UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 1996 :
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-16856
RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P.
(Exact name of registrant as specified in its charter)
Delaware 13-3368726
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
411 West Putnam Avenue, Greenwich, CT 06830
(Address or principal executive offices) (Zip Code)
Registrant's telephone number, including area code 203-862-7000
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of Each Class which registered
- ------------------- ----------------
None None
Securities registered pursuant to Section 12(g) of the Act:
Units of Limited Partnership Interest, $250 per Unit
(Title of Class)
Indicate by check mark whether 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 registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [ X ] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
Exhibit Index set forth on page IV-1.
<PAGE>
PART I
Item 1. Business
General
Registrant is a Delaware limited partnership formed as of August 14, 1986. RAM
Funding, Inc., a Delaware corporation that is a wholly-owned subsidiary of
Presidio Capital Corp. ("Presidio"), is Registrant's managing general partner
("Managing General Partner"). RAM Funding Inc., was until November 3, 1994 a
wholly owned subsidiary of Integrated Resources Inc. (Integrated"). On November
3, 1994, Integrated consummated its plan of reorganization under Chapter 11 of
the United States Bankruptcy Code, at which time, pursuant to such plan of
reorganization, the newly formed Presidio purchased substantially all of
Integrated's assets. The other General Partner of Registrant is Presidio AGP
Corp., a Delaware corporation ("Presidio AGP"), which replaced as the Associate
General Partner Z Square G Partners II, a New York general partnership whose
partners were previously associated with Integrated.
Effective with the consummation of Integrated's plan of reorganization, Presidio
entered into a management and administrative agreement with Concurrency
Management Corp. ("Concurrency"). Effective January 1, 1996, Wexford Management
Corp. (formerly Concurrency) assigned its agreement to provide administrative
services to Presidio and its subsidiaries to Wexford Management LLC ("Wexford").
In December 1994, Z Square G Partners II notified Registrant of its withdrawal
as the Associate General Partner of Registrant. The withdrawal became effective,
after 60 days prior written notice to Limited Partners, on February 28, 1995.
Upon the effective date of such withdrawal, Presidio AGP, which is a
wholly-owned subsidiary of Presidio Capital Corp., became the Associate General
Partner. (The Managing General Partner and Associate General Partner are
hereinafter collectively referred to as the "General Partners").
Registrant invested primarily in "zero coupon" first and junior mortgage loans
("Mortgage Loans") on properties owned or acquired principally by privately and
publicly syndicated limited partnerships originally sponsored by affiliates of
Integrated. The Mortgage Loans had original terms of approximately twelve years
with all interest and principal due and payable at the maturity or prepayment of
the Mortgage Loan.
Registrant offered 400,000 units of limited partnership interest (the "Units")
pursuant to the Prospectus dated April 12, 1988 (the "Prospectus") of Registrant
which was filed with the Securities and Exchange Commission as part of
Post-Effective Amendment No. 2 to Registrant's Registration Statement on Form
S-11, Commission File No. 33-9705, as amended (the "Registration Statement").
The Prospectus was supplemented by supplements dated August 12, 1988, February
8, 1989, March 10, 1989, April 28, 1989 and June 26, 1989. In June 1988,
Registrant had its initial admission of limited partners, and its offering
terminated on September 20, 1989. As of its final admission on October 1, 1989,
Registrant had accepted subscriptions for 187,919 Units (including Units owned
by the initial limited partner) resulting in total gross proceeds of $46,979,750
of which $18,405,847 of the offering proceeds was not invested or committed by
April 12, 1990 and was returned in accordance with the terms of Registrant's
partnership agreement ("Partnership Agreement"). In 1996, 1995 and 1994, the
percentage of Registrant's revenue attributable to interest on short term
investments was 6.6%, 8.3% and 4.9%, respectively. For the years ended December
31, 1996, 1995 and 1994, the Sierra Loan accounted for approximately 91.1%,
90.7% and 85% respectively, of Registrant's revenues.
<PAGE>
Investments of Registrant
Registrant originally invested 100% of its net proceeds in four Mortgage Loans
in the original amount of $23,323,513, including interest of $23,513. In June
1992, the senior mortgage lender on one of Registrant's investments, the
Promenade Loan, foreclosed on the property securing its loan, and Registrant
lost its entire investment. As of March 1, 1997, Registrant had investments in
the remaining three Mortgage Loans in the original amounts of $17,700,000,
including interest of $23,513. All interest and principal is due and payable at
maturity and there are no current payments due on any of the Mortgage Loans.
Following is a description of the status of Registrant's investments: Sierra
Marketplace Loan
A $6,500,000 first Mortgage Loan (the "Sierra Loan") to High Cash Partners, L.P.
