<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
[Fee Required]
For the fiscal year ended
December 31, 1996
or
[ ] Transition Report to Section 13 or 15(d) of the Securities
Exchange Act of 1934
[Fee Required]
For the transition period from _______to_______
Commission File Number
33-26327-A
RAINES LENDERS, L.P.
(Exact name of Registrant as specified in its charter)
Delaware 62-1375240
(State or other Jurisdiction of (I.R.S. Employer
incorporation or organization) Identification
Number.)
One Belle Meade Place, 4400 Harding Road, Suite 500, Nashville,
Tennessee 37205
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (615) 292-1040
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange
on which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
UNITS OF LIMITED PARTNERSHIP INTEREST
(Title of Class)
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 at least the past 90 days.
YES X NO
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is
not contained herein, and will not be contained, to the best of the
registrant's knowledge, in definitive proxy of information
statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
[X]
The aggregate sales price of the Units of Limited Partnership
Interest to non-affiliates was $5,625,000 as of January 31, 1997.
This does not reflect market value, but is the price at which these
Units of Limited Partnership Interest were sold to the public.
There is no current market for these Units.
DOCUMENTS INCORPORATED BY REFERENCE
Documents Incorporated by Reference in Part IV:
Prospectus of Registrant, dated April 3, 1989, as filed pursuant to
Rule 424(b) of the Securities and Exchange Commission.
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PART I
Item 1. Business
Raines Lenders, L.P. ("Registrant"), is a Delaware limited
partnership organized on December 16, 1988, pursuant to the
provisions of the Delaware Revised Uniform Limited Partnership Act,
Sections 17-101 - 17-1109, Title 6. The General Partner of the
Registrant is 222 Raines, Ltd., a Tennessee limited partnership,
whose general partners are Steven D. Ezell, Michael A. Hartley and
222 Partners, Inc.
The Registrant's primary business is to lend monies to Raines
Road, L.P. an affiliated partnership, which is engaged primarily in
the business of acquiring, developing and disposing of certain
undeveloped real estate in Memphis, Tennessee (the "Property").
The Registrant's investment objectives are preservation of capital
and capital appreciation through lending with a participating
interest in a partnership that invests in real estate which is
expected to appreciate through the passage of time, growth in the
surrounding areas, and the development of the Property prior to
resale.
Financial Information about Industry Segments
The Registrant's activity is within one industry segment and
geographical area. Therefore, financial data relating to the
industry segment and geographical area is included in Item 6 -
Selected Financial Data.
Narrative Description of Business
The Registrant issued a $4,700,000 participating mortgage note
(the "Lender Financing"), maturing on December 31, 2001 to Raines
Road, L.P., (the "Borrower") an affiliated partnership sharing the
same General Partner. The proceeds of the Lender Financing were
used by the Borrower, together with the available equity proceeds,
to acquire the Property and fund reserves. The Lender Financing
entitles the Registrant to receive a priority return of interest
and principal, and a 50% profit participation upon the sale of the
Property by the Borrower.
The Property securing the Lender Financing consists of
approximately 230 acres of partially developed land on Raines Road
in Memphis, Tennessee, adjacent to the Memphis International
Airport. The Property is zoned for a wide variety of light
industrial, warehouse, office-warehouse and distribution uses. All
utilities, including water, sewer, electricity and natural gas, are
available to the Property.
In May, 1994, the Borrower secured a $1,100,000 loan
commitment from C.I.O.S., a Tennessee charitable lead trust. On
May 6, 1996 the Borrower retired the loan in full. The original
loan proceeds were used to pay tax property taxes and a
construction payable. The C.I.O.S. note was secured with a first
mortgage on the Borrower's Property and left the Registrant with a
subordinated position.
Competition
Because the Registrant is under agreement to loan all proceeds
raised, less operating reserves, to Raines Road, L.P., the
Registrant is not involved in competition.
The General Partner believes that the Property securing the
Lender Financing provides strong competition for purchasers or
developers of land in the Memphis Airport Area. There are a number
of tracts of competitive industrial land in the area, though there
are very few large vacant parcels available.
Primary competition comes from three industrial parks in the
airport sub-market, each offering similar pricing to the
Registrant. The General Partner believes that the Property is
competitive due to its location, access and low costs of
development.
The Registrant has no employees. Mortgage services are being
provided under a contractual agreement with Landmark Realty
Services Corporation, an affiliate of the General Partner.
Item 2. Properties
The Registrant does not own any property, nor does it intend
to own any property in the future.
Item 3. Legal Proceedings
Registrant is not party to any material legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders
The security holders of Registrant did not vote on any matter
during the fiscal year covered by this report.
PART II
Item 5. Market for Registrants' Units of Limited Partnership
Interest and Related Security Holder Matters
There is no established market for the Units, and it is not
anticipated that any will exist in the future. The Registrant
commenced an offering to the public on April 3, 1989 of 5,625 Units
of Limited Partnership Interests at $1,000 per Unit. The offering
of $5,625,000 was fully subscribed and closed on December 15, 1989.
As of February 28, 1997, there were 500 holders of record of the
Units of Limited Partnership Interests.
There were no distributions made in 1996. There are no
material restrictions upon the Registrant's present or future
ability to make distributions in accordance with the provisions of
Registrant's Limited Partnership Agreement.
<PAGE>
Item 6. Selected Financial Data
For the Year Ended
December 31,
1996 1995 1994 1993 1992
Total Revenues-
Interest $ 564,821 573,513 572,343 571,987 574,316
Net earnings 525,459 534,542 529,049 522,123 521,025
Net earnings per
limited partner
unit 93.41 94.02 94.05 92.82 92.63
Distributions per
limited partner
unit - 100 - - -
Total assets 7,499,700 6,974,241 7,007,881 6,478,827 5,956,304
Note receivable
from affiliate 4,700,000 4,700,000 4,700,000 4,700,000 4,700,000
Interest receivable
from affiliate 2,695,434 2,131,434 2,159,600 1,617,767 1,055,934
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Due to the nature of the Registrant, the majority of its
activity on a regular basis is to earn interest income. There are
no interest payments due to the Registrant until the Property
securing the Registrant's loan or portions thereof is sold, or
until December 31, 2001, whichever is first.
