,451 votes "withheld." There were 685,750 votes "for" Mr. Pishny and 16,035
votes "withheld." There were 686,234 votes "for" Mr. Thomson and 15,551 votes
"withheld." There were 685,650 votes "for" Mr. Garlich and 16,135 votes
"withheld."
As a result of the approval of Proposal 3 to change the Trust's name, on May 10,
2000, the Trust filed an amendment to the Trust's Articles of Incorporation
changing the Trust's name to Maxus Realty Trust, Inc. As a result of the change
of name, the Trust is in the process of changing the Trusts NASDAQ symbol from
"NRTI" to "MRTI."
ITEM 5. OTHER INFORMATION
On May 9, 2000 the newly appointed Board of Directors of the Trust declared a
cash dividend of $0.16 per share payable to the holders of record on May 31,
2000 of the Trust's $1.00 par value, common stock. The Board anticipates that
the dividend will be paid on June 21, 2000. The dividend is being paid out of
the Trust's paid-in surplus.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
See Exhibits Index on Page 16
(b) Reports on Form 8-K
The following reports on Form 8-K were filed by the Trust during the first
quarter of 2000:
On January 25, 2000, the Trust filed a Form 8-K (File No. 000-13754) reporting
the dismissal of Deloitte and Touche LLP as its certifying accountant (Items 4
and 7). On February 14, 2000, the Trust filed Amendment No. 1 to this Form 8-K
(Items 4 and 7).
On February 11, 2000, the Trust filed a report on Form 8-K (File No. 000-13754)
which reported the appointment of KPMG LLP as its certifying accountant (Item
4).
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8 - CONTINUED
On May 5, 2000, the Trust filed a report on Form 8-K (File No. 000-13754) which
reported the Trust's execution of a letter of intent to sell one of its
properties (Item 5).
On May 11, 2000, The Trust filed a report on Form 8-K (File No. 000-13754) which
reported the consummation of a private placement, the results of the annual
meeting of the shareholders and the declaration of a dividend (Item 5).
(The remainder of this page left blank intentionally)
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Trust has duly caused this report to be signed on its behalf by
the undersigned, there unto duly authorized.
MAXUS REALTY TRUST, INC.
Date: May 11, 2000 By: /s/Daniel W. Pishny
------------------------
Daniel W. Pishny
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below on May 11, 2000, by the following persons on behalf of the
Trust and in the capacities indicated.
/s/ John W. Alvey
-----------------------------
John W. Alvey
Vice President
Chief Financial and
Accounting Officer
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EXHIBIT INDEX
Exhibit
Number Description
3.1 Articles of Incorporation dated June 12, 1984.
3.2 Amendment of Articles of Incorporation dated May 10, 2000.
3.3 Bylaws of the Registrant, as amended.
27.1 Financial Data Schedule
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ARTICLES OF INCORPORATION
OF
NOONEY REALTY TRUST, INC.
The undersigned natural person of the age of eighteen years or more for
the purpose of forming a corporation under The General and Business Corporation
Law of Missouri adopts the following Articles of Incorporation:
ARTICLE ONE
The name of the corporation is "Nooney Realty Trust, Inc."
ARTICLE TWO
The address of the corporation's initial registered office in this
state is 7701 Forsyth Boulevard, St. Louis, Missouri 63105 and the name of its
initial agent at such address is Gregory J. Nooney, Jr.
ARTICLE THREE
The aggregate number of shares which the corporation shall have
authority to issue is Five Million shares (5,000,000) of Common Stock all of
which shall have a par value of one Dollar ($1.00) per share, amounting in the
aggregate to Five Million Dollars ($5,000,000.00).
ARTICLE FOUR
No stock or other security of the corporation shall carry with it and
no owner of any share or shares of stock or other security or securities of the
corporation shall be entitled to any preferential or pre-emptive right
whatsoever to acquire additional shares of stock or of any other security of the
corporation.
<PAGE>
ARTICLE FIVE
The name and address of the incorporator is:
Connie B. Walsh
500 N. Broadway
Suite 2000
St. Louis, Missouri 63102
ARTICLE SIX
The number of directors to constitute the first board of directors is
nine. Thereafter, the number of directors shall be fixed by, or in the manner
provided in the bylaws. Any changes in the number will be reported to the
Secretary of State within thirty calendar days of such change.
ARTICLE SEVEN
The duration of the corporation is perpetual.
ARTICLE EIGHT
The Corporation is formed for the following purposes:
1. To make investments in real estate primarily consisting of
income producing property.
2. To engage in any lawful activity for which a corporation may
be organized under The General and Business Corporation Law of
Missouri.
ARTICLE NINE
The board of directors is expressly authorized to make and adopt the
original bylaws of the corporation. Such bylaws
2
<PAGE>
may be altered, amended or repealed or new bylaws may be adopted in lieu thereof
by the affirmative vote of a majority of the shares issued and outstanding and
entitled to vote thereon; provided, however, that the board of directors may
amend the bylaws of the corporation without the vote or consent of the
shareholders in the event the board of directors deems such necessary to conform
the bylaws to the requirements of the Internal Revenue Code of 1954, as amended,
with respect to real estate investment trusts, to applicable state or federal
securities laws or to other applicable state or federal laws or regulations.
IN WITNESS WHEREOF, these Articles of Incorporation have been signed
this 12th day of June, 1984.
/s/Connie B. Walsh
Connie B. Walsh
Incorporator
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
I, Mignon Sue Been, a notary public, do hereby certify that on the 12th
day of June, 1984, personally appeared before me, Connie B. Walsh, who being by
me first duly sworn, declared that she is the person who signed the foregoing
document as incorporator, and that the statements therein contained are true.
FILED AND CERTIFICATE OF /s/Mignon Sue Been
INCORPORATION ISSUED Notary Public
JUN 14 1984
/s/James C. Kirkpatrick MIGNON SUE BEEN
NOTARY PUBLIC-STATE OF MISSOURI
ST. LOUIS COUNTY
MY COMMISSION EXPIRES DECEMBER 30, 1985
3
<PAGE>
RECEIVED JUN 25, 1984
/s/James C. Kirkpatrick NOTICE THAT THE CHAIRMAN OF THE BOARD
Corporation Dept. WILL ACT AS CHIEF EXECUTIVE OFFICER
Secretary of State
HONORABLE JAMES C. KIRKPATRICK Charter No.
SECRETARY OF STATE 00265409
STATE OF MISSOURI
JEFFERSON CITY, MO 65101
Pursuant to the provisions of The General and Business Corporation Law
of Missouri, the undersigned Corporation certifies the following:
1. The name of the Corporation is NOONEY REALTY TRUST, INC. The
name under which it was originally organized was NOONEY REALTY
TRUST, INC.
2. Effective June 18, 1984 the chairman of the board of directors
will also serve as the chief executive officer of the
Corporation.
IN WITNESS WHEREOF, the undersigned, James J. O'Connor III, Secretary,
attests to this notice on the 18th day of June, 1984.
ATTEST:
/s/James J. O'Connor III
James J. O'Connor III
Secretary
STATE OF MISSOURI )
) SS.
COUNTY OF ST. LOUIS )
I, Connie B. Walsh, a notary public do hereby certify that on this
18th day of June, 1984, personally appeared before me, James J. O'Connor III
who, being by me first sworn, declared that he is the Secretary of Nooney Realty
Trust, Inc., that he signed the foregoing document as Secretary of Nooney Realty
Trust, Inc., and that the statements therein contained are true.
/s/Connie B. Walsh
Notary Public
My commission expires:
CONNIE B. WALSH
NOTARY PUBLIC-STATE OF MISSOURI
CITY OF ST. LOUIS
MY COMMISSION EXPIRES JANUARY 9, 1988
4
State of Missouri
[MO Seal] Rebecca McDowell Cook, Secretary of State
Corporations Division James C. Kirkpatrick State Information Center
P.O. Box 778 600 W. Main Street, Rm 322, Jefferson City, MO 65101
Jefferson City, MO 65102
Amendment of Articles of Incorporation
(To be submitted in duplicate)
Pursuant to the provisions of the General and Business Corporation Law of
Missouri, the undersigned Corporation certifies the following:
1. The present name of the Corporation is Maxus Realty Trust, Inc.
The name under which it was originally organized was Nooney Realty Trust,
Inc. No. 00265409
2. An amendment to the Corporation's Articles of Incorporation was adopted by
the shareholders on May 9, 2000.
3. Article Number One is amended to read as follows:
"1.1 Name. The name of the corporation is "Maxus Realty Trust, Inc."
Article Number Eight is amended to read as follows:
"The Corporation is formed for the following purposes:
1. To acquire, own, finance, develop, improve, lease, operate, manage,
dispose of, sell, liquidate and otherwise invest in and deal with real
estate primarily consisting of income-producing property.
2. To engage in any lawful activity for which a corporation may be organized
under The General and Business Corporation Law of Missouri.
(If more than one article is to be amended or
more space is needed attach additional pages)
<PAGE>
4. Of the 866,624 Shares outstanding, 866,624 of such shares were entitled to
vote on such amendment.
The number of outstanding shares of any class entitled to vote thereon as a
class were as follows:
Class Number of Outstanding Shares
Common 866,624
5. The number of shares voted for and against the amendment was as follows:
Class No. Voted For No. Voted Against
Common
Amendment to Article Number One 629,011 61,302
Amendment to Article Number Eight 491,697 67,506
6. If the amendment changed the number of par value of authorized shares having
a par value, the amount in dollars of authorized shares having a par value
as changed is:
N/A
If the amendment changed the number of authorized shares without par value,
the authorized number of shares without par value as changed and the
consideration proposed to be received for such increased authorized shares
without par value as are to be presently issued are:
N/A
7. If the amendment provides for an exchange, reclassification, or cancellation
of issued shares, or a reduction of the number of authorized shares of any
class below the number of issued shares of that class, the following is a
statement of the manner in which such reduction shall be effected:
N/A
2
<PAGE>
IN WITNESS WHEREOF, the undersigned, Daniel W. Pishny has executed this
instrument and its Christine A. Robinson has affixed its corporate seal hereto
and attested said seal on May 9, 2000.
Place
CORPORATE SEAL
Here
(If no seal, state "None.")
None Maxus Realty Trust, Inc.
By /s/Daniel W. Pishny
ATTEST: /s/Christine A. Robinson President
Secretary or Assistant Secretary FILED AND CERTIFICATE
ISSUED
State of Missouri } MAY 10 2000
} Ss /s/Rebecca McDowell Cook
County of Jackson } Secretary of State
I, Grace E. Bales , A Notary Public, do hereby certify that on May 9, 2000
personally appeared before me Daniel W. Pishny who, being by me first duly
sworn, declared that he/she is the President of Maxus Realty Trust, Inc. that
he/she signed the foregoing documents as President of the corporation, and that
the statements therein contained are true.
