-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Uk0sa9sxgG4+O5B1s9UazzjaGh/MQkbP6yaMqRZZ7m8nzNnkzoE+23IBRvgJHf0v GPMEwgoIS1Lj4w7iz8vuYQ== 0000950152-97-002973.txt : 19970421 0000950152-97-002973.hdr.sgml : 19970421 ACCESSION NUMBER: 0000950152-97-002973 CONFORMED SUBMISSION TYPE: 10-K405/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960131 FILED AS OF DATE: 19970418 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: REALTY REFUND TRUST CENTRAL INDEX KEY: 0000082473 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 346647590 STATE OF INCORPORATION: OH FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-K405/A SEC ACT: SEC FILE NUMBER: 001-07062 FILM NUMBER: 97583327 BUSINESS ADDRESS: STREET 1: 1385 EATON CENTER STREET 2: 1111 SUPERIOR AVE CITY: CLEVELAND STATE: OH ZIP: 44114 BUSINESS PHONE: 2167717663 MAIL ADDRESS: STREET 1: 1385 EATON CENTER STREET 2: 1111 SUPERIOR AVENUE CITY: CLEVELAND STATE: OH ZIP: 44114 10-K405/A 1 REALTY REFUND TRUST 10-K405 AMENDMENT NO. 2 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K/A AMENDMENT NO. 2 (Mark One) [X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (Fee Required) For the fiscal year ended January 31, 1996 [ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (No Fee Required) For the transition period from _______ to ________. Commission File No. 1-7062 REALTY REFUND TRUST - -------------------------------------------------------------------------------- (Exact Name of Registrant as specified in its Charter) OHIO 34-6647590 - -------------------------------------------------------------------------------- (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification Number) 1385 Eaton Center, Cleveland, Ohio 44114 - -------------------------------------------------------------------------------- (Address of Principal Executive Office) (ZIP Code) (216) 771-7663 - -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) Securities registered pursuant to Section 12(b) of the Act: TITLE OF EACH CLASS NAME OF EXCHANGE ON WHICH REGISTERED - ------------------- ------------------------------------ Shares of Beneficial Interest New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- [Cover Continued on Following Page] 2 Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] Aggregate market value of voting stock held by non-affiliates of the Registrant as of March 10, 1997: $ 4,202,782. ------------ Indicate the number of shares outstanding of each of the Registrant's classes of common stock, as of the latest practicable date: 1,020,586 --------- DOCUMENTS INCORPORATED BY REFERENCE Portions of the Registrant's 1996 Annual Report to Shareholders -- Part II. 3 PART II PART IV Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS --------------------------------------------------- ON FORM 8-K. ------------ (a) 1. See the Index to Financial Statements set forth on page 21 of the Registrant's Annual Report on Form 10-K for the fiscal year ended January 31, 1996, for a list of financial statements and financial schedules included or incorporated herein by reference. 2.1 The Financial Statements of Riverview Tower Limited Partnership, a borrower of the Registrant (which financial statements were audited by such borrower's auditors), are set forth as Exhibit 99(b) hereto. 2.2 The Financial Statements of Pacific Place Partners, LTD., a borrower of the Registrant (which financial statements were audited by such borrower's auditors), are set forth as Exhibit 99(c) to the Registrant's Annual Report on Form 10-K for the fiscal year ended January 31, 1996. 3. The exhibits filed as part of this report are set forth on the Exhibit Index on pages 3 through 7 hereof and each management contract or compensatory plan or arrangement required to be filed as an exhibit hereto has been marked with an asterisk on the Exhibit Index. (b) No current reports on Form 8-K were filed during the last quarter of fiscal year 1996. 1 4 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: April 17, 1997 REALTY REFUND TRUST By: /s/James H. Berick --------------------------- Name: James H. Berick Title: President 2 5 Index of Exhibits ----------------- Exhibit Number - ------ 3(a) First Amended and Restated Declaration of Trust (incorporated by reference to Exhibit 3.1 of Registration Statement No. 2-40238 effective June 17, 1971). 3(b) By-Laws (incorporated by reference to Exhibit 3.2 of the Registrant's Current Report on Form 8-K dated February 12, 1985 and filed with the Securities and Exchange Commission on February 13, 1985). 10(a)* Form of Advisory Agreement between the Registrant and the Advisor (incorporated by reference to Exhibit 12.1 of Registration Statement No. 2-40238 effective June 17, 1971). 10(b)* Amendment dated June 1, 1987 to Advisory Agreement between Registrant and the Advisor (incorporated by reference to Exhibit 10(b) of the Registrant's Form 10-K for the fiscal year ended January 31, 1994). 