SECURED INVESTMENT RESOURCES FUND, L.P. III
1100 Main, Suite 2100
Kansas City, Missouri 64105
CONSENT STATEMENT
To the Limited Partners:
Nichols Resources, Ltd. ("Nichols"), a general partner of Secured
Investment Resources Fund, L.P. III (the "Partnership"), is recommending that
each limited partner of the Partnership ("Limited Partner") consent to (i) the
assignment of James R. Hoyt's and SIR Partners III, L.P.'s general partner
interests to Nichols and (ii) the appointment of Nichols as successor Managing
General Partner.
THIS CONSENT STATEMENT IS BEING MAILED TO LIMITED PARTNERS ON OR ABOUT
NOVEMBER ___, 1998. TO BE COUNTED, A PROPERLY SIGNED CONSENT FORM MUST BE
RECEIVED BY NICHOLS RESOURCES, LTD. (A GENERAL PARTNER) AT 1100 MAIN, SUITE
2100, KANSAS CITY, MISSOURI 64105, ON OR BEFORE DECEMBER 15, 1998.
SETTLEMENT AGREEMENT
On July 21, 1998, Nichols, Bond Purchase, L.L.C. ("Bond"), David L. Johnson
("Johnson") and other affiliates of Johnson, together with the Partnership, SIR
Partners III, L.P., a general partner of the Partnership ("SIR Partners III"),
SPECS, Inc., the company which provides management and investor services to the
Partnership ("SPECS") and James R. Hoyt, the current Managing General Partner of
the Partnership ("Hoyt"), entered into a certain Settlement Agreement and Mutual
Release (the "Settlement Agreement"). The Settlement Agreement settled a dispute
which had arisen between Nichols, SIR Partners III and Hoyt, being all of the
general partners of the Partnership, over the proper course of action to be
taken for the Partnership. This dispute resulted in the filing of civil actions
in the Circuit Court of Jackson County, Missouri.
Pursuant to the Settlement Agreement, Nichols agreed (i) to pay $100,000 in
cash to SIR Partners III and Hoyt, $21,751 of which will be paid by Hoyt to the
Partnership to pay a receivable owed by affiliates of the Partnership to the
Partnership for unpaid excess syndication costs and expenses currently shown on
the Partnership's financial statements and (ii) to dismiss the civil actions
filed. In exchange for the $100,000 in cash and the dismissal of the civil
actions, SIR Partners III and Hoyt have agreed to transfer their General Partner
interests to Nichols, and Hoyt has agreed to withdraw as Managing General
Partner. Under the Partnership Agreement, such transfers are subject to the
majority vote of the Limited Partners as is the appointment of a successor
Managing General Partner. Hoyt and SIR Partners III have also agreed that
Nichols, as a General Partner of the Partnership, shall have the right to
designate the management company to
1
<PAGE>
manage the assets of the Partnership and to execute all documents to effectuate
the release of the current management contract.
PROPOSAL 1
ASSIGNMENT OF GENERAL PARTNERSHIP INTERESTS
The Partnership currently has three general partners: Nichols, SIR Partners
III and Hoyt. Hoyt is the current Managing General Partner. Nichols, as a
General Partner of the Partnership, is seeking the consent of the Limited
Partners to the transfer of the General Partner interests of the Partnership
from Hoyt and SIR Partners to Nichols.
Nichols has three directors: Johnson, John W. Alvey and Daniel W. Pishny.
Christine A. Robinson is Nichols' President, and Mr. Pishny and Mr. Alvey are
Nichols' Vice President and Secretary/Treasurer, respectively. Nichols was
formed on August 22, 1988 for the purpose of acting as a general partner of
public real estate programs and otherwise investing in and dealing with limited
partnerships, property management and real estate syndications. Prior to
January, 1998, Nichols was a wholly-owned subsidiary of the J.C. Nichols
Company. In January, 1998, MJS Associates, Inc., a Missouri corporation ("MJS")
acquired all the issued and outstanding shares of common stock of Nichols from
the J.C. Nichols Company. Johnson is the principal shareholder and an officer
and director of MJS.