(Notarial Seal or Stamp) Grace E. Bales
Notary Public
- ---------------------------------------
| Grace E. Bales | My Commission expires Aug. 24, 2002
| Notary Public Notary Seal | My County of Commission Clay County
| State of Missouri |
| Clay County |
|My Commission Expires Aug. 24, 2002 |
- ---------------------------------------
3
BYLAWS
OF
MAXUS REALTY TRUST, INC., AS AMENDED
<PAGE>
INDEX
Page
ARTICLE I
THE TRUST: DEFINITIONS.......................................2
1.1 Name................................................2
1.2 Places of Business..................................2
1.3 Nature of Trust.....................................2
1.4 Definitions.........................................2
ARTICLE II
TRUSTEES.....................................................6
2.1 Number of Trustees..................................6
2.2 Election and Term of Office.........................6
2.3 Vacancies...........................................6
2.4 Place of Meeting....................................6
2.5 Organization Meetings...............................6
2.6 Regular Meetings....................................7
2.7 Special Meetings....................................7
2.8 Quorum..............................................7
2.9 Executive Committee.................................7
2.10 Audit Committee.....................................7
2.11 Other Committees....................................8
2.12 Action by Written Consent...........................8
2.13 Fees and Compensation...............................8
2.14 Independent Trustees................................9
2.15 Removal of Trustee by Board of Trustees.............9
2.16 Removal of Trustees by Shareholders.................9
ARTICLE III
TRUSTEES' POWERS.............................................9
3.1 Power and Authority of Trustees.....................9
3.2 Trustees' Regulations..............................14
3.3 Limit on Trustees' Obligations.....................14
3.4 Independent Trustees...............................14
i
<PAGE>
ARTICLE IV
OFFICERS....................................................15
4.1 Officers...........................................15
4.2 Election and Term of Office........................15
4.3 Subordinate Officers...............................16
4.4 Compensation.......................................16
4.5 Chairman of the Board..............................16
4.6 President..........................................16
4.7 Executive or Senior Vice Presidents................16
4.8 Vice Presidents....................................16
4.9 Secretary..........................................16
4.10 Assistant Secretaries..............................17
4.11 Treasurer..........................................17
4.12 Assistant Treasurer................................17
ARTICLE V
ADVISOR; LIMITATION ON OPERATING EXPENSES...................17
5.1 Employment of Advisor..............................17
5.2 Qualification of Advisor...........................18
5.3 Contract with Advisor..............................18
5.4 Other Activities of the Advisor....................18
5.5 Limitation on Total operating Expenses of the
Trust..............................................19
ARTICLE VI
INVESTMENT POLICY...........................................20
6.1 General Statement of Policy........................20
6.2 Restrictions.......................................21
6.3 Appraisals.........................................23
ARTICLE VII
MEETINGS OF SHAREHOLDERS....................................23
7.1 Place of Meetings..................................23
7.2 Annual Meetings....................................23
7.3 Special Meetings...................................23
7.4 Closing of Transfer Books and Fixing of Record
Dates..............................................24
7.5 Quorum.............................................25
7.6 Voting of Shares...................................25
7.7 Action by Written Consent..........................25
7.8 Proxies............................................25
ii
<PAGE>
ARTICLE VIII
SHARES OF STOCK.............................................26
8.1 Certificates.......................................26
8.2 Transfer Agent, Dividend Disbursing Agent, Dividend
Reinvestment Plan and Registrar....................26
8.3 Transfer Agents and Registrars; Facsimile
Signatures.........................................26
8.4 Lost Certificates..................................27
8.5 Transfer of Shares.................................27
8.6 Registered Shareholders............................27
8.7 Shareholder's Disclosure; Call of Shares; Right to
Refuse to Transfer Shares or Warrants..............27
8.8 Limitation on Acquisition and Ownership of
Shares and Warrants................................29
8.9 Dividends or Distributions to Shareholders.........30
ARTICLE IX
LIABILITY OF TRUSTEES, SHAREHOLDERS AND OFFICERS
AND OTHER MATTERS...........................................30
9.1 Exculpation of Trustees, Officers and Others.......30
9.2 Indemnification of Trustees, Officers, Employees
and Agents.........................................30
9.3 Right of Trustees, officers and Others to own Shares
or Other Property and to Engage in Other Business..31
9.4 Transactions Between the Trust, the Trustees, the
Advisor, and Certain Affiliates....................31
9.5 Persons Dealing with Trustees or Officers..........33
9.6 Reliance...........................................33
9.7 Income Tax Status..................................33
ARTICLE X
MISCELLANEOUS...............................................34
10.1 Reports to Shareholders............................34
10.2 Notices............................................34
10.3 Inspection of Bylaws...............................34
10.4 Inspection of Corporate Records....................35
10.5 Checks.............................................35
10.6 Fiscal Year........................................35
10.7 Seal...............................................35
10.8 Power of Shareholders in Event of Merger or Sale of
Assets.............................................35
iii
<PAGE>
10.9 Conflicting Provisions.............................35
ARTICLE XI
AMENDMENTS..................................................36
iv
<PAGE>
BYLAWS
OF
MAXUS REALTY TRUST, INC., AS AMENDED
ARTICLE I
THE TRUST: DEFINITIONS
1.1 Name. The name of the corporation is "Maxus Realty Trust, Inc."
Maxus Realty Trust, Inc. is referred to herein as the "Trust". As far as
practicable and except as otherwise provided in the Articles of Incorporation
and these Bylaws, the Trustees (as defined in Section 1.4(x) hereof) shall
manage the business, conduct the affairs of the Trust and execute all documents
in the name of Maxus Realty Trust, Inc.
1.2 Places of Business. The registered office of the Trust in Missouri
shall be located at 7701 Forsyth Boulevard, St. Louis, Missouri 63105 or at such
other address within the State of Missouri as the Board of Trustees may from
time to time authorize by duly adopted resolution. The Trust may maintain such
other offices or places of business both within and without the State of
Missouri as the Trustees may from time to time determine or as the business of
the Trust may require.
1.3 Nature of Trust. The Trust is a corporation organized under the
laws of the State of Missouri. It is intended that the Trust shall qualify as a
"real estate investment trust" under the REIT Provisions of the Internal Revenue
Code during such period as the Trustees shall deem it advisable so to qualify
the Trust.
1.4 Definitions. As used in these Bylaws, the following terms shall
have the following meanings unless the context otherwise requires:
(a) Administrator. "Administrator" shall mean the official
or agency administering the securities laws of a jurisdiction.
(b) Advisor. "Advisor" shall mean any Person responsible for
directing or performing the day-to-day business affairs of the Trust,
including any Person to whom an Advisor subcontracts substantially all
of such functions.
(c) Affiliate. "Affiliate" of a specified Person (the
"Specified Person") shall mean any Person (i) who directly or
indirectly controls, is controlled by, or is under common control with
the Specified Person; (ii) who owns or controls ten
1
<PAGE>
percent (10%) or more of the Specified Person's outstanding voting
securities; (iii) in whom such Specified Person owns or controls ten
percent (10%) or more of the outstanding voting securities; (iv) who is
a director, partner, executive officer or trustee of the Specified
Person; or (v) in whom the Specified Person is a director, partner,
executive officer or trustee.
(d) Annual meeting of Shareholders. "Annual Meeting of
Shareholders" shall mean the meeting referred to in Section 7.2 hereof.
(e) Annual Report. "Annual Report" shall mean the report
referred to in section 10.1 hereof.
(f) Appraisal. "Appraisal" shall mean a determination of the
fair market value, as of the date of the Appraisal, of real property in
its existing state or in a state to be created, such determination to
be made by a qualified independent real estate appraiser selected by
the Independent Trustees.
(g) Articles of Incorporation. "Articles of Incorporation"
shall mean the original Articles of Incorporation of the Trust and all
amendments thereto.
(h) Average Invested Assets. "Average Invested Assets" for any
period shall mean the average of the aggregate book value (on an
historical cost basis) of the assets of the Trust invested, directly or
indirectly, in equity interests in and loans secured by real estate,
before reserves for depreciation or bad debts or other similar non-cash
reserves, computed by taking the average of such values at the end of
each month during such period.
(i) Board of Trustees. "Board of Trustees" shall mean, as of
any particular time, the members of the Board of Directors of the
Trust.
(j) Bylaws. "Bylaws" shall mean these Bylaws and all
amendments, restatements or modifications thereof. References in these
Bylaws to "herein", "hereof" and "hereunder" shall be deemed to refer
to these By laws and shall not be limited to the particular text,
article or section in which such words appear.
(k) Independent Trustee(s). " Independent Trustee(s)" shall
mean the Trustee(s) of the Trust who are not Affiliates, either
directly or indirectly, of the Advisor or of any business entity which
is an Affiliate of the Advisor. An indirect relationship shall include
circumstances in which a member of the immediate family of a Trustee is
an Affiliate of the Advisor or the Trust. The "immediate family" of a
Trustee shall include only such Trustee's parents, grandparents,
brothers and sisters, spouse, children and grandchildren.
2
<PAGE>
(l) Internal Revenue Code. "Internal Revenue code" shall mean
the Internal Revenue Code of 1954, as amended.
(m) Net Assets. "Net Assets" shall mean the Total Assets
(other than intangibles) at cost, before deducting depreciation or
other non-cash reserves, less total liabilities, calculated at least
quarterly on a basis consistently applied.
(n) Net Income. "Net Income" for any period shall mean total
revenues applicable to such period, less the expenses applicable to
such period other than additions to reserves for depreciation or bad
debts or other similar non-cash reserves.
(o) Person. "Person" shall mean any individual, corporation,
partnership, trust or other entity.
(p) REIT. "REIT" shall mean a real estate investment trust, as
defined in the Internal Revenue Code.
(q) REIT Provisions of the Internal Revenue Code. "REIT
Provisions of the Internal Revenue Code" shall mean Part II of
Subchapter M of Chapter 1 of Subtitle A of the Internal Revenue Code,
as now enacted or hereafter amended, or successor statutes, and any
regulations and rulings promulgated thereunder.
(r) Securities. "Securities" shall mean any Shares, stock,
shares, voting trust certificates, bonds, limited partnership
interests, debentures, notes, or other evidences of indebtedness or
ownership or, in general, any instruments commonly known as
"securities" or any certificates of interest, shares or participations
in temporary or interim certificates for, receipts for, guarantees of,
or warrants, options or rights to subscribe to purchase or acquire any
of the foregoing.
(s) Shares. "Shares" shall mean the shares of common stock of
the Trust, as described in Article VIII hereof.
(t) Shareholders. "Shareholders" shall mean, as of any
particular time, the holders of record of outstanding Shares at such
time.
(u) Total Assets. "Total Assets" shall mean the total assets
of the Trust as shown on its balance sheet, without deducting therefrom
any liabilities of the Trust and without deducting depreciation or
other non-cash reserves.
3
<PAGE>
(v) Total operating Expenses of the Trust. "Total Operating
Expenses of the Trust" for any period shall mean all expenses of the
Trust regarded as operating expenses in accordance with generally
accepted accounting principles, including expenses paid directly or
indirectly by the Trust to the Advisor, Affiliates of the Advisor, or
by third parties based upon their relationship with the Trust,
including loan administration, servicing, engineering, inspection and
all other operating expenses paid by the Trust, exclusive of
(i) the cost of money borrowed by the Trust;
(ii) taxes on income and taxes and assessments on
real property and all other taxes applicable to the Trust;
(iii) legal, auditing, accounting, underwriting,
brokerage, private placement, listing, registration and other
fees and printing, engraving and other expenses and taxes
incurred in connection with the organization of the Trust and
the issuance, distribution, transfer, registration and listing
of the Trust's securities, including compensation and direct
expenses of partners, officers and employees of the Advisor
and its Affiliates while directly engaged in such activities
on behalf of the Trust;
(iv) expenses connected directly with the
acquisition, financing, refinancing, disposition, operation,
maintenance and management of Trust assets, including but not
limited to fees payable to the Advisor or its Affiliates in
connection with the acquisition and disposition of Trust
assets (including Incentive Compensation, as defined in the
Advisory Agreement between the Trust and Nooney Advisors
Ltd.), expenses connected with the maintenance, repair and
improvement of Trust property, property management fees,
leasing commissions, legal and accounting fees, premiums for
insurance on property owned by the Trust, taxes, brokerage and
sales commissions, title insurance and abstract expenses,
provisions for depreciation, depletion and amortization, and
losses on the disposition of assets and provisions for such
losses;
(v) expenses connected with communications to holders
of Securities of the Trust and other bookkeeping and clerical
work necessary in maintaining relations with holders of such
Securities, including legal expenses; the cost of printing and
mailing certificates for Securities, proxy solicitation
materials and reports to holders of the Trust's Securities;
and transfer agents', warrant agents' and dividend
reinvestment plan agents' fees and expenses; and
4
<PAGE>
(vi) expenses related to the organization,
modification, reorganization or liquidation of the Trust.
(w) Trust. "Trust" shall mean Nooney Realty Trust, Inc.
(x) Trustees. "Trustees" shall mean, as of any particular
time, the directors of the Trust holding office at such time.
(y) Trust Estate. "Trust Estate" shall mean, as of any
particular time, any and all property, real, personal or otherwise,
tangible or intangible, which is owned or held by the Trust, including
but not limited to property which is transferred, conveyed or paid to
the Trust and all rents, income, profits and gains therefrom.
ARTICLE II
TRUSTEES
2.1 Number of Trustees. Unless and until changed by action of a
majority of the entire Board of Trustees, the number of Trustees to constitute
the Board of Trustees shall be nine (9), and, subject to the provisions of
Section 2.14, at least a majority of the Trustees shall at all times be
Independent Trustees. Any change in the number of members of the Board of
Trustees shall be reported to the Secretary of State of Missouri within thirty
(30) calendar days of such change. No reduction in the number of Trustees shall
affect the term of office of any incumbent Trustee.