10(c)* Amendment dated June 1, 1988 to Advisory Agreement between the Registrant and the Advisor (incorporated in Exhibit 10(c) of the Registrant's Form 10-K for fiscal year ended January 31, 1995). 10(d)* Amendment dated June 1, 1989 to Advisory Agreement between the Registrant and the Advisor (incorporated by reference to Exhibit 10(d) of the Registrant's Form 10-K for the fiscal year ended January 31, 1990). 10(e)* Amendment dated June 1, 1990 to Advisory Agreement between the Registrant and the Advisor (incorporated by reference to Exhibit 10(e) of the Registrant's Form 10-K for the fiscal year ended January 31, 1991). 10(f)* Amendment dated June 1, 1991 to Advisory Agreement between the Registrant and the Advisor (incorporated by reference to Exhibit 10(f) of the Registrant's Form 10-K for the fiscal year ended January 31, 1992). 10(g)* Amendment dated June 1, 1992 to Advisory Agreement between the Registrant and the Advisor (incorporated by reference to Exhibit 10(g) of the Registrant's Form 10-K for the fiscal year ended January 31, 1993). 3 6 10(h)* Amendment dated June 1, 1993 to Advisory Agreement between the Registrant and the Advisor (incorporated by reference to Exhibit 10(h) of the Registrant's Form 10-K for the fiscal year ended January 31, 1994). 10(i)* Amendment dated June 1, 1994 to Advisory Agreement between the Registrant and the Advisor (incorporated by reference to Exhibit 10(i) of Registrant's Form 10-K for fiscal year ended January 31, 1995). 10(j)* Amendment dated June 1, 1995 to Advisory Agreement between the Registrant and the Advisor.(1) 10(k) Credit Agreement dated July 18, 1990 between the Registrant and the Bank (incorporated by reference to Exhibit 10(f) of the Registrant's Form 10-K for the fiscal year ended January 31, 1991). 10(l) Extension Agreement dated June 27, 1991 to Credit Agreement between the Registrant and the Bank (incorporated by reference to Exhibit 10(g) of the Registrant's Form 10-K for the fiscal year ended January 31, 1992). 10(m) Amendment and Waiver Agreement dated as of July 7, 1992 to Credit Agreement between the Registrant and the Bank (incorporated by reference to Exhibit 10.5 of the Registrant's Current Report on Form 8-K dated March 16, 1993 and filed with the Securities and Exchange Commission on March 24, 1993). 10(n) Security Agreement (Promissory Notes) dated as of July 7, 1992 between Registrant and the Bank (incorporated by reference to Exhibit 10.6 of the Registrant's Current Report on Form 8-K dated March 16, 1993 and filed with the Securities and Exchange Commission on March 24, 1993). 10(o) Second Amendment dated March 16, 1993 to Credit Agreement between the Registrant and the Bank (incorporated by reference to Exhibit 10.2 of the Registrant's Current Report on Form 8-K dated March 16, 1993 and filed with the Securities and Exchange Commission on March 24, 1993). 10(p) Third Amendment dated as of July 28, 1994 between the Registrant and the Bank (incorporated by reference to Exhibit 10(o) of the Registrant's Form 10-K for the fiscal year ended January 31, 1995). 4 7 10(q) Security Agreement (Promissory Notes) dated as of March 16, 1993 between Registrant and the Bank (incorporated by reference to Exhibit 10.4 of the Registrant's Current Report on Form 8-K dated March 16, 1993 and filed with the Securities and Exchange Commission on March 24, 1993). 10(r) Fourth Amendment dated as of July 27, 1995 between the Registrant and the Bank.(1) 10(s) Fifth Amendment dated as of January 29, 1996 between Registrant and the Bank.(1) 10(t) Sixth Amendment dated April 16, 1996 between Registrant and the Bank.(1) 10(u) Security Agreement (Inventory, Receivables and Equipment) dated as of March 16, 1993 between Registrant and Bank (incorporated by reference to Exhibit 10.3 of the Registrant's Current Report on Form 8-K dated March 16, 1993 and filed with the Securities and Exchange Commission on March 24, 1993). 10(v) Secured Note Purchase Agreement dated March 16, 1993 between the Registrant and Alan M. Krause (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K dated March 16, 1993 and filed with the Securities and Exchange Commission on March 24, 1993). 10(w)* Employment Agreement dated January 22, 1990 between the Registrant and Alan M. Krause (incorporated by reference to Exhibit 10(i) of the Registrant's Form 10-K for the fiscal year ended January 31, 1992). 10(x)* Amendment No. 1 dated June 1, 1990 to Employment Agreement between the Registrant and Alan M. Krause (incorporated by reference to Exhibit 10(j) of the Registrant's Form 10-K for the fiscal year ended January 31, 1992). 10(y)* Amendment No. 2 dated June 1, 1991 to Employment Agreement between the Registrant and Alan M. Krause (incorporated by reference to Exhibit 10(k) of the Registrant's Form 10-K for the fiscal year ended January 31, 1992). 10(z)* Amendment No. 3 dated June 1, 1992 to Employment Agreement between the Registrant and Alan M. Krause (incorporated by reference to Exhibit 10(s) of the Registrant's Form 10-K for the fiscal year ended January 31, 1993). 