(the "Sierra Borrower"), a public limited partnership originally sponsored by
Integrated, which is secured by a shopping center commonly known as the Sierra
Marketplace located in Reno, Nevada (the "Sierra Property"). The Sierra Property
consists of approximately 233,000 square feet of net rentable area. The shopping
center occupies 18.67 acres, consisting of two main buildings and three anchor
tenant buildings with surface parking for 1,184 automobiles.
The Sierra Loan was funded on February 10, 1989 and bears interest at a rate of
11.22% per annum, compounded monthly and is due on February 28, 2001, at which
time a balloon payment of $24,966,653, together with additional interest (as
described below) if any, will be payable. Under the terms of the loan, the
Sierra Borrower must provide, on request, a current appraisal of the Sierra
Property. If the sum of (i) the principal balance of the Sierra Loan plus all
other then outstanding indebtedness secured by the Sierra Property plus (ii) all
accrued and unpaid interest in excess of 5% per annum of the principal balance
of such mortgages, exceed 85% of the current appraised value, the Sierra
Borrower shall be immediately obligated to pay such excess. In the event that
such excess becomes due, the Sierra Borrower may not have sufficient liquidity
to satisfy its obligation to Registrant. The Sierra Borrower could be forced to
sell its property or seek other relief, including protection under the
bankruptcy laws. Management has prepared a valuation of the Property and based
on that valuation, no additional amounts are presently due. However, it appears
possible that the loan will accrue to a value in excess of the property's market
value within the next few years. At that time it is likely that the Registrant
may cease accruing interest on this loan and a provision for loan losses may be
recorded against the loan value.
Registrant is entitled to additional interest equivalent to 23.9% of the
appreciation in the value of the Sierra Property after payment of a specified
return to the Sierra Borrower. The maximum annual rate of interest, including
the additional interest, cannot exceed 16% compounded annually. It is unlikely
that Registrant will realize any additional interest from the appreciation of
the property.
The total amount, including fees, allocated to the Sierra Loan from the gross
proceeds of Registrant's offering was $7,715,134 including payment to the
Managing General Partner of a mortgage placement fee of $385,757.
Harborista Loan
A $10,000,000 second Mortgage Loan (the "Harborista Loan") to Harborista
Associates L.P. (the "Harborista Borrower"), a private limited partnership
originally sponsored by Integrated, is secured by an office building commonly
<PAGE>
known as the Harbor Plaza, located in Boston, Massachusetts ("Harbor Plaza").
Harbor Plaza consists of a 13-story office building on .88 acres containing
approximately 334,000 square feet of rentable space, located in the Fort Point
Channel section of downtown Boston. Harbor Plaza is 100% leased pursuant to a
master net lease (the "Master Lease") which, subject to a right of early
termination by the Harborista Borrower, expires on November 30, 1998.
The Harborista Loan was funded on February 13, 1989 and bears interest at a rate
of 13.307% per annum, compounded monthly and was originally due on December 1,
1998 at which time a balloon payment of $36,568,146 will be payable.
The total amount, including fees, allocated to the loan from the gross proceeds
of Registrant's offering was $11,897,345 including payment to the Managing
General Partner of a mortgage placement fee of $594,867.
Harbor Plaza is also encumbered by a first mortgage loan in the amount of
$24,475,000 (the "Northwestern Mortgage") held by Northwestern Mutual Life
Insurance Co. ("Northwestern"). The Northwestern Mortgage was due to mature on
December 1, 1995, but was extended until December 1, 1999.
In 1993, based upon information that the cash flow from the tenant at Harbor
Plaza was far below the amount of rental payments due under the Master Lease,
the condition of the Boston real estate market and the likelihood that the
public works construction which had adversely affected Harbor Plaza would
continue for some time, there was a substantial likelihood that the Harborista
Borrower would not be able to refinance the Northwestern Mortgage when it
matured. For these reasons, during 1993 management determined that interest on
the Harborista Loan should cease to accrue and that an allowance for loan losses
was necessary for the entire carrying value of the Harborista Loan which was
$10,618,380. In addition, if 470 Atlantic Management Corp. was successful in the
lawsuit referred to below, it may have resulted in an attempted foreclosure by
Northwestern. See Item 3, "Legal Proceedings - Harbor Plaza Litigation" for a
discussion of the litigation involving Harbor Plaza.
The Master Lessee and Registrant consummated an agreement during the fourth
quarter of 1995, pursuant to which Registrant received $341,038 (which is
included in other income for the year ended December 31, 1995). In accordance
with this agreement, Registrant subordinated its lien to any new monies invested
in Harbor Plaza and extended its loan (as did the first mortgagor) until 1999,
among other things. For additional information concerning the Harborista Loan
see Item 7, "Management's Discussion and Analysis of Financial Condition and
Results of Operations."