2.2 Election and Term of Office. The Trustees, other than the initial
Board of Trustees, shall be elected at the Annual Meeting of Shareholders, and
each Trustee shall serve until the next succeeding Annual Meeting of
Shareholders and until his successor shall have been elected and qualified. The
initial Board of Trustees shall hold office until the first Annual Meeting of
Shareholders.
2.3 Vacancies. Vacancies on the Board of Trustees, including vacancies
created by an increase in the number of Trustees, may be filled by the vote of a
majority of the Trustees then in office, although less than a quorum, or by a
sole remaining Trustee; provided, however, that replacements for vacancies
amongst the Independent Trustees' positions shall be nominated by the
Independent Trustees pursuant to Section 2.14 hereof so long as there remains
one Independent Trustee in office. Each Trustee so elected shall hold office
until the next election of Trustees by the Shareholders.
2.4 Place of Meeting. The Trustees may hold their meetings and keep the
books of the Trust at the registered office of the Trust or at such other place
as they may from time to time determine and as may be permitted by law. Trustees
may participate in
5
<PAGE>
a meeting of the Board of Trustees or in a meeting of any committee designated
by the Board of Trustees by means of conference telephone or similar
communications equipment whereby all Persons participating in the meeting can
hear each other, and participation in a meeting in this manner shall constitute
presence in person at the meeting.
2.5 Organization Meetings. The first organization meeting of the Board
of Trustees shall be held as soon as convenient after the organization of the
Trust at the call of a majority of the Trustees. Thereafter, the Board of
Trustees shall hold a regular meeting for the purpose of organization, election
of officers and the transaction of other business immediately following each
Annual Meeting of Shareholders. Notice of such meetings, with the exception of
the initial organization meeting, is hereby dispensed with.
2.6 Regular Meetings. Regular meetings of the Board of Trustees may be
held without notice at such time and place as shall from time to time be
determined by the Board of Trustees.
2.7 Special Meetings. Special meetings of the Board of Trustees for any
purpose or purposes may be called by any Trustee or, upon the written request of
any Trustee, by the president or secretary of the Trust. Written notice of the
time and place of special meetings shall be delivered personally to the Trustees
or sent to each Trustee by mail or by other form of written communication,
charges prepaid, addressed to the Trustee at such address as appears on the
records of the Trust. In case such notice is mailed, it shall be deposited in
the United States mail in the place in which the registered office of the Trust
is located at least four (4) days prior to the time of the special meeting. In
case such notice is delivered personally or telegraphed, it shall be so
delivered or deposited with the telegraph company at least forty-eight (48)
hours prior to the time of the meeting.
2.8 Quorum. At all meetings of the Board of Trustees a majority of the
entire Board of Trustees shall be necessary and sufficient to constitute a
quorum for the transaction of business and the act of a majority of the Trustees
present at any meeting at which there is a quorum shall be the act of the Board
of Trustees, except as may be otherwise specifically provided by statute, by the
Articles of Incorporation or by these Bylaws. If a quorum shall not be present
at any meeting of Trustees, the Trustees present thereat may adjourn the
meeting, from time to time, without notice other than announce ment at the
meeting, until a quorum shall be present.
2.9 Executive Committee. The Board of Trustees, by resolution adopted
by a majority of the entire Board of Trustees, may designate three (3) or more
Trustees to constitute an Executive Committee; provided, however, that subject
to the provisions of Section 2.14, at least a majority of the members of the
Executive Committee shall at all times be Independent Trustees. The Executive
Committee shall have and may exercise, between meetings of the Board of
Trustees, all of the authority of the Board of Trustees in the management of the
Trust. Vacancies in the membership of the Executive Committee
6
<PAGE>
shall be filled by the Board of Trustees at any regular or special meeting of
the Board of Trustees. The Executive Committee shall keep regular minutes of its
proceedings and report the same to the Board of Trustees when requested.
Notwithstanding the foregoing, the designation of an Executive Committee shall
not operate to relieve the Board of Trustees or any member thereof of any
responsibility imposed upon it or him by statute, the REIT Provisions of the
Internal Revenue Code, the Articles of Incorporation or these Bylaws.
2.10 Audit Committee. The Board of Trustees, by resolution adopted by a
majority of the entire Board of Trustees, may designate three (3) or more
Independent Trustees to constitute the Audit Committee. The Audit Committee
shall recommend to the Board of Trustees the accounting firm to be selected by
the Board of Trustees as independent auditor of the Trust, and shall act on
behalf of the Board of Trustees in meeting and reviewing with the independent
auditors and the appropriate Trust officers matters relating to Trust financial
reporting and accounting procedures and policies, the adequacy of Trust
financial, accounting and operating controls and the scope of the respective
audits of the independent auditors and the internal auditor, if any. The Audit
Committee shall additionally submit to the Board of Trustees any recommendations
it may have from time to time with respect to Trust financial reporting and
accounting practices and policies and financial, accounting, and operation
controls and safeguards, and shall have such other duties as shall be specified
by resolution of the Board of Trustees. Vacancies in the membership of the Audit
Committee shall be filled by the Board of Trustees at any regular or special
meeting of the Board of Trustees. Notwithstanding the foregoing, the designation
of an Audit Committee shall not operate to relieve the Board of Trustees or any
member thereof of any responsibility imposed upon it or him by statute, the REIT
Provisions of the Internal Revenue Code, the Articles of Incorporation or these
Bylaws.
2.11 Other Committees. The Board of Trustees, by resolution adopted by
a majority of the entire Board, may designate three (3) or more Trustees to
constitute such other committees of the Board of Trustees as the Board of
Trustees by resolution may establish; provided, however, that, subject to the
provisions of Section 2.14, at least a majority of the members of each such
committee shall at all times be Independent Trustees. Each such committee, to
the extent provided in the resolutions establishing the committee, shall have
and exercise all of the authority of the Board of Trustees in the management of
the Trust. Vacancies in the membership of any such committee shall be filled by
the Board of Trustees at any regular or special meeting of the Board of
Trustees. Notwithstanding the foregoing, the designation of any such committees
and the delegation thereto of authority shall not operate to relieve the Board
of Trustees or any member thereof, of any responsibility imposed upon it or him
by statute, the REIT Provisions of the Internal Revenue Code, the Articles of
Incorporation or these Bylaws.
7
<PAGE>
2.12 Action by Written Consent. Any action which is required to be or
may be taken at a meeting of the Trustees or of any committee of the Trustees
may be taken without a meeting if consents in writing, setting forth the action
so taken, are signed by all of the members of the Board of Trustees or of the
committee, as the case may be.
2.13 Fees and Compensation. The Trustees shall be entitled to receive
expenses of attendance, if any, for attendance at meetings of the Board and such
reasonable compensation for their services as Trustees as the Trustees may fix
or determine from time to time by resolution of the Board of Trustees; provided,
however, that the Trustees of the Trust who are Affiliates of the Advisor or of
business entities which are Affiliates of the Advisor shall not receive
Compensation from the Trust for their services as Trustees of the Trust. The
Trustees shall also be entitled to receive, directly or indirectly, compensation
for services rendered to the Trust in any other capacity including, without
limitation, services as an officer of the Trust, legal, accounting or other
professional services, or services as a transfer agent, warrant agent,
underwriter or broker; provided, however, that Trustees of the Trust who are
directors, partners, officers, employees and agents of the Advisor or of
Affiliates of the Advisor shall receive no compensation from the Trust for their
services as officers of the Trust, except while directly engaged on behalf of
the Trust in activities connected with the organization of the Trust and the
issuance, distribution, transfer, registration and listing of the Trust's
Securities.
2.14 Independent Trustees. A majority of the Trustees of the Trust and
a majority of the members of any Trust committee shall at all times be
Independent Trustees; provided, however, that in the event that an Independent
Trustee shall cease to be a Trustee, whether by reason of resignation, removal,
death, incapacity or otherwise, the Board of Trustees shall have a reasonable
period of time to fill the vacancy created by the departure of such Independent
Trustee with another Independent Trustee. Replacements for vacancies amongst the
Independent Trustees' positions shall be nominated by the Independent Trustees
so long as there remains one Independent Trustee in office.
2.15 Removal of Trustee by Board of Trustees. Any Trustee may be
removed for cause by action of a majority of the entire Board of Trustees if the
Trustee to be removed, at the time of removal, shall fail to meet the
qualifications stated in the Articles of Incorporation or these Bylaws for
election as a Trustee or shall be in breach of any agreement between such
Trustee and the Trust relating to such Trustee's services as a Trustee or
employee of the Trust. Notice of any proposed removal shall be given to all
Trustees prior to action thereon.
2.16 Removal of Trustees by Shareholders. The entire Board of Trustees
may be removed, with or without cause, by a vote of the holders of a majority of
the outstanding Shares then entitled to vote at an election of Trustees at a
meeting of Shareholders called for the express purpose of removing Trustees and
held at the registered office of the Trust or in the county in which the
registered office is located. If less than the entire Board is to be
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removed at such a meeting, no one of the Trustees may be removed if the votes
cast against his removal would be sufficient to elect him if then cumulatively
voted at an election of the entire Board of Trustees.
ARTICLE III
TRUSTEES' POWERS
3.1 Power and Authority of Trustees. The property and business of the
Trust shall be controlled and managed by the Board of Trustees. Notwithstanding
the designation "Trustees", the Trustees will have no different or greater level
of fiduciary duty and responsibility than do directors of any Missouri business
corporation. All powers of the Trust may be exercised by or under authority of
the Board of Trustees, except as conferred on or reserved to the Shareholders by
statute, by the Articles of Incorporation or by these Bylaws. Without prejudice
to such general powers but subject to the same limitations, and in addition to
any other powers conferred on the Trustees by law, the Articles of Incorporation
and these Bylaws, it is hereby expressly declared that the Trustees shall have
the following powers and authorities which may be exercised by them at any time
and from time to time, in their sole judgment and discretion, and in such manner
and upon such terms and conditions as they may from time to time deem proper:
(a) To retain, invest and reinvest the capital or other funds
of the Trust in and to purchase or otherwise acquire for such
consideration as the Trustees deem proper and to hold for investment,
all on behalf of the Trust, real and personal property of any kind,
tangible or intangible, in entirety or in participation, all without
regard to whether any such property is authorized by law for the
investment of Trust funds.
(b) To sell, rent, lease, hire, exchange, release, partition,
negotiate, convey, transfer or otherwise dispose of any of the Trust's
properties and assets in the ordinary course of its business without
Shareholder approval.
(c) To authorize the issue of Shares or other Securities of
the Trust, which may be secured or unsecured and may be subordinated to
any indebtedness of the Trust and may be convertible into Shares, and
to grant warrants, options or other rights to acquire Shares to such
Persons at such times and on such terms as the Trustees may deem
advisable, and to list any of the foregoing Shares, other Securities,
warrants, options or rights issued by the Trust on any securities
exchange or to include them in the National Association of Securities
Dealers, Inc. Automated Quotations System or other over-the-counter
market, and to purchase or otherwise acquire, hold, cancel, reissue,
sell and transfer any of such Shares,
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other Securities, warrants, options or rights; provided, however, that
the Trustees shall not
(i) Issue any non-voting or assessable Security;
(ii) Issue equity Securities of more than one class;
(iii) issue any redeemable equity Security, which
shall mean any security, other than short-term paper, under
the terms of which the holder, upon its presentation to the
issuer or to a Person designated by the issuer, is entitled
(whether absolutely or only out of surplus) to receive
approximately his proportionate share of the issuer's current
Net Assets, or the cash equivalent thereof;
(iv) Issue debt Securities unless the historical debt
service coverage in the most recently completed fiscal year,
as adjusted for known changes, is sufficient to properly
service such debt;
(v) Other than in connection with the initial public
offering, issue options or warrants to purchase its Shares at
exercise prices less than the fair market value of such Shares
on the date of grant and for consideration (which may include
services) that, in the judgment of the Independent Trustees,
has a market value less than the value of such options or
warrants on the date of grant;
(vi) Other than in connection with the initial public
offering, issue options or warrants or similar evidences of a
right to acquire its Securities unless issued (A) to all of
its Security holders ratably, (B) as a part of a financing
arrangement, or (C) as part of a stock option plan for
Trustees, officers and employees of the Trust;
(vii) Issue options or warrants to purchase its
Shares that are exercisable more than five (5) years from
their date of issuance; or
(viii) Issue options or warrants to purchase its
Shares upon such terms and in such amounts that the aggregate
number of Shares issuable at any time upon exercise of the
outstanding options and warrants would exceed an amount equal
to ten percent (10%) of the outstanding Shares of the Trust on
the date of the grant of any of the options or warrants.