5 8 10(aa)* Amendment No. 4 dated June 1, 1993 to Employment Agreement between the Registrant and Alan M. Krause (incorporated by reference to Exhibit 10(u) of the Registrant's Form 10-K for the fiscal year ended January 31, 1994). 10(bb)* Amendment No. 5 dated June 1, 1994 to Employment Agreement between the Registrant and Alan M. Krause (incorporated by reference to Exhibit 10(x) of the Registrant's Form 10-K for the fiscal year ended January 31, 1995). 10(cc)* Amendment No. 6 dated June 1, 1995 to Employment Agreement between Registrant and Alan M. Krause.(1) 10(dd)* Employment Agreement dated January 22, 1990 between the Registrant and James H. Berick (incorporated by reference to Exhibit 10(l) of the Registrant's Form 10-K for the fiscal year ended January 31, 1992). 10(ee)* Amendment No. 1 dated June 1, 1990 to Employment Agreement between the Registrant and James H. Berick (incorporated by reference to Exhibit 10(m) of the Registrant's Form 10-K for the fiscal year ended January 31, 1992). 10(ff)* Amendment No. 2 dated June 1, 1991 to Employment Agreement between the Registrant and James H. Berick (incorporated by reference to Exhibit 10(n) of the Registrant's Form 10-K for the fiscal year ended January 31, 1992). 10(gg)* Amendment No. 3 dated June 1, 1992 to Employment Agreement between the Registrant and James H. Berick (incorporated by reference to Exhibit 10(w) of the Registrant's Form 10-K for the fiscal year ended January 31, 1993). 10(hh)* Amendment No. 4 dated June 1, 1993 to Employment Agreement between the Registrant and James H. Berick (incorporated by reference to Exhibit 10 (z) of the Registrant's Form 10-K for the fiscal year ended January 31, 1994). 10(ii)* Amendment No. 5 dated June 1, 1994 to Employment Agreement between the Registrant and James H. Berick (incorporated by reference to Exhibit 10(dd) of the Registrant's Form 10-K for the fiscal year ended January 31, 1995). 6 9 10(jj)* Amendment No. 6 dated June 1, 1995 to Employment Agreement between the Registrant and James H. Berick.(1) 13 The Registrant's 1996 Annual Report.(1) 23 Consent of Independent Public Accountants.(1) 24 Powers of Attorney.(1) 27** Financial Data Schedule.(1) 99(a) Notice of Annual Meeting and Proxy Statement dated April 5, 1996 and Supplement to Proxy Statement dated April 11, 1996.(1) 99(b) Financial Statements of Riverview Tower Limited Partnership as at December 31, 1993, 1994 and 1995. 99(c) Financial Statements of Pacific Place Partners, Ltd. as at December 31, 1994 and 1995.(1) *Management contract or compensatory plan or arrangement required to be filed as an exhibit hereto. **Filed only in electronic format pursuant to Item 601(b)(27) of Regulation S-K. (1)Previously filed. 7 EX-99.B 2 EXHIBIT 99(B) 1 EXHIBIT 99(b) RIVERVIEW TOWER LIMITED PARTNERSHIP LIMITED PARTNERSHIP FINANCIAL STATEMENTS As At December 31, 1993 2 RIVERVIEW TOWER LIMITED PARTNERSHIP LIMITED PARTNERSHIP FINANCIAL STATEMENTS As At December 31, 1993 3 RIVERVIEW TOWER LIMITED PARTNERSHIP A LIMITED PARTNERSHIP December 31, 1993 INDEX ----- AUDITORS' REPORT STATEMENT OF ASSETS, LIABILITIES AND EQUITY EXHIBIT A As At December 31, 1993 ANALYSIS OF PARTNERS ' EQUITY SCHEDULE A-1 For The Year Ended December 31, 1993 STATEMENT OF REVENUES AND EXPENSES EXHIBIT B For The Year Ended December 31, 1993 STATEMENT OF CASH FLOWS EXHIBIT C For The Year Ended December 31, 1993 NOTES TO FINANCIAL STATEMENTS EXHIBIT D 4 [MALITZ, WEINSTEIN & RUBIN CO.-LETTERHEAD] February 22, 1994 INDEPENDENT AUDITOR'S REPORT RIVERVIEW TOWER LIMITED PARTNERSHIP A LIMITED PARTNERSHIP We have audited the accompanying statement of assets, liabilities and equity of Riverview Tower Limited Partnership, A Limited Partnership, as of December 31, 1993, and the related statements of partners' equity, revenues and expenses and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Riverview Tower Limited Partnership, A Limited Partnership, as at December 31, 1993, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. /s/ Malitz, Weinstein & Rubin 5 RIVERVIEW TOWER LIMITED PARTNERSHIP A LIMITED PARTNERSHIP STATEMENT Of ASSETS, LIABILITIES AND EQUITY Exhibit A As At December 31, 1993
ASSETS ------ Cash $ 9,162. Accounts Receivable 506. Escrow Receivable 159,722. Prepaid Expenses 22,916. Property and Equipment 16,705,077. Less: Accumulated Depreciation and Amortization (3,664,018.) ------------- TOTAL ASSETS $13,233,365. =========== LIABILITIES AND PARTNERS' EQUITY -------------------------------- LIABILITIES Accounts Payable $ 2,092,044. Accrued Interest and Real Estate Taxes 406,374. Mortgage Payable 13,758,615. ----------- Total Liabilities $ 16,257,033. PARTNERS' EQUITY - SCHEDULE A-1 (3,023,668.) ------------ TOTAL LIABILITIES AND PARTNERS' EQUITY $ 13,233,365. ============
6 RIVERVIEW TOWER LIMITED PARTNERSHIP A LIMITED PARTNERSHIP ANALYSIS OF PARTNERS' EQUITY Schedule A-1 For The Year Ended December 31, 1993