The operations of the Registrant have remained comparable
through the years. The reduction in amortization expense is due to
the organization costs being fully amortized in 1994. The minimal
operational expenses are expected to continue in the future.
In 1994, the Borrower sold 36 acres to an industrial developer
for $1.9 million. Proceeds were used to fund required development
and reduce the note payable to C.I.O.S. The Borrower took a short
term note receivable for $646,400 as part of the sale proceeds.
The note receivable with all accrued interest was received in full
on February 10, 1995.
The Borrower did not have any property sales in 1996 or 1995.
From sales in 1990, 1991 and 1994, the Cumulative Applicable
Principal payments of $1,196,180 are due and payable from the next
available sales proceeds, after all accrued interest is paid.
Financial Condition and Liquidity
At January 31, 1997, the Registrant had approximately $5,984
available in funds to cover operating expenses for 1997. Operating
expenses are primarily accounting fees which includes audit and
tax, and mortgage servicing fees. The cash reserves are expected
to run low toward the latter part of 1997. If a sale of the
property occurs, then funds may be available from a payment on the
Lender Financing. The General Partner expects the Registrant to
meet operational needs through affiliated loans if necessary.
In 1994, 1991 and 1990, the Borrower retained a portion of
sale proceeds for development and operations and did not distribute
all sale proceeds to the Registrant as payments of interest or
applicable principal. During 1995, the Borrower paid $600,000 to
the Registrant toward accrued interest from the 1994 sale proceeds.
An interest payment of $1,027,454 was made to Lender from the 1991
net proceeds. The Registrant's and Borrower's joint General
Partner believes that using sales proceeds for development and
distributing only the Borrower's net available cash was
contemplated by the loan agreement. However, the loan agreement is
ambiguous on this use of funds; therefore, this treatment could
constitute a default on the loan agreement. In such an event, the
registrant is required to foreclose the loan and accelerate the
amounts due. Currently, the Registrant has not foreclosed or
accelerated the amounts due under the loan agreement and has no
plans to do so.
<PAGE>
Item 8. Financial Statement and Supplementary Data
RAINES LENDERS, L.P.
(A Limited Partnership)
FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 1996, 1995, 1994
INDEX
Page
Number
Independent Auditors' Report 8
Financial Statements
Balance Sheets 9
Statements of Earnings 10
Statements of Partners' Equity 11
Statements of Cash Flows 12
Notes to Financial Statements 13
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Independent Auditors' Report
The Partners
Raines Lenders, L.P.:
We have audited the accompanying balance sheets of Raines Lenders,
L.P. (a limited partnership) as of December 31, 1996 and 1995, and
the related statements of earnings, partners' equity, and cash
flows for each of the years in the three-year period ended December
31, 1996. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Raines
Lenders, L.P. at December 31, 1996 and 1995, and the results of its
operations and its cash flows for each of the years in the three-
year period ended December 31, 1996, in conformity with generally
accepted accounting principles.
As discussed in Notes 1, the Partnership adopted the provisions of
Statement of Financial Accounting Standards (SFAS) No. 114,
"Accounting by Creditors for Impairment of a Loan", as amended by
SFAS No. 118, "Accounting by Creditors for Impairment of a Loan -
Income Recognition and Disclosure", in 1995.
KPMG Peat Marwick LLP
Nashville, Tennessee
January 20, 1997
<PAGE>
RAINES LENDERS, L.P.
(A Limited Partnership)
Balance Sheets
December 31, 1996 and 1995
Assets 1996 1995
Cash and cash equivalents $ 8,254 29,007
Note receivable from affiliate (note 3) 4,700,000 4,700,000
Interest receivable
from affiliate (note 3) 2,695,434 2,131,434
Deferred loan costs, less accumulated
amortization of $135,238 and
$117,450 in 1996 and 1995
96,012 113,800
Total assets $ 7,499,700 6,974,241
Liabilities and Partners' Equity
Liabilities - accounts payable $ 405 405
Partners' equity
Limited partners (5,625 units
outstanding) 7,499,295 6,973,836
General partner - -
Total partners' equity $ 7,499,295 6,973,386
Commitments and contingencies (note 2 and 3)
Total liabilities and
partners' equity $ 7,499,700 6,974,241
See accompanying notes to financial statements.
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RAINES LENDERS, L.P.
(A Limited Partnership)
Statements of Earnings
Years ended December 31, 1996, 1995 and 1994
1996 1995 1994
Interest income $ 564,821 573,513 572,343
Expenses:
Mortgage service fee
(note 2) 9,000 9,000 9,000
Legal and accounting
fees (note 2) 12,237 10,477 10,189
General and administrative 337 1,706 1,038
Amortization 17,788 17,788 23,067
Total expenses 39,362 38,971 43,294
Net earnings $ 525,459 534,542 529,049
Net earnings allocated to:
General Partner $ - 5,682 -
Limited Partner $ 525,459 528,860 529,049
Net earnings per
limited partner unit $ 93.41 94.02 94.05
Weighted average
units outstanding 5,625 5,625 5,625
See accompanying notes to financial statements.
<PAGE>
RAINES LENDERS, L.P.
(A Limited Partnership)
Statements of Partners' Equity
Years ended December 31, 1996, 1995 and 1994
Limited General
partners partner Total
Units Amounts
Balance at
December 31, 1993 5,625 $ 6,478,427 - 6,478,427
Net earnings - 529,049 - 529,049
_______ _______ _______ _______
Balance at
December 31, 1994 5,625 7,007,476 - 7,007,476
Net earnings - 528,860 5,682 534,542
Distributions(note 4) - (562,500) (5,682) (568,182)
_______ _______ _______ _______
Balance at
December 31, 1995 5,625 6,973,836 - 6,973,836
Net earnings - 525,459 - 525,459
_______ _______ _______ _______
Balance at
December 31, 1996 5,625 $ 7,499,295 - 7,499,295
See accompanying notes to financial statements.
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RAINES LENDERS, L.P.