Ms. Robinson has served as President of Nichols since January, 1998. As
such, Ms. Robinson manages the day-to-day administrative functions of Nichols.
Ms. Robinson also is currently Vice President and a minority shareholder of
Maxus Properties, Inc., a Missouri corporation ("Maxus") that specializes in
commercial property management for affiliated owners. Ms. Robinson has served as
Vice President of Maxus since September 1997. Prior to September 1997, Ms.
Robinson served as Sales/Marketing/Financial Analyst for American Italian Pasta
Company, a retail pasta manufacturing and sales company, and also worked as an
independent contractor for American Management Association, a company that
provides management, finance and inventory seminars. Ms. Robinson graduated
Magna Cum Laude from Kansas State University in 1990 where she received a degree
in accounting.
Johnson is Chairman, Chief Executive Officer, and majority shareholder of
Maxus. Mr. Johnson is also currently Vice President of KelCor, Inc., a Missouri
corporation ("KelCor") that specializes in the acquisition of commercial real
estate. Mr. Johnson and his wife own all of the issued and outstanding stock of
KelCor and 80 percent of the issued and outstanding stock of MJS. Mr. Johnson is
a 1978 graduate of the University of Missouri-Columbia. Upon graduation, Mr.
Johnson joined the international accounting firm of Arthur Andersen & Co., where
he was promoted to Tax Manager in 1982. At Arthur Andersen, Mr. Johnson
specialized in structuring real estate transactions for clients. In 1988, Mr.
Johnson left Arthur Andersen to pursue a career in the development,
2
<PAGE>
syndication and management of commercial and multi-family real estate projects.
Mr. Johnson is a licensed real estate broker and a certified public accountant
in the State of Missouri. As of the date of this Proxy Statement, Mr.Johnson is
a beneficial owner of 20 Limited Partner Units owned by Bond.
Besides his office of Vice President of Nichols, Daniel W. Pishny is
President, Chief Operating Officer and a minority shareholder of Maxus. Mr.
Pishny graduated with highest distinction from the University of Kansas in 1984
where he obtained a degree in business administration. After graduating, he
joined the Kansas City office of KPMG Peat Marwick, an international accounting
firm. At KPMG Peat Marwick, Mr. Pishny was promoted to Audit Manager,
specializing in the auditing of financial institutions. From 1990 to 1995, Mr.
Pishny worked in the commercial real estate lending departments of two major
Kansas City financial institutions. Mr. Pishny joined Maxus in 1995 and is
responsible for the day-to-day operations of Maxus and its managed properties.
Besides his office of Secretary/Treasurer of Nichols, John W. Alvey is
Executive Vice President, Chief Financial Officer and a minority shareholder of
Maxus and President of KelCor. Mr. Alvey holds a degree from Rockhurst College
and a Masters of Accountancy from Kansas State University. In 1982, Mr. Alvey
joined Arthur Andersen & Co., where he was promoted to Tax Manager working
primarily on real estate matters for individual clients. Mr. Alvey joined Maxus
in 1988 after spending one year working with a Kansas City-area real estate
company. Mr. Alvey became President of KelCor in 1992. Mr. Alvey is responsible
for the day-to-day accounting functions, risk management and taxes for Maxus and
its managed properties.
James R. Hoyt, age 60, holds a bachelor's degree in business administration
and is a licensed real estate broker in two states. Mr. Hoyt has been actively
involved for more than the past 20 years in various real estates endeavors
including development, syndication, property management and brokerage. Since
1983, Mr. Hoyt has been involved as a general partner in ten real estate private
placement offerings. As of December 31, 1997, these partnerships, including the
Partnership, have raised a total of $60,709,750.
SIR Partners III, formerly known as Hoyt Partners III, L.P., is a Missouri
limited partnership organized in February 23, 1988. Mr. Hoyt is the general
partner. SIR Partners III was formed for the purpose of acting as a general
partner and acquisition agent of the Partnership.