BALANCE NET BALANCE BEGINNING LOSS ENDING --------- ---- ------ GENERAL PARTNERS $ (348,521.) $ (54,662.) $ (403,183.) LIMITED PARTNERS (2,265,207.) (355,278.) (2,620,485.) ------------- ----------- ------------ TOTALS $(2,613,728.) $(409,940.) $(3,023,668.) ============= =========== ===========
7 RIVERVIEW TOWER LIMITED PARTNERSHIP A LIMITED PARTNERSHIP STATEMENT OF REVENUES AND EXPENSES Exhibit B For The Year Ended December 31, 1993
INCOME Rentals $ 2,177,816. Excess Operating and Tax Charges 1,164,161. Garage 321,682. Antenna 128,301. ------------ Total Income $ 3,791,960. OPERATING EXPENSES Custodial and Manager $ 264,383. Depreciation and Amortization 438,452. Elevator Maintenance 112,372. Insurance 70,304. Interest Expense 1,214,005. Management Fees 230,689. Office Expense 66,011. Professional Fees 42,472. Repairs and Maintenance 630,005. Supplies (17,382.) Taxes - Real Estate 258,343. Taxes - Other 3,430. Travel 570. Utilities 881,481. General Expenses 6,765. ----------- Total Operating Expenses 4,201,900. ------------ NET LOSS $ (409,940.) ============
8 RIVERVIEW TOWER LIMITED PARTNERSHIP A LIMITED PARTNERSHIP STATEMENT OF CASH FLOWS Exhibit C For The Year Ended December 31, 1993
CASH GENERATED BY OPERATIONS: Net Loss $ (409,940.) Depreciation Amortization 438,452. --------------- Total $ 28,512. CHANGES IN OPERATING ASSETS AND LIABILITIES: Current Assets - (Increase) Decrease Receivables $ (8,132.) Prepaids (1,601.) Current Liabilities - Increase (Decrease) Accounts Payable 349,747. Accrued Expenses and Taxes (42,860.) --------------- Total 297,154. ---------- NET CASH PROVIDED BY OPERATIONS $ 325,666. INVESTING ACTIVITIES -0- FINANCING ACTIVITIES Decrease In Debt (325,666.) ---------- INCREASE (DECREASE) IN CASH $ -0- CASH BALANCE - BEGINNING 9,162. ---------- CASH BALANCE - ENDING $ 9,162. ---------- SUPPLEMENTAL DISCLOSURE Cash Paid During The Year For Interest $ 1,214,005. ============
9 RIVERVIEW TOWER LIMITED PARTNERSHIP A LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS Exhibit D NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES - ------------------------------------------ ACCOUNTING METHOD ----------------- The Partnership keeps its records and prepares its financial statements on the accrual basis. Property and Equipment ---------------------- The fixed assets are recorded at cost and are being depreciated as follows: Buildings 40 Years Straight-Line Building Improvements 40 Years Straight-Line Equipment and Improvements 10 Years Straight-Line NOTE 2 - TRANSACTIONS WITH RELATED PARTY - ---------------------------------------- The property, which is located in Toledo, Ohio is managed by the Mid America Management Corporation. Accounts payable in the amount of $1,890,218. are due to the management company. NOTE 3 - MORTGAGE PAYABLE - ------------------------- The land and buildings owned by the Company are encumbered by mortgages securing two notes; one to New York Life Insurance (due in 1999) and the other to Realty Refund Trust (due in 1994). One of the limited partners of the partnership is also Chairman of the Board of Realty Refund Trust. The Company has a fixed monthly payment of $128,362. To the extent that this amount will not satisfy the New York Life monthly payment and interest on the Realty Refund note, the shortfall will be added to the Realty Refund note. 10 RIVERVIEW TOWER LIMITED PARTNERSHIP LIMITED PARTNERSHIP FINANCIAL STATEMENTS As At December 31, 1994 11 MALITZ, WEINSTEIN & RUBIN CO. RIVERVIEW TOWER LIMITED PARTNERSHIP A LIMITED PARTNERSHIP December 31, 1994 INDEX ----- AUDITORS' REPORT BALANCE SHEET EXHIBIT A As At December 31, 1994 ANALYSIS OF PARTNERS' EQUITY SCHEDULE A-1 For The Year Ended December 31, 1994 STATEMENT OF OPERATIONS EXHIBIT B For The Year Ended December 31, 1994 STATEMENT OF CHANGES IN CASH POSITION EXHIBIT C For The Year Ended December 31, 1994 NOTES TO FINANCIAL STATEMENTS EXHIBIT D SCHEDULE OF PROPERTY AND EQUIPMENT EXHIBIT E For The Years Ended December 31, 1992, 1993 and 1994 SCHEDULE OF ACCUMULATED DEPRECIATION AND AMORTIZATION EXHIBIT F OF PROPERTY AND EQUIPMENT For The Years Ended December 31, 1992, 1993 and 1994 12 [MALITZ, WEINSTEIN & RUBIN C0.- LETTERHEAD] CERTIFIED PUBLIC ACCOUNTANTS 3690 ORANGE PLACE - SUITE 250 CLEVELAND, OHIO 44122-4422 TELEPHONE (216)464-9560 TELECOPIER (216) 464-2887 February 24, 1995 INDEPENDENT AUDITOR'S REPORT RIVERVIEW TOWER LIMITED PARTNERSHIP A LIMITED PARTNERSHIP We have audited the accompanying balance sheet of Riverview Tower Limited Partnership, A Limited Partnership, as of December 31, 1994, and the related statements of partners' equity, operations and changes in cash position for the year then ended. These financial statements and the schedules referred to below are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedules based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our Opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Riverview Tower Limited Partnership, A Limited Partnership, as at December 31, 1994, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. Our audit was made for the purpose of forming an opinion on the basic financial statements taken as a whole. The information contained in Exhibits E and F is presented for purposes of additional analysis and is not a required part of the basic financial statements. This information has been subjected to the auditing procedures applied in our audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ Malitz, Weinstein & Rubin Co. 13 RIVERVIEW TOWER LIMITED PARTNERSHIP A LIMITED PARTNERSHIP BALANCE SHEET Exhibit A As At December 31, 1994