Twin Oak Loan
A $1,200,000 second Mortgage Loan (the "Twin Oak Loan") to Twin Oak Plaza
Associates (the "Twin Oak Borrower"), a limited partnership originally sponsored
by Integrated, is secured by the Twin Oak Shopping Center, located in Fort
Lauderdale, Florida (the "Twin Oak Property").
The property is a 113,217 square foot community retail shopping center which
includes the 15,000 square foot addition built by the Twin Oak Borrower, which
had been fully leased to McCrory until March 1995 at which time McCrory vacated.
McCrory filed a voluntary petition for reorganization under Chapter 11 of the
United States Bankruptcy Code in February 1992. In July, 1993, the Bankruptcy
Court approved McCrory's application for a Lease Amendment which allowed for a
reduction in its rental rates to current market levels. The tenant had been
current with its rent payments since the Bankruptcy Court hearing, however,
<PAGE>
McCrory had petitioned the Bankruptcy Court to terminate its Lease and vacated
the premises on March 31, 1995. During 1996 the McCrory space was leased to
Scotty's Hardware, who began paying rent to the Twin Oak Borrower in February
1997.
The Twin Oak Loan was funded on April 3, 1990 and bears interest at a rate of
12.23% per annum, compounded annually, and is due on May 1, 2002 at which time a
balloon payment of $4,843,839 will be payable. Under the terms of the loan, the
Twin Oak Borrower must provide, at Registrant's request, a current appraisal of
the Twin Oak Property. If the sum of (i) the principal balances of the Twin Oak
Loan plus the first mortgage plus (ii) all accrued and unpaid interest in excess
of 5% per annum of the principal balance of such mortgages exceeds 85% of the
then current appraised value, the Twin Oak Borrower shall be immediately
obligated to pay such excess. Based on management's cash flow projections and
analyses, the Twin Oak Borrower is currently failing this test. Registrant will
not take action against Twin Oak at this time as there is not an adequate remedy
for the Registrant. By Registrant calling its mortgage, Twin Oak would most
likely seek protection under Chapter 11 of the United States Bankruptcy Code.
Since the estimated value of the underlying property is currently approximately
equal to the first mortgage plus the carrying value of Registrant's mortgage, by
calling its loan, Registrant would jeopardize its potential of realizing any
proceeds from the Twin Oak Loan.
The total amount, including fees, allocated to the loan from the gross proceeds
of Registrant's offering was $1,424,332, including payment to the Managing
General Partner of a mortgage placement fee of $71,217.
The Twin Oak Property is also encumbered by a first mortgage in the amount of
$4,250,000, held by Southern Life Assurance Company (the "Southern Life
Mortgage"). The Southern Life Mortgage bears interest at a rate of 10% per annum
plus contingent interest, and is payable in 119 equal monthly installments of
$36,550. The maturity date of the Southern Life Mortgage, originally July 1,
1993, was extended by three years to July 1, 1996. The Twin Oak borrower is
currently negotiating an extension on the First Mortgage. The Twin Oak borrower
has ceased making debt service payments on the first mortgage and is using
current cash flow to repair the Winn Dixie roof while negotiations are in
progress. If negotiations are not successful, it is not possible to predict what
effect this will have on Registrant.
In January 1995, Registrant ceased accruing interest on the Twin Oak loan due to
the fact that McCrory, a tenant occupying approximately 13% of the retail space,
filed a voluntary petition for reorganization under Chapter 11 of the United
States Bankruptcy Code which significantly reduced the value of the Property.
McCrory successfully petitioned the Court to terminate its lease and vacated the
premises in March 1995.
During the year ended 1996, a $1,515,000 provision for loan losses was recorded
on the Twin Oak Loan. As a result of the continued vacancy of the former McCrory
space and uncertainties regarding its lease up, a decline in the standard of
living in the surrounding area of the Twin Oak Shopping Center and negotiations
with the first mortgage lender regarding an extension of its loan which was due
July 1, 1996, cash flow projections were performed during the second quarter of
1996 which indicated that the estimated fair value of the Twin Oak property was
approximately $4,530,000 at that time. The contractual balance of the first
mortgage at June 30, 1996 was approximately $3,890,000, necessitating a
provision for loan losses of $1,515,000 to reduce the carrying value of the loan
to approximately $640,000.
<PAGE>
As of December 31, 1996, the McCrory space had been leased to Scotty's Hardware
who will begin paying rent to the Twin Oak borrower in April 1997.
