United States
SECURITIES AND EXCHANGE COMMISSION
Washington DC 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section
13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended March 31, 1999
-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 333-63723-07
RRC OPERATING PARTNERSHIP OF GEORGIA, L.P.
(Exact name of registrant as specified in its charter)
Georgia 59-33363127
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
121 West Forsyth Street, Suite 200
Jacksonville, Florida 32202
(Address of principal executive offices) (Zip Code)
(904) 356-7000
(Registrant's telephone number, including area code)
Unchanged
(Former name, former address and former fiscal year,
if changed since last report)
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[ ]
<PAGE>
RRC OPERATING PARTNERSHIP OF GEORGIA, L.P.
Balance Sheets
March 31, 1999 and December 31, 1998
(unaudited)
1999 1998
----------- ----------
Assets
Cash restricted for tenants' security deposits $ 21,441 21,441
Property and buildings, at cost
Land 1,123,200 1,123,200
Buildings and improvements 4,498,921 4,426,662
----------- ----------
5,622,121 5,549,862
Less accumulated depreciation 347,631 319,124
----------- ----------
Net property and buildings 5,274,490 5,230,738
----------- ----------
Other assets:
Accounts receivable and other assets 21,357 33,782
Deferred leasing costs, less accumulated
amortization 23,786 24,952
----------- ----------
Total other assets 45,143 58,734
----------- ----------
$ 5,341,074 5,310,913
=========== ==========
Liabilities and Partners' Capital
Liabilities:
Notes payable (note 2) 3,484,916 3,484,916
Accounts payable and other liabilities 553,307 345,675
Tenants' security deposits 21,441 21,441
----------- ----------
Total liabilities 4,059,664 3,852,032
Partners' capital (note 3) 1,281,410 1,458,881
----------- ----------
$ 5,341,074 5,310,913
=========== ==========
See accompanying notes to financial statements.
<PAGE>
RRC OPERATING PARTNERSHIP OF GEORGIA, L.P.
Statements of Operations
For the Three Months Ended March 31, 1999 and 1998
(unaudited)
1999 1998
------------ ------------
Revenues:
Rental income $ 174,005 165,644
Tenant reimbursements and other income 33,909 30,790
------------ ------------
Total revenues 207,914 196,434
------------ ------------
Expenses:
Depreciation and amortization 30,476 28,973
General and administrative 30,129 22,831
Real estate taxes 15,471 15,471
Interest 55,364 54,824
------------ ------------
Total expenses 131,440 122,099
------------ ------------
Net income $ 76,474 74,335
============ ============
See accompanying notes to financial statements.
<PAGE>
RRC OPERATING PARTNERSHIP OF GEORGIA, L.P.
Statements of Cash Flows
For the Three Months ended March 31, 1999 and 1998
(unaudited)
1999 1998
----------- -----------
Cash flows from operating activities:
Net income $76,474 74,335
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 30,476 28,973
Deferred leasing costs (803) (17,925)
Changes in assets and liabilities:
Accounts receivable and other assets 12,425 22,295
Accounts payable and other liabilities 207,632 72,143
Cash restricted for tenants security
deposits -- (6,794)
Tenants' security deposits -- 6,794
----------- -----------
Net cash provided by
operating activities 326,204 179,821
----------- -----------
Cash flows from investing activities -
additions to property and buildings (72,259) --
----------- -----------
Cash flows from financing activities:
Net contributions (distributions) (253,945) (179,821)
----------- -----------
Net cash used in financing activities (253,945) (179,821)
----------- -----------
Net change in cash -- --
Cash at beginning of year -- --
----------- -----------
Cash at end of year $ -- --
============ ===========
See accompanying notes to financial statements.
<PAGE>
RRC OPERATING PARTNERSHIP OF GEORGIA, L.P.
Notes to Consolidated Financial Statements
March 31, 1999
(unaudited)
1. Organization and Principles of Consolidation
RRC Operating Partnership of Georgia, L.P. (the Partnership) was formed
on February 22, 1996 as a Georgia limited partnership for the purpose
of acquiring, leasing and operating Parkway Station Shopping Center, a
94,290 square foot shopping center located in Warner-Robins, Georgia.
The Partnership interest is held 16% by Regency Centers, L.P., a
Delaware partnership (RCLP), as general partner, and 84% by various
individuals (Limited Partners). The Partnership will terminate on
December 31, 2050 or earlier upon the occurrence of certain events
specified in the Partnership agreement.
The Financial Statements reflect all adjustments which are of a normal
recurring nature, and in the opinion of management, are necessary to
properly state the results of operations and financial position.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted, although
management believes that the disclosures are adequate to make the
information presented not misleading. The Financial Statements should
be read in conjunction with the financial statements and notes thereto
included in the Partnership's December 31, 1998 Form 10-K filed with
the Securities and Exchange Commission.
2. Notes Payable and Unsecured Line of Credit
The Partnership has two notes payable to RCLP, which total $3,484,916
at March 31, 1999 and December 31, 1998. The notes provide for payment
of interest only annually at 6.73%, and are due in full August 28,
2012.
3. Partners' Capital
The Partnership Agreement provides, among other provisions, that (1)
100% of the net income shall be allocated to RCLP, (2) RCLP has
complete discretion as to the operations of Parkway Station Shopping
Center, and to its ultimate disposal, and (3) the Limited Partners
receive distributions in an amount equal to the dividends paid to
RCLP's parent company's (Regency Realty Corporation) stockholders.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following discussion should be read in conjunction with the accompanying
Consolidated Financial Statements and Notes thereto of RRC Operating Partnership
of Georgia, L.P. (the "Partnership") appearing elsewhere in this Form 10-Q, and
with the Partnership's Form 10-K as of December 31, 1998.
Organization
The Partnership was formed on February 22, 1996 as a Georgia limited partnership
for the purpose of acquiring, leasing and operating Parkway Station Shopping
Center, a 94,290 square foot shopping center located in Warner-Robins, Georgia.
The Partnership interest is held 16% by Regency Centers, L.P., a Delaware
partnership (RCLP), as general partner, and 84% by various individuals (Limited
Partners). The Partnership will terminate on December 31, 2050 or earlier upon
the occurrence of certain events specified in the Partnership agreement.
Liquidity and Capital Resources
Management anticipates that cash generated from operating activities will
provide the necessary funds on a short-term basis for its operating expenses and
recurring capital expenditures necessary to properly maintain the shopping
center.
Management expects to meet long-term liquidity requirements from excess cash
generated from operating activities or advances from RCLP, the general partner.
The Partnership expects that cash provided by operating activities and from RCLP
are adequate to meet liquidity requirements.
Results from Operations
Comparison of the Three Months Ended March 31, 1999 to 1998
Revenues increased $11,480 or 6% to $207,914 in 1999. The increase was due
primarily to the increase in occupancy percentage from 92.9% to 94.5% at March
31, 1999.
Total expenses increased $9,341 or 8% to $131,440 in 1999. Such expenses
increase directly with the fluctuations in occupancy as described above.
Net income was $76,474 in 1999 vs. $74,335 in 1998, a $2,139 or 3% increase for
the reasons previously described.
Inflation
Inflation has remained relatively low during 1999 and 1998 and has had a minimal
impact on the operating performance of the shopping center, however,
substantially all of the Partnership's long-term leases contain provisions
designed to mitigate the adverse impact of inflation. Such provisions include
clauses enabling the Partnership to receive percentage rentals based on tenants'
gross sales, which generally increase as prices rise, and/or escalation clauses,
which generally increase rental rates during the terms of the leases. Such
escalation clauses are often related to increases in the consumer price index or
similar inflation indices. In addition, many of the Partnership's leases are for
terms of less than ten years, which permits the Partnership to seek increased
rents upon re-rental at market rates. Most of the Partnership's leases require
the tenants to pay their share of operating expenses, including common area
maintenance, real estate taxes, insurance and utilities, thereby reducing the
Partnership's exposure to increases in costs and operating expenses resulting
from inflation.
Year 2000 System Compliance
The general accounting and property management of the Partnership are handled by
RCLP's systems and applications. RCLP's management recognizes the potential
effect Year 2000 may have on the operations and, as a result, RCLP has
implemented a Year 2000 Compliance Project. The term "Year 2000 compliant" means
that the software, hardware, equipment, goods or systems utilized by, or
material to the physical operations, business operations, or financial reporting
of an entity will properly perform date sensitive functions before, during and
after the year 2000.
RCLP's Year 2000 Compliance Project includes an awareness phase, an assessment
phase, a renovation phase, and a testing phase of our data processing network,
accounting and property management systems, computer and operating systems,
software packages, and building management systems. The project also includes
surveying major tenants and financial institutions.
RCLP's computer hardware, operating systems, general accounting and property
management systems and principal desktop software applications are Year 2000
compliant as certified by the various vendors. RCLP is currently testing these
systems, and expects to complete the testing phase by June 30, 1999.
Based on initial testing, RCLP's management does not anticipate any Year 2000
issues that will materially impact the Partnership's operations or operating
results and has represented to the Partnership that such systems are used to
manage its property.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Market Risk
The Partnership is not exposed to market risk since its only debt is fixed rate
and is not a party to market risk sensitive instruments, nor has it been a party
to market risk sensitive instruments during the reporting period or the
preceding fiscal year.
<PAGE>
PART II
Item 3.1 Agreement of Limited Partnership of RRC Operating Partnership of
Georgia, L.P.
Item 27 Financial Data Schedule
Item 4.1 Indenture dated July 20, 1998 between Regency Centers, L.P., the
guarantors named there and First Union National Bank, as trustee
(incorporated by reference to Exhibit 4.1 to the registration statement
on Form S-4 of Regency Centers, L.P., No. 333-63723).
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: May 17, 1999 RRC OPERATING PARTNERSHIP OF GEORGIA, L.P.