ASSETS ------ Cash $ 150. Accounts Receivable 183. Escrow Receivable 163,377. Prepaid Expenses 24,248. Property and Equipment 16,705,077. Less: Accumulated Depreciation and Amortization (4,102,470.) ------------ TOTAL ASSETS $12,790,565. =========== LIABILITIES AND PARTNERS' EQUITY -------------------------------- LIABILITIES Accounts Payable $ 320,001. Accrued Interest and Real Estate Taxes 360,280. Security Deposits 2,482. Mortgage Payable 11,937,438. ------------- Total Liabilities $12,620,201. PARTNERS' EQUITY - SCHEDULE A-1 170,364. ----------- TOTAL LIABILITIES AND PARTNERS' EQUITY $12,790.565. ===========
14 RIVERVIEW TOWER LIMITED PARTNERSHIP A LIMITED PARTNERSHIP ANALYSIS OF PARTNERS' EQUITY Schedule A-1 For The Year Ended December 31, 1994
BALANCE NET BALANCE BEGINNING INCOME ENDING --------- ------ -------- GENERAL PARTNERS $ (403,183.) $ 283,918. $ (119,265.) LIMITED PARTNERS (2,620,485.) 2,910,114. 289,629. ------------ ----------- ----------- TOTALS $(3,023,668.) $ 3,194,032. $170,364. ============ =========== ===========
15 RIVERVIEW T0WER LIMITED PARTNERSHIP A LIMITED PARTNERSHIP STATEMENT OF OPERATIONS Exhibit B For The Year Ended December 31, 1994
INCOME Rentals $ 4,314,541. Excess Operating and Tax Charges 2,656,961. Garage 382,448. Antenna 142,841. ----------- Total Income $ 7,496,791. OPERATING EXPENSES Custodial and Manager $ 302,628. Depreciation and Amortization 438,452. Elevator Maintenance 114,630. Insurance 71,410. Interest Expense 1,140,730. Management Fees 120,000. Office Expense 67,249. Professional Fees 43,406. Repairs and Maintenance 900,374. Supplies (29,272.) Taxes - Real Estate 271,360. Taxes - Other 2,659. Travel 155. Utilities 854,087. General Expenses 4,891. ----------- Total Operating Expenses 4,302,759. ---------- NET INCOME $3,194,032. ==========
16 RIVERVIEW TOWER LIMITED PARTNERSHIP A LIMITED PARTNERSHIP STATEMENT OF CHANGES IN CASH POSITION Exhibit C For The Year Ended December 31, 1994
CASH GENERATED BY OPERATIONS: Net Income $ 3,194,032. Depreciation Amortization 438,452. ------------- Total $ 3,632,484. CHANGES IN OPERATING ASSETS AND LIABILITIES: Current Assets - (Increase) Decrease Receivables $ 323. Prepaids and Escrows (4,987.) Current Liabilities - Increase (Decrease) Accounts Payable (1,772,043.) Security Deposits 2,482. Accrued Expenses and Taxes (46,094.) ------------ Total (1,820,319.) ------------ NET CASH PROVIDED BY OPERATIONS $ 1,812,165. INVESTING ACTIVITIES -0- FINANCING ACTIVITIES Decrease In Debt (1,821,177.) ------------- INCREASE (DECREASE) IN CASH $ (9,012.) CASH BALANCE - BEGINNING 9,162. ------------- CASH BALANCE - ENDING $ 150. ------------- SUPPLEMENTAL DISCLOSURE Cash Paid During The Year For Interest $ 1,112,312. =============
17 RIVERVIEW TOWER LIMITED PARTNERSHIP A LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS Exhibit D NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES - ---------------------------------------- Accounting Method ----------------- The Partnership keeps its records and prepares its financial statements on the accrual basis. Property and Equipment ---------------------- The fixed assets are recorded at cost and are being depreciated as follows: Buildings 40 Years Straight-Line Building Improvements 40 Years Straight-Line Equipment and Improvements 10 Years Straight-Line NOTE 2 - TRANSACTIONS WITH RELATED PARTY - ---------------------------------------- The property, which is located in Toledo, Ohio is managed by the Mid America Management Corporation. Accounts Payable in the amount of $137,244. are due to the management company. 18 RIVERVIEW TOWER LIMITED PARTNERSHIP A LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS Exhibit D (Continued) NOTE 3 - MORTGAGE PAYABLE - ------------------------- The land and buildings owned by the Company are encumbered by mortgages securing two notes; one to New York Life Insurance (due in 1999) and the other to Realty Refund Trust (due in 1996). One of the limited partners of the partnership is also Chairman of the Board of Realty Refund Trust. The Company has a fixed monthly principal and interest payment of $74,195. on the first mortgage plus an interest only payment on the Realty Refund note at 10% per annum. In addition, the Company has agreed to pay $850,000. against the outstanding amount due on January 1, 1995 and January 1, 1996. The Company has also agreed to deposit with Realty Refund Trust in escrow all excess cash flow. The funds will be made available for tenant improvements or third party leasing commissions. The amount due for 1994 is $304,291. NOTE 4 - LEASE AMENDMENT AND EXTENSION - -------------------------------------- On June 2, 1994, the Company modified its lease with Owens-Corning Fiberglass Corporation as follows: The tenant has extended its lease to December 31, 1996 and agreed to a lease extension fee of $5,000,000. payable June, 1994, January, 1995 and January, 1996. There were also modifications of lease and operating expense payment terms. 19 RIVERVIEW TOWER LIMITED PARTNERSHIP A LIMITED PARTNERSHIP SCHEDULE OF PROPERTY AND EQUIPMENT Exhibit E For The Years Ended December 31, 1992, 1993 and 1994 1992 ----