(A Limited Partnership)
Statements of Cash Flows
Years ended December 31, 1996, 1995 and 1994
1996 1995 1994
Cash flows from operating activities:
Net earnings $ 525,459 534,542 529,049
Adjustments to reconcile
net earnings to net
cash (used) provided by
operating activities:
Amortization 17,788 17,788 23,067
(Increase) decrease
in interest receivable
from affiliate (564,000) 28,166 (541,833)
Increase in accounts
payable - - 5
Net cash (used) provided
by operating
activities (20,753) 580,496 10,288
Cash flows from financing
activities - distribution - (568,182) -
Net (decrease) increase
in cash and cash
equivalents (20,753) 12,314 10,288
Cash and cash equivalents at
beginning of year 29,007 16,693 6,405
Cash and cash equivalents at
end of year $ 8,254 29,007 16,693
See accompanying notes to financial statements.
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RAINES LENDERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
December 31, 1996 and 1995
(1) Summary of Significant Accounting Policies
(a) Organization
Raines Lenders, L.P. (the Partnership) is a Delaware limited
partnership organized on December 16, 1988, for the purpose of
making a participating mortgage loan to Raines Road, L.P.,
which shares the same General Partner. The General Partner is
222 Raines, Ltd., whose general partners are Steven D. Ezell,
Michael A. Hartley and 222 Partners,Inc. The Partnership
prepares financial statements and Federal income tax returns
on the accrual method and includes only those assets,
liabilities and results of operations which relate to the
business of the Partnership.
(b) Estimates
Management of the Partnership has made estimates and
assumptions to prepare these financial statements in
accordance with generally accepted accounting principles.
Actual results could differ from those estimates.
(c) Cash and Cash Equivalents
The Partnership considers all short-term investments with
original maturities of three months or less at the date of
purchase to be cash equivalents.
Cash belonging to the Partnership is combined in an account
with funds from other partnerships related to the general
partner.
(d) Note Receivable from Affiliate
Effective January 1, 1995, the Partnership adopted the
provisions of Statement of Financial Accounting Standards
(SFAS) No. 114, "Accounting by Creditors for Impairment of a
Loan", as amended by SFAS No. 118, "Accounting by Creditors
for Impairment of a Loan - Income Recognition and Disclosure".
The Partnership, considering current information and events
regarding the borrower's ability to repay its obligations,
considers a note to be impaired when it is probable that the
Partnership will be unable to collect all amounts due
according to the contractual terms of the note agreement.
When a note is considered to be impaired, the amount of the
impairment is measured based upon the estimated fair value of
<PAGE>
RAINES LENDERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
(1) Summary of Significant Accounting Policies (continued)
the underlying collateral. When a note is considered
impaired, management ceases the accrual of interest income.
The Partnership will establish an impairment allowance for the
amount that the recorded value of the note exceeds its
estimated fair value. The impairment allowance is established
by a change in earnings. Any cash receipts on impaired notes
receivable are applied to reduce the principal amount of such
notes until the principal has been recovered and are
recognized as interest income, thereafter.
At December 31, 1996 and 1995, the Partnership has no notes
that meet the definitions of an impaired loan under SFAS
No.114. Accordingly, the note receivable from affiliate is
recorded at cost with no allowance for impairment.
(e) Deferred Loan Costs
Deferred loan costs are amortized by the straight-line method
over the thirteen year term of the note receivable from
affiliate.
(f) Income Taxes
No provision has or will be made for Federal or state income
taxes since such taxes are the responsibility of the partners.
Annually, the Partners receive from the Partnership IRS forms
K-1's, which provide them with their respective share of
taxable income (or losses), deductions, and other tax related
information. The only difference between the tax basis and
reported amounts of the Partnership's assets and liabilities
relates to the recognition of interest income. For income tax
purposes, the outstanding principal balance accrues interest
at a compounded interest rate of 8.7% per annum.
(g) Partnership Allocations
Net profits, losses and distribution of cash flow of the
Partnership are allocated to the Partners in accordance with
the Partnership agreement as follows:
Partnership net profits are allocated first to any partner
with a negative balance in their capital account, determined
at the end of the taxable year as if the Partnership had
distributed cash flow, in proportion to the negative capital
balance account of all partners until no partner's capital
<PAGE>
RAINES LENDERS
(A Limited Partnership)
Notes to Financial Statements
(1) Summary of Significant Accounting Policies (continued)
account is negative. Net profit allocations are then made to
limited partners up to the difference between their capital
account balances and the sum of their adjusted capital
contributions (capital balance, net of cumulative cash
distributions in excess of preferred returns - 12% annual
cumulative return on capital contributed). Any remaining net
profit allocations are then made to the limited partners until
the taxable year in which cumulative profits to the limited
partners equal their adjusted capital contribution plus an
unpaid preferred return (12% annual cumulative return on
capital contributed). Net profits are then allocated to the
general partner until the ratio of the general partner's
capital account balance to the capital account balances, in
excess of adjusted capital contributions and unpaid preferred
return, of all limited partners is 27 and 73. Thereafter,
profits are generally allocated 27% to the general partner and
73% to the limited partners. Net losses are allocated to the
partners in proportion to their positive capital accounts.
Partnership distributions are allocated 99% to limited
partners and 1% to the general partner in an amount equal to
their preferred return (12% annual, cumulative return on
capital contributed), 99% to the limited partners and 1% to
the general partner until the limited partners have received
an amount equal to their adjusted capital contributions, and
then 73% to the limited partners and 27% to the general
partner.
<PAGE>
RAINES LENDERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
(2) Related Party Transactions
The General Partner and its affiliates have been actively
involved in managing the Partnership. Affiliates of the General
Partner receive fees for performing certain services. Expenses
incurred for these services are as follows:
1996 1995 1994
Mortgage service fee $ 9,000 9,000 9,000
Accounting fees 2,100 1,500 1,500
(3) Note Receivable From Affiliate
The note receivable from affiliate represents a $4,700,000
long-term note receivable from Raines Road, L.P. (the Borrower), an
affiliate sharing the same General Partner. The note accrues
simple interest at an annual rate of 12% plus additional interest
equal to 50% of "net revenues", as defined in the Participating
Loan Agreement. The note is secured by a mortgage on land and
improvements held for investment by the Borrower and by a security
interest in any unrestricted cash reserves or investment securities
held by the Borrower.
