Exhibit (c)(i)
MRI BUSINESS PROPERTIES FUND, LTD. II
NOTE 2 TO
CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED SEPTEMBER 30, 1994, 1993 AND 1992
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 services were
assigned pursuant to a services agreement by the general partner and
affiliates to Metric Realty Services, L.P., which performed partnership
management and other services for the Partnership. On January 1, 1993,
Metric Management, Inc., 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 services
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
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Reimbursement of expenses:
Partnership accounting and
investor services $76,000 $39,000 $160,000
Professional services 11,000 7,000 30,000
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Total $87,000 $46,000 $190,000
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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 ten percent, determined on a cumulative
non-compounded basis of cash available for distribution (as defined in
the Partnership Agreement) distributed to partners, and (2) a continuing
interest representing a two percent share of cash available for
distribution distributed to partners remaining after the allocation of
the Partnership management incentive. The Partnership management
incentive is subordinated to certain cash distributions to the limited
partners. 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 was
also allocated its continuing interest representing a two percent share
of the Partnership's net income (loss) and taxable income (loss).