Exhibit (c)(i)
MRI BUSINESS PROPERTIES FUND, LTD. III
NOTE 2 TO
CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED SEPTEMBER 30, 1994
2. TRANSACTIONS WITH THE GENERAL PARTNER AND AFFILIATES
In accordance with the Partnership Agreement, the Partnership may be
charged by the general partner and affiliates for services provided to
the Partnership. From March 1988 to December 1992 such amounts were
assigned pursuant to a services agreement by the general partner and
affiliates to Metric Realty Services, L.P. ("MRS"), which performed
partnership management and other services for the Partnership. On
January 1, 1993, Metric Management, Inc., predecessor to MRS, a company
which is not affiliated with the general partner, commenced providing
certain property and portfolio management services to the Partnership
under a new services agreement. As provided in the new services
agreement effective January 1, 1993, no reimbursements were made to the
general partner and affiliates after December 31, 1992. Subsequent to
December 31, 1992, reimbursements were made to Metric Management, Inc.
On December 16, 1993, the service agreement with Metric Management, Inc.
was modified and, as a result thereof, the Partnership's general
partner assumed responsibility for various partnership services between
December 23, 1993 and April 1, 1994. Related party expenses for the
years ended September 30, 1994, 1993 and 1992 are as follows:
1994 1993 1992
-------- -------- --------
Reimbursement of expenses:
Partnership accounting and
investor services $102,000 $52,000 $218,000
Professional services 12,000 11,000 44,000
-------- ------- --------
Total $114,000 $63,000 $262,000
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In accordance with the Partnership Agreement, the general partner
receives cash distributions as follows: (1) a Partnership management
incentive equal to an allocation of ten percent determined on a
cumulative, noncompounded basis, of cash available for distribution (as
defined in the Partnership Agreement) which is distributed to partners,
and (2) a continuing interest representing two percent of cash available
for distribution distributed to partners remaining after the allocation
of the Partnership management incentive. Subsequent to December 31,
1986, the Partnership management incentive is subordinated to certain
cash distributions to the unit holders. There were no cash
distributions to the general partner for the years ended September 30,
1994, 1993 and 1992.
In accordance with the Partnership Agreement, the general partner is
entitled to receive an allocation of net income (loss) and taxable
income (loss) of two percent.