BALANCE AT BEGINNING ADDITIONS BALANCE AT END OF PERIOD AT COST RETIREMENTS OF PERIOD ------------ --------- ----------- ------------- Building $13,771,320. $ 13,771,320. Building Improvements 1,473,220. 1,473,220. Equipment 551,143. 551,143. Land 887,000. 887,000. ----------- ----------- --------- ------------- Total $16,682,683. $ -0- $ -0- $ 16,682,683. =========== =========== ========= ============= 1993 ---- Building $13,771,320. $ 13,771,320. Building Improvements 1,473,220. 1,473,220. Equipment 551,143. $ 22,394. 573,537. Land 887,000. 887,000. ----------- ----------- --------- ------------- Total $ 16,682,683. $ 22,394. $ -0- $ 16,705,077. =========== =========== ========= ============= 1994 ---- Building $13,771,320. $ 13,771,320. Building Improvements 1,473,220. 1,473,220. Equipment 573,537. 573,537. Land 887,000. 887,000. ----------- ----------- --------- ------------- Total $16,705,077. $ -0- $ -0- $ 16.705.077. =========== =========== ========= =============
20 RIVERVIEW TOWER LIMITED PARTNERSHIP A LIMITED PARTNERSHIP SCHEDULE OF ACCUMULATED DEPRECIATION AND AMORTIZATION Exhibit F OF PROPERTY AND EQUIPMENT For The Years Ended December 31, 1992, 1993 and 1994
1992 ---- BALANCE ADDITIONS AT BEGINNING CHARGED TO BALANCE AT END PERIOD COSTS & EXPENSES RETIREMENTS OF PERIOD ------ ---------------- ----------- --------- Building $ 2,233,494. $ 344,283. $ 2,567,777. Building Improvements 231,217. 36,816. 268,033. Equipment 333,522. 56,234. 389,756. ----------- ---------- ------------ ----------- Total $ 2,798,233. $ 437,333. $ -0- $ 3,225,566. ============ ========== ============ =========== 1993 ---- Building $ 2,567,777. $ 344,283. $ 2,912,060. Building Improvements 268,033. 36,816. 304,849. Equipment 389,756. 57,353. 447,109. ----------- ---------- ------------ ----------- Total $ 3,225,566. $ 438,452. $ -0- $ 3,664,018. =========== ========== ============ =========== 1994 ---- Building $ 2,912,060. $ 344,283. $ 3,256,343. Building Improvements 304,849. 36,816. 341,665. Equipment 447,109. 57,353. 504,462. ----------- ---------- ------------ ----------- Total $ 3,664,018. $ 438,452. $ -0- $ 4,102,470. ============ ========== ============ ===========
21 THE RIVERVIEW TOWER LIMITED PARTNERSHIP FINANCIAL REPORT DECEMBER 31, 1995 22 THE RIVERVIEW TOWER LIMITED PARTNERSHIP CONTENTS - -------------------------------------------------------------------------------- Page ---- AUDITORS' REPORT ON THE FINANCIAL STATEMENTS 1 FINANCIAL STATEMENTS Balance sheet 2 Statement of income 3 Statement of partners' equity 4 Statement of cash flows 5 Notes to financial statements 6-7 AUDITORS' REPORT ON ACCOMPANYING INFORMATION 8 ACCOMPANYING INFORMATION Schedules of property and equipment 9 Schedules of accumulated depreciation and amortization of property and equipment 10 23 To the Partners The Riverview Tower Limited Partnership Cleveland, Ohio Independent Auditors' Report ---------------------------- We have audited the accompanying balance sheet of The Riverview Tower Limited Partnership as of December 31, 1995, and the related statements of income, partners' equity, and cash flows for the year then ended. These financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Riverview Tower Limited Partnership as of December 31, 1995, and the results of its operations and cash flows for the year then ended, in conformity with generally accepted accounting principles. /s/ Hausser & Taylor Cleveland, Ohio February 23, 1996 -1- 24 THE RIVERVIEW TOWER LIMITED PARTNERSHIP BALANCE SHEET December 31, 1995 -----------------
ASSETS - ------ RENTAL PROPERTY Land $ 887,000 Building and improvements 15,264,693 Equipment 598,257 ----------- Total 16,749,950 Less accumulated depreciation 4,518,193 ----------- Net rental property $12,231,757 OTHER ASSETS Cash 150 Accounts receivable 44,533 Prepaid expenses 22,846 Real estate escrow 149,017 Capital reserve escrow 214,291 ----------- Total other assets 430,837 ----------- $12,662,594 =========== LIABILITIES AND PARTNERS' EQUITY - -------------------------------- LIABILITIES Accounts payable $ 148,316 Accrued interest and real estate taxes 365,075 Security deposits 2,482 Mortgage notes payable 10,413,780 ----------- Total liabilities $10,929,653 PARTNERS' EQUITY 1,732,941 ----------- $12,662,594 ===========