Employees
Registrant does not have any employees. Certain services are performed by the
General Partners and/or their affiliates for Registrant in connection with the
servicing of the Mortgage Loans pursuant to a mortgage servicing agreement.
Wexford currently performs accounting, secretarial, transfer and administrative
services for Registrant and Registrant pays for its pro rata amount of such
services. Wexford also performs similar services for other affiliates of the
General Partners.
Item 2. Properties
None.
Item 3. Legal Proceedings
None.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report through the solicitation of
proxies or otherwise.
PART II
Item 5. Market for Registrant's Securities and Related Security Holder
Matters
There is no established public trading market for the Units of Registrant.
There are restrictions set forth in the Partnership Agreement which may limit
the ability of a limited partner to transfer units. Such restrictions could
impair the ability of a limited partner to liquidate its investment in the event
of an emergency or for any other reason.
As of March 1, 1997, there were approximately 4,200 holders of Units of
Registrant, owning an aggregate of 187,919 Units (including Units held by the
initial limited partner).
<PAGE>
There are no material legal restrictions set forth in the Partnership Agreement
upon Registrant's present or future ability to make distributions. No
distributions were made in 1996, 1995 and 1994. No distributions from cash flow
are anticipated to be made in as much as all payments due from borrowers under
the Mortgage Loans are deferred and payable upon maturity or prepayment of the
respective Mortgage Loans. Where deemed appropriate, the Managing General
Partner will consider accepting prepayments on a negotiated basis. During 1995,
Registrant received $341,038 from the Harborista settlement, and is currently
holding the said settlement in reserves.
Item 6. Selected Financial Data.
<TABLE>
<CAPTION>
Year ended December 31,
1996 1995 1994 1993 1992
--------------- ------------ ------------ ---------------- ------------
<S> <C> <C> <C> <C> <C>
Revenues ........ $ 1,794,213 $ 1,946,240 $ 1,885,747 $ 1,797,318 $ 1,353,217
Net Income (Loss) $ 123,888(2) $ 1,765,545 $ 1,723,537 $ (9,056,306)(1) $ 1,151,537
Net Income (Loss)
Per Unit .... $ .64(2) $ 9.16 $ 8.94 $ (46.99)(1) $ 5.97
Total Assets .... $ 19,501,016 $ 19,346,908 $ 17,554,159 $ 15,853,759 $ 24,847,907
(1) Net of provision for loan losses of $10,618,380 or $55.09 per Unit.
(2) Net of provision for loan losses of $1,515,000 or $7.86 per Unit.
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Liquidity and Capital Resources
Registrant has invested the net proceeds of its public offering in "zero coupon"
first and junior mortgage loans secured by properties owned principally by
privately and publicly syndicated limited partnerships originally sponsored by
affiliates of Integrated. The initial admission of limited partners occurred on
June 1, 1988 and as of the termination of its offering on September 20, 1989
Registrant had raised gross proceeds of $46,979,750. Since all gross proceeds
that were raised had not been invested or committed for investment, Registrant
was obligated under the terms of the Prospectus to return such uninvested funds.
The Managing General Partner distributed these proceeds in the amount of
$19,263,445 (including interest of $857,598) in August, 1990. This represented a
return of capital of $90.06 per unit and an allocation of interest earned on
uninvested gross proceeds, ranging from $6.42 per unit to $17.90 per unit
depending on the date of admission. Additionally, Registrant made a second
related distribution of $606,978, or $3.23 per unit, on October 30, 1990.
Registrant had invested in four Mortgage Loans aggregating approximately
$23,300,000 in principal. In June, 1992 Registrant lost its investment in the
Promenade Loan which represented original loan proceeds of $5,600,000 leaving an
aggregate of original investments of approximately $17,700,000.
<PAGE>
Registrant uses working capital reserves provided from the proceeds of its
public offering and subsequent settlement amounts, and interest earned thereon
as its primary measure of liquidity. Registrant does not anticipate making any
distributions from cash flow during its first 8 to 12 years of operations, or
until such time as the Mortgage Loans mature or are prepaid. Working capital
reserves are invested in short-term instruments and are expected to be
sufficient to pay administrative expenses during the term of Registrant. As of
December 31, 1996, Registrant had working capital reserves of approximately
$2,873,000.
A portion of the Registrant's Proof of Claim against Integrated was allowed by
the Bankruptcy Court in the amount of $691,791. During 1994, a cash distribution
of approximately 35.8 percent or $247,613 was made to the Registrant in full
settlement of this claim. The Managing General Partner has added this amount to
Registrant's working capital reserves.
In February 1995, Registrant entered into an agreement in principle with respect
to the Harbor Plaza litigation which was consummated in accordance with its
terms in December 1995. The agreement required a payment to Registrant of
approximately $341,038 from the Master Lessee of Harbor Plaza. The Managing
General Partner has added this amount to Registrant's working capital reserves.