<PAGE>
RAINES LENDERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
(3) Note Receivable From Affiliate (continued)
Summarized financial information of Raines Road, L.P. at
December 31, 1996 and 1995, and for the years ended December 31,
1996, 1995 and 1994, is presented below:
Assets 1996 1995
Cash and cash equivalents $ 41,633 175,779
Restricted cash 156,241 155,687
Land and improvements held for investment 5,856,861 5,856,226
Other assets - 7,981
Total assets $ 6,054,735 6,195,673
Liabilities and Partners' Deficit
Liabilities:
Note payable - affiliate $ 4,700,000 4,700,000
Accrued interest payable - affiliate 2,695,434 2,131,434
Note payable - private - 100,000
Accrued interest payable - private - 2,420
Accounts payable 4,856 1,235
Accrued property taxes 41,895 -
Total liabilities 7,442,185 6,935,089
Partners' deficit:
Limited partners (1,387,450) (739,416)
General partners - -
Total partners' deficit $ (1,387,450) (739,416)
Total liabilities and
partners' deficit $ 6,054,735 6,195,673
<PAGE>
RAINES LENDERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
(3) Note Receivable from Affiliate (continued)
Operations 1996 1995 1994
Revenue:
Gain on sales of land
and improvements - - 536,626
Interest $ 11,266 40,628 16,091
Total revenues 11,266 40,628 552,717
Expenses:
Interest 568,571 607,862 621,908
Other 90,729 111,195 137,891
Total expenses 659,300 719,057 759,799
Net income (loss) (648,034) 678,429 207,082
________________ _______ _______ _______
Cash Flows
Net cash (used) provided by
operating activities $ (34,146) (205,192) 288,527
Net cash (used) provided by
financing activities (100,000) (267,716) 319,835
Net (decrease) increase in
cash and cash equivalents $ (134,146) (472,908) 608,362
In 1991 and 1990, the Borrower sold a total of 44.8 acres of
land receiving net proceeds of $1,110,524 and $963,328,
respectively. An interest payment of $1,027,454 was made to the
Partnership from 1991's net proceeds. There have been no
subsequent interest payments made. There were no sales of land in
1993 or 1992. During 1994, the Borrower sold two tracts of land
totaling approximately 36.5 acres receiving net cash proceeds of
$229,448. There were no sales of land in 1995 or 1996.
Due to anticipated future requirements for additional
development and operations, the Borrower retained proceeds from
these sales and did not pay additional amounts of interest and/or
applicable principal balance to the Partnership. The Partnership's
and Borrower's joint general partner believes that retaining sales
proceeds for development, and distributing only net available cash
to the Partnership, was contemplated by the note agreement.
However, the note agreement does not explicitly authorize this use
<PAGE>
RAINES LENDERS, L.P.
(A Limited Partnership)
Notes to Financial Statements
(3) Note Receivable from Affiliate (continued)
of funds; therefore, this treatment could constitute a default on
the note agreement. In such an event, the Partnership is required
to accelerate the amounts due or foreclose the loan. To date, the
Partnership has accelerated the amounts due under the note
agreement. At December 31, 1996 and 1995, the applicable principal
balance due to the Partnership is $1,196,180.
(4) Distributions
For the year ended December 31, 1995, the Partnership made a
distribution of $568,182. Of this amount, $562,500 ($100 per unit)
was allocated to the limited partners and $5,682 was allocated to
the general partner. There were no distribution in 1996 and 1994.
(5) Fair Value of Financial Instruments
At December 31, 1996 and 1995, the Partnership had financial
instruments including cash and cash equivalents, interest
receivable, accounts payable, and a note receivable. The carrying
amounts of cash and cash equivalents, and accounts payable
approximate their fair value because of the short maturity of those
financial instruments.
The determination of the estimated fair values of the note
receivable and related interest receivable was not practicable as
the note agreement does not provide for a predictable cash payment
stream.
<PAGE>
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosures.
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
The Registrant does not have any directors or officers. 222
Raines, Ltd. is the General Partner. Steven D. Ezell, Michael A.
Hartley and 222 Partners, Inc. are the general partners of the
General Partner and as such have general responsibility and
ultimate authority in matters affecting Registrant's business.
The General Partners of 222 Raines, Ltd. are as follows:
Steven D. Ezell
Steven D. Ezell, age 44, is a general partner of 222 Raines,
Ltd. He is the President and sole shareholder of 222 Partners,
Inc. He has been an officer of 222 Partners, Inc. from September
17, 1986 through the current period. Mr. Ezell is President and
50% owner of Landmark Realty Services Corporation. For the prior
four years, Mr. Ezell was involved in property acquisitions for
Dean Witter Realty Inc. in New York City, most recently as Senior
Vice President. Steven D. Ezell is the son of W. Gerald Ezell.
Michael A. Hartley
Michael A. Hartley, age 37, is Secretary/Treasurer and a Vice
President of 222 Partners, Inc. He has been an officer of 222
Partners, Inc. from September 17, 1986 through the current period.
Mr. Hartley is Vice President and 50% owner of Landmark Realty
Services Corporation. Prior to joining Landmark in 1986, Mr.
Hartley was Vice President of Dean Witter Realty Inc., a New York-
based real estate investment firm.
222 Partners Inc.
222 Partners, Inc. was formed in September, 1986 and serves as
general partner for several other real estate investment limited
partnerships. The directors of 222 Partners, Inc. are W. Gerald
Ezell, Steven D. Ezell, and Michael A. Hartley.
W. Gerald Ezell
W. Gerald Ezell, age 66, serves on the Board of Directors of
222 Partners, Inc. Until November, 1985, Mr. Ezell had been for
over 20 years an agency manager for Fidelity Mutual Life Insurance
Company and a registered securities principal of Capital Analysts
Incorporated, a wholly owned subsidiary of Fidelity Mutual Life
Insurance Company.
Item 11. Executive Compensation
During 1996, Registrant was not required to and did not pay
remuneration to any executives, partners of the General Partner or
any affiliates, except as set forth in Item 13 of this report,
"Certain Relationships and Related Transactions."