(d) To enter into leases, contracts, obligations, and other
agreements for a term extending beyond the term of office of the
Trustees and beyond the possible termination of the Trust or for a
lesser term.
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(e) To borrow money and incur indebtedness for the purposes of
the Trust and to cause to be executed and delivered therefor, in the
Trust name, promissory notes, bonds, debentures, deeds of trust,
mortgages, pledges, hypothecations or other evidences of debt and
Securities therefor; to guarantee, indemnify or act as surety with
respect to payment or performance of obligations of third parties; to
enter into other obligations on behalf of the Trust; and to assign,
convey, transfer, mortgage, subordinate, pledge, grant security
interests in, encumber or hypothecate the Trust Estate to secure any of
the foregoing; provided, however, that:
(i) the aggregate borrowings of the Trust, secured
and unsecured, shall be reasonable in relation to the Net
Assets of the Trust and shall be reviewed by the Trustees at
least quarterly;
(ii) [Intentionally omitted]; and
(iii) [Intentionally omitted].
(f) To create reserve funds for any purpose.
(g) To incur and pay out of the Trust Estate any charges or
expenses, and disburse any funds of the Trust, which charges, expenses
or disbursements are, in the opinion of the Trustees, necessary or
incidental to or desirable for the carrying out of any of the purposes
of the Trust or conducting the business of the Trust, including without
limitation taxes and other governmental levies, charges and
assessments, of whatever kind or nature, imposed upon or against the
Trust Estate or any part thereof, and for any of the purposes herein.
(h) To deposit funds of the Trust in banks, trust companies,
savings and loan associations and other depositories, whether or not
such deposits will draw interest, the same to be subject to withdrawal
on such terms and in such manner and by such Person or Persons
(including any one or more Trustees, officers, agents or
representatives) as the Trustees may determine.
(i) To cause to be organized or assist in organizing any
Person, under the laws of any jurisdiction, to acquire the Trust Estate
or any part or parts thereof or to carry on any business in which the
Trust shall direct y or indirectly have any interest, and to sell,
rent, lease, hire, convey, negotiate, assign, exchange or transfer the
Trust Estate or any part or parts thereof to or with any such Person in
exchange for the Securities thereof or otherwise, and to lend money to,
subscribe for the Securities of, and enter into any contracts with, any
such Person in which the Trust holds or is about to acquire Securities
or any other interest.
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(j) To enter into and participate in any plan of
reorganization, consolidation, merger, combination, or other similar
plan, to enter into any contract or agreement in connection with any
such plan and to do all things necessary and proper or that the
Trustees deem advisable in carrying out any such plan.
(k) To enter into joint ventures, general or limited
partnerships and any other lawful combinations or associations with
independent third parties or with the Advisor or its Affiliates or a
combination thereof, provided the Trust or an Affiliate or both taken
together have a controlling interest in any such combination; and
provided further that the terms and conditions of any joint venture,
combination or association entered into with the Advisor or its
Affiliates have been unanimously approved by the Trustees.
(l) To select and remove all officers, agents,
representatives, employees and independent contractors of the Trust, to
prescribe such powers and duties for them as may not be inconsistent
with law, the Articles of Incorporation and these Bylaws, and to fix
their compensation; provided, however, that no Affiliate of the Advisor
may be selected as an officer, agent, representative, employee or
independent contractor of the Trust except with the approval of a
majority of the Independent Trustees.
(m) To determine from time to time the value of all or any
part of the Trust Estate and of any services, Securities, property or
other consideration to be furnished to or acquired by the Trust, and
from time to time to revalue all or any part of the Trust Estate in
accordance with such Appraisals or other information as the Trustees,
in their sole judgment, may deem necessary.
(n) To collect, sue for, and receive all sums of money coming
due to the Trust, and to engage in, intervene in, prosecute, join,
defend, compound, compromise, abandon or adjust, by arbitration or
otherwise, any actions, suits, proceedings, disputes, claims,
controversies, demands or other litigation relating to the Trust, the
Trust Estate or the Trust's affairs, to enter into agreements therefor,
whether or not any suit is commenced or claim accrued or asserted and,
in advance of any controversy, to enter into agreements regarding
arbitration, adjudication or settlement thereof.
(o) To renew, modify, release, compromise, extend, consolidate
or cancel, in whole or in part, any obligation to or of the Trust.
(p) To purchase and pay for out of the Trust Estate insurance
contracts and policies insuring the Trust Estate against any and all
risks and insuring the
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Trust, the Trustees, the Shareholders, officers, agents,
representatives, employees and independent contractors of the Trust, or
any or all of them, against any and all claims and liabilities of every
nature asserted by any Person arising by reason of any action alleged
to have been taken or omitted by the Trust or by any such Person as
Trustee, shareholder, officer, agent, representative, employee or
independent contractor, whether or not the Trust would have the power
to indemnify such Person against such liability.
(q) To from time to time change the fiscal year of the Trust.
(r) To file any and all documents and take any and all such
action as the Trustees, in their sole judgment, may deem necessary in
order that the Trust may lawfully conduct its business in any
jurisdiction.
(s) To appoint, employ or contract with an independent
contractor to serve as the manager of the property of the Trust;
provided, however, that any determination to appoint, employ or
contract with such an independent contractor shall be valid only if
made or ratified with the approval of a majority of the Independent
Trustees.
(t) Generally to exercise all of the powers and to perform all
of the acts and duties that from time to time may be permitted by law
appertaining to their office.
3.2 Trustees' Regulations. The Trustees may make, adopt, amend or
repeal regulations containing provisions relating to the business of the Trust,
the conduct of its affairs, its policies on investment and borrowing, its rights
or powers and the rights or powers of its Shareholders, Trustees or officers,
which regulations shall be consistent with law, the REIT Provisions of the
Internal Revenue Code, the Articles of Incorporation and these Bylaws.
3.3 Limit on Trustees' Obligations. The Trustees, in their capacity as
Trustees, shall not be required to devote their entire time to the business and
affairs of the Trust.
3.4 Independent Trustees. Notwithstanding any other provision of these
Bylaws, the Independent Trustees, in addition to their other duties, to the
extent that they may legally do so, shall:
(a) Monitor the relationship of the Trust with the Advisor. In
this regard, the Independent Trustees as a group, in addition to all
Trustees as a group, will have a fiduciary duty to the Shareholders to
supervise the relationship of the Trust with the Advisor. The
Independent Trustees will monitor the Advisor's
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performance of its contract and will determine at least annually that
the Advisor's compensation is reasonable in relation to the nature and
quality of services performed. Each such determination will be based on
(i) the amount of the Advisor's compensation in relation to the size,
composition and profitability of the Trust's portfolio, (ii) the
investment opportunities generated by the Advisor, (iii) advisory fees
paid by other real estate investment trusts and by investors other than
real estate investment trusts to advisors performing services similar
to those performed by the Advisor, (iv) other compensation paid to the
Advisor and its Affiliates by the Trust or by others with whom the
Trust does business, including underwriting and brokerage commissions,
(v) the quality and extent of service and advice furnished by the
Advisor, (vi) the performance of the investment portfolio of the Trust,
(vii) the quality of the investment portfolio of the Trust in relation
to the investments generated by the Advisor for its own account, and
(viii) all other factors such Independent Trustees may deem relevant.
(b) Review the Trust's investment policies at least annually
to determine that such policies remain in the best interests of the
Shareholders.
(c) Take reasonable steps to ensure that the Annual Report is
sent to Shareholders pursuant to Section 10.1 and that the Annual
Meeting is conducted pursuant to Article VII hereof.
(d) Determine at least annually that the total fees and
expenses of the Trust are reasonable in light of its Net Assets, Net
Income, investment experience, and the fees and expenses of other
comparable advisors in real estate. In this regard, the Independent
Trustees will have the fiduciary responsibility for limiting Total
Operating Expenses of the Trust to the greater of two percent (2%) of
the Trust's Average Invested Assets or twenty-five percent (25%) of its
Net Income in any fiscal year unless such Independent Trustees make a
finding that a higher level of expenses is justified based on unusual
or non-recurring factors which they deem sufficient.
(e) [Intentionally omitted].
(f) In cases in which an Appraisal of Trust property is deemed
necessary or appropriate, select a qualified independent real estate
appraiser to prepare the Appraisal.
(g) Determine the adequacy of any non-cash consideration given
upon the exercise of any options or warrants.
The vote or consent of a majority of the independent Trustees qualified
to act and present at any meeting of the Trustees or committee at which a quorum
of Trustees or
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committee members is present will constitute the action of a majority of all of
the Independent Trustees. All required determinations and the bases therefor
will be reflected in the minutes of the Trustees' meetings.
ARTICLE IV
OFFICERS
4.1 Officers. The officers of the Trust shall be a chairman of the
board, a president and a secretary and, to the extent deemed necessary or
appropriate by the Trustees, one or more executive or senior vice presidents,
one or more vice presidents, a treasurer, and one or more assistant secretaries
and assistant treasurers. Any two (2) or more offices may be held by the same
person.
4.2 Election and Term of Office. The officers of the Trust, except
those officers appointed in accordance with the provisions of Section 4.3, shall
be chosen by the Board of Trustees at its first meeting after each Annual
Meeting of Shareholders. The officers of the Trust shall hold office until their
successors are chosen and qualify in their stead. Any officer elected or
appointed by the Board of Trustees may be removed at any time by the affirmative
vote of a majority of the entire Board of Trustees. If the office of any officer
becomes vacant for any reason, the vacancy shall be filled by the Board of
Trustees. The appointment as an officer of any Person who is an Affiliate of the
Advisor shall be valid only if made or ratified with the approval of a majority
of the Independent Trustees.
4.3 Subordinate Officers. The Board of Trustees may appoint such other
officers and agents as it shall deem necessary, who shall hold their offices for
such terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the Board of Trustees.
4.4 Compensation. The salaries of all officers and agents of the Trust
shall be fixed by the Board of Trustees.
4.5 Chairman of the Board. The chairman of the board shall be the chief
executive officer of the Trust and shall have general supervision, direction and
control of the business of the Trust. He shall have general powers and duties of
management, shall see that all orders and resolutions of the Board of Trustees
are carried into effect, shall execute bonds, mortgages and other contracts
requiring a seal under the seal of the Trust, except where permitted by law to
be otherwise signed and executed and except where the signing and execution
thereof shall be expressly delegated by the Board of Trustees to some other
officer or agent of the Trust, shall preside at all meetings of the Shareholders
and Trustees at which he is present and shall perform such other duties as the
Board of Trustees may prescribe.
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4.6 President. In the absence or disability of the chairman of the
board, the president shall perform the duties and exercise the powers of the
chairman of the board. In addition, the president shall have such other powers
and duties as the Board of Trustees may prescribe.
4.7 Executive or Senior Vice Presidents. The executive or senior vice
presidents, if any, in the order of their seniority shall, in the absence or
disability of the president, perform the duties and exercise the powers of the
president, and shall perform such other duties as the Board of Trustees may
prescribe.
4.8 Vice Presidents. The vice presidents, if any, in the order of their
seniority shall, in the absence or disability of the president and any executive
vice presidents, perform the duties and exercise the powers of the president,
and shall perform such other duties as the Board of Trustees may prescribe.
4.9 Secretary. The secretary shall keep or cause to be kept at the
registered office of the Trust or such other place as the Board of Trustees may
order a record of all meetings of the Shareholders and the Board of Trustees and
record all votes and the minutes of all proceedings in a book to be kept for
that purpose. He shall give, or cause to be given, notice of all meetings of the
Shareholders and special meetings of the Board of Trustees, and shall perform
such other duties as may be prescribed by the Board of Trustees, the chairman of
the board or the president, under whose supervision he shall be. He shall keep
in safe custody the seal of the corporation and shall affix the same to any
instrument requiring it.
The Secretary shall keep or cause to be kept at the registered
office of the Trust or at the office of the Trust's transfer agent a Share
register or a duplicate Share register in which shall be recorded the number of
Shares subscribed, the names of the owners of the Shares, the number of Shares
owned by each Shareholder, the amount of Shares paid, and by whom, and the
transfer of such Shares with the date of transfer.
4.10 Assistant Secretaries. The assistant secretaries, if any, in order
of their seniority shall, in the absence or disability of the secretary, perform
the duties and exercise the powers of the secretary and shall perform such other
duties as the Board of Trustees may prescribe.