By: Regency Centers, LP., general partner
By: /s/ J. Christian Leavitt
Vice President, Treasurer and Secretary
of Regency Realty Corporation, general
partner of Regency Centers, L.P.
AGREEMENT OF LIMITED PARTNERSHIP
OF
RRC OPERATING PARTNERSHIP OF GEORGIA, L.P.
<PAGE>
2
TABLE OF CONTENTS
ARTICLE 1
Formation and Name, Representations and
Warranties of Limited Partners....................................... 1
ARTICLE 2
Addresses of Parties................................................ 2
ARTICLE 3
Definitions and Glossary of Terms.....................................2
ARTICLE 4
Business of Partnership...............................................8
ARTICLE 5
Capital Contributions; Issuance of Units..............................8
ARTICLE 6
Distributions.........................................................9
ARTICLE 7
Allocation of Net Profits and Net Losses............................. 9
ARTICLE 8
Rights and Duties of the General Partner............................ 13
ARTICLE 9
Rights of the Limited Partners...................................... 19
ARTICLE 10
Transfer of Limited Partner Interests............................... 19
ARTICLE 11
Records and Reports..................................................21
ARTICLE 12
Amendments.......................................................... 22
ARTICLE 13
Termination and Dissolution....................................... . 23
ARTICLE 14
Appointment of Attorney-in-Fact..................................... 24
ARTICLE 15
Miscellaneous....................................................... 25
Schedule 0 - Partners of RRC Operating Partnership of Georgia, L.P.
Schedule A-1 - Legal Description for Parkway Station Shopping Center
Schedule A-2 - Earn Out Amount
Exhibit 8.4 - Form of Guaranty
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4
AGREEMENT OF LIMITED PARTNERSHIP
THIS AGREEMENT OF LIMITED PARTNERSHIP is dated as of February ____,
1996, by and among RRC GA ONE, INC., a Georgia corporation, as general partner
(the "General Partner"), and PARKWAY STATION, LTD., a Georgia limited
partnership (the "Initial Limited Partner"), and those additional persons who
from time to time agree to be bound by this Agreement as limited partners.
ARTICLE 1
Formation and Name, Representations and
Warranties of Limited Partners
1.1 Formation. The undersigned parties do hereby enter into this
Agreement pursuant to the Act.
1.2 Name. The name of the Partnership shall be "RRC Operating
Partnership of Georgia, L.P."
1.3 Representations and Warranties of Limited Partners. As inducement
for their admission to the Partnership, each Limited Partner hereby represents
and warrants that such Limited Partner (a) has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of an investment in the Partnership, and (b) has been given the
opportunity to examine all documents and to ask questions of, and to receive
answers from, the General Partner and its representatives concerning the terms
and conditions of the acquisition by it of Units in the Partnership, and to
obtain any additional information which it deems necessary to verify the
accuracy of the information with respect thereto. Such Limited Partner has
received and carefully reviewed copies of the reports filed by Regency for its
two most recent fiscal years and the interim period to date under the Securities
Exchange Act of 1934 and such additional information concerning the General
Partner, Regency and the transactions contemplated by this Agreement, to the
extent that the General Partner and Regency could acquire such information
without unreasonable effort or expense, as such Limited Partner deems necessary
for purposes of making an investment in the Partnership. The Units in the
Partnership acquired by such Limited Partner are being acquired by such Limited
Partner for its own account for investment and not with a view to the public
distribution thereof. Such Limited Partner agrees as a condition to the issuance
of such Units in its name that any transfer, sale, assignment, hypothecation,
offer or other disposition of such Units other than pursuant to a buy-sell
agreement between the Limited Partner and the Partnership may not be effected
except pursuant to an effective registration statement under the Securities Act
of 1933 and the rules and regulations promulgated thereunder, or an exemption
therefrom, and in compliance with all other applicable securities and blue sky
laws.
ARTICLE 2
Addresses of Parties
2.1 Partnership. The principal place of business of the Partnership
shall be at Lenox Tower, Suite 1629, 3400 Peachtree Road, N.E., Atlanta, Georgia
30326, or at such other place as the General Partner may from time to time
designate in writing to the Limited Partners. The Partnership may also maintain
such other offices at such other places as the General Partner may deem
advisable. The Partnership's registered agent and registered office shall be as
set forth in the Certificate of Limited Partnership filed with the Georgia
Department of State, as it may be amended from time to time by the General
Partner.
2.2 Partners. The business addresses of the General Partner and the
Limited Partner shall be those stated after their names in Schedule 0 attached
hereto, as from time to time amended, or as otherwise set forth in the books and
records of the Partnership. A Limited Partner may change its address by written
notice to the General Partner, and the General Partner may change its address by
written notice to the Limited Partners, which notices shall become effective
upon receipt.
ARTICLE 3
Definitions and Glossary of Terms
3.1 The following terms used in this Agreement shall (unless otherwise
expressly provided herein or unless the context otherwise requires) have the
meanings specified in this Article 0.
3.2 Act: The Georgia Revised Uniform Limited Partnership Act, as
amended from time to time, and any successor legislation thereto.
3.3 Adjusted Capital Account: With respect to any Partner, such
Partner's Capital Account, after giving effect to the
following adjustments:
(a) Credit to such Capital Account any amounts which such
Partner is obligated to restore pursuant to any provision of this Agreement or
is deemed to be obligated to restore pursuant to the penultimate sentences of
Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
(b) Debit to such Capital Account the items described in
Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and
1.704-1(b)(2)(ii)(d)(6) of the Regulations.
The foregoing definition of Adjusted Capital Account is intended to comply with
the provisions of Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall be
interpreted consistently therewith.
3.4 Adjustment Ratio: In the event of (a) any dividend or other
distribution with respect to the Common Stock payable in shares of Common Stock,
(b) subdivision of the Common Stock into a larger number of shares, or (c)
combination of outstanding shares of Common Stock into a smaller number of
shares, a fraction, the numerator of which shall be the number of shares of
Common Stock outstanding immediately after such dividend, distribution,
subdivision or other combination and the denominator of which shall be the
number of shares of Common Stock outstanding immediately prior to such event.
3.5 Affiliate: Any person directly or indirectly controlling,
controlled by or under common control with another person.
3.6 Agreement: This agreement, as amended, modified, or supplemented
from time to time.
3.7 Capital Account: A capital account maintained for each Partner
which in general shall be equal to its initial capital contribution (a)
increased by (i) any additional capital contributions made by it, and (ii) its
share of Net Profits, and (b) decreased by (i) distributions to it of Cash Flow
and (ii) its share of Net Losses. The foregoing provisions and the other
provisions of this Agreement relating to the maintenance of Capital Accounts are
intended to comply with Treasury Regulation Section 1.704-1(b)(2)(iv), and shall
be interpreted and applied in a manner consistent with such Regulation
throughout the term of this Agreement. If the General Partner shall determine
that it is necessary to modify the manner in which the Capital Accounts, or any
debits, or credits thereto, are computed or maintained in order to comply with
such Regulation, the General Partner is authorized to make such modification.
3.8 Cash Flow: Partnership cash receipts from operations (including
operating cash flow and Sale or Refinancing Proceeds but excluding tenant
deposits that have not been forfeited to the Partnership) minus all cash
expenditures (including payments of principal and interest on Partnership
indebtedness including indebtedness to any Partner, capital expenditures,
Guaranteed Payments and any reserves deemed reasonably necessary by the General
Partner).
3.9 Code: The Internal Revenue Code of 1986, as amended.
3.10 Common Stock: The voting Common Stock, $.0.01 par value, of
Regency ------------
3.11 Depreciation means, for each fiscal year, an amount equal to the
depreciation, amortization, or other cost recovery deduction allowable with
respect to an asset for such fiscal year, except that if the Gross Asset Value
of an asset differs from its adjusted basis for federal income tax purposes at
the beginning of such fiscal year, Depreciation shall be an amount which bears
the same ratio to such beginning Gross Asset Value as the federal income tax
depreciation, amortization, or other cost recovery deduction for such fiscal
year bears to such beginning adjusted tax basis; provided, however, that if the
adjusted basis for federal income tax purposes of an asset at the beginning of
such fiscal year is zero, Depreciation shall be determined with reference to
such beginning Gross Asset Value using any reasonable method selected by the
General Partner.
3.12 General Partner: RRC GA One, Inc. and any person or
entity subsequently becoming a General Partner pursuant to
the terms of this Agreement.
3.13 Gross Asset Value: With respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as
follows:
(a) The initial Gross Asset Value of any asset contributed by
a Partner to the Partnership shall be the fair market value (exclusive of
liabilities) of such asset, as determined by the General Partner;
(b) The Gross Asset Values of all Partnership assets shall be
adjusted to equal their respective fair market values (exclusive of
liabilities), as determined by the General Partner, as of the following times:
(i) the acquisition of an additional interest in the Partnership by any new or
existing Partner in exchange for more than a de minimis capital contribution;
(ii) the distribution by the Partnership to a Partner of more than a de minimis
amount of property as consideration for an interest in the Partnership; and
(iii) the liquidation of the Partnership within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g): provided, however, that adjustments pursuant to
clauses (i) and (ii) above shall be made only if the General Partner reasonably
determines that such adjustments are necessary or appropriate to reflect the
relative economic interests of the Partners in the Partnership;
(c) The Gross Asset Value of any Partnership asset distributed
to any Partner shall be adjusted to equal the fair market value (exclusive of
liabilities) of such asset on the date of distribution as determined by the
General Partner; and
(d) The Gross Asset Values of Partnership assets shall be
increased (or decreased) to reflect any adjustments to the adjusted basis of
such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to
the extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); provided,
however, that Gross Asset Values shall not be adjusted pursuant to this
paragraph (d) to the extent the General Partner determines that an adjustment
pursuant to paragraph (b) above is necessary or appropriate in connection with a
transaction that would otherwise result in an adjustment pursuant to this
paragraph (d).