The General Partner does participate in the Profits, Losses
and Distributions of the Registrant as set forth in the Partnership
Agreement.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
As of February 28, 1997 no person or "group" (as that term is
used in Section 3(d) (3) of the Securities Exchange Act of 1934)
was known by the Registrant to beneficially own more than five
percent of the Units of Registrant.
As of the above date, the Registrant knew of no officers or
directors of 222 Partners, Inc. that beneficially owned any of the
units of the Registrant.
There are no arrangements known by the Registrant, the
operation of which may, at a subsequent date, result in a change in
control of the Registrant.
Item 13. Certain Relationships and Related Transactions
During 1996, no affiliated entities have earned compensation
for services from the Registrant in excess of $60,000. For a
listing of all miscellaneous transactions with affiliates which
were less than $60,000 refer to Note 2 to the Financial Statements
in Item 8.
The Registrant loaned $4,700,000 to Raines Road, L.P., an
affiliated partnership, during 1989, and accrued $2,695,434 in
interest on such loan through 1996.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
(a) (1) Financial Statements
See Financial Statements Index in Item 8 hereof.
(2) Financial Statement Schedule
See Financial Statement Schedule Index at page 23
hereof.
(3) Exhibits
3 Amended and Restated Certificate and Agreement of
Limited Partnership, incorporated by reference to
Exhibit A to the Prospectus of Registrant dated April
3, 1989 filed pursuant to Rule 424(b) of the Securities
and Exchange Commission.
10A Participating Loan Agreement by and among Raines Road,
L.P. and the Registrant, incorporated by reference to
Exhibit 10.1 to Registrant's Form S-18 Registration
Statement as filed on January 4, 1989.
10B Deed of Trust, Assignment of Leases and Security
Agreement by and among Raines Road, L.P. and the
Registrant, incorporated by reference to Exhibit 10.2
of the Registrant's Form S-18 Registration Statement as
filed on January 3, 1989.
10C Participating Mortgage Note of Owner to Lender
incorporated by reference to Exhibit 10.3 to
Registrant's Form S-18 Registration Statement as filed
on January 4, 1989.
22 Subsidiaries-Registrant has no subsidiaries.
27 Financial Data Schedule
(b) No reports on Form 8-K have been filed during the last
quarter of 1996.
<PAGE>
Financial Statement Schedule Filed Pursuant to Item 14(a)(2):
RAINES LENDERS, L.P.
(A Limited Partnership)
ADDITIONAL INFORMATION
FOR THE YEARS ENDED
DECEMBER 31, 1996, 1995 AND 1994
INDEX
Page
Number
Additional financial information furnished
pursuant to the requirements of Form 10-K:
Financial Statement Schedule -
Independent Auditor's Report 25
Schedule IV - Mortgage Loans on Real Estate 26
Financial Statements of Properties Securing
Mortgage Loans - Raines Road, L.P
Independent Auditors' Report 27
Balance Sheets 28
Statements of Operations 29
Statements of Partners' Deficit 30
Statements of Cash Flows 31
Notes to Financial Statements 32
All other Schedules have been omitted because they are
inapplicable, not required or the information is included in the
Financial Statements or notes thereto.
<PAGE>
Independent Auditors' Report
The Partners
Raines Lenders, L.P.
Under date of January 20, 1997, we reported on the balance sheets
of Raines Lenders, L.P. as of December 31, 1996 and 1995, and the
related statements of earnings, partners' equity, and cash flows
for each of the years in the three-year period ended December 31,
1996. These financial statements and our report thereon are
included elsewhere herein. In connection with our audits of the
aforementioned financial statements, we have also audited the
related financial statement schedule information as listed in the
accompanying index. This financial statement schedule is the
responsibility of the Partnership's management. Our responsibility
is to express an opinion on this financial statement schedule based
on our audit.
In our opinion, such financial statement schedule, when considered
in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information set
forth therein.
As discussed in Note 1, the Partnership adopted the provisions of
Statement of Financial Accounting Standards (SFAS) No. 114,
"Accounting by Creditors for Impairment of a Loan" as amended by
SFAS No. 118, "Accounting by Creditors for Impairment of a Loan -
Income Recognition and Disclosure" in 1995.
KPMG PEAT MARWICK LLP
Nashville, Tennessee
January 20, 1997
<PAGE>
Schedule IV
RAINES LENDERS, L.P.
(A Limited Partnership)
Mortgage Loans on Real Estate
December 31, 1996
<TABLE> Principal
amount of
loan
subject to
Carrying delin-
<CAPTION> Face amount quent
Final Periodic amount of principal
Interest maturity payment Prior of mortgage or
Description rate date terms liens mortgage (1)(2) interest
<S>_________ <C>_____ <C>_____ <C>____ <C>___ <C>_____ <C>_____ <C>_____
Raines Road,
L.P., an
affiliate* 12% December Upon the
31, 2001 sale of
property - $4,700,000 $4,700,000-
</TABLE>
1996 1995 1994
(1) Balance at beginning of
period $ 4,700,000 4,700,000 4,700,000
Balance at end of period$ 4,700,000 4,700,000 4,700,000
(2) Aggregate cost for Federal
tax purposes $ 4,302,126 4,302,126 4,302,126
*This represents a promissory note from Raines Road, L.P., an
affiliate sharing the same General Partner. This note accrues
simple interest at an annual rate of 12% plus additional interest
equal to 50% of the "net revenues," as defined in the Participating
Loan Agreement. The note is secured by a mortgage on the land in
Memphis, Tennessee held by the debtor, subject to a subordination
agreement to the holder of the note payable-private described in
note 3, and by a security interest in any cash reserves or
investment securities held by the debtor. At December 31, 1996,
interest of $2,695,434 was accrued on the promissory note.
Interest and principal payments become due upon the sale of the
collateral or any portion thereof to the extent cash is available,
but no later than December 31, 2001. See note 3 to the financial
statements.
See accompanying independent auditors' report.
<PAGE>
Independent Auditors' Report
The Partners
Raines Road, L.P.:
We have audited the accompanying balance sheets of Raines Road,
L.P. (a limited partnership) as of December 31, 1996 and 1995, and
the related statements of operations, partners' deficit, and cash
flows for each of the years in the three-year period ended December
31, 1996. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Raines
Road, L.P. at December 31, 1996 and 1995, and the results of its
operations and its cash flows for each of the years in the three-
year period ended December 31, 1996, in conformity with generally
accepted accounting principles.