Except as discussed above, management is not aware of any other known trends,
events, commitments, or uncertainties that will have a significant impact on
liquidity.
Real Estate Market
The real estate market continues to suffer from the effects of the recession
which included a substantial decline in the market value of existing properties.
Market values have been slow to recover, and while the pace of new construction
has slowed, high vacancy rates continue to exist in many areas. These factors
may continue to reduce rental rates. As a result, Registrant's potential for
realizing the full value of its investment in certain mortgages is considered
unlikely.
Allowance for Loan Losses
An allowance for loan losses is established based upon a quarterly review of
each of the mortgage loans in Registrant's portfolio. In performing the review,
management considers the estimated net realizable value of the property or
collateral as well as other factors, such as the current occupancy, the amount
and status of senior debt, if any, the prospects for the property and the
economic situation in the region where the property is located. Because this
determination of net realizable value is based upon projection of future
economic events which are inherently subjective, the amounts ultimately realized
at disposition may differ materially from the carrying values as of December 31,
1996.
For the quarter ended June 30, 1996, a $1,515,000 allowance for loan losses was
recorded on the Twin Oak Loan. As a result of the vacancy of the former McCrory
space and uncertainties regarding its lease up, a decline in the standard of
living in the surrounding area of the Twin Oak Shopping Center and negotiations
with the first mortgage lender regarding an extension of its loan which was due
July 1, 1996, cash flow projections were performed which indicated the estimated
fair value of the Twin Oak property to be approximately $4,530,000 at June 30,
1996. The contractual balance of the first mortgage at June 30, 1996 was
approximately $3,890,000, necessitating a write-down of $1,515,000 to reduce the
carrying value of the loan to approximately $640,000.
<PAGE>
The allowance is inherently subjective and is based on management's best
estimate of current conditions and assumptions about expected future conditions.
Registrant may provide additional losses in subsequent years and such provisions
could be material.
Results of Operations
1996 vs. 1995
Net income decreased for the year December 31, 1996 compared to 1995. The
decrease was primarily due to the provision for loan losses recorded on the Twin
Oak loan during the second quarter of 1996, as discussed above.
Revenues decreased compared to the same period in 1995. The decrease was
primarily a result of a decrease in other income due to the receipt of $341,038
relating to the settlement of the Harbor Plaza Litigation in 1995, partially
offset by an increase in the contractual value of the Sierra loan (due to the
deferral of interest) on which the mortgage interest income is calculated.
Costs and expense increased for the year ended December 31, 1996 compared to the
same period in 1995. The increase was primarily due to the provision for loan
losses recorded on the Twin Oak loan, partially offset by a decrease in general
and administrative expenses. General and administrative expenses decreased
primarily as a result of decreased payroll related costs
1995 vs. 1994
Net income increased during 1995 compared to 1994. The increase is due to a
greater increase in revenues than the increase in expenses for the year ended
December 31, 1995 compared to 1994.
Revenues increased for the year ended December 31, 1995 compared to 1994 as a
result of increases in other income and interest income, partially offset by a
decrease in investment income. Other income increased primarily due to the
receipt of $341,038 from the settlement of the Harborista litigation during 1995
as compared to the receipt in 1994 of approximately $247,000 from the Integrated
settlement. Interest income increased when compared to the prior year due to an
increase in working capital reserves combined with an increase in short term
interest rates. Investment income decreased for the year ended December 31, 1995
compared to 1994 due to the cessation of the interest accrual related to the
Twin Oak loan.
Costs and expenses increased for the year ended December 31, 1995 compared to
1994 due to an increase in general and administrative expenses. General and
administrative expenses increased primarily due to an increase in the costs to
administer the legal affairs of the Partnership partially offset by a decrease
in payroll costs for 1995 versus 1994.
Other Legal Proceedings
None.
<PAGE>
Item 8. Financial Statements and Supplementary Data
RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P.
FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995, AND 1994
INDEX
Independent Auditor's Report
Independent Auditors' Report
Financial Statements - Years ended
December 31, 1996, 1995 and 1994
Balance sheets
Statements of income
Statement of partners' equity
Statements of cash flows
Notes to financial statements
All financial statement schedules are omitted because they are not applicable or
the required information is shown on the financial statements or notes thereto.
<PAGE>
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
<PAGE>
To the Partners of
Resources Accrued Mortgage Investors 2 L.P.
Greenwich, Connecticut
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying balance sheets of Resources Accrued Mortgage
Investors 2 L.P. ( a limited partnership) as of December 31, 1996 and 1995, and
the related statements of income, partners' equity and cash flows for the years
then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our 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 Resources Accrued Mortgage
Investors 2 L.P. as of December 31, 1996 and 1995, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.