If the Gross Asset Value of an asset has been determined or adjusted pursuant to
paragraphs (a), (b), or (d) above, such Gross Asset Value shall thereafter be
adjusted by the Depreciation taken into account with respect to such asset for
purposes of computing profits and losses.
3.14 Guaranteed Payment: An amount, determined for each Limited Partner
with respect to a Partnership Record Date, equal to the product of (i) the
number of Units held as of the Partnership Record Date by the Limited Partner to
whom a Guaranteed Payment is being made under Section 0 and (ii) the portion of
any cash dividend declared by Regency on a share of Common Stock with respect to
holders of record on the same date which is characterized for federal income tax
purposes as taxable income and not a return of capital. In the event that the
Adjustment Ratio applies, the number of Units in the foregoing formula shall be
multiplied by the Adjustment Ratio.
3.15 Initial Limited Partner: Parkway Station, Ltd., a Georgia
limited partnership.
3.16 Limited Partners: All persons other than the General Partner who
have acquired Units from the Partnership and have agreed to be bound by this
Agreement, including the Initial Limited Partner, as well as any parties
admitted as Substituted Limited Partners pursuant to Section 0.
3.17 Majority in Interest: A majority in interest of the Limited
Partners, measured by the relative number of Units held by each.
3.18 Net Profits and Net Losses: The profits and losses of the Limited
Partnership for Federal income tax purposes for each fiscal year (including,
without limitation, each item of Partnership income, gain, loss, deduction or
credit) determined in accordance with the accounting method followed by the
Partnership for such purposes, with the following adjustments:
(a) Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing profits or losses
shall be added to such taxable income or loss;
(b) Any expenditures of the Partnership described in Code
Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures
pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken
into account in computing Profits or Losses, shall be subtracted from such
taxable income or loss;
(c) In the event the Gross Asset Value of any Partnership
asset is adjusted pursuant to paragraphs (b) or (c) of the definition thereof,
the amount of such adjustment shall be taken into account as gain or loss from
the disposition of such asset for purposes of computing profits or losses;
(d) Gain or loss resulting from any disposition of property
with respect to which gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the Property disposed
of, notwithstanding that the adjusted tax basis of such property differs from
its Gross Asset Value;
(e) In lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation for such fiscal year or other
period;
(f) To the extent an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken
into account in determining Capital Accounts as a result of a distribution other
than in liquidation of a Partner's interest, the amount of such adjustment shall
be treated as an item of gain (if the adjustment increases the basis of the
asset) or loss (if the adjustment decreases the basis of the asset) from the
disposition of the asset and shall be taken into account for purposes of
computing profits or losses; and
(g) Notwithstanding any other provisions any items which are
specially allocated pursuant to Sections 0 and 0 hereof shall not be taken into
account in computing profits or losses.
3.19 Nonrecourse Deductions has the meaning set forth in Section
1.704-2(b)(1) of the Regulations.
3.20 Partner Nonrecourse Debt has the meaning set forth in Section
1.704-2(b)(4) of the Regulations.
3.21 Partner Nonrecourse Debt Minimum Gain: An amount, with respect to
each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would
result if such Partner Nonrecourse Debt were treated as a nonrecourse liability,
determined in accordance with Section 1.704-2(i)(3) of the Regulations.
3.22 Partner Nonrecourse Deductions has the meaning set forth in
Sections 1.704-2(i)(1) and 1.704-2(i)(2) of the Regulations.
3.23 Partners: The General Partner and all Limited Partners, where no
distinction is required by the context in which the term is used in this
Agreement.
3.24 Partnership: RRC Operating Partnership of Georgia, L.P., a Georgia
limited partnership.
3.25 Partnership Minimum Gain has the meaning set forth in Sections
1.704-2(b)(2) and 1.704-2(d) of the Regulations.
3.26 Partnership Record Date: The record date established by the
General Partner for the distribution of Guaranteed Payments pursuant to Section
0 hereof, which record date shall be the same as the record date established by
Regency for the distribution of cash dividends on the Common Stock.
3.27 Percentage Interest: The percentage interest of a Partner,
computed based on the number of Units held by such Partner as a percentage of
the total number of Units outstanding at the time.
3.28 Property: The real property known as Parkway Station Shopping
Center in Warner Robins, Georgia, more particularly described on Schedule A-1.
3.29 Preferred Return: An amount, determined for each Limited Partner
with respect to a Partnership Record Date, equal to the product of (i) the
number of Units held as of the Partnership Record Date by the Limited Partner
and (ii) the portion of any cash dividend declared by Regency on a share of
Common Stock with respect to holders of record on the same date which is
characterized for federal income tax purposes as a return of capital and not
taxable income. In the event that the Adjustment Ratio applies, the number of
Units in the foregoing formula shall be multiplied by the Adjustment Ratio.
3.30 Regency: Regency Realty Corporation, a Florida corporation,
together with any successor.
3.31 Regulations: The Income Tax Regulations, including Temporary
Regulations, promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).
3.32 Sale or Refinancing Proceeds: The net cash remaining from the
sale, disposition, or refinancing of Partnership property after (a) the
retirement of any applicable mortgage debt, and (b) the payment of (i) all real
estate brokerage fees, (ii) all other costs, fees, commissions and expenses of
the transaction, (iii) with respect to financing proceeds, all amounts deemed
necessary by the General Partner for the maintenance, repair or renovation of
Partnership properties, (iv) the amount of any reserves deemed necessary by the
General Partner, and (v) any advances or loans made by any Partner to the
Partnership.
3.33 Substituted Limited Partner: Any Limited Partner admitted
by the General Partner pursuant to Section 0.
3.34 Unit: An interest in the Partnership entitling the holder thereof
to participate in distributions and in allocations of Net Profits and Net
Losses.
3.35 Voluntary Withdrawal: Retirement from the Partnership upon the
giving of written notice to the other Partners but excluding any withdrawal by
the General Partner in compliance with Section 0.
3.36 Withdrawal: The occurrence of any of the following events as
to the General Partner:
(a) Voluntary Withdrawal from the Partnership;
(b) The involuntary transfer by the General Partner of all its
interest as General Partner in the Partnership;
(c) If the General Partner (i) makes an assignment for the
benefit of creditors; (ii) files a voluntary petition in bankruptcy; (iii) is
adjudicated a bankrupt or insolvent or has entered against him an order for any
relief in any bankruptcy or insolvency proceeding; (iv) files a petition or
answer seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution, or similar relief under any statute, law or regulation
or fails to contest the material allegations of a petition filed against him in
a proceeding of such nature; or (v) seeks, consents to, or acquiesces in the
appointment of a trustee, receiver, or liquidator of the General Partner or all
or any substantial part of its properties;
(d) If any proceeding against the General Partner seeking
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any statute, law, or regulation has not
been dismissed within 120 days after the commencement thereof; or
(e) If a trustee, receiver, or liquidator is appointed for the
General Partner or all or any substantial part of its properties without the
General Partner's consent or acquiescence, and the appointment has not been
vacated or stayed within 90 days after the appointment or if stayed, the
appointment has not been vacated within 90 days after the expiration of any such
stay.
ARTICLE 4
Business of Partnership
4.1 This Partnership is organized for the purpose of engaging in the
following activities:
(a) to acquire, own, develop, construct, improve, maintain,
operate, lease, sell, transfer, mortgage, encumber, exchange and otherwise
dispose of or deal with the Property, together with all personal property and
other rights appurtenant thereto, including proceeds from claims on insurance
policies associated with any such property; and
(b) to engage in any activity and exercise any powers
permitted to partnerships under the laws of the State of Georgia that are
related or incidental to the foregoing and necessary, advisable or appropriate
to accomplish the foregoing.
ARTICLE 5
Capital Contributions; Issuance of Units
5.1 Capital Contributions by Limited Partners. Simultaneously with the
execution of this Agreement, the Initial Limited Partner has contributed the
Property to the Partnership, which the Partners agree has the value set forth on
Schedule 0, in exchange for the number of Units set forth on Schedule 0. The
Initial Limited Partner shall not be required to make any additional capital
contributions to the Partnership. However, additional Units shall be issued to
the Initial Limited Partner under the circumstances described in Schedule A-2.
5.2 Capital Contributions by General Partner. Simultaneously with the
execution of this Agreement, the General Partner has contributed cash to the
Partnership in the amount set forth on Schedule 0, in exchange for the number of
Units set forth on Schedule 0. The General Partner shall not be required to make
any additional capital contributions to the Partnership.
5.3 No Admission of Additional Limited Partners. Without the approval
of the Limited Partners, the General Partner shall not issue additional Units to
additional persons and admit them as Limited Partners.
5.4 Withdrawal of Capital. Prior to the dissolution and liquidation of
the Partnership, no Partner shall be entitled, without the consent of the
General Partner, to withdraw any part of such Partner's Capital Account, except
for distributions made in accordance with Articles 0 or 0. All distributions
made to a Partner pursuant to Articles 0 or 0 shall be treated as a return of
capital until the aggregate amount so distributed to the Partner is at least
equal to its capital contributions to the Partnership.
5.5 Interest Earned on Partnership Capital. Interest earned on
Partnership funds shall inure to the benefit of the Partnership, and no Partner
shall be entitled to receive interest, as such, on capital contributions made by
it.
ARTICLE 6
Distributions
6.1 Distribution of Cash Flow to Limited Partners.
(a) The Partnership shall distribute Cash Flow no later than
20 days after each Partnership Record Date, one hundred percent (100%) to the
Limited Partners until each Limited Partner has received distributions of Cash
Flow hereunder equal to its Preferred Return. Distributions under this Section 0
shall be allocated among the Limited Partners pro rata in accordance with the
number of Units owned by each.