As discussed in Note 1, the Partnership adopted the provisions of
Statement of Financial Accounting Standards (SFAS) No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed Of" on January 1, 1996.
KPMG Peat Marwick LLP
Nashville, Tennessee
January 20, 1997
<PAGE>
RAINES ROAD, L.P.
(A Limited Partnership)
Balance Sheets
December 31, 1996 and 1995
<TABLE>
Assets 1996 1995
<S> <C> <C>
Cash and cash equivalents (note 5) $ 41,633 175,779
Restricted cash (note 3) 156,241 155,687
Land and improvements held for investment
(notes 4, 5 and 6) 5,856,861 5,856,226
Note receivable (note 7) - -
Accrued interest receivable - -
Loan costs, less accumulated amortization of
$47,881 in 1996 and $39,900 in 1995 - 7,981
Total assets $ 6,054,735 6,195,673
Liabilities and Partners' Deficit
Liabilities:
Note payable - affiliate (note 5)$ 4,700,000 4,700,000
Accrued interest payable to
affiliate (note 5) 2,695,434 2,131,434
Notes payable - private (note 6) - 100,000
Accrued interest payable - private - 2,420
Accounts payable 4,856 1,235
Accrued property taxes 41 895 -
Total liabilities 7,442,185 6,935,089
Partners' deficit:
Limited partners (1,875 units
outstanding) (1,387,450) (739,416)
General partner - -
Total partners' deficit (1,387,450) (739,416)
Commitments and contingencies
(notes 2 and 5)
Total liabilities and
partners' deficit $ 6,054,735 6,195,673
</TABLE>
See accompanying notes to financial statements.
<PAGE>
RAINES ROAD, L.P.
(A Limited Partnership)
Statements of Operations
<TABLE>
Years ended December 31, 1996, 1995 and 1994
<CAPTION>
1996 1995 1994
<S> <C> <C> <C>
Revenues
Sales proceeds $ - - 1,908,400
Cost of land sold - - (1,196,959)
Selling expenses (note 2) - - (174,815)
Income on sales of land
and improvements - - 536,626
Interest 11,266 40,628 16,091
Total revenues 11,266 40,628 552,717
Expenses:
Interest expense 568,571 607,862 621,908
Property taxes 40,087 47,175 81,666
Consulting services 17,471 14,335 8,581
General and administrative 2,860 5,479 5,490
Legal and accounting
(note 2) 16,605 12,227 10,990
Amortization 7,981 23,940 18,107
Land maintenance fees 2,725 5,039 10,057
Program management fee
(note 2) 3,000 3,000 3,000
Total expenses 659,300 719,057 759,799
Net loss $ (648,034) (678,429) (207,082)
Net loss allocated to:
General partner $ - - -
Limited partners $ (648,034) (678,429) (207,082)
Net loss per limited
partner unit $ (345.62) (361.83) (110.44)
Weighted average units
outstanding 1,875 1,875 1,875
</TABLE>
See accompanying notes to financial statements.
<PAGE>
RAINES ROAD, L.P.
(A Limited Partnership)
Statements of Partners' Deficit
Years ended December 31, 1996, 1995 and 1994
<TABLE>
<CAPTION>
Limited General
partners partner Total
Units Amounts
<S> <C> <C> <C> <C>
Balance at
December 31, 1993 1,875 $ 146,095 - 146,095
Net loss - (207,082) - (207,082)
_______ _______ _______ _______
Balance at
December 31, 1994 1,875 (60,987) - (60,987)
Net loss - (678,429) - (678,429)
_______ _______ _______ _______
Balance at
December 31, 1995 1,875 (739,416) - (739,416)
Net loss - (648,034) - (648,034)
_______ _________ ______ ________
Balance at
December 31, 1996 1,875 $(1,387,450) - (1,387,450)
===== =========== ====== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
RAINES ROAD, L.P.
(A Limited Partnership)
Statements of Cash Flows
Years ended December 31, 1996, 1995 and 1994
1996 1995 1994
Cash flows from operating activities:
Net loss $(648,034) (678,429) (207,082)
Adjustments to reconcile net
loss to net cash (used)
provided by operating activities:
Amortization 7,981 23,940 18,107
Cost of land and improvements
held for investment,
net of noncash
transaction (635) - (211,612)
Decrease (increase) in
note receivable - 646,400 (646,400)
Cost of land and improvements
sold - - 1,196,959
Decrease (increase) in
accrued interest
receivable - 7,650 (7,650)
(Increase) decrease in
restricted cash (554) (1,302) (139,358)
Increase (decrease) in
accrued interest
payable 561,580 (33,213) 549,300
Increase (decrease) in
accounts payable, net
of noncash transaction 3,621 (131,006) (119,686)
Increase (decrease) in
accrued property taxes 41,895 (39,232) (144,051)
Net cash (used) provided
by operating
activities (34,146) (205,192) 288,527
<PAGE>
RAINES ROAD, L.P.
(A Limited Partnership)
Statements of Cash Flows (continued)
Years ended December 31, 1996, 1995 and 1994
1996 1995 1994
Cash flows from financing activities:
Proceeds from note
payable-private - - 1,100,000
Payment of note
payable-private (100,000) (267,716) (732,284)
Payment of loan costs - - (47,881)
Net cash (used) provided
by financing
activities (100,000) (267,716) 319,835
Net (decrease) increase
in cash and cash
equivalents (134,146) (472,908) 608,362
Cash and cash equivalents
at beginning of year 175,779 648,687 40,325
Cash and cash equivalents
at end of year $ 41,633 175,779 648,687
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest $ 6,991 641,075 69,189
Supplemental Disclosure of Noncash Financing and Investing
Activities:
During 1994, the Partnership reached an agreement with one of its
vendors whereby a liability of $115,629 which was being disputed
was forgiven resulting in a reduction in land and improvements held
for investment and accounts payable.
See accompanying notes to financial statements.
<PAGE>
RAINES ROAD, L.P.