Hays & Company
February 21, 1997
New York, New York
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Partners of
Resources Accrued Mortgage Investors 2 L.P.
We have audited the accompanying statements of operations, partners' equity and
cash flows of Resources Accrued Mortgage Investors 2 L.P. (a Delaware limited
partnership) for the year ended December 31, 1994. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements and the financial statement
schedule based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the results of operations and cash flows of Resources Accrued Mortgage
Investors 2 L.P. for the year ended December 31, 1994 in conformity with
generally accepted accounting principles.
As more fully described in Note 4, the Partnership provided for significant
losses on its investments in mortgage loans in 1993. As disclosed in Note 2, the
determination of the allowance for loan losses is based upon projections of
future economic events which are inherently subjective.
March 16, 1995
Deloitte & Touche
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P.
BALANCE SHEETS
December 31,
-----------------------------
1996 1995
------------ ------------
<S> <C> <C>
ASSETS
Investments in mortgage loans (net of allowance
for loan losses of $12,133,380 and $10,618,380 at
December 31, 1996 and 1995) ..................... $ 16,616,033 $ 16,511,153
Cash and cash equivalents .......................... 2,873,084 2,835,755
Other receivable ................................... 11,899 --
------------ ------------
$ 19,501,016 $ 19,346,908
============ ============
LIABILITIES AND PARTNERS' EQUITY
Liabilities
Accounts payable and accrued expenses .............. $ 130,798 $ 100,578
------------ ------------
Commitments and contingencies (Notes 3, 4, and 6)
Partners' equity
Limited partners' equity (187,919 units issued
and outstanding) ................................ 19,619,745 19,498,954
General partners' deficit .......................... (249,527) (252,624)
------------ ------------
Total partners' equity .......................... 19,370,218 19,246,330
------------ ------------
$ 19,501,016 $ 19,346,908
============ ============
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P.
STATEMENTS OF INCOME
Year ended December 31,
-------------------------------------
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Revenues
Mortgage loans interest income ...... $1,619,880 $1,455,616 $1,533,217
Short term investment interest ...... 144,945 133,136 92,233
Other income ........................ 29,388 357,488 260,297
---------- ---------- ----------
1,794,213 1,946,240 1,885,747
---------- ---------- ----------
Costs and expenses
General and administrative expenses . 155,325 180,695 162,210
Provision for loan losses ........... 1,515,000 -- --
---------- ---------- ----------
1,670,325 180,695 162,210
---------- ---------- ----------
Net income ............................... $ 123,888 $1,765,545 $1,723,537
========== ========== ==========
Net income attributable to
Limited partners .................... $ 120,791 $1,721,406 $1,680,449
General partners .................... 3,097 44,139 43,088
---------- ---------- ----------
$ 123,888 $1,765,545 $1,723,537
========== ========== ==========
Net income per unit of limited partnership
interest (187,919 units outstanding) $ 0.64 $ 9.16 $ 8.94
========== ========== ==========
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P.
STATEMENT OF PARTNERS' EQUITY
YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996
General Limited Total
Partners' Partners' Partners'
Deficit Equity Equity
<S> <C> <C> <C>
Balance, January 1, 1994 ...... $ (339,851) $16,097,099 $15,757,248
Net income - 1994 ............. 43,088 1,680,449 1,723,537
----------- ----------- -----------
Balance, December 31, 1994 .... (296,763) 17,777,548 17,480,785
Net income - 1995 ............. 44,139 1,721,406 1,765,545
----------- ----------- -----------
Balance, December 31, 1995 .... (252,624) 19,498,954 19,246,330
Net income - 1996 ............. 3,097 120,791 123,888
----------- ----------- -----------
Balance, December 31, 1996 .... $ (249,527) $19,619,745 $19,370,218
=========== =========== ===========
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P.
STATEMENTS OF CASH FLOWS
Year ended December 31,
-------------------------------------------
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS
Cash flows from operating activities
Net income ..................................... $ 123,888 $ 1,765,545 $ 1,723,537
Adjustments to reconcile net income to
net cash provided by operating activities
Provision for loan losses ................... 1,515,000 -- --
Non-cash interest earned
on mortgage loans ....................... (1,619,880) (1,455,616) (1,533,217)
Changes in assets and liabilities
Other receivables ........................... (11,899) -- --
Accounts payable and accrued expenses ....... 30,220 27,204 (23,137)
----------- ----------- -----------
Net cash provided by operating activities 37,329 337,133 167,183
----------- ----------- -----------
Net increase in cash and cash equivalents ........... 37,329 337,133 167,183
Cash and cash equivalents, beginning of year ........ 2,835,755 2,498,622 2,331,439
----------- ----------- -----------
Cash and cash equivalents, end of year .............. $ 2,873,084 $ 2,835,755 $ 2,498,622
=========== =========== ===========
See notes to financial statements.