(b) Any remaining Cash Flow shall be distributed at such times
as the General Partner may determine, in its discretion, to the Partners pro
rata in accordance with their respective Percentage Interests.
6.2 Guaranteed Payment. The Partnership shall pay no later than 20 days
after each Partnership Record Date to each Limited Partner who is a Partner on
the most recent Partnership Record Date an amount of cash equal to the
Guaranteed Payment for such Partner. Amounts paid pursuant to this Section 0 are
intended to constitute guaranteed payments within the meaning of Section 707(c)
of the Code, shall be treated consistently therewith by the Partnership and all
Partners, and shall not be treated as distributions for purposes of computing
the Partners' Capital Accounts.
6.3 Special Distributions to General Partner. In the event that funds
are available for distribution pursuant to Section 0 but distribution thereunder
would cause a Unit to have a fair market value greater than a share of Common
Stock (as determined by the General Partner in its sole discretion), when
measured by the amount of Cash Flow and Guaranteed Payments paid with respect to
a Unit vis-a-vis the amount cash dividends paid on a share of Common Stock
during the same 12-month period, the General Partner may distribute an amount of
Cash Flow to the General Partner for distribution to Regency, for distribution
in turn on the Common Stock, so as to equalize the fair market value of each.
ARTICLE 7
Allocation of Net Profits and Net Losses
7.1 Allocation Between Limited Partners and General Partner. Except as
otherwise required by the Code or Regulations, Net Profits and Net Losses shall
be allocated with respect to each fiscal year, as follows:
(a) Net Profits shall be allocated as follows:
(i) First, one hundred percent (100%) to the General
Partner in an amount equal to the excess, if any, of (a) the cumulative Net
Losses allocated to the General Partner pursuant to Section 0 for the current
and all prior fiscal years, over (b) the cumulative Net Profits allocated
pursuant to this Section 0 for the current and all prior fiscal years;
(ii) Next, one hundred percent (100%) to the Partners
in an amount equal to the excess, if any, of (i) the cumulative Net Losses
allocated to the Partners pursuant to Section 0 for the current and all prior
fiscal years, over (ii) the cumulative Net Profits allocated pursuant to this
Section 0 for the current and all prior fiscal years, to be allocated among
the Partners in the same
proportion as such Net Losses were allocated;
(iii) Thereafter, one hundred percent (100%) to the
Partners, pro rata in accordance
with their respective Percentage Interests.
(b) Net Losses shall be allocated to the Partners as follows:
(i) First, to those Partners with positive Adjusted Capital
Account balances in proportion to their respective positive Adjusted Capital
Account balances until such time as the positive Adjusted Capital Account
balance of each Limited Partner is zero;
(ii) Thereafter, one hundred percent (100%) to the
General Partner.
7.2 Special Allocations. The following special allocations shall
be made in the following order:
(a) Minimum Gain Chargeback. Except as otherwise provided in
Section 1.704-2(f) of the Regulations, notwithstanding any other provision of
this Article 0, if there is a net decrease in Partnership Minimum Gain during
any fiscal year, each Partner shall be specially allocated items of Partnership
income and gain for such fiscal year (and, if necessary, subsequent fiscal
years) in an amount equal to such Partner's share of the net decrease in
Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Partner
pursuant thereto. The items to be so allocated shall be determined in accordance
with Sections 1.704-2(f)(6) and 1.704-2(j)(2) of the Regulations. This Section 0
is intended to comply with the minimum gain chargeback requirement in Section
1.704-2(f) of the Regulations and shall be interpreted consistently therewith.
(b) Partner Minimum Gain Chargeback. Except as otherwise
provided in Section 1.704-2(i)(4) of the Regulations, notwithstanding any other
provision of this Article 0, if there is a net decrease in Partner Nonrecourse
Debt Minimum Gain attributable to a Partner Nonrecourse Debt during any fiscal
year, each Partner who has a share of the Partner Nonrecourse Debt Minimum Gain
attributable to such Partner Nonrecourse Debt, determined in accordance with
Section 1.704-2(i)(5) of the Regulations, shall be specially allocated items of
Partnership income and gain for such fiscal year (and, if necessary, subsequent
fiscal years) in an amount equal to such Partner's share of the net decrease in
Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse
Debt, determined in accordance with Regulations Section 1.704-2(i)(4).
Allocations pursuant to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each partner pursuant thereto.
The items to be so allocated shall be determined in accordance with Sections
1.704-2(i)(4) and 1.704-2(j)(2) of the Regulations. This Section 0 is intended
to comply with the minimum gain chargeback requirement in Section 1.704-2(i)(4)
of the Regulations and shall be interpreted consistently therewith.
(c) Qualified Income Offset. In the event any Partner
unexpectedly receives any adjustments, allocations or distributions described in
Sections 1.704(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or
1.704-1(b)(2)(ii)(d)(6) of the Regulations, items of Partnership income and gain
shall be specially allocated to each such Partner in an amount and manner
sufficient to eliminate, to the extent required by the Regulations, the Adjusted
Capital Account deficit of such Partner as quickly as possible, provided that an
allocation pursuant to this Section 0 shall be made only if and to the extent
that such Partner would have an Adjusted Capital Account deficit after all other
allocations provided for in this Article 0 have been tentatively made as if this
Section 0 were not in the Agreement.
(d) Gross Income Allocation. In the event any Partner has a
deficit Capital Account at the end of any fiscal year which is in excess of the
sum of (i) the amount such Partner is obligated to restore pursuant to any
provision of this Agreement, and (ii) the amount such Partner is deemed to be
obligated to restore pursuant to the penultimate sentences of Sections
1.704-2(g)(1) and 1.704-2(i)(5) of the Regulations, each such Partner shall be
specially allocated items of Partnership income and gain in the amount of such
excess as quickly as possible, provided that an allocation pursuant to this
Section 0 shall be made only if and to the extent that such Partner would have a
deficit Capital Account in excess of such sum after all other allocations
provided for in this Article 0 have been made as if Section 0 hereof and this
Section 0 were not in the Agreement.
(e) Nonrecourse Deductions. Nonrecourse Deductions for any
fiscal year or other period shall be specially allocated to the Partners in
accordance with their respective Percentage Interests.
(f) Partner Nonrecourse Deductions. Any Partner Nonrecourse
Deductions for any fiscal year shall be specially allocated to the Partner who
bears the economic risk of loss with respect to the Partner Nonrecourse Debt to
which such Partner Nonrecourse Deductions are attributable in accordance with
Regulations Section 1.704-2(i)(1).
(g) Special Allocation for Guaranteed Payment Loans.
Notwithstanding any other provision hereof, in the event that the General
Partner or any Affiliate loans amounts to the Partnership and the proceeds of
such loan are used to make Guaranteed Payments to the Limited Partners, any
deductions and/or losses attributable to or arising from the making of such
Guaranteed Payments shall be specially allocated to the General Partner, to the
extent not so allocated to the General Partner under Section 0 hereof.
(h) Special Allocation for Certain Distributions.
Notwithstanding any other provision hereof except Section 0, in the event that
distributions are made to the General Partner pursuant to Section 0 hereof, an
amount of gross income and/or gains equal to the amount so distributed shall be
specially allocated to the General Partner.
7.3 Curative Allocations. The allocations set forth in Sections 0
through 0 hereof (the "Regulatory Allocations") are intended to comply with
certain requirements of the Regulations. It is the intent of the Partners that,
to the extent possible, all Regulatory Allocations shall be offset either with
other Regulatory Allocations or with special allocations of other items of
Partnership income, gain, loss, or deduction pursuant to this Section 0.
Therefore, notwithstanding any other provision of this Section 0 (other than the
Regulatory Allocations), the General Partner shall make such offsetting special
allocations of Partnership income, gain, loss or deduction in whatever manner it
determines appropriate so that, after such offsetting allocations are made, each
General Partner's and Limited Partner's Capital Account balance is, to the
extent possible, equal to the Capital Account balance such General Partner or
Limited Partner would have if the Regulatory Allocations were not part of the
Agreement. In exercising its discretion under this Section 0, the General
Partner shall take into account future Regulatory Allocations under Sections 0
and 0 that, although not yet made, are likely to offset other Regulatory
Allocations previously made under Section 0 and 0.
7.4 Other Allocation Rules.
(a) For purposes of determining Net Profits, Net Losses, or
other items allocable to any period, Net Profits, Net Losses, and any such other
items shall be determined on a daily, monthly, or other basis, as determined by
the General Partner using any permissible method under Section 706 of the Code
and the Regulations thereunder.
(b) Solely for purposes of determining a Partner's
proportionate share of the "excess nonrecourse liabilities" of the Partnership
within the meaning of Section 1.752-3(a)(3) of the Regulations, the General
Partner's and Limited Partners' interests in Partnership profits shall be equal
to each such Partner's respective Percentage Interest.
(c) In accordance with Code Section 704(c) and the Regulations
thereunder, income, gain, loss and deduction with respect to any property
contributed to the capital of the Partnership shall, solely for tax purposes, be
allocated among the Partners so as to take account of any variation between the
adjusted basis of such property to the Partnership for federal income tax
purposes and its initial Gross Asset Value. For purposes of maintaining Capital
Accounts pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv), the Initial
Gross Asset Value of the land constituting part of the Property is $1,865,000
and the remaining fair market value of the Property as shown on Schedule A shall
be allocated to the improvements in proportion to their adjusted tax basis.
In the event the Gross Asset Value of any Partnership asset is
adjusted, subsequent allocations of income, gain, loss, and deductions with
respect to such asset shall take account of any variation between the adjusted
basis of such asset for federal income tax purposes and its Gross Asset Value in
the same manner as under Code Section 704(c) and the Regulations thereunder.