4.11 Treasurer. The treasurer, if any, shall have the custody of the
Trust's funds and Securities, shall keep and maintain or cause to be kept and
maintained full and accurate accounts of the properties and business
transactions of the Trust in books belonging to the Trust and shall deposit all
moneys and other valuable effects in the name and to the credit of the Trust in
such depositories as may be designated by the Board of Trustees. The treasurer
shall disburse the funds of the Trust as may be ordered by the
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Board of Trustees, taking proper vouchers for such disbursements, and shall
render to the president and Trustees, at the regular meetings of the Board of
Trustees or whenever they may require it, an account of all his transactions as
treasurer and of the financial condition of the Trust. If required by the Board
of Trustees, the treasurer shall give the Trust a bond in such sum and with such
surety or sureties as shall be satisfactory to the Board of Trustees for the
faithful performance of the duties of his office and for the restoration to the
Trust, in case of his death, resignation, retirement or removal from office, of
all books, papers, vouchers, money and other property of whatever kind in his
possession or under his control belonging to the Trust. The Treasurer shall have
such other powers and shall perform such other duties as may be prescribed by
the Board of Trustees.
4.12 Assistant Treasurer. The assistant treasurers, if any, in the
order of their seniority shall, in the absence or disability of the treasurer,
perform the duties and exercise the powers of the treasurer and shall perform
such other duties as the Board of Trustees may prescribe.
ARTICLE V
ADVISOR; LIMITATION ON OPERATING EXPENSES
5.1 Employment of Advisor. Anything herein to the contrary
notwithstanding, the Trustees shall have continuing exclusive authority over the
management of the Trust and shall be responsible for the general policies of the
Trust and for generally supervising the business of the Trust as conducted by
all officers, agents, employees, advisors, managers or independent contractors
of the Trust to ensure that such business conforms to the provisions of these
Bylaws. However, the Trustees shall not be required personally to conduct all
the business of the Trust, and consistent with their ultimate responsibility as
stated above, the Trustees shall have the power to appoint, employ or contract
with any Person or Persons (including one or more of themselves or any
corporation, partnership, or trust in which one or more of them may be
directors, officers, stockholders, partners or trustees) as the Trustees may
deem necessary or proper for the transaction of the business of the Trust. The
Trustees may therefor employ or contract with an Advisor and the Trustees may
grant or delegate such authority to the Advisor as the Trustees may in their
sole discretion deem necessary or desirable; provided, however, that any
determination to employ or contract with an Advisor which is a Trustee or which
is an Affiliate of a Trustee shall be valid only if made or ratified with the
approval of a majority of the Independent Trustees.
The Trustees (subject to the provisions of Sections 5.3 and
5.5) shall have the power to determine the employment terms and compensation of
the Advisor or any other Person whom they may employ or with whom they may
contract. The Trustees may exercise broad discretion in allowing the Advisor to
administer and regulate the operations of the Trust, to act as agent for the
Trust, to execute documents on behalf of the Trust, and
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to make executive decisions which conform to general policies and general
principles previously established by the Trustees.
5.2 Qualification of Advisor. Prior to entering into or renewing a
contract with an Advisor, the Trustees shall evaluate the performance of the
Advisor and determine that the proposed Advisor possesses sufficient
qualifications to perform the advisory function for the Trust and to justify the
compensation to be paid to it for its services. The criteria used by the
Trustees in evaluating the performance of the Advisor shall be reflected in the
minutes of the Trustees' meeting at which such evaluation takes place.
5.3 Contract with Advisor. The Trustees shall not enter into any
contract with an Advisor unless such contract has a term of no more than one (1)
year; provided, however, that the initial term of any contract with the Advisor
may be for a period ending December 31, 1985. The contract with the Advisor
shall also provide that it may be terminated without cause by a majority of the
Trustees, a majority of the Independent Trustees, or the Advisor, on sixty (60)
days written notice, and that, in the event of its termination, the Advisor will
cooperate with the Trust and take all reasonable steps requested to assist the
Trustees in making an orderly transition of the advisory function.
5.4 Other Activities of the Advisor. The Advisor shall not be required
to administer the investment activities of the Trust as its sole and exclusive
function and may have other business interests and may engage in other
activities similar or in addition to those relating to the Trust, including the
rendering of services and advice to other Persons (including other real estate
investment trusts) and the management of other investments (including
investments of the Advisor and its Affiliates). The Trustees may request the
Advisor to engage in other activities which complement the Trust's investments,
and the Advisor may receive compensation or commissions therefor from the Trust
or other Persons.
The Advisor shall be required to use its best efforts to present a
continuing and suitable investment program to the Trust which is consistent with
the investment policies and objectives of the Trust, but neither the Advisor nor
any Affiliate of the Advisor (subject to any applicable provisions of Sections
9.3 and 9.4) shall be obligated to present any particular investment opportunity
to the Trust even if such opportunity is of a character which, if presented to
the Trust, could be taken by the Trust and, subject to the foregoing, shall be
protected in taking for its own account or recommending to others such
particular investment opportunity. The Advisor or its Affiliates, or a
combination thereof, may enter into joint ventures or other lawful combinations
or associations with the Trust in connection with the acquisition and ownership
of real property investments; provided, however, that in such event the Trust or
an Affiliate or both taken together shall at all times own a controlling
interest in such joint venture, combination or association and provided,
further, that the terms and conditions of any such joint venture, combination or
association shall be unanimously approved by the Trustees.
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5.5 Limitation on Total Operating Expenses of the Trust. The Total
Operating Expenses of the Trust for any fiscal year of the Trust shall, in the
absence of a satisfactory showing to the contrary, be deemed to be excessive if
they exceed an amount equal to the greater of two percent (2%) of the Average
Invested Assets of the Trust or twenty-five percent (25%) of its Net Income for
such year.
Pursuant to Section 3.4 hereof, the Independent Trustees shall have the
fiduciary responsibility of limiting the Total Operating Expenses of the Trust
to amounts that do not exceed these limitations unless such Independent Trustees
shall have made a finding that, based on unusual or non-recurring factors which
the Independent Trustees deem sufficient, a higher level of expenses is
justified for such fiscal year. In addition, any time the Total Operating
Expenses of the Trust exceed the limitations set out above for any twelve (12)
month period ending at the end of a fiscal quarter of the Trust, the
shareholders shall receive written disclosure of such fact, together with an
explanation of the factors that the Independent Trustees considered in arriving
at the conclusion that the excess operating expenses were justified, if such was
the conclusion of the Independent Trustees, within sixty (60) days after the end
of such fiscal quarter. In the event the Independent Trustees do not determine
that the excess operating expenses for a fiscal year are justified, the Advisor
shall reimburse the Trust, at the end of the fiscal year, for the amount of such
excess expenses for such fiscal year; provided, however, that no such refund
shall be in an amount exceeding the amount of regular compensation paid to the
Advisor for such fiscal year and any unrefunded amounts shall not cumulate from
year to year. Moreover, each contract made with an Advisor shall specifically
provide that, in the event the Independent Trustees do not determine that any
excess operating expenses for a fiscal year are justified, the Advisor shall
reimburse the Trust at the end of such fiscal year the amount of any such excess
expenses for such fiscal year; provided, however, that no such refund shall be
in an amount exceeding the amount of regular compensation paid to the Advisor
for such fiscal year and any unrefunded amounts shall not cumulate from year to
year.
ARTICLE VI
INVESTMENT POLICY
6.1 General Statement of Policy. The Trustees intend initially, or to
the extent funds are not fully invested in real property as described below, to
invest the Trust Estate in investments such as (a) short-term government
Securities, certificates of deposit and bank deposits, (b) Securities of
government agencies, (c) bankers' acceptances, (d) certificates of deposit, (e)
deposits in commercial banks, (f) participations in pools of mortgages or bonds
and notes (such as Federal Home Loan Mortgage Corporation participation sale
certificates
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("Freddie Mac PC's"), Government National Mortgage Association modified
pass-through certificates ("Ginnie Mae's") and Federal National Mortgage
Association bonds and notes ("Fannie Mae's"), (g) other short-term investment
Securities and money market funds, and/or (h) such other investments as shall be
approved by a majority of the Trustees. Otherwise, the Trustees intend to invest
the major portion of the Trust Estate in ownership or other interests in real
property or in Persons involved in owning, operating, leasing, developing,
financing or dealing in real property (which investments shall ordinarily be
made in connection with properties having income-producing capabilities). The
Trustees may make commitments to make investments consistent with the foregoing
policies. The Trust may also participate in the investments with other
investors, including investors (which, subject to Section 5.4, may include the
Advisor or its Affiliates) having investment policies similar to those of the
Trust, on the same or different terms, and the Advisor may act as advisor to
such other investors, including investors who have the same investment policies.
It is the intention of the Trustees that the net proceeds of any
offering of Shares (less reserves and except for interim investments) will
initially be invested primarily in commercial and industrial income-producing
real property; however, the Trust may invest in other types of income-producing
real properties which could include, but are not limited to, apartment
complexes. The maximum amount of aggregate mortgage indebtedness which may be
incurred by the Trust in connection with its properties may not exceed eighty
percent (80%) of the value of all of its properties on a combined basis, as
determined by Appraisals; provided, however, that this limitation shall not be
applicable until the conclusion of the Trust's initial public offering of its
Shares. Such indebtedness may be in the form of temporary or permanent financing
from banks, institutional investors and other lenders, which indebtedness may be
secured by mortgages or other interests in the properties owned by the Trust,
including "wrap-around" or other "all-inclusive" mortgages. The Trust may also
obtain temporary financing from the Advisor or its Affiliates; provided, however
that the interest and other financing charges or fees applicable to such
temporary financing may not exceed the amounts which would be charged by
unrelated lending institutions on comparable loans for the same purpose in the
same locality of the property and, provided, further, that there can be no
prepayment charge or penalty in connection with such loans. The Trust shall not
be limited as to the amount or percent of assets which may be invested in any
one property.
The Trust may take purchase money obligations as part payment in
connection with sales of properties by the Trust. When a purchase money
obligation is accepted in lieu of cash upon the sale of a Trust property, the
Trust will continue to have a debt interest in the property and the proceeds of
the sale will be realized over a period of years rather than at closing.
The Trustees shall endeavor to invest the Trust's assets in accordance
with the investment policies set forth in this Article VI, but the failure so to
invest its assets shall not affect the validity of any investment made or action
taken by the Trustees.
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The general purpose of the Trust is to seek income which qualifies
under the REIT Provisions of the Internal Revenue Code. The Trustees, at such
time as it is in the best interests of the Shareholders to do so, intend to make
investments in such a manner as to comply with the requirements of the REIT
Provisions of the Internal Revenue Code with respect to the composition of the
Trust's investments and the derivation of its income; provided, however, that
neither the Advisor nor any Trustee, officer, employee, agent, investment
advisor or independent contractor of the Trust shall be liable for any act or
omission, intentional or otherwise, resulting in the loss of tax benefits under
the Internal Revenue Code, except for that arising from his or its own gross
negligence or willful or wanton misconduct; and, provided further, that for the
period of time during which the portfolio of equity investments is developed,
the Trust's assets may be invested in investments with income which does not
qualify under the REIT Provisions of the Internal Revenue Code.
6.2 Restrictions. The Trust shall not:
(a) Invest in any foreign currency (except as necessary for
the offer of the Trust's Securities in a foreign state), bullion,
commodities, or commodities futures contracts, except as permitted in
Section 6.1 hereof;
(b) Invest in contracts for the sale of real estate, except in
conjunction with the acquisition or sale of real property;
(c) Engage in any short sale, except in connection with a
long sale;
(d) [Intentionally omitted];
(e) Invest in junior mortgage loans, except as permitted in
Section 6.1 hereof;
(f) Engage in trading as compared with investment activities,
or engage in the business of underwriting or agency distribution of
Securities issued by others, but this prohibition shall not prevent the
Trust from selling participations or interests in real property or from
investing in investments authorized under Section 6.1 hereof;
(g) Hold property primarily for sale to customers in the
ordinary course of the trade or business of the Trust, but this
prohibition shall not be construed to deprive the Trust of the power to
sell any property which it owns at any time;
(h) Invest in unimproved real property, which shall mean
property which has the following three characteristics: (i) it was not
acquired for the purpose of producing rental or other operating income,
(ii) no development or construction is in
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process thereon, and (iii) no development or construction is planned in
good faith to commence thereon within one year;
(i) [Intentionally omitted];
(j) Make investments in the form of joint ventures,
partnerships, or other entities if the Trust or an Affiliate or both
taken together have less than a controlling interest in the entity;
(k) Incur aggregate mortgage indebtedness in connection with
its investment properties in excess of eighty percent (80%) of the
value of all of its investment properties as determined by Appraisals;
provided, however, that this provision shall not be applicable until
the conclusion of the Trust's initial public offering of its Shares; or
(l) Purchase insurance from an Affiliate of the Trust or from
the Advisor or its Affiliates.