</TABLE>
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
1 ORGANIZATION
Resources Accrued Mortgage Investors 2 L.P. (formerly Resources Accrued
Mortgage Investors L.P. - Series 87 and Resources Accrued Mortgage
Investors L.P. - Series 88), a Delaware limited partnership (the
"Partnership"), was formed in August 1986 under the Delaware Revised
Uniform Limited Partnership Law for the purpose of investing primarily in
senior and junior accrued interest mortgage loans on properties owned or
acquired principally by publicly or privately syndicated limited
partnerships sponsored by affiliates of Integrated Resources, Inc.
("Integrated"), the former parent of the General Partners.
The Partnership originally offered 400,000 units of limited partnership
interest (the "Units") pursuant to the Prospectus dated April 12, 1988
(the "Prospectus") which was filed with the Securities and Exchange
Commission as part of Post-Effective Amendment No. 2 to the Partnership's
Registration Statement on Form S-11, Commission File No. 33-9705, as
amended by supplements dated August 12, 1988, February 8, 1989, March 10,
1989, April 28, 1989 and June 26, 1989. In June 1988 the Partnership had
its initial admission of limited partners, and its offering terminated on
September 20, 1989. As of its final admission, which was effective
October 1, 1989, the Partnership had accepted subscriptions for 187,919
Units (including Units owned by the initial limited partner) resulting in
total gross proceeds of $46,979,750. Since all gross proceeds that were
raised had not been invested or committed for investment, the Partnership
was obligated, under the terms of the Prospectus, to return such
uninvested funds. The Managing General Partner distributed these funds in
the amount of $19,263,445, including interest of $857,598, in August,
1990.
In August 1986, the Partnership admitted Resources Capital Corp. as the
Administrative General Partner; RAM Funding, Inc. as the Investment
General Partner; and Z Square G Partners II as the Associate General
Partner. In September, 1986, the aforementioned general partners made
capital contributions to the Partnership of $960, $20, and $20,
respectively. The Administrative General Partner, Investment General
Partner and Associate General Partner were originally entitled to receive
4.8%, .1% and .1%, respectively, of the Adjusted Cash From Operations,
Disposition Proceeds and Allocations of Net Income and Loss, each as
defined in the Prospectus. The initial limited partner was admitted in
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
August, 1986, and made a capital contribution of $2,500 for ten Units. In
May 1987, RAM Funding, Inc. purchased from Resources Capital Corp. its
4.8% general partner interest in the Partnership for $960. RAM Funding,
Inc. then became the Managing General Partner of the Partnership. All of
the undertakings and responsibilities originally assumed by Resources
Capital Corp. were assumed by RAM Funding, Inc. as the Managing General
Partner. Integrated, the parent of the Managing General Partner until
November 3, 1994, agreed to such changes.
In December 1987, RAM Funding, Inc. and Z Square G Partners II reduced
their general partner interests from 4.9% and .1%, respectively, to 2.45%
and .05%, respectively; accordingly, RAM Funding, Inc. and Z Square G
Partners II were then entitled to receive 2.45% and .05%, respectively,
of Adjusted Cash From Operations, Disposition Proceeds and Allocations of
Net Income and Loss. In addition, the Limited Partners' interest in
Adjusted Cash from Operations, Disposition Proceeds and Allocations of
Net Income and Loss had increased from 95% to 97.5%.
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Investments in mortgage loans
The Partnership principally invests in "zero coupon" senior and junior
mortgage loans on properties owned or acquired by limited partnerships
originally sponsored by affiliates of the General Partners. These loans
generally contain provisions whereby the Partnership may be entitled to
additional interest represented by participation in the appreciation of
the underlying property.
The Partnership accounts for its investments in mortgage loans under the
following methods:
Investment method
Mortgage loans representing transactions in which the Partnership is
considered to have substantially the same risks and potential rewards as
the borrower are accounted for as investments in real estate rather than
as loans. Although the transactions are structured as loans, due to the
terms of the zero coupon mortgage, it is not readily determinable at
inception that the borrower will continue to maintain a minimum
investment in the property. Under this method of accounting, the
Partnership will recognize as revenue the lesser of the amount of
interest as contractually provided for in the mortgage loan, or its pro
rata share of the actual cash flow from operations of the underlying
property inclusive of depreciation and interest expense on any senior
indebtedness. None of the Partnership's mortgage loans are currently
recognizing revenue under the investment method.