Any elections or other decisions relating to such allocations shall be
made by the General Partner; provided, however, that the "traditional method" of
making Section 704(c) allocations described in Section 1.704-3(b) of the
Regulations shall be used. Notwithstanding anything contained herein to the
contrary, at the time of the sale of the Property, tax gain, if any, shall be
allocated to the Initial Limited Partner to offset the effect, if any, of the
"ceiling rule" limitation described in Section 704(c) of the Regulations
(including the cumulative allocation to the General Partner of book depreciation
which exceeds the cumulative allocation of tax depreciation) attributable to the
book-tax disparity existing on the date of the contribution of the Property by
the Initial Limited Partner to the Partnership. Allocations pursuant to this
Section 0 are solely for purposes of federal, state, and local taxes and shall
not affect, or in any way be taken into account in computing, any Partner's
Capital Account or share of Profits, Losses, other items, or distributions
pursuant to any provision of this Agreement.
7.5 Allocation of Items. Whenever a proportionate part of the
Partnership's Net Profits or Net Losses is credited or charged to a Partner's
Capital Account, every item of income, gain, loss or deduction entering into the
computation of such Net Profit or Net Loss shall be considered either credited
or charged, as the case may be, and every item of credit or tax preference
related to such Net Profit or Net Loss and applicable to the period during which
such Net Profit or Net Loss was realized shall be allocated to such account in
the same proportion.
ARTICLE 8
Rights and Duties of the General Partner
8.1 Powers of the General Partner. The General Partner shall have full,
exclusive and complete authority and discretion to manage and control the
business of the Partnership for the purposes herein stated and shall make all
decisions affecting the business of the Partnership. Any person dealing with the
Partnership may conclusively rely on a certificate signed by the General Partner
as to its identity and its authority to act on behalf of the Partnership and
without further inquiry may rely upon the authority of the General Partner to
perform any act or execute and deliver any instrument for the Partnership. The
General Partner shall have all the rights and powers which may be possessed by a
General Partner pursuant to the Act, including without limitation all rights and
powers necessary to carry out the purposes set forth in Article 0 of this
Agreement. The powers of the General Partner include, but are not limited to,
the power, to any of the following, and no approval of the Limited Partners
shall be required therefor:
(a) Expend the capital and revenues of the Partnership in furtherance of
the Partnership's business;
(b) Develop, construct, improve, maintain, operate and lease the Property;
(c) Enter into and execute (i) agreements and any and all
documents and instruments employed in the real estate industry in connection
with the acquisition, sale, lease, development, construction and operation of
real properties; (ii) agreements, commitments and any and all documents and
instruments employed in real estate financing, and (iii) all other instruments
deemed by the General Partner to be necessary or appropriate to the proper
operation of the Property or to perform effectively and properly the General
Partner's duties or exercise its powers hereunder;
(d) Sell, lease, trade, exchange, or otherwise dispose of
Partnership assets, including the sale or lease of the Partnership's assets
substantially as a whole, upon such terms and conditions and for such
consideration as the General Partner deems appropriate, and no approval of the
Limited Partners shall be required therefor;
(e) Borrow money or otherwise obtain financing from banks,
other lending institutions and other lenders for any Partnership purpose, and in
connection therewith, issue notes, debentures and other debt securities and/or
enter into loan agreements, indentures, leases or other financing agreements and
hypothecate all or any part of the assets of the Partnership to secure repayment
of the borrowed sums or other obligations; and no lender or other person to
which application is made for financing shall be required to inquire as to the
purposes for which such financing is sought; and, as between the Partnership and
such lender or other person, it shall be conclusively presumed that the proceeds
of such financing are to be and will be used for the purpose authorized under
this Agreement;
(f) Grant security interests and mortgages in Partnership
property and repay in whole or in part, refinance, recast, modify, consolidate,
or extend any mortgages affecting any such property so long as doing so will not
cause the Initial Limited Partner to realize a gain for federal income tax
purposes as a result thereof;
(g) Invest Partnership reserves in bank demand deposit and
savings accounts, savings and loan association deposits, commercial paper,
certificates of deposit, bankers' acceptances, government securities, money
market funds and other short-term interest-bearing obligations and similar
instruments;
(h) Place record title to Partnership assets in the name or
names of a nominee or nominees for the purpose of any financing or any other
convenience or benefit to the Partnership;
(i) Enter into agreements and contracts with parties and give
receipts, releases and discharges, with respect to all of the foregoing and any
matters incident thereto as the General Partner may deem advisable or
appropriate;
(j) Maintain, at the expense of the Partnership, adequate
records of all operations and expenditures and furnish to the Limited Partners
the reports specified in Article 0;
(k) Employ from time to time persons in connection with the
management of the Property, including without limitation, property managers,
accountants and attorneys, on such terms and for such compensation as the
General Partner shall determine;
(l) Purchase liability and other insurance which the General
Partner deems advisable, appropriate or convenient to protect the Partnership's
property or business;
(m) Perform any and all other acts or activities incident
to the operation of the Partnership's business;
(n) Make such elections as the General Partner believes
necessary or desirable under the tax laws of the United States, the State of
Georgia and other relevant jurisdictions as to the treatment of items of
Partnership income, gain, loss, deduction and credit, and as to all other
relevant matters;
(o) Select or vary depreciation and accounting methods, and
the fiscal year of the Partnership, and make other decisions with respect to the
treatment of various transactions for accounting or tax purposes; and
(p) Bring, defend, settle or compromise actions or claims at
law or in equity on behalf of and in the name of the Partnership and submit
Partnership claims or liabilities to arbitration.
By way of extension of the foregoing and not in limitation thereof, the General
Partner shall possess all of the powers and rights of a partner in a general
partnership without limited partners under the partnership law of the State of
Georgia.
8.2 Limitation Upon Rights and Powers of the General Partner. In
addition to other acts expressly prohibited by this Agreement or by law, and
notwithstanding any other provision of this Agreement, the General Partner shall
not have the authority, without the consent of a Majority in Interest of the
Limited Partners, to:
(a) do any act which would make it impossible to carry on the
ordinary business of the Partnership, except as expressly provided in this
Agreement; or
(b) cause the Partnership to engage in any business other than
that set forth in Article 0.
8.3 Duties of the General Partner.
(a) The General Partner shall manage and control the affairs
of the Partnership to the best of its ability and shall use its best efforts to
carry out the business of the Partnership set forth in Article 0.
(b) The General Partner shall act at all times in a fiduciary
manner to conduct the affairs of the Partnership in the best interests of the
Partnership and of the Limited Partners, including the safekeeping of all
Partnership funds and assets and the use thereof for the exclusive benefit of
the Partnership.
(c) The General Partner shall serve as the Partnership's tax
matters partner with respect to its federal income tax matters.
(d) The General Partner agrees to cause a Section 754
election to be made at the request of the Limited Partner or a Substitute
Limited Partner.
8.4 Loans.
(a) The General Partner hereby agrees to loan sufficient funds
to the Partnership from time to time (i) to enable it to make the distributions
described in Sections 0 and 0 in the event that the Partnership does not have
sufficient Cash Flow to make the distributions set forth therein, and (ii)
regardless of whether the Partnership has sufficient cash, to fund capital
expenditures in excess of $10,000 per year.
(b) Notwithstanding any other provision of this Agreement, the
General Partner hereby agrees with the Initial Limited Partner that if the
General Partner determines to reduce the principal amount of the indebtedness
owed to Metropolitan Life Insurance Company or any subsequent indebtedness
encumbering the Property, including the repayment thereof at its maturity, the
General Partner shall loan the funds to the Partnership from time to time for
the purpose of making such reduction or retirement rather than making a capital
contribution, which loans shall be non-recourse to the Partnership provided that
the Limited Partner guarantees such loans pursuant to a guaranty in
substantially the form attached as Exhibit 8.4. Such loan and guaranty are
limited to a maximum aggregate outstanding principal balance of $2.85 million at
any one time. The non-recourse revolving note evidencing the General Partner's
loans shall bear interest at the long-term applicable rate determined under
Section 1274(d) of the Code, payable annually, and shall be payable in full on
the fifteenth anniversary date thereof.
8.5 Withdrawal of General Partner, Transfer of General Partner's Interest.
(a) The General Partner shall not Voluntarily Withdraw from
the Partnership except pursuant to an assignment of its partnership interest
made in compliance with this Section 0 or Section 0.
(b) Except as provided in Section 0, unless it has first
received the written consent or affirmative vote to do so from a Majority in
Interest of the Limited Partners, the General Partner shall not admit an
additional General Partner, and the General Partner shall not voluntarily
transfer or assign all or any portion of its interest as General Partner, except
in either case to an Affiliate of the General Partner.
(c) A transferee or assignee of all or any part of a
withdrawing General Partner's interest shall become a General Partner to the
extent of the interest assigned provided that any required consent of the
Limited Partners for such transfer or assignment has been obtained pursuant to
this Section 0. Upon any such transfer or assignment, the successor general
partner(s) shall have the right to carry on the business of the Partnership, and
the Partnership shall not be terminated or dissolved upon any such transfer or
assignment.