In the event that the Limited Partners consent to the assignment of the
General Partner interests, Nichols will own by itself the 1% General Partner
interest. This change in ownership in the General Partner interests in the
Partnership will not in any manner alter or affect the amount or percentage of
income or profits or losses for tax purposes distributed or allocated to the
Limited Partners.
3
<PAGE>
PROPOSAL 2
APPOINTMENT OF A SUCCESSOR MANAGING GENERAL PARTNER
Nichols, as a General Partner of the Partnership, is also seeking the
consent of the Limited Partners to the appointment of Nichols as the successor
Managing General Partner of the Partnership. In connection with the Settlement
Agreement, as indicated above, Mr. Hoyt has agreed to withdraw as Managing
General Partner, subject to the Limited Partners' appointment of Nichols as the
Managing General Partner.
REASONS FOR VOTING FOR
PROPOSALS 1 AND 2
In voting to (i) consent to the assignment of General Partner interests in
the Partnership from Hoyt and SIR Partners III to Nichols and (ii) appoint
Nichols as the successor Managing General Partner, Limited Partners should
consider the following:
1. The consent to the assignment of General Partner interests in the
Partnership from Hoyt and SIR Partners III to Nichols and the appointment of
Nichols as the successor Managing General Partner of the Partnership would
resolve the dispute over the management of Partnership among the General
Partners.
2. Hoyt, as Managing General Partner, was unable to devote adequate
attention to the management of the Partnership, including failing to make timely
SEC filings.
3. The management team of Nichols has substantial experience in the
management of real estate properties.
The views and recommendations of the Partnership contained in this Proxy
Statement are only those of Nichols, a General Partner of the Partnership.
4
<PAGE>
VOTING PROCEDURES
Voting by Limited Partners on the proposals is based on units of limited
partnership issued by the Partnership ("Units"). On October 20, 1998, there were
issued and outstanding and entitled to vote 9,685 Units representing $4,842,500
of capital contributions. Each Limited Partner is entitled to one vote per Unit
owned, which represents a $500 capital contribution to the Partnership.
Pursuant to the second paragraph of Paragraph 16.2.8 of the Amended and
Restated Agreement of Limited Partnership of the Partnership, dated December 6,
1988 (the "Partnership Agreement"), the Limited Partners must approve by a
Majority Vote the assignment of a General Partner's interest in the Partnership.
Pursuant to Paragraph 17.6 of the Partnership Agreement, the Limited Partners
may only appoint a successor Managing General Partner of the Partnership by a
Majority Vote. A "Majority Vote" means the vote of Limited Partners who own more
than 50% of the total number of Units currently issued and outstanding.
Therefore, Limited Partners holding at least 4843 Units must approve (i) the
assignment of James R. Hoyt's and SIR Partners III, L.P.'s General Partner
interests to Nichols and (ii) the appointment of Nichols as successor Managing
General Partner. Because abstentions and brokers non-votes will not be counted
as a vote for the assignment of the General Partner interests or the appointment
of Nichols as successor Managing General Partner, it will thus have the same
effect as if the Units represented thereby were voted against the assignment of
the General Partner interests and the nominee for successor Managing General
Partner.
Accompanying this Consent Statement is a Consent Form for each Limited
Partner with respect to his/her unit ownership in the Partnership. By checking
the appropriate box, each Limited Partner can indicate whether he/she votes FOR
or AGAINST or ABSTAINS as to the two proposals. IF ANY INVESTOR RETURNS A
CONSENT FORM DULY SIGNED WITHOUT CHECKING ANY BOX, HE/SHE WILL BE DEEMED TO HAVE
VOTED FOR BOTH THE ASSIGNMENT OF THE GENERAL PARTNER INTERESTS AND THE
APPOINTMENT OF NICHOLS AS SUCCESSOR MANAGING GENERAL PARTNER.
A Limited Partner who votes against or abstains does not have dissenters',
appraisal or similar rights under Missouri law.