(A Limited Partnership)
Notes to Financial Statements
December 31, 1995 and 1994
(1) Summary of Significant Accounting Policies
(a) Organization
Raines Road, L.P. (the Partnership) is a Delaware limited
partnership organized on December 16, 1988 to acquire
several contiguous, undeveloped tracts of land in
Memphis, Tennessee for the purpose of developing and
selling parcels of real estate. The General Partner is
222 Raines, Ltd., whose general partners are Steven D.
Ezell, Michael A. Hartley, and 222 Partners, Inc. The
Partnership prepares financial statements and income tax
returns on the accrual method of accounting. The
financial statements include only those assets,
liabilities and results of operations which relate to the
Partnership.
(b) Estimates
Management of the Partnership has made estimates and
assumptions to prepare these financial statements in
accordance with generally accepted accounting principles.
These estimates include the determination of the
estimated fair value of the Partnership's land and
improvements in accordance with the provisions of SFAS
No. 121. Actual results could differ from those
estimates.
(c) Cash and Cash Equivalents
The Partnership considers all short-term investments with
original maturities of three months or less at the date
of purchase to be cash equivalents.
Cash belonging to the Partnership is combined in an
account with funds from other partnerships related to the
general partner.
(d) Land and Improvements Held for Investment
Land and improvements held for investment is recorded at
cost and includes approximately 230 acres in 1996 and
1995. Interest expense on the note payable to affiliate,
<PAGE>
RAINES ROAD, L.P.
(A Limited Partnership)
Notes to Financial Statements
December 31, 1995 and 1994
(1) Summary of Significant Accounting Policies (continued)
insurance and property taxes are capitalized as carrying
costs of the property during the development period.
Costs to hold land, including interest, insurance, and
property taxes are charged to expense once the
development of the property is substantially complete.
Land improvement costs incurred and capitalized include
development costs expended subsequent to the acquisition
of a tract of land.
The Partnership adopted the provisions of Statement of
Financial Accounting Standards (SFAS) No. 121,
"Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to be Disposed Of" on January 1,
1996. SFAS NO. 121 requires that long-lived assets to be
disposed of be reported at the lower of the carrying
amount or fair value less estimated costs to sell. The
fair value of the assets can be determined externally,
using appraisals, or internally using discounted future
net cash flows. If such assets are considered impaired,
the impairment to be recognized is measured by the amount
by which the carrying amount of the assets exceeds the
fair value of the assets less estimated costs to sell.
Impairment is recognized through the establishment of an
allowance for impairment with a corresponding charge to
operations. Losses upon the sale of the assets are
charged to the allowance. Based upon management's
analysis of discounted future net cash flows, the
Partnership's land and improvements held for investment
does not meet definitions of impairment under SFAS No.
121. Accordingly, land held for investment is recorded
at cost with no allowance for impairment necessary. The
adoption of SFAS No. 121 did not have an impact on the
Partnership's financial position, results of operations,
or liquidity.
(e) Loan Costs
Loan costs were amortized by the straight-line method
over the two year term of the note payable - private.
<PAGE>
RAINES ROAD, L.P.
(A Limited Partnership)
Notes to Financial Statements
December 31, 1995 and 1994
(1) Summary of Significant Accounting Policies (continued)
(f) Income Taxes
No provision has been made in the financial statements
for Federal or state income taxes, since such taxes are
the responsibilities of the partners.
Annually, the Partners receive, from the Partnership, IRS
Form K-1's, which provide them with their respective
share of taxable income or losses, deductions, and other
tax related information. The only difference between the
tax basis and reported amounts of the Partnership's
assets and liabilities relates to the valuation of land
held for investment. For income tax purposes certain
costs were capitalized as additional land improvement
costs.
(g) Partnership Allocations
Net profits, losses and distribution of cash flow of the
Partnership are allocated to the Partners in accordance
with the Partnership agreement as follows:
Partnership net profits are allocated first to any
partner with a negative balance in their capital account,
determined at the end of the taxable year as if the
Partnership had distributed cash flow, in proportion to
the negative capital balance account of all partners
until no partner's capital account is negative. Net
profit allocations are then made to the limited partners
up to the difference between their capital account
balances and the sum of their adjusted capital
contributions (capital balance, net of cumulative cash
distributions in excess of preferred returns - 12% annual
cumulative return on capital contributed). Any remaining
net profit allocations are then made to the limited
partners until the taxable year in which cumulative
profits to the limited partners equal their adjusted
capital contribution plus an unpaid preferred return (12%
annual cumulative return on capital contributed). Net
profits are then allocated to the general partner until
the ratio of the general partner's capital account
<PAGE>
RAINES ROAD, L.P.
(A Limited Partnership)
Notes to Financial Statements
December 31, 1995 and 1994
(1) Summary of Significant Accounting Policies (continued)
balance to the capital account balances, in excess of
adjusted capital contributions and unpaid preferred
return, of all limited partners is 27 to 73. Thereafter,
profits are generally allocated 27% to the general
partner and 73% to the limited partners. Net losses are
allocated to the partners in proportion to their positive
capital accounts.
Partnership distributions are allocated 99% to the
limited partners and 1% to the general partner in an
amount equal to their preferred return (12% annual,
cumulative return on capital contributed), 99% to the
limited partners and 1% to the general partner until the
limited partners have received an amount equal to their
adjusted capital contributions, and then 73% to the
limited partners and 27% to the general partner.
(h) Reclassifications
Certain prior year amounts have been reclassified to
conform with the current year presentation.
(2) Related Party Transactions
The General Partner and its affiliates have been actively
involved in managing the Partnership. Affiliates of the General
Partner receive fees and commissions for performing certain
services. Expenses incurred for these services are as follows:
1996 1995 1994
Accounting fees $ 2,100 1,500 1,500
Program management fee 3,000 3,000 3,000
Interest expense 564,000 571,834 571,833
Real estate sales commission - - 76,176
(3) Restricted Cash
At December 31, 1996 and 1995, the Partnership had restricted
cash balances of $156,241 and $155,687, respectively, to be used to
fund property improvements consisting of road and utility work.
<PAGE>
RAINES ROAD, L.P.