8.6 Right of First Refusal in Favor of Initial Limited Partner. In the
event that the General Partner receives a bona fide offer from a third party to
purchase the property contributed by the Initial Limited Partner to the
Partnership and the General Partner wishes to accept such offer, the General
Partner shall send a copy thereof to the Initial Limited Partner, offering the
Initial Limited Partner or an Affiliate the right to acquire the entire interest
of the General Partner in the Partnership for cash at a price equal to (i) the
amount that the General Partner would receive if (x) the Partnership sold the
property pursuant to such offer, (y) all outstanding indebtedness owed to the
General Partner by the Partnership or the Initial Limited Partner were then paid
in full, and (z) the net proceeds of the sale were distributed pursuant to
Article 0, less (ii) an amount equal to (x) the number of Units owned by the
Initial Limited Partner times (y) the closing price of the Common Stock on the
New York Stock Exchange (or the exchange or quotation system on which the Common
Stock is then listed for trading) on the last business day preceding the closing
of the sale of the General Partner's interest (the "First Refusal Price"). The
General Partner's notice to the Initial Limited Partner shall include a full
copy of any proposed contract it has received from the offeror together with the
name, identity, contact person, telephone number and address of the offeror. If
the Limited Partner advises the General Partner within 30 days of the date of
the General Partner's notice that it elects to exercise its right of first
refusal, the General Partner shall sell its interest in the Partnership to the
Initial Limited Partner, free and clear of all liens and encumbrances, and the
Limited Partner shall purchase such interest at the First Refusal Price at a
closing to be held within 75 days after the date of the General Partner's
notice. The General Partner agrees to undertake reasonable steps in cooperation
with the Initial Limited Partner to facilitate the structuring by the Initial
Limited Partner of a transaction with the offeror that will qualify as a
tax-free exchange by the Partnership under Section 1031 of the Code.
8.7 Other Business of Partners.
(a) The Partners, their Affiliates, and the shareholders,
officers, directors, partners and employees of any Partner or Affiliate may have
interests in businesses other than the Partnership business. Neither the
Partnership nor any Partner shall have a right to the income or proceeds derived
by any Partner or Affiliate from such other business interests, and even if they
are competitive with the Partnership business, such business interests shall not
be deemed wrongful or improper.
(b) Neither the General Partner nor any of its Affiliates
shall be obligated to present any particular investment opportunity to the
Partnership even if such opportunity is of a character which, if presented to
the Partnership, could be taken by the Partnership, and the General Partner
shall have the right to take for its own account or to recommend to others any
such particular investment opportunity.
8.8 Transactions with Affiliates. The Partnership may contract with the
General Partner or any Limited Partner or any Affiliate of any Partner to
provide goods to or perform services for the Partnership, including the
furnishing to the Partnership of general contractor's services and property
management services or the lending of funds to the Partnership, provided that
the terms and conditions thereof shall be competitive with the terms which
reasonably could be obtained from non-affiliated persons supplying comparable
goods or performing comparable services. Any Partner who shall lend money to the
Partnership under the terms of this Section shall be considered an unrelated
creditor with respect to such loan to the extent allowed by applicable law.
8.9 Establishment of Reserves. The General Partner may establish and
maintain reasonable reserves for working capital, as well as for debt repayment,
and for other payments required in connection with the operation of the
Partnership's business, and to provide for contingencies, and for such other
purposes as it may determine.
8.10 Bank Accounts. All funds of the Partnership shall be deposited in
a separate bank account or accounts in such banking institutions as the General
Partner shall determine and all withdrawals against such accounts shall be made
by check, draft or other written order drawn by the General Partner or its
properly delegated agents.
8.11 Payment and Reimbursement of General Partner's Expenses. The
Partnership shall pay, or reimburse the General Partner at its cost for all
expenses incurred on behalf of the Partnership in connection with the business
of the Partnership, including, but not limited to, fees paid to accountants,
attorneys and other persons employed or retained in connection with the business
of the Partnership and the cost of any goods or materials used by or for the
Partnership but excluding general overhead costs (e.g. rent and utilities) with
respect to offices of the General Partner or its Affiliates.
8.12 Liability and Indemnification of the General Partner. Neither the
General Partner, nor any Affiliate nor any shareholder, officer, director,
partner or employee of the General Partner or any Affiliate shall be liable,
responsible or accountable in damages or otherwise to any of the Limited
Partners or to the Partnership for any act or omission performed or omitted by
them in good faith, provided that they were not guilty of gross negligence or
willful misconduct. Except for actions or omissions constituting gross
negligence or willful misconduct, the Partnership shall and does hereby
indemnify and save harmless the General Partner, each Affiliate and each
shareholder, officer, director, partner and employee of the General Partner or
any Affiliate, for any loss, liability, damage, or expense incurred by them on
behalf of the Partnership or in furtherance of the Partnership's interests,
including reasonable attorney's fees and expenses. Reasonable attorney's fees
and expenses may be paid as incurred provided that the indemnified party
executes a written undertaking to repay such amounts if the indemnified party is
ultimately found not to be entitled to indemnification by the Partnership
pursuant to this Section. The satisfaction of any indemnification and any saving
harmless shall be from and limited to Partnership assets and no Partner shall
have any personal liability on account thereof.
ARTICLE 9
Rights of the Limited Partners
9.1 Limited Liability of Limited Partners. No Limited Partner shall be
liable for any of the losses, debts or obligations of the Partnership, or be
required to contribute any additional capital; provided, however, that a Limited
Partner shall return any or all of that portion of its capital contribution
which has been distributed to it to the extent required by the Act.
9.2 Limitation Upon Limited Partners' Authority. No Limited Partner, as
such, shall take part in the management of the business, transact any business
for the Partnership, or have the power to sign for or to bind the Partnership to
any agreement or document, such powers being vested solely and exclusively in
the General Partner.
9.3 No Right of Withdrawal. No Limited Partner shall be entitled to
Voluntarily Withdraw from the Partnership.
9.4 Admission of Successor or Additional General Partner. Each of the
Limited Partners, by the execution of this Agreement, hereby consents to the
admission as a General Partner of any person who becomes a General Partner by
means of a transfer or assignment by the General Partner of all or a portion of
its interest as General Partner made in compliance with the requirements of this
Agreement, and the admission of such person shall, without any further consent
or approval of the Limited Partners, be an act of all of the Limited Partners.
ARTICLE 10
Transfer of Limited Partner Interests
10.1 Limitations on Transfer of Limited Partner Interests. A Limited
Partner may sell, assign or subject to a security interest or otherwise
transfer, whether voluntarily or involuntarily or by operation of law, any or
all of its interest in the Partnership only with the written consent of the
General Partner, which may be granted or withheld in the sole and absolute
discretion of the General Partner. Any transfer in violation of this Section 0
shall be void. The General Partner may require, among other things, that:
(a) Such Limited Partner and his purchaser, transferee or
assignee execute, acknowledge and deliver to the General Partner such
instruments of transfer and assignment with respect to such transaction as are
in form and substance satisfactory to the General Partner, including an
agreement of the purchaser, transferee or assignee to be bound by all the terms
and conditions of this Agreement in the same manner as though such person were
an original party hereto;
(b) Such Limited Partner furnish an opinion of recognized
counsel (experienced in matters relating to securities laws) satisfactory in
form and substance to the Partnership's counsel, that such sale, transfer or
assignment will not violate any applicable federal or state securities laws or
other applicable laws or cause a termination of the Partnership for federal
income tax purposes;
(c) The purchaser, transferee or assignee represent in writing
that it is acquiring the interest for its own account for investment and not
with the view to the public distribution thereof and that it has the financial
resources to make such an investment; and
(d) The transfer will not require the Partnership to register
under Section 12 of the Securities Exchange Act of 1934.
The General Partner hereby consents to the transfer from time to time by a
Limited Partner of all or any portion of its interest in the Partnership to the
General Partner or any Affiliate of the General Partner pursuant to the terms of
any buy-sell agreement between the General Partner and/or the Partnership and
any Limited Partner, and no further consent of the General Partner shall be
required for any such transfer.
10.2 Pledges. In the event a transfer made in the manner described
herein is in the nature of a pledge, encumbrance or other transfer to secure any
indebtedness or other obligation, and all of the provisions of this Article 0
shall have been complied with prior to such pledge, encumbrance or transfer, the
transferee shall be free to assume full and complete ownership of the
transferred interest and to become a Substituted Limited Partner in the manner
and upon the occurrence of such events as may be specified in the documents
effecting such transfer, but any further transfer shall be made only on the same
terms and conditions herein specified.
10.3 Admission of Substituted Limited Partners. Any transferee of the
interest of a Limited Partner shall become a Substituted Limited Partner in
place of its transferor if the written instruments of transfer submitted to the
General Partner pursuant Section 0 set forth the intention of the transferor
that the transferee become a Substituted Limited Partner and the General Partner
gives its consent as provided in Section 0. Each Partner by its execution of
this Agreement does hereby consent to such substitution when all of the
conditions set forth in this Article 0 are satisfied and when the Agreement or
the Partnership's books and records have been amended to reflect the admission
of the Substituted Limited Partner. A transferee of the interest of a Limited
Partner who has become a Substituted Limited Partner has, to the extent
assigned, the rights and powers and is subject to the restrictions and
liabilities of a Limited Partner under this Agreement and the Act. A transferee
who becomes a Substituted Limited Partner also is liable for the obligations of
its transferor to make contributions and return distributions as provided in
this Agreement and the Act.
10.4 Unit Holders Who Are Not Limited Partners. A person who is the
holder of one or more Units but who has not been admitted as a Substituted
Limited Partner as provided in Section 0 shall be entitled only (a) to
allocations of Net Profits and Net Losses as provided in Article 0, (b) to
distributions as provided in Article 0, (c) to distributions upon liquidation of
the Partnership as provided in Article 0, and (d) to transfer his Units as
provided in this Article 0.
10.5 Death, Incompetency or Dissolution of a Limited Partner. Upon the
death or legal incompetency of a Limited Partner, his personal representative
shall have such rights as the decedent or incompetent possessed to transfer his
Units as provided in this Article 0, and such power as the decedent or
incompetent possessed to designate his transferee as a Substituted Limited
Partner, as provided in Section 0. Upon the bankruptcy, insolvency, dissolution
or other cessation to exist as a legal entity of a Limited Partner not an
individual, the authorized representative of such entity shall have all the
rights as such entity possessed to transfer its Units as provided in this
Article 0 and to designate its transferee as a Substituted Limited Partner, as
provided in Section 0.