The General Partners have fixed the close of business on October 20, 1998
as the record date for the determination of the Limited Partners entitled to
notice of and to vote on the assignment of the General Partner interests and the
appointment of Nichols as successor Managing General Partner, the close of
business on December 15, 1998 as the date by which Consent Forms must be
received by Nichols in order to be counted, and December 17, 1998 as the date on
which the consents are to be counted. A Limited
5
<PAGE>
Partner may revoke his/her consent at any time prior to December 15, 1998,
provided written revocation is received by Nichols prior to that date.
The Partnership will pay all costs of preparing and soliciting consents. In
addition to solicitation by mail, the Partnership may solicit proxies from
Limited Partners personally or by telephone. This Consent Statement was first
mailed to Limited Partners on or about November ___, 1998. Staff of Nichols will
be available by telephone to answer any questions concerning this Consent.
To the knowledge of the Partnership, no person is the beneficial owner of
more than 5 percent of the outstanding Units and none of the General Partners is
the beneficial owner, directly or indirectly, of any Units, except for 20 Units
beneficially owned by David L. Johnson, who is a director of Nichols.
The Partnership has no employees. The Managing General Partner of the
Partnership, currently Mr. Hoyt, is responsible for all aspects of the
Partnership's operations.
Property management services for the Partnership's investment properties
have been provided by SPECS, for which it has received a management fee based on
the gross revenues of the properties owned by the Partnership. During 1997, the
Partnership paid SPECS a property management fee of $137,445, plus $42,707 for
certain professional services (such as tax accounting, audit preparation,
preparation of Securities and Exchange Commission annual and quarterly reports
and investor services). Pursuant to the Partnership Agreement, the Partnership
also pays 5 percent of Cash Flow From Operations to the General Partners and
their designees, but no such fee has been due for the last three years due to
the lack of positive net cash flow. The General Partners also hold an aggregate
one percent interest in the profits and losses of the Partnership.
BY ORDER OF THE BOARD OF DIRECTORS
OF NICHOLS RESOURCES, LTD.
/s/ Christine A. Robinson
Christine A. Robinson
President
6
<PAGE>
APPENDIX A
SECURED INVESTMENT RESOURCES FUND, L.P. III
CONSENT OF LIMITED PARTNERS
This consent is solicited by the Board of Directors
of Nichols Resources, Ltd., a General Partner
The undersigned, a Limited Partner of Secured Investment Resources Fund,
L.P. III (the "Partnership"), hereby consents (unless otherwise directed below)
to the assignment of the General Partner interests and the appointment of
Nichols as successor Managing General Partner, as more fully described in the
Consent Statement (the "Proposals").
Please date and sign this Consent below and return it in the enclosed,
postage paid envelope. To be counted, this Consent must be received not later
than the close of business on December 15, 1998.
NICHOLS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS:
1. THE ASSIGNMENT OF JAMES R. HOYT'S AND SIR PARTNERS
III, L.P.'S GENERAL PARTNER INTERESTS TO NICHOLS
RESOURCES, LTD.
FOR the Assignment to Nichols Resources, Ltd. [ ]
Against the Assignment to Nichols Resources,
Ltd. [ ]
2. APPOINTMENT OF A SUCCESSOR MANAGING GENERAL
PARTNER
FOR the Appointment of Nichols Resources, Ltd. [ ]
Against the Appointment of Nichols Resources,
Ltd. [ ]
7
<PAGE>
The Partnership Units held by the signing Limited Partner will be voted
as directed. They will be voted "FOR" the Proposal if no box is checked.
Please sign exactly as your name appears below. When Partnership Units
are held by joint tenants, both owners should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such. If
a corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
PLEASE MARK, SIGN, DATE AND PROMPTLY RETURN THIS CONSENT BY
DECEMBER 15, 1998.
___________________________
Date
___________________________
Signature
___________________________
Print Name
___________________________
Signature, if held jointly
___________________________
Print Name
8
<PAGE>