(A Limited Partnership)
Notes to Financial Statements
(4) Land and Improvements Held for Investment
The components of land and improvements held for investment at
December 31, are as follows:
1996 1995
Land and carrying costs $ 4,826,846 4,826,846
Land improvements 1,030,015 1,029,380
------- -------
$ 5,856,861 5,856,226
Aggregate cost of land and improvements held for investment for
federal income tax purposes was $7,641,267 and $7,101,355 at
December 31, 1996 and 1995, respectively.
(5) Note Payable - Affiliate
The note payable to affiliate represents a $4,700,000 note
payable to Raines Lenders,L.P. (Lender), an affiliate sharing the
same General Partner. The note accrues simple interest at an
annual rate of 12% plus additional interest equal to 50% of "net
revenues", as defined in the Participating Loan Agreement. The
note is secured by a mortgage on land and improvements held for
investment by the Partnership and by a security interest in any
cash reserves or investment securities held by the Partnership.
Interest and principal payments become due upon the sale of the
collateral or any portion thereof to the extent cash is available,
but no later than December 31, 2001.
In 1991 and 1990, the partnership sold a total of 44.8 acres
of land receiving net proceeds of $1,110,524 and $963,328,
respectively. An interest payment of $1,027,454 was made to the
Lender from the 1991 net proceeds. There were no sales of land in
1993 or 1992. During 1994, the Partnership sold two tracts of land
totaling approximately 36.5 acres receiving net cash proceeds of
$229,448. In 1996 and 1995, there were no sales of land and an
interest payment of $600,000, was made to the Lender in 1995.
Due to anticipated future requirements for additional
development and operations, the Partnership retained proceeds from
these sales and did not pay additional amounts of interest and/or
applicable principal balance to the Lender. The Partnership's and
Lender's joint general partner believes that retaining sales
proceeds for development and distributing only net available cash
to the Lender was contemplated by the note agreement. However, the
note agreement does not explicitly authorize this use of funds;
therefore, this treatment could constitute a default on the note
agreement. In such an event, Lender is required to foreclose the
<PAGE>
RAINES ROAD, L.P.
(A Limited Partnership)
Notes to Financial Statements
(5) Note Payable - Affiliate (continued)
note and accelerate the amounts due. To date, the Lender has not
foreclosed or accelerated the amounts due under the note agreement.
At December 31, 1996 and 1995, the applicable principal balance due
to Lender is $1,196,180.
Interest expense associated with the note payable to affiliate
in 1996, 1995, and 1994 was $564,000, $571,834, and $571,833,
respectively.
(6) Note Payable - Private
The note payable represented the funding of $1,100,000 under
a two year term loan commitment from C.I.O.S., a Tennessee
charitable trust. The note accrued simple interest at an annual
rate of 12%. The note matured on May 5, 1996 and was paid in full.
At December 31, 1995, no additional draws could be made under this
commitment.
(7) Fair Value of Financial Instruments
At December 31, 1996 and 1995, the Partnership had financial
instruments including cash and cash equivalents, restricted cash,
accrued interest payable, accounts payable, accrued property taxes,
and notes payable. The carrying amounts of cash and cash
equivalents, restricted cash, accounts payable, and accrued
property taxes approximate their fair value because of the short
maturity of those financial instruments.
The determination of the estimated fair values of the note
payable and the related accrued interest payable to affiliate was
not practicable as the note agreement does not provide for a
predictable cash payment stream. The fair values of the $100,000
note payable - private and the related accrued interest payable -
private approximate cost due to the note's short term nature.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
RAINES LENDERS, L.P.
By: 222 Raines, Ltd.
General Partner
DATE: March 27, 1997 By: /s/ Steven D. Ezell
General Partner
DATE: March 27, 1997 By: /s/ Michael A. Hartley
General Partner
By: 222 Partners, Inc.
General Partner
DATE: March 27, 1997 By: /s/ Michael A. Hartley
Secretary/Treasurer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.
RAINES LENDERS, L.P.
By: 222 Raines, Ltd.
General Partner
DATE: March 27, 1997 By: /s/ Steven D. Ezell
General Partner
DATE: March 27, 1997 By: /s/ Michael A. Hartley
General Partner
By: 222 Partners, Inc.
General Partner
DATE: March 27, 1997 By: /s/ Michael A. Hartley
Secretary/Treasurer
Supplement Information to be Furnished with Reports filed
Pursuant to Section 15(d) of the Act by Registrant Which Have Not
Registered Securities Pursuant to Section 12 of the Act:
No annual report or proxy material has been sent to security
holders.
<PAGE>
Exhibits filed to Item 14(a)(3):
RAINES LENDERS, L.P.
(A Delaware Limited Partnership)
Exhibit Index
Exhibit
3 Amended and Restated Certificate and Agreement of Limited
Partnership, incorporated by reference to Exhibit A to
the Prospectus of Registrant dated April 3, 1989 filed
pursuant to Rule 424(b) of the Securities and Exchange
Commission.
10A Participating Loan Agreement by and among Raines Road,
L.P., incorporated by reference to Exhibit 10.1 to
registrant's Form S-18 Registration Statement as filed on
January 4, 1989.
10B Deed of Trust, Assignment of Leases and Security
Agreement by and among Raines Road, L.P. and the
Registrant, incorporated by reference to Exhibit 10.2 of
the Registrant's Form S-18 Registration Statement as
filed on January 4, 1989.
10C Participating Mortgage Note of Raines Road, L.P. to
Raines Lenders, L.P., incorporated by reference to
Exhibit 10.3 to Registrant's Form S-18 Registration
Statement as filed on January 4, 1989.
22 Subsidiaries-Registrant has no subsidiaries.
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000845399
<NAME> RAINES LENDERS, LTD.
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 8,254
<SECURITIES> 0
<RECEIVABLES> 4,700,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,499,700
<CURRENT-LIABILITIES> 405
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 7,499,295
<TOTAL-LIABILITY-AND-EQUITY> 7,499,700
<SALES> 0
<TOTAL-REVENUES> 564,821
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 39,362
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 525,459
<INCOME-TAX> 0
<INCOME-CONTINUING> 525,459
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 525,459
<EPS-PRIMARY> 93.41
<EPS-DILUTED> 93.41
</TABLE>