10.6 Right to Vote of Assignor Limited Partner. In the event a vote of
the Limited Partners shall be taken pursuant to any provision of this Agreement
or of the Act, a Limited Partner, solely for the purpose of determining the
number of votes to be cast by him, shall be deemed to be the holder of any Units
transferred by him the transferee of which has not become a Substituted Limited
Partner.
ARTICLE 11
Records and Reports
11.1 Books and Records of the Partnership. The General Partner shall
cause the Partnership to keep records and books of account in which shall be
entered fully and accurately all transactions and other matters relative to the
Partnership's business as are usually entered in records and books of account
maintained by persons engaged in business of a like character. Subject to the
right of the General Partner to elect otherwise at any time, the Partnership
shall report its income for federal income tax purposes on the accrual basis and
the Partnership's books of account shall be kept on the accrual basis in
accordance with the accounting methods followed by the Partnership for federal
income tax purposes. The Partnership shall maintain at its registered office the
books and records required to be maintained by the Act, which shall be subject
to inspection and copying during ordinary business hours at the reasonable
request, and at the expense, of any Partner.
11.2 Financial and Other Reports. The General Partner shall use best
efforts to furnish to the Limited Partners (a) within 75 days after the end of
each fiscal year, such tax information as shall be necessary for the preparation
by them of their federal and state income tax returns, and (b) within 45 days
after the end of each fiscal quarter, quarterly financial statements and within
90 days after the end of each fiscal year, an annual report of the Partnership,
containing financial statements prepared on the basis of accounting then used by
the Partnership.
ARTICLE 12
Amendments
12.1 Procedure for Amendments. The General Partner may submit to the
Partners the text of any proposed amendment to this Agreement and a statement of
the purpose of any such amendment. Any such amendment shall be adopted if,
within 90 days after the mailing of such amendment to all Partners, the General
Partner shall have approved such amendment and shall have received written
approval thereof from a Majority in Interest of the Limited Partners. A written
approval may not be withdrawn or voided once it is filed with the General
Partner. A Partner filing a written objection may thereafter file a valid
written approval. The date of adoption of an amendment pursuant to this Article
0 shall be the date on which the General Partner shall have received the
requisite written approvals. Any proposed amendment which is not adopted may be
resubmitted. In the event any proposed amendment is not adopted, any written
approval received with respect thereto shall be void and shall not be effective
with respect to any resubmission of the proposed amendment.
12.2 Amendments by the General Partner. In addition to any amendments
otherwise authorized herein, this Agreement may be amended from time to time by
the General Partner, without the further consent of any of the Limited Partners:
(a) to add to the representations, duties or obligations of
the General Partner or surrender any right or power granted to the General
Partner herein, for the benefit of the Limited Partners;
(b) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other provision herein, or
to make any other provisions with respect to matters or questions arising under
this Agreement which will not be inconsistent with the provisions of this
Agreement;
(c) to delete or add any provision of this Agreement required
to be so deleted or added by the Staff of the Securities and Exchange Commission
or other federal agency or by a state "blue sky" commissioner or similar such
official, which addition or deletion is deemed by such commission, agency or
official to be for the benefit or protection of the Limited Partners;
(d) to delete or add any provision of this Agreement required
to be so deleted or added by the staff of the Internal Revenue Service in order
to permit the Partnership to obtain a ruling from the Internal Revenue Service
that it will be treated as a partnership for federal income tax purposes;
(e) to add to or change the name of the Partnership if such
addition or change is necessary to protect the limited liability of the Limited
Partners or to comply with applicable federal or state law or the rules or
regulations of any governmental agency;
(f) to delete or add any provision to this Agreement if such
change is necessary to comply with the Act as in effect from time to time; or
(g) to effect changes of a ministerial nature which do not
materially and adversely affect the rights of the Limited Partners, including
the admission of Substituted Limited Partners in compliance with the provisions
of this Agreement;
provided, however, that no amendment may be adopted pursuant to this Section 0
unless the adoption thereof (i) is for the benefit of or not adverse to the
interests of the Limited Partners; (ii) is consistent with Section 0 of this
Agreement; (iii) does not affect distributions or the allocation of Net Profits
and Net Losses among the Limited Partners or between the Limited Partners and
the General Partner; and (iv) does not affect the limited liability of the
Limited Partners or adversely affect the status of the Partnership as a
partnership for federal income tax purposes.
12.3 Amendments Requiring Consent of Certain Partners. Notwithstanding
the foregoing provisions of this Article 0, no amendment, without the prior
written approval of all Partners to be adversely affected by the amendment, may
(a) enlarge the obligations of any Partner under this Agreement, (b) enlarge the
liability of the General Partner to the Limited Partners, (c) amend this Article
0, (d) alter the interest of a Partner in distributions or in allocations of Net
Profits and Net Losses; or (e) alter the Partnership in such manner as will
result in the Partnership no longer being classified as a partnership for
federal income tax purposes.
ARTICLE 13
Termination and Dissolution
13.1 Termination and Dissolution of the Partnership. The Partnership
shall be terminated and dissolved on December 31, 2050; provided, however, that
the Partnership shall be terminated upon the earlier occurrence of any of the
following events:
(a) The Withdrawal of the General Partner unless (x) at the
time of such event there is at least one remaining General Partner and that
General Partner elects to continue the business of the Partnership or (y) if no
other General Partner exists, all remaining Partners agree in writing, within 90
days of such Withdrawal, to continue the business of the Partnership and to the
appointment of one or more additional General Partners, and within 30 days after
the date of such agreement, an amendment to the Partnership's Certificate of
Limited Partnership is filed with the Georgia Department of State reflecting
such agreement;
(b) The written consent of the General Partner and a Majority
in Interest of the Limited Partners to the termination and dissolution of the
Partnership;
(c) The sale or other disposition of all Partnership
properties and investments (including any mortgages or other purchase money
security interests received in connection with any such sale or other
disposition), and the liquidation of the proceeds thereof; or
(d) The entry of a decree of judicial dissolution pursuant to
the Act.
13.2 Change of Limited Partners. The Partnership shall not be
terminated or dissolved by the transfer by a Limited Partner of all or any
portion of its interest in the Partnership, or by the admission of a Substituted
Limited Partner.
13.3 Procedure Upon Termination. In the event the Partnership is
terminated, the General Partner, or the person required by law to wind up the
Partnership's affairs, shall wind up the Partnership's affairs, and shall
liquidate all of the Partnership's assets as promptly as is consistent with
obtaining, insofar as possible, the fair market value thereof. After all
liabilities of the Partnership, including for this purpose liabilities to
Partners who are creditors (other than liabilities for any amounts distributable
to Partners pursuant to Article 0), and all costs of dissolution have been paid
or provided for and subject to the right of the General Partner to set up such
cash reserves as it deems reasonably necessary for any contingent or unforeseen
liabilities or obligations, the remaining proceeds of the liquidation shall be
distributed to the Partners pro rata in accordance with the distribution
provisions contained in Section Error! Reference source not found. hereof. No
Limited Partner shall have the right to demand or receive property other than
cash upon dissolution and termination of the Partnership.
13.4 Return of Capital Investment. Each Limited Partner shall look
solely to the assets of the Partnership for all distributions with respect to
the Partnership and the return of its capital contributions thereto and share of
Net Profits or Net Losses thereof, and shall have no recourse therefor (upon
dissolution or otherwise) against the General Partner or any other Limited
Partner.
13.5 Waiver of Action for Dissolution. Each of the Limited Partners
hereby irrevocably waives any right that such Limited Partner may have to cause
the termination and dissolution of the Partnership, by court decree or
otherwise, except as set forth in Section 0.
13.6 Waiver of Action for Partition. Each of the Partners irrevocably
waives, during the term of the Partnership and during the period of its
liquidation following any dissolution, any right that such Partner may have to
maintain any action for partition with respect to any of the assets of the
Partnership.
ARTICLE 14
Appointment of Attorney-in-Fact
Each Limited Partner and each Substituted Limited Partner, by execution
hereof, irrevocably constitutes and appoints the General Partner of the
Partnership, with full power of substitution, his true and lawful
attorney-in-fact, in his name, place and stead to consent and agree to, make,
execute, sign, acknowledge, swear to, deliver, record and file, on behalf of him
and on behalf of the Partnership, the following:
(a) any instrument which may be required to be filed by the
Partnership under appropriate state law or by any governmental agency or which
the General Partner deems in the best interests of the Partnership to file;
(b) any documents which may be required to form, qualify or
continue the Partnership, or which may be necessary to reflect the admission of
additional or Substituted Limited Partners, any change in the amount of capital
contributions of the Partners, or the dissolution and termination of the
Partnership, or which the General Partner deems in the best interests of the
Partnership to file;
(c) any and all amendments to this Agreement adopted pursuant
to Section 0; and
(d) any and all such other instruments as may be deemed
necessary or desirable by the General Partner to carry out fully the provisions
of this Agreement in accordance with their terms.
The foregoing grant of authority:
(i) is a Special Power of Attorney coupled with an interest,
is irrevocable and
shall survive the death or incapacity of any person hereby giving such power;
(ii) may be exercised by a facsimile signature of the person
hereby giving the
power or by listing the name of such person along with the names of all other
persons for whom such attorney is so acting, and executing this Agreement or
such other certificates, instruments and documents with the single signature of
the General Partner as such attorney-in-fact acting for all the persons whose
names are so listed;
(iii) shall survive the delivery of an assignment by
a Limited Partner of the whole
or any portion of its Units; and
(iv) shall be governed by and construed and enforced in accordance
with the laws of the State of Georgia.