Notwithstanding provisions to the contrary, the foregoing limitations
shall not limit the manner in which any required investment by the Advisor or
its Affiliates in the Trust is made or preclude the Trust from structuring an
investment in real property to minimize Shareholder liability and facilitate the
investment policies of the Trust under Article VI hereof.
6.3 Appraisals. The consideration paid for real property acquired by
the Trust shall ordinarily be based on the fair market value of such property as
determined by a majority of the Trustees. In cases in which a majority of the
Independent Trustees so determine, such fair market value shall be determined by
Appraisal.
ARTICLE VII
MEETINGS OF SHAREHOLDERS
7.1 Place of Meetings. All meetings of the shareholders shall be held
at the registered office of the Trust, or at such other place, within or without
the State of Missouri, as the Trustees may specify in the notice of such
meeting.
7.2 Annual Meetings.
(a) Time of Holding. The Annual Meeting of Shareholders shall
be held on the second Tuesday in May of each year, commencing in May of
1987, at 10:00 o'clock a.m., provided, however, that if such day is a
legal holiday, then any such Annual Meeting of Shareholders shall be
held on the next business day following.
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At such Annual Meeting, Trustees shall be elected by the cumulative
voting procedures prescribed by the Missouri statutes, and such other
business shall be transacted as may properly be brought before the
Annual Meeting.
(b) Notice. Written or printed notice of the Annual Meeting
shall be given to each Shareholder of record entitled to vote, either
personally or by first-class mail or other means of written
communication, charges prepaid, addressed to such Shareholder at such
address as appears on the records of the Trust. Notice shall be deemed
to have been delivered at the time when delivered personally or
deposited in the mail or sent by other means of written communication,
properly addressed and with all charges thereon prepaid. All such
notices shall be delivered or given to each Shareholder entitled
thereto not less than ten (10) nor more than fifty (50) days before the
date of the Annual meeting and shall state the place, day and hour of
the meeting.
7.3 Special Meetings.
(a) How Called. Special meetings of the Shareholders, for any
purpose or purposes, may be called by the chief executive officer or
president of the Trust, by a majority of the Trustees or by a majority
of the Independent Trustees and shall be called by any officer of the
Trust upon receipt, either in person or by registered mail, from
Shareholders holding in the aggregate not less than ten percent (10%)
of the outstanding Shares of a written request for a special meeting
which states the purpose or purposes of the requested meeting. Within
ten (10) business days after receipt of any such request from
Shareholders, the officer receiving the request shall cause notice of a
special meeting to be given to each Shareholder of record entitled to
vote at such meeting in accordance with the provisions of Section
7.3(b) hereof. Any such special meeting called on the request of
Shareholders shall be held on a date not less than twenty (20) nor more
than sixty (60) days after the receipt of the request and at a time and
place convenient to the Shareholders. Nothing contained in this
paragraph shall be construed as limiting, fixing or affecting the time
when a special meeting of Shareholders called other than upon the
request of ten percent (10%) of the Shareholders may be held.
(b) Notice. Notices of special meetings shall be given in the
same manner as for Annual Meetings. In addition to stating the place,
day and hour of a special meeting, the notice of a special meeting
shall state the nature of the business to be transacted at the meeting
and that no other business shall be considered at the meeting.
(c) Business Transacted. The business transacted at any
special meeting of Shareholders shall be confined to the purposes
stated in the notice of the meeting.
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7.4 Closing of Transfer Books and Fixing of Record Dates. The Board of
Trustees shall have power to close the Share transfer books of the Trust for a
period not exceeding fifty (50) days preceding the date of any meeting of
Shareholders, or the date for the payment of any dividend, or the date for the
allotment of rights, or the date when any change, conversion or exchange of
Shares shall go into effect; provided, however, that, in lieu of closing the
Share transfer books as aforesaid, the Board of Trustees may fix in advance a
date, not exceeding fifty (50) days preceding the date of any meeting of the
Shareholders, or the date for the payment of any dividend, or the date for the
allotment of rights, or the date when any change or conversion or exchange of
Shares shall go into effect, as a record date for the determination of the
Shareholders entitled to notice of, and to vote at the meeting, and any
adjournment thereof, or entitled to receive payment of the dividend, or entitled
to the allotment of rights, or entitled to exercise the rights in respect of the
change, conversion or exchange of Shares. In such case only the Shareholders who
are shareholders of record on the date of closing the Share transfer books or on
the record date so fixed shall be entitled to notice of, and to vote at, the
meeting and any adjournment thereof, or to receive payment of the dividend, or
to receive the allotment of rights, or to exercise the rights, as the case may
be, notwithstanding any transfer of any Shares on the books of the Trust after
the date of closing of the Share transfer books or the record date fixed as
aforesaid. If the Board of Trustees shall not have closed the Share transfer
books or set a record date for the determination of its Shareholders entitled to
notice of, and to vote at, a meeting of Shareholders, only the Shareholders who
are shareholders of record at the close of business on the twentieth (20th) day
preceding the date of the meeting shall be entitled to notice of, and to vote
at, the meeting and any adjournment of the meeting; except that, if prior to the
meeting written waivers of notice of the meeting are signed and delivered to the
Trust by all of the shareholders of record at the time the meeting is convened,
only the Shareholders who are Shareholders of record at the time the meeting is
convened shall be entitled to vote at the meeting or at any adjournment thereof.
7.5 Quorum. A majority of the Shares issued and outstanding and
entitled to vote at any meeting, represented in person or by proxy, shall
constitute a quorum at all meetings of the Shareholders for the transaction of
business, except as otherwise provided by statute. When a quorum is present at
any meeting, the vote of the holders of a majority of the shares having voting
power represented in person or by proxy shall decide any question brought before
such meeting, unless the question is one upon which, by express provision of the
statutes, the Articles of Incorporation, or these Bylaws, a different vote is
required, in which case such express provision shall govern and control the
decision of such questions. If a quorum shall not be present or represented at
any meeting of the Shareholders, the Shareholders entitled to vote at the
meeting, present in person or represented by proxy, shall have power
successively to adjourn the meeting to a specified date not more than ninety
(90) days after such adjournment, without notice other than announcement at the
meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
scheduled.
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7.6 Voting of Shares. Except as provided in this Section 7.6, each
outstanding Share entitled to vote under the provisions of the Articles of
Incorporation shall be entitled to one vote on each matter submitted to a vote
of the Shareholders. Every Shareholder entitled to vote at any election for
Trustees shall have the right to cumulate his votes and to give one candidate a
number of votes equal to the number of Trustees to be elected multiplied by the
number of votes to which his Shares are entitled, or to distribute his votes on
the same principle among as many candidates as he shall think fit.
7.7 Action by Written Consent. Any action which may be taken at any
meeting of the Shareholders may be taken without a meeting if consents in
writing, setting forth the action so taken, shall be signed by all of the
Shareholders entitled to vote with respect to the subject matter thereof.
7.8 Proxies. Every Person entitled to vote or execute consents shall
have the right to do so either in person or by proxy appointed by a proper
instrument in writing executed by the Shareholder or his duly authorized
attorney in fact. No proxy shall be valid after eleven (11) months from the date
of its execution, unless otherwise provided in the proxy. A duly executed proxy
shall be irrevocable only if it states that it is irrevocable and if it is
coupled with an interest sufficient in law to support an irrevocable power of
attorney.
ARTICLE VIII
SHARES OF STOCK
8.1 Certificates. The certificates representing Shares of the Trust
shall be numbered and shall be entered in the books of the Trust as they are
issued. They shall exhibit the name of the registered holder and number of
shares represented thereby and the par value of each Share and shall be signed
by the chairman of the board and the secretary or by such other officers
authorized so to do by law and shall bear the seal of the Trust or a facsimile
thereof. The Persons in whose names certificates are registered on the records
of the Trust shall be deemed the absolute owners of the shares represented
thereby for all purposes of the Trust; but nothing herein contained shall be
deemed to preclude the Trustees or officers or their agents or representatives,
from inquiring as to ,he actual ownership of Shares. Until a transfer is duly
registered on the records of the Trust, the Trustees shall not be affected by
any notice of such transfer, either actual or constructive. The payment thereof
to the Person in whose name any shares are registered on the records of the
Trust or to the duly authorized agent of such Person (or, if such Shares are so
registered in the names of more than one Person, to any one of such Persons or
to the duly authorized agent of any such Person) shall be a sufficient discharge
for all dividends or distributions payable or
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deliverable in respect of such Shares and from all liability to see to the
application thereof. All Shares shall be fully paid and non-assessable by or on
behalf of the Trust upon receipt of the full consideration for which they have
been issued.
8.2 Transfer Agent, Dividend Disbursing Agent, Dividend Reinvestment
Plan Agent and Registrar. The Trustees shall have the power to employ one or
more transfer agents, dividend disbursing agents, dividend reinvestment plan
agents and registrars, including Affiliates of the Advisor; provided, however,
that any determination to employ an Affiliate of the Advisor in any such
capacity shall be valid only if made or ratified with the approval of a majority
of the Independent Trustees. The Trustees may authorize any such Persons on
behalf of the Trust to keep records, to hold, disburse and reinvest any
dividends and distributions, and to have and perform in respect of all original
issues and transfers of Shares, dividends and distributions and reports and
communications to Shareholders such powers and duties customarily had and
performed by transfer agents, dividend disbursing agents, dividend reinvestment
plan agents and registrars as may be conferred upon them by the Trustees.
8.3 Transfer Agents and Registrars; Facsimile Signatures. If the Board
of Trustees appoints one or more transfer agents or transfer clerks or one or
more registrars, the Board of Trustees may require all certificates for Shares
to bear the signature or signatures of any of them. Where a certificate is
signed (a) by a transfer agent or an assistant or co- transfer agent, or (b) by
a transfer clerk or (c) by a registrar or co-registrar, the signatures of the
president and secretary or other authorized officers of the Trust thereon may be
facsimile. Where a certificate is signed by a registrar or co-registrar the
certificate of any transfer agent or co-transfer agent thereon may be by
facsimile signature of the authorized signatory of such transfer agent or
co-transfer agent. In case any officer or officers of the Trust who have signed,
or whose facsimile signature or signatures have been used on any such
certificate or certificates shall cease , to be such officer or officers of the
Trust, whether, because of death, resignation or otherwise, before such
certificate or certificates have been delivered by the Trust, such certificate
or certificates may, nevertheless, be issued and delivered as though the Person
or Persons who signed such certificate or certificates or whose facsimile
signature or signatures have been used thereon had not ceased to be such officer
or officers of the Trust.
8.4 Lost Certificates. The holder of any Shares of the Trust shall
immediately notify the Trust and its transfer agents and registrars, if any, of
any loss or destruction of the certificates representing the same. The Board of
Trustees may direct a new certificate or certificates to be issued in place of
any certificate or certificates theretofore issued by the Trust alleged to have
been lost or destroyed, upon the making of an affidavit of that fact by the
Person claiming the certificate to be lost or destoyed. When authorizing such
issue of a new certificate or certificates, the Board of Trustees may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall require and
give the Trust a bond in such sum as it may direct as indemnity against
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any claim that may be made against the Trust with respect to the certificate
alleged to have been lost or destroyed.
8.5 Transfer of Shares. The Shares of the Trust shall be transferable
only upon the books of the Trust by the holders thereof in person or by their
duly authorized attorneys or legal representatives. Upon surrender to the Trust
or the transfer agent of the Trust of a certificate for Shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Trust to issue a new certificate to the
Person entitled thereto, cancel the old certificate and record the transaction
upon its books.
8.6 Registered Shareholders. The Trust shall be entitled to treat the
holder of record of any Share or Shares as the holder in fact thereof and shall
not be bound to recog nize any legal, equitable or other claim to, or interest
in, such Share or Shares on the part of any other Person, whether or not it or
they shall have express or other notice thereof, and shall not be liable for any
registration or transfer of shares which are registered, or to be registered, in
the name of a fiduciary or the nominee of a fiduciary unless made with actual
knowledge that a fiduciary, or nominee of a fiduciary is committing a breach of
trust in requesting such registration or transfer, or with knowledge of such
facts that its participation therein amounts to bad faith.