The accompanying notes are an integral part of these financial statements. -2- 25 THE RIVERVIEW TOWER LIMITED PARTNERSHIP STATEMENT OF INCOME Year Ended December 31, 1995 ----------------------------
INCOME Rental income $ 3,631,044 Garage 390,413 Antenna 154,855 Excess operating and other pass through charges 1,925,473 ------------ Total income $ 6,101,785 EXPENSES Custodial and manager expenses 180,286 Depreciation and amortization 415,723 Elevator maintenance 123,746 Insurance 70,302 Interest expense 944,283 Management fees 120,000 Office expense and miscellaneous 128,220 Office salaries 55,132 Professional fees 34,623 Repairs and maintenance 743,561 Security expense 22,419 Sellers' fee 90,000 Supplies 36,462 Taxes - payroll 15,726 Taxes - personal property 2,427 Taxes - real estate 286,871 Travel 1,696 Utilities 1,267,731 ------------ Total expenses 4,539,208 ------------- NET INCOME $ 1,562,577 =============
The accompanying notes are an integral part of these financial statements. -3- 26 THE RIVERVIEW TOWER LIMITED PARTNERSHIP STATEMENT OF PARTNERS' EQUITY Year Ended December 31, 1995 ----------------------------
Balance Net Balance Beginning Income Distributions Ending --------- ------ ------------- ------ GENERAL PARTNERS $ (119,265) $ 208,344 $ - $ 89,079 LIMITED PARTNERS 289,629 1,354,233 - 1,643,862 ------------ ------------ ------------ ------------- TOTAL $ 170,364 $ 1,562,577 $ - $ 1,732,941 ============ ============ ============ =============
The accompanying notes are an integral part of these financial statements. -4- 27 THE RIVERVIEW TOWER LIMITED PARTNERSHIP STATEMENT OF CASH FLOWS Year Ended December 31, 1995 ----------------------------
CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 1,562,577 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization $ 415,723 Changes in assets and liabilities: Increase in accounts receivable (44,350) Decrease in prepaid expenses 1,402 Decrease in escrow receivables (199,931) Decrease in accounts payable (171,685) Increase in accrued interest and taxes 4,795 ---------- Total adjustments 5,954 ----------- Net cash provided by operating activities 1,568,531 CASH FLOWS FROM INVESTING ACTIVITIES Building improvements and equipment purchases (44,873) CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on long-term debt (1,523,658) ----------- NET CHANGE IN CASH CASH - BEGINNING OF YEAR 150 ----------- CASH - END OF YEAR $ 150 =========== Supplemental disclosure of cash flow information: Cash paid during the year for: Interest $ 944,283
The accompanying notes are an integral part of these inancial statements. -5- 28 THE RIVERVIEW TOWER LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS NOTE 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Purpose - The Riverview Tower Limited Partnership is an Ohio limited partnership formed for the purpose of owning, leasing and operating an office building in Toledo, Ohio. The Partnership commenced operations on July 26, 1985. B. Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. C. Concentration Account - An affiliate of the general partner utilizes a concentration account for the various properties it manages. In this way excess cash for all properties may be invested on a short term basis and cash disbursements made on behalf of each separate partnership are funded when necessary. D. Property and Improvements - The building and related improvements are being depreciated on straight-line or accelerated cost recovery methods over periods dictated by statutory requirements. E. Income Taxes - No provision for income taxes is necessary because any income or loss is includible in the tax returns of the partners. NOTE 2. MORTGAGE NOTES PAYABLE The land and building owned by the Partnership are encumbered by mortgages securing two notes; one to New York Life Insurance (due in 1999) and the other to Realty Refund Trust (due in 1996). One of the limited partners of the Partnership is also Chairman of the Board of Realty Refund Trust. The Partnership has a fixed monthly principal and interest (at 6.05%) payment of $74,195 on the first mortgage plus an interest only payment on the Realty Refund note at 10% per annum. In addition, the Partnership has agreed to pay $850,000 against the outstanding amount due on January 1, 1996. Principal payments on the mortgage notes payable as of December 31, 1995 are as follows:
1996 $ 7,854,792 1997 756,263 1998 803,308 1999 999,417 ---------------- Total $ 10,413,780 ================
The fair value of the Partnership's long-term debt is estimated based on borrowing rates currently available to the Partnership for bank loans with similar terms and maturities and approximates the carrying value. -6- 29 THE RIVERVIEW TOWER LIMITED PARTNERSHIP NOTES TO FINANCIAL STATEMENTS (CONTINUED) NOTE 3. TRANSACTIONS WITH RELATED PARTY The property is managed by the Mid-America Management Corporation. Accounts receivable in the amount of $41,405 are due from the management company. The Partnership is obligated to pay a management fee to Mid-America Management Corporation for certain services with respect to the operations of the Partnership. The amount of the fee included in expense for the year ended December 31, 1995 is $120,000. NOTE 4. OPERATING LEASES The Partnership's operating revenue is principally obtained from tenants through rental payments as provided for under noncancelable operating leases. The tenant leases typically provide for fixed minimum rent and reimbursement of real estate taxes and operating costs. The following is a schedule of minimum future rentals on noncancelable operating leases as of December 31, 1995 for the next five years:
1996 $ 2,418,850 1997 137,660 1998 42,700 1999 19,540 2000 19,200 --------------- Total $ 2,637,950 ===============
NOTE 5. LEASE AMENDMENT AND EXTENSION On June 2, 1994, the Partnership modified its lease with Owens-Corning Fiberglas Corporation as follows: The tenant has extended its lease to December 31, 1996 and agreed to a lease extension fee of $5,000,000 payable as follows:
June 1994 $ 2,000,000 January 1995 1,500,000 January 1996 1,500,000 --------------- Total $ 5,000,000 ===============
There were also modifications of lease and operating expense payment terms. NOTE 6. SUBSEQUENT EVENTS The Partnership's principal tenant has not renewed its lease and is expected to vacate the premises during 1996. The Partnership has listed the building with a broker and is attempting to dispose of the property. -7- 30 [HAUSSER & TAYLOR LETTERHEAD] Partners The Riverview Tower Limited Partnership Cleveland, Ohio Our audit was made for the purpose of forming an opinion of the basic financial statements for the year ended December 31, 1995, taken as a whole. The accompanying information is presented for purposes of additional analysis and is not a required part of the basic financial statements. The information has been subjected to the auditing procedures applied in our audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. The supplemental information for 1994 and 1993 which follows was audited by other accountants whose report dated February 25, 1995, indicated that the supplemental information is fairly stated in all material respects. /s/ Hausser & Taylor Cleveland, Ohio February 23, 1996 -8- 31 THE RIVERVIEW TOWER LIMITED PARTNERSHIP SCHEDULES OF PROPERTY AND EQUIPMENT Years Ended December 31, 1995, 1994, and 1993 ---------------------------------------------
1995 -------------------------------------------------------------------------- Balance At Beginning Additions Balance At of Period At Cost Retirements End of Period --------- ------- ----------- ------------- Building $ 13,771,320 $ 13,771,320 Building improvements 1,473,220 $ 20,152 1,493,372 Equipment 573,537 24,721 598,258 Land 887,000 887,000 ------------- -------- ---------- ------------- Total $ 16,705,077 $ 44,873 $ - $ 16,749,950 ============= ======== ========== ============= 1994 -------------------------------------------------------------------------- Building $ 13,771,320 $ 13,771,320 Building improvements 1,473,220 1,473,220 Equipment 573,537 573,537 Land 887,000 887,000 ------------- -------- ---------- ------------- Total $ 16,705,077 $ - $ - $ 16,705,077 ============= ======== ========== ============= 1993 -------------------------------------------------------------------------- Building $ 13,771,320 $ 13,771,320 Building improvements 1,473,220 1,473,220 Equipment 551,143 $ 22,394 573,537 Land 887,000 887,000 ------------- -------- ---------- ------------- Total $ 16,682,683 $ 22,394 $ - $ 16,705,077 ============= ======== ========== =============
-9- 32 THE RIVERVIEW TOWER LIMITED PARTNERSHIP SCHEDULES OF ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY AND EQUIPMENT Years Ended December 31, 1995, 1994, and 1993 ---------------------------------------------
1995 ----------------------------------------------------------------- Additions Balance Charged To At Beginning Costs and Balance At of Period Expenses Retirements End of Period --------- -------- ----------- ------------- Building $ 3,256,343 $ 344,283 $ 3,600,626 Building improvements 341,665 37,320 378,985 Equipment 504,462 34,120 538,582 ------------- ------------ ------------ ------------- Total $ 4,102,470 $ 415,723 $ - $ 4,518,193 ============= ============ ============ ============= 1994 ----------------------------------------------------------------- Building $ 2,912,060 $ 344,283 $ 3,256,343 Building improvements 304,849 36,816 341,665 Equipment 447,109 57,353 504,462 ------------- ------------ ------------ ------------- Total $ 3,664,018 $ 438,452 $ - $ 4,102,470 ============= ============ ============ ============= 1993 ----------------------------------------------------------------- Building $ 2,567,777 $ 344,283 $ 2,912,060 Building improvements 268,033 36,816 304,849 Equipment 389,756 57,353 447,109 ------------- ------------ ------------ ------------- Total $ 3,225,566 $ 438,452 $ - $ 3,664,018 ============= ============ ============ =============
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