ARTICLE 15
Miscellaneous
15.1 Notices. Any notice or other communication required or permitted
to be given by any provision of this Agreement shall be in writing and shall be
deemed to have been given for all purposes if:
(a) it is delivered personally to the party or to an officer of the party
to whom the same is directed;
(b) it is delivered by registered or certified mail, return
receipt requested, addressed (i) if to the General Partner, to its address set
forth in Schedule 0 or to such other address as the General Partner may from
time to time specify by written notice to the Partners, and (ii) if to a Limited
Partner, to his address set forth on Schedule 0 of this Agreement or to such
other address as such Limited Partner may from time to time specify by written
notice to the General Partner; or
(c) it is delivered by telecopier, addressed as provided in
Section 0, with a duplicate copy sent by first class mail, postage prepaid.
15.2 Own Advisors. Each Limited Partner represents and warrants that it
has relied on its own advisors for advice in connection with structuring the
transactions contemplated by this Agreement in order to qualify as a nontaxable
transaction under Section 721 of the Code and is not relying on the General
Partner, Regency or their accountants, attorneys or other advisors with regard
to such qualification.
15.3 Section Captions. Section and other captions contained in this
Agreement are for reference purposes only and are in no way intended to
describe, interpret, define or limit the scope, extent or intent of this
Agreement or any provision hereof. Whenever required by the context, the
singular number shall include the plural and the masculine gender shall include
the feminine and neuter and vice versa.
15.4 Severability. Every provision of this Agreement is intended to be
severable. If any term or provision hereof is illegal or invalid for any reason
whatsoever, such illegality or invalidity shall not affect the remainder of this
Agreement.
15.5 Governing Law. This Agreement and the rights of the Partners shall
be governed by and construed and enforced in accordance with the laws of the
State of Georgia. The Act, as in effect from time to time, shall govern and
supersede any provision of this Agreement which would otherwise be in violation
of the Act.
15.6 Counterparts. This Agreement may be executed in several
counterparts, and all counterparts so executed shall constitute one agreement,
binding on all of the parties hereto, notwithstanding that all the parties are
not signatory to the original or the same counterpart.
15.7 Parties in Interest. Except as otherwise provided herein, each and
every covenant, term, provision and agreement herein contained shall be binding
upon and inure to the benefit of the successors and assigns of the respective
parties hereto.
15.8 Integrated Agreement. This Agreement constitutes the entire
understanding and agreement among the parties hereto with respect to the subject
matter hereof, and there are no agreements, understandings, restrictions,
representations or warranties among the parties other than those set forth
herein or herein provided for.
IN WITNESS WHEREOF, this Agreement of Limited Partnership has been
executed and sworn to as of the date first written above.
GENERAL PARTNER
RRC GA ONE, INC.
By:
Its:
INITIAL LIMITED PARTNER
PARKWAY STATION, LTD.
By:
Its:
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<PAGE>
shapeType1fFlipH0fFlipV0lTxid327680dxTextLeft0dyTextTop0dxTextRight0dyTextBotto
0fFilled0lineWidth0fLine0fShadow0fBehindDocument1
SCHEDULE A
Partners of
RRC Operating Partnership of Georgia, L.P.
General Partner
Capital Percentage
Name and Address Contribution No. of Units Interest
RRC GA One, Inc. $100,000.00 Cash 5,491 16%
Lenox Tower, Suite 1629
3400 Peachtree Road, N.E.
Atlanta, GA 30326
Limited Partners
Name and Address Capital Contribution Contribution Units
---------------- -------------------- ------------ -----
Parkway Station, Ltd. The Property more $169,851.55 9,327
1405 North Harris Ridge particularly described in
Atlanta, GA 30327 Schedule A-1, subject to
existing mortgage debt to
Metropolitan Life Insurance
Company in the principal
amount of $4,366,233.63
Earn-Out(1) $355,480.00(1) 19,521(1)
----------- ------
Fair
Market
Value of
Capital No. of Percentage
Interest
--------
28,848 84%
(1) Effective as of July 1, 1996.
<PAGE>
SCHEDULE A-1
Legal Description for Parkway Station Shopping Center
<PAGE>
SCHEDULE A-2
Earn Out Amount
The number of Units will be increased, and the Initial Limited
Partner's capital account will be increased from time to time but no later than
nine (9) months after the date of contribution of the Property by the Initial
Limited Partner to the Partnership, by an aggregate amount for all such
increases equal to the quotient arrived at by dividing the Earn-Out Amount, as
defined below, by 18.21. The aggregate Earn-Out Amount shall be the lesser of
(i) $355,480 or (ii) the sum of the first year annual base rent for the initial
terms of leases for Qualified Tenants (as defined herein), capitalized at the
rate of 10%. The Units and the Initial Limited Partner's capital account will be
increased based on the applicable portion of the Earn-Out Amount, divided by
18.21, each time a new tenant qualifies as a Qualified Tenant (each such date is
referred to as an "Adjustment Date"). The term "Qualified Tenant" means any
tenant, which is not Initial Limited Partner or an Affiliate of Initial Limited
Partner provided such tenant:
(a) is procured by Initial Limited Partner;
(b) has accepted the premises, is open for business and begins
paying rent in one or more of spaces B3, B4, D3, B14 or B15
within the center prior to the applicable Adjustment Date
(limited to one Qualified Tenant for any such space during the
nine-month period);
(c) is not in default under any term of its lease on the
applicable Adjustment Date;
(d) is creditworthy, and provides adequate security, in the
reasonable opinion of General Partner and in accordance with
customary industry standards;
(e) pays rent at market rates for comparable space in the center
with market concessions and market tenant improvement
allowances;
(f) executes the standard form lease used by the Initial Limited
Partner for the Property for an initial lease term of three
(3) years or longer, a form of which is attached hereto as
Exhibit 1 (unless another form or term is approved in writing
by General Partner), which shall be modified where appropriate
so it does not conflict with Kroger's expansion rights under
its existing lease;
(g) is not a tenant under a master lease;
(h) does not violate any law or use covenants contained in any
other leases in the center;
(i) does not duplicate any existing use within the center; and
(j) has not received nor expects to receive any financial benefit
of any nature from the Initial Limited Partner, any Affiliate
of Initial Limited Partner or any shareholder or partner of
any Affiliate of Initial Limited Partner other than market
concessions and allowances.
<PAGE>
All free rent, rent concessions, buildout expenses, leasing commissions
and other tenant occupancy expenses payable by the Partnership as landlord shall
be paid by the Initial Limited Partner (collectively, the "Tenant Concessions").
Initial Limited Partner will grant a security interest in the Units delivered on
each Adjustment Date to secure Initial Limited Partner's obligation to pay the
Tenant Concessions. It shall be a condition to the issuance of the Units at each
Adjustment Date that the Initial Limited Partner furnish the General Partner
with lien waivers for all tenant improvements for the new lease for the
Qualified Tenant.
<PAGE>
EXHIBIT 1
Initial Limited Partner's Form of Lease
<PAGE>
EXHIBIT 0
Form of Guaranty
SCHEDULE A-1
Earn-Out Amount
The number of Units will be increased, and the Initial Limited
Partner's capital account will be increased, nine (9) months after the date of
contribution of the property by the Initial Limited Partner to the Partnership
("Contribution Date") by an amount equal to the quotient arrived at by dividing
the Earn-Out Amount, as defined below, by 18.21. The Earn-Out Amount shall be
the lesser of (i) $355,480 or (ii) the sum of the capitalized first year annual
base rent for the initial terms of leases for Qualified Tenants, (as defined
herein), at the rate of 10%. The term "Qualified Tenants" means any tenants,
which are not Initial Limited Partner or Affiliates of Initial Limited Partner
provided such tenants:
1. are procured by Initial Limited Partner;
2. continually occupy and rent three or more of spaces B3, B4,
D3, B14 or B15 within the center from the commencement of the
respective lease to the Contribution Date;
3. are not in default under any term of the leases prior to the
Contribution Date;
4. conduct businesses for two consecutive years or more prior to
execution of the lease;
5. are creditworthy, and provide adequate security, in the
reasonable opinion of General Partner and in accordance with
customary industry standards;
6. pay rent at market rates for comparable space in the center
with market concessions and market tenant improvement
allowances;
7. execute the standard form lease used for the Property for an
initial lease term of five (5) years or longer, a form of
which is attached hereto as Exhibit (unless another form or
term is approved in writing by General Partner);
8. are not master tenants;
9. do not violate any law or use covenants contained in any other
leases in the center; and
10. do not duplicate any existing use within the center.
All rent concessions, buildout expenses, leasing commissions, other
tenant occupancy expenses payable by the Partnership as landlord, and down time
and lost rent shall be paid by the Initial Limited Partner (collectively, the
"Tenant Concessions"). Initial Limited Partner will grant a security interest in
the Units delivered on the Contribution Date to secure Initial Limited Partner's
obligation to pay the Tenant Concessions.
\RWH\CSK6839|05/13/99 4:05PM
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM RRC
OPERATING PARTNERSHIP OF GEORGIA L.P.'S REPORT FOR THE PERIOD ENDED 3/31/99
</LEGEND>
<CIK> 0001066253
<NAME> RRC OPERATING PARTNERSHIP OF GEORGIA, L.P.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 21,441
<SECURITIES> 0
<RECEIVABLES> 21,357
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 5,622,121
<DEPRECIATION> 347,631
<TOTAL-ASSETS> 5,341,074
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 1,281,410
<TOTAL-LIABILITY-AND-EQUITY> 5,341,074
<SALES> 0
<TOTAL-REVENUES> 207,914
<CGS> 0
<TOTAL-COSTS> 15,471
<OTHER-EXPENSES> 30,476
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 55,364
<INCOME-PRETAX> 76,474
<INCOME-TAX> 0
<INCOME-CONTINUING> 76,474
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 76,474
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