8.7 Shareholders' Disclosure; call of Shares; Right to Refuse to
Transfer Shares or Warrants. The Shareholders, any holders of warrants or
similar rights to purchase shares, and any proposed transferee of Shares or
warrants or similar rights to purchase Shares shall upon demand disclose to the
Trustees in writing such information with respect to direct and indirect
ownership of the Shares and warrants or similar rights to purchase Shares and
any proposed or requested transfer thereof as the Trustees deem necessary to
comply with the provisions of the Internal Revenue Code and the regulations
thereunder, as the same shall be from time to time amended, or to comply with
the requirements of any other taxing authority, or which the Trustees deem
necessary to avoid violation of state or federal securities laws. Several
different Share ownership tests have to be satisfied in order for the Trust to
qualify as a REIT or for the Trust's income to satisfy certain income tests
applicable to REITs. Pursuant to the Internal Revenue Code, Share ownership is
not determined in the same manner for each test. Depending upon the particular
test with which compliance is being determined, a Shareholder's Share ownership
may be determined (i) without applying any rules of attribution; (ii) pursuant
to Section 318 of the Internal Revenue Code; or (iii) pursuant to Sections
542(a) and 544 of the Internal Revenue Code.
(a) If the Trustees shall, at any time and in good faith, be
of the opinion that direct or indirect ownership of Shares of the Trust
has or may become concen trated to an extent which would prevent the
Trust from qualifying as a REIT under the REIT Provisions of the
Internal Revenue Code, the Trust shall have the power by
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lot or other means deemed equitable by the Trustees, to call a number
of Shares sufficient, in the opinion of the Trustees, to maintain or
bring the direct or indirect ownership of Shares of the Trust into
conformity with the requirements for a REIT; provided, however, that
failure to call Shares as provided herein shall not render the Trustees
or any Shareholder or officer liable to anyone for such failure. The
call price shall be equal to (i) the last reported sale price of the
Shares on the last business day prior to the call date on the principal
national securities exchange on which the Shares are listed or admitted
to trading, or (ii) if the Shares are not so listed or admitted to
trading, the average of the highest bid and lowest asked prices on such
last business day as reported by NASDAQ, National Quotation Bureau
incorporated or a similar organization selected by the Trust for such
purpose, or (iii) if no quotations for the Shares are available, as
determined in good faith by the Trustees. From and after the date fixed
for such call by the Trustees, the holder of any Shares so called shall
cease to be entitled to dividends, distributions, voting rights and
other benefits with respect to such Shares, excepting only the right to
payment of the call price fixed as aforesaid.
(b) If the Trustees shall, at any time and in good faith, be
of the opinion, which opinion shall be conclusive upon any proposed
transferor or proposed transferee of Shares or warrants or similar
rights to purchase Shares, that any proposed transfer or exercise would
jeopardize the status of the Trust as a REIT under the Internal Revenue
Code, as now enacted or as hereafter amended, or would violate state or
federal securities laws or regulations, the Trustees may refuse to
permit such transfer or exercise; provided, however, that failure to
refuse to permit such transfer or exercise as provided herein shall not
render the Trustees or any Shareholder or holder of warrants or similar
rights to purchase Shares or officer of the Trust liable to anyone for
such failure. Any attempted transfer or exercise as to which the
Trustees have refused their permission shall be void and of no effect
to transfer any legal or beneficial interest in the Shares or warrants
or similar rights to purchase Shares. All contracts for the sale or
other transfer or exercise of Shares or warrants or similar rights to
purchase Shares shall be subject to this provision.
8.8 Limitation on Acquisition and ownership Of Shares and Warrants
(a) In order to guard against the concentration of ownership
of Shares and warrants or similar rights to purchase Shares to an
extent which is contrary to the requirements of the REIT Provisions of
the Internal Revenue Code, no Person may at any time subsequent to the
Trust's commencement of business operations acquire ownership of or
own, directly or indirectly, as determined pursuant to both (i) Section
318 and (ii) Sections 542(a) and 544 of the Internal Revenue Code, (A)
a number of Shares in excess of 9.8% of the outstanding shares of the
Trust, or (B) an aggregate number of Shares and warrants and similar
rights to purchase Shares in excess of 9.8% of the aggregate number of
outstanding Shares and warrants and similar rights
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to purchase Shares. In addition, no Shares shall be transferred (or
issued, for example, upon the exercise of warrants) and no warrants
shall be transferred to any Person if, following such transfer, such
Person's direct or indirect ownership of Shares and warrants and
similar rights to purchase Shares would exceed these limits.
(b) If Shares or warrants or similar rights to purchase Shares
are acquired by any Person in violation of this Section 8.8, such
acquisition shall be valid only to the extent it does not result in a
violation of this Section 8.8, and such acquisition shall be null and
void with respect to the excess ("Excess Shares" and/or "Excess
Warrants"). Excess Shares shall be deemed to have been acquired and to
be held on behalf of the Trust, and, as the equivalent of treasury
shares for such purpose, shall not be considered to be outstanding for
quorum or voting purposes, and shall not be entitled to receive
dividends, interest or any other distribution. Excess Warrants shall be
deemed to be void.
(c) The Trust shall, if deemed necessary or desirable to
implement the provisions of this Section 8.8, include on the face or
back of each Share or warrant certificate issued by the Trust an
appropriate legend referring the holder of such certificate to the
restrictions contained in this Section 8.8 and stating that the
complete text of this Section 8.8 is on file with the Secretary of the
Trust at the Trust's registered office.
(d) Nothing herein contained shall limit the ability of the
Trustees to impose or to seek judicial or other imposition of
additional restrictions if deemed necessary or advisable to protect the
Trust and the interests of its Shareholders by preservation of the
Trust's status as a qualified REIT under the Internal Revenue Code.
(e) If any provision of this Section 8.8 or any application of
any such provision is determined to be invalid by any federal or state
court having jurisdiction over the issue, the validity of the remaining
provisions shall not be affected and the other applications of such
provisions shall be affected only to the extent necessary to comply
with the determination of such court.
8.9 Dividends or Distributions to Shareholders. The Trustees may from
time to time declare and pay to Shareholders such dividends or distributions in
cash, Shares, other Securities or other property, out of current or accumulated
income, capital, capital gains, principal, surplus, proceeds from the increase
or refinancing of Trust obligations, or from the sale of portions of the Trust
Estate or from any other source as the Trustees in their discretion shall
determine and as may be permitted by law. Shareholders shall have no right to
any dividend or distribution unless and until declared by the Trustees. The
Trustees shall furnish the Shareholders after the close of each fiscal year with
a statement in writing advising as to the source of the funds so distributed
during such fiscal year.
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ARTICLE IX
LIABILITY OF TRUSTEES,
SHAREHOLDERS AND OFFICERS AND OTHER MATTERS
9.1 Exculpation of Trustees, Officers and Others. The Trustees are
required to perform their duties with respect to the Trust's business in good
faith and in a manner believed by the Trustees to be in or not opposed to the
best interests of the Trust. A Trustee who performs his duties in accordance
with the foregoing standards and without gross negligence or willful or wanton
misconduct shall not be liable to any Person for failure to discharge his
obligations as a Trustee. Notwithstanding the additional responsibilities of
Independent Trustees, an Independent Trustee shall not have any greater
liability than that of a Trustee who is not an Independent Trustee.
Moreover, the Trust's officers, employees and other agents are also
required to act in good faith and in a manner believed by them to be in or not
opposed to the best interests of the Trust. An officer, employee or other agent
who performs his duties in accordance with the foregoing standards and without
gross negligence or willful or wanton misconduct shall not be liable to any
Person for failure to discharge his obligations as an officer, employee or
agent.
9.2 (a) Actions Involving Directors, Officers and Employees. The Trust
shall indemnify any person who was or is a party (other than a party plaintiff
suing on his own behalf or in the right of the Trust), or who is threatened to
be made a party, to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, including
any action by or in the right of the Trust, by reason of the fact that such
person is or was a director, officer or employee of the Trust, or is or was
serving at the request of the Trust as a director, officer, partner or employee
of another trust, partnership, joint venture, corporation or other enterprise,
against any and all claims, damages, losses, costs or expenses of every kind and
nature, including, but not limited to, attorneys' fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding; provided, that no such person shall be
indemnified by the Trust (a) with respect to remuneration paid to such person if
it shall be finally adjudged that such remuneration was in violation of law; (b)
on account of any suit in which judgment is rendered against such person for an
accounting of profits made from the purchase or sale by such person of
securities of the Trust pursuant to the provisions of Section 16(b) of the
Securities Exchange Act of 1934 and amendments thereto or similar provisions of
any federal, state or local statutory law; (c) from or on account of such
person's conduct which was finally adjudged to have been knowingly fraudulent,
deliberately dishonest or willful misconduct or (d) to the extent that such
indemnification shall otherwise be finally adjudged to be unlawful.
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(b) Actions Involving Agents. The Trust may indemnify any person who
was or is a party (other than a party plaintiff suing on his own behalf or in
the right of the Trust), or who is threatened to be made a party, to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, including any action by or in the
right of the Trust, by reason of the fact that he is an agent of the Trust, or
is or was serving at the request of the Trust as an agent of another trust,
partnership, joint venture, corporation or other enterprise, against any and all
claims, damages, losses, costs or expenses of every kind and nature, including,
but not limited to, attorneys' fees, judgments, fines and amounts paid in
settlement actually and reasonably incurred by aim in connection with such
action, suit or proceeding, provided, that an agent shall not be indemnified by
the Trust from or on account of conduct which was finally adjudged to have been
knowingly fraudulent, deliberately dishonest or willful misconduct.
9.3 Right of Trustees, Officers and Others to Own Shares or Other
Property and to Engage in Other Business. Any Trustee, officer, employee or
agent of the Trust may acquire, own, hold and dispose of Shares in the Trust and
may exercise all rights of a Shareholder to the same extent and in the same
manner as if he were not a Trustee, officer, employee or agent of the Trust. Any
Trustee, officer, employee or agent of the Trust may have personal business
interests and may engage in personal business activities, which interests and
activities may include the acquisition, syndication, holding, management,
operation or disposition, for his own account or for the account of others, of
interests in real property or interests in Persons engaged in the real estate
business, including Persons authorized as investments pursuant to Section 5.4
hereof. In addition, any Trustee, officer, employee or agent of the Trust may
take for his own account or recommend to others any particular investment
opportunity and shall be under no obligation to present any particular
investment opportunity to the Trust even if such opportunity is of a character
which, if presented to the Trust, could be taken by the Trust and, subject to
the foregoing, shall be protected in taking for his own account or recommending
to others any particular investment opportunity. Subject to the provisions of
Section 2.13 and Article V, any Trustee, officer, employee or agent may be
interested as trustee, officer, director, stockholder, partner, member, advisor
or employee, or otherwise have a direct or indirect interest in any Person who
may be engaged to render advice or services to the Trust, and may receive
compensation from such Person as well as compensation as Trustee, officer or
otherwise hereunder. None of these activities shall be deemed to conflict with
his duties and powers as Trustee or officer.
9.4 Transactions Between the Trust, the Trustees, the Advisor, and
Certain Affiliates. No contract, act or other transaction between the Trust and
any Trustee, officer of the Trust, or other Person in which any such Trustee or
officer is directly or indirectly interested or with which any such Trustee or
officer is directly or indirectly connected or of which any such Trustee or
officer is a trustee, partner, director, officer or retired officer shall be
valid unless approved by a vote of a majority of the disinterested Trustee(s).
Except as
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prohibited by these Bylaws, and in the absence of fraud, a contract, act or
other transaction between the Trust and any other Person, or in which the Trust
is interested, shall be valid even though (a) one or more of the Trustees or
officers are directly or indirectly interested in or connected with, or are
trustees, partners, directors, officers or retired officers of such other
Person, or (b) one or more of the Trustees or officers of the Trust,
individually or jointly with others, is a party or are parties to, or directly
or indirectly interested in, or connected with, such contract, act or
transaction. No Trustee or officer who is aware of the conflict or relationship
shall be under any disability from or have any liability as a result of entering
into any such contract, act or transaction, provided that such interest or
connection is disclosed or known to the Trustees and thereafter the Trustees in
good faith authorize such contract, act or other transaction by the vote of a
majority of the disinterested Trustee(s).
The Trust shall not sell, directly or indirectly, any of its real
property to any Trustee or officer of the Trust, the Advisor, or any Affiliate
thereof, and no such Person shall sell any property to the Trust unless:
(a) the property was purchased by any of the foregoing Persons
for the purpose of accumulating a portfolio of investments for the
Trust under circumstances which are fully disclosed in the prospectus
by which Shares are initially offered to the public;
(b) the property was purchased by any of the foregoing Persons
for the purpose of its subsequent acquisition by the Trust upon
completion of financing arrangements by the Trust;
(c) the property or option thereon was purchased or taken by
any of the foregoing Persons in its own name and title and was
temporarily held in such name for the purpose of facilitating the
acquisition of such property by the Trust or facilitating the borrowing
of money or obtaining of financing for the Trust or for any other
purpose related to the business of the Trust and the property or option
thereon is purchased by the Trust for a cash payment no greater than
the cost of the property or option to such Person; provided, however,
that the Trust may, if the proceeds of the Trust's sale of Shares from
its initial public offering 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 such initial public offering, sell to the Advisor or
any Affiliate thereof such property or properties (or sell to the
Advisor or an Affiliate of the Advisor an interest therein) but only on
terms which provide for cash payments to the Trust equal to the Trust's
cash payments made and the assumption of all indebtedness incurred in
connection with the acquisition of such property or properties by the
Trust and only if, in the opinion of the Independent Trustees, the
Trust will be unable to obtain a higher price for such property or
properties from an unaffiliated third party;
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<PAGE>
(d) the purchase or sale was made on terms no less favorable
to the Trust than those that could have been obtained in a comparable
transaction on an arm's length basis from a person who is not an
affiliate of the Trust and the purchase or sale was approved by
unanimous vote of the disinterested Independent Trustees.
Nothing herein, however, shall be deemed to preclude the Trust from entering
into a joint venture with any such Persons with respect to Trust real property
as otherwise permitted herein.
Except as otherwise provided in these Bylaws, the Trust shall not,
directly or indirectly, engage in any transaction with any Trustee, officer or
employee of the Trust or any partner, officer or employee of the Advisor, or of
any company or other organization of which any of the foregoing is an Affiliate,
except for (i) the execution and performance of the agreements and the making of
investments contemplated by Articles V and VI hereof, (ii) transactions
involving the purchase of Securities of the Trust by the Advisor and its
Affiliates upon the inception of the Trust to satisfy minimum capital
requirements of applicable laws and regulations of states having jurisdiction
and transactions involving the purchase of Securities of the Trust on the same
terms on which such Securities are then being offered to all holders of any
class of Securities of the Trust or to the public, (iii) entering into joint
ventures or partnerships with the Advisor or its Affiliates including other
programs sponsored by the Advisor; (iv) transactions with the Advisor or
Affiliates thereof involving loans, advances, allocations of overhead and other
operating expenses, acquisition and investment advisory services, real estate
brokerage services on the purchase and sale of real property, real property
management and leasing services, personal property leasing services, or other
services, provided such transactions are on terms not less favorable to the
Trust than the terms on which non-affiliated parties are then making similar
loans or performing similar services for comparable entities in the same area
and are not entered into on an exclusive basis with such Person, (v)
transactions necessary to comply with minimum sponsor contribution requirements,
or (vi) transactions made or ratified with the unanimous approval of the
Trustees; provided, however, that any transaction referred to in clause (iv)
relating to payments to the Advisor and its Affiliates for services rendered in
a capacity other than as Advisor may only be made (A) upon a determination by
the Independent Trustees that the compensation is fair and reasonable and not
greater than the charges for comparable services available from others who are
competent and not Affiliates of the parties involved, and (B) with the approval
of a majority of the Independent Trustees. The simultaneous acquisition by the
Trust and the Advisor or any Affiliate of the Advisor of participations in any
investment shall not be deemed to constitute the purchase or sale of property by
one of them to the other. This Section 9.4 shall not prevent the payment to any
Person of commissions or fees for the so-called "private placement" of
Securities with investors.
9.5 Persons Dealing with Trustees or Officers. Any act of the Trustees
or officers purporting to be done in their capacity as such shall, as to any
Persons dealing in good faith with such Trustees or officers, be conclusively
deemed to be within the purposes
33
<PAGE>
of this Trust and within the powers of the Trustees and officers. The Trustees
may authorize any officer or officers or agent or agents to enter into any
contract or execute any instrument in the name and on behalf of the Trust. No
Person dealing in good faith with the Trustees or any of them, or with the
authorized officers, employees, agents or representatives of the Trust, shall be
bound to see to the application of any funds or property passing into their
hands or control. The receipt of the Trustees or any of them, or of authorized
officers, employees, agents, or representatives of the Trust, for moneys or
other consideration, shall be binding upon the Trust.
9.6 Reliance. The Trustees and officers may consult with counsel and
the advice or opinion of such counsel shall be full and complete personal
protection to all of the Trustees and officers in respect of any action taken or
suffered by them in good faith and in reliance on or in accordance with such
advice or opinion. In discharging their duties, Trustees and officers, when
acting in good faith, may rely upon financial statements of the Trust
represented to them to be correct by the president or the officer of the Trust
having charge of its books of account, or stated in a written report by an
independent certified public accountant fairly to present the financial position
of the Trust. The Trustees may rely, and shall be personally protected in
acting, upon any instrument or other document believed by them to be genuine.
9.7 Income Tax Status. The Trustees shall use their best efforts to
refrain from any action which, in their good faith judgment, would adversely
affect the status of the Trust as a REIT, as defined in the Internal Revenue
Code and the rules and regulations thereunder, once such status is achieved.
Anything to the contrary herein notwithstanding and without limitation of any
rights of indemnification or non-liability of the Trustees herein, however, said
Trustees by these Bylaws make no commitment or representation that the Trust
will qualify as a REIT, as defined in the Internal Revenue Code and the rules
and regulations thereunder in any given year. The failure of the Trust to
qualify as a REIT under the Internal Revenue Code shall not render the Trustees
liable to the Shareholders or to any other Person or in any manner operate to
annul the Trust.
ARTICLE X
MISCELLANEOUS
10.1 Reports to Shareholders.
(a) Within one hundred twenty (120) days after the close of
each fiscal year of the Trust or as soon thereafter as practicable, the
Trustees shall mail a report of the business and operation of the Trust
during such fiscal year to the Shareholders, which report shall
constitute the accounting of the Trustees for such fiscal year. The
report shall be in such form and have such content as the Trustees deem
proper. The Annual Report shall include a balance sheet and a statement
of income and surplus
34
<PAGE>
of the Trust. Such financial statements shall be prepared in accordance
with generally accepted accounting principles and shall be accompanied
by the report of an independent certified public accountant thereon. A
manually signed copy of the accountant's report shall be filed with the
Trustees. The Independent Trustees shall take reasonable steps to
ensure that this requirement is met.
(b) At least quarterly the Trustees shall send interim reports
to the Shareholders. The interim reports shall be in such form and have
such content as the Trustees deem proper. The interim reports shall
include a statement of the aggregate amount of advisory fees and the
aggregate amount of other fees paid during the preceding quarter to the
Advisor and its Affiliates by the Trust and by third parties based upon
their relationship with the Trust.
10.2 Notices. Any notice of meeting or other notice, communication or
report to any Shareholder or Trustee shall be deemed duly delivered to such
Shareholder or Trustee when such notice, communication or report is deposited,
with postage prepaid, in the United States mail, addressed to such Shareholder
or Trustee at his address as it appears on the records of the Trust, or is
delivered in person to such Shareholder.
Whenever any notice is required to be given, a waiver thereof in
writing signed by the Person or Persons entitled to said notice, whether before
or after the time stated therein, shall be deemed equivalent thereto.
10.3 Inspection of Bylaws. The Trust shall keep at its registered
office in the County of St. Louis, State of Missouri, the original or a copy of
the Articles of Incorporation and Bylaws of the Trust and any amendments
thereto, all of which shall be open to inspection by Shareholders during normal
business hours.
10.4 Inspection of Corporate Records. The books and records of the
Trust, including Shareholder records, shall be open to inspection by an
Administrator or by any Shareholder during normal business hours at the
registered office of the Trust in the County of St. Louis, State of Missouri
upon the written request of such Administrator or Shareholder. A list of the
names and addresses of all Shareholders shall be maintained as part of the books
and records of the Trust.
10.5 Checks. All checks or demands for money and notes of the Trust
shall be signed by such officer or officers, or such other Person or Persons as
the Board of Trustees may from time to time designate.
10.6 Fiscal Year. The fiscal year of the Trust shall commence on
January 1 and close on December 31.
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10.7 Seal. The seal of the Trust shall have inscribed thereon the name
of the Trust, the year of its incorporation, the words "Corporate Seal" and
"Missouri", and such other inscriptions as the Board of Trustees may deem
appropriate. Said seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
10.8 Power of Shareholders in Event of Merger or Sale of Assets.
(a) The affirmative vote of the holders of at least two-thirds
(2/3) of the outstanding Shares entitled to vote thereon shall be
required to approve the nature and amount of the consideration and the
other principal terms of any merger or consolidation of the Trust with
any Person.
(b) The affirmative vote of the holders of at least two-thirds
(2/3) of the outstanding Shares entitled to vote thereon shall be
required to approve the sale, lease, exchange or other disposition,
other than by mortgage, deed of trust or pledge, of all or
substantially all of the property and assets of the Trust, if such
sale, lease, exchange or other disposition is not made in the usual and
regular course of the business of the Trust.
10.9 Conflicting Provisions.
(a) The provisions of these Bylaws are severable, and if the
Trustees shall determine, with the advice of counsel, that any one or
more of such provisions (the "Conflicting Provisions") would have the
effect of preventing the Trust from qualifying as a REIT under the
Internal Revenue Code, or are in conflict with other applicable federal
or state securities laws or regulations or other applicable federal or
state laws or regulations, the Conflicting Provisions shall be deemed
never to have constituted a part of these Bylaws; provided, however,
that no such determination by the Trust shall affect or impair any of
the remaining provisions of these Bylaws or render invalid or improper
any action taken or omitted prior to such determination. A
certification in recordable form signed by a majority of the Trustees
setting forth any such determination and reciting that it was duly
adopted by the Trustees, or a copy of these Bylaws, with the
Conflicting Provisions removed pursuant to such determination, in
recordable form, signed by a majority of the Trustees, shall be
conclusive evidence of such determination when lodged in the records of
the Trust. The Trustees shall not be liable for failure to make any
determination under this Section 10.9. Nothing in this Section 10.9
shall in any way limit or affect the right of the Trustees to amend
these Bylaws as provided in Article XI.
(b) If any provision of these Bylaws shall be held invalid or
unenforceable, such invalidity or unenforceability shall attach only to
such provision and shall not in any manner affect or render invalid or
unenforceable any other
36
<PAGE>
provision of these Bylaws, and these Bylaws shall be carried out as if
any such invalid or unenforceable provision were not contained herein.
ARTICLE XI
AMENDMENTS
These Bylaws may be altered, amended or repealed or new bylaws may be
adopted in lieu thereof by the affirmative vote of a majority of the Shares
issued and outstanding and entitled to vote thereon; provided, however, that the
Trustees may amend these Bylaws without the vote or consent of the Shareholders
in the event the Trustees deem such necessary to conform these Bylaws to the
requirements of the REIT Provisions of the Internal Revenue Code, to applicable
state or federal securities laws or to other applicable state or federal laws or
regulations, but the Trustees shall not be liable for failing to do so.
37
<TABLE> <S> <C>
<S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS FOR MAXUS REALTY TRUST, INC. AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.</LEGEND>
<MULTIPLIER> 1
<CIK>0000748580
<NAME> MAXUS REALTY TRUST, INC.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-30-2000
<CASH> 41000
<SECURITIES> 0
<RECEIVABLES> 269,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 19,075,000
<DEPRECIATION> 5,951,000
<TOTAL-ASSETS> 14,037,000
<CURRENT-LIABILITIES> 0
<BONDS> 4,510,000
<COMMON> 866,624
0
0
<OTHER-SE> 8,932,000
<TOTAL-LIABILITY-AND-EQUITY> 14,037,000
<SALES> 657,000
<TOTAL-REVENUES> 725,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 661,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 95,000
<INCOME-PRETAX> (36,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (36,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (36,000)
<EPS-BASIC> (.04)
<EPS-DILUTED> 0
</TABLE>