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Interest method
Under this method of accounting, the Partnership recognizes revenue as
interest income over the term of the mortgage loan so as to produce a
constant periodic rate of return. Interest income will not be recognized
as revenue during periods where there are concerns about the ultimate
realization of the interest or loan principal.
Allowance for loan losses
An allowance for loan losses is established based upon a quarterly review
of each of the mortgage loans in the Partnership's portfolio. In
performing this review, management considers the estimated net realizable
value of the mortgage loan or collateral as well as other factors, such
as the current occupancy, the amount and status of any senior debt, the
prospects for the property and the economic situation in the region where
the property is located. Because this determination of net realizable
value is based upon projections of future economic events which are
inherently subjective, the amounts ultimately realized at disposition may
differ materially from the carrying value at each year end. Accordingly,
the Partnership may provide for additional losses in subsequent years and
such provisions could be material.
Financial statements
The financial statements include only those assets, liabilities and
results of operations which relate to the business of the Partnership.
Cash and cash equivalents
For the purpose of the statements of cash flows, the Partnership
considers all short-term investments which have original maturities of
three months or less to be cash equivalents.
Substantially all of the Partnership's cash and cash equivalents are held
at one financial institution.
Fair value of financial instruments
The fair value of financial instruments is determined by reference to
market data and other valuation techniques as appropriate. The
Partnership's financial instruments include cash and cash equivalents and
investments in mortgage loans. Unless otherwise disclosed, the fair value
of financial instruments approximates their recorded values.
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Net income per unit of limited partnership interest
Net income per unit of limited partnership interest is computed based
upon the number of units outstanding (187,919), during the years ended
December 31, 1996, 1995, and 1994.
Income taxes
No provisions have been made for federal, state and local income taxes,
since they are the personal responsibility of the partners.
The income tax returns of the Partnership are subject to examination by
federal, state and local taxing authorities. Such examinations could
result in adjustments to Partnership income or losses, which changes
could effect the income tax liability of the individual partners.
Reclassifications
Certain reclassifications have been made to the financial statements
shown for the prior years in order to conform to the current year's
classifications.
Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
3 CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES
The Managing General Partner of the Partnership, RAM Funding, Inc., was
until November 3, 1994 a wholly-owned subsidiary of Integrated at which
time, pursuant to the consummation of Integrated's Plan of
Reorganization, the assets of Integrated were sold to Presidio Capital
Corp. ("Presidio"). As of February 28, 1995, the Associate General
Partner of the Partnership is Presidio AGP Corp., a Delaware Corporation
("Presidio AGP"), which replaced Z Square G Partners II, a New York
general partnership comprised of a general partnership and individuals
who were all former officers, directors and significant shareholders of
Integrated. The general partners and certain affiliates of the general
partners, are general partners in several other limited partnerships
which are also affiliated with Presidio, and which are engaged in
businesses that are, or may be in the future, in direct competition with
the Partnership.
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
3 CONFLICTS OF INTEREST AND TRANSACTIONS WITH RELATED PARTIES (continued)
Wexford Management Corp. had been engaged to perform management and
administrative services for Presidio and its direct and indirect
subsidiaries as well as the Partnership. Wexford Management Corp. was
engaged to perform similar services for other similar entities that may
be in competition with the Partnership. Effective January 1, 1996,
Wexford Management Corp., formerly Concurrency Management Corp., assigned
its agreement to provide management and administrative services to
Presidio and its subsidiaries to Wexford Management LLC ("Wexford").
During 1996 the Partnership paid Wexford $30,813 for management and
administrative services rendered.
Subject to the rights of the Limited Partners under the agreement of
limited partnership of the Partnership, as amended (the "Limited
Partnership Agreement"), Presidio will control the Partnership through
its direct or indirect ownership of all of the shares of the Managing
General Partner, and as of February 28, 1995, the Associate General
Partner. Presidio was managed by Presidio Management Company, LLC
("Presidio Management"), a company controlled by a director of Presidio.
Presidio Management is responsible for the day-to-day management of
Presidio and among other things, has authority to designate directors of
the Managing General Partner and the Associate General Partner. In March
1996, Presidio Management assigned its agreement for the day to day
management of Presidio to Wexford.
Presidio is a liquidating company. Although it has no immediate plans to
do so, it will ultimately seek to dispose of the interests it acquired
from Integrated through liquidation; however, there can be no assurance
of the timing of such transaction or the effect it may have on the
Partnership.
Presidio has elected new directors for the Managing General Partner.
However, one of its executive officers remains the same and certain of
Integrated's former employees who performed services with respect to the
Partnership are employed by Wexford, which provides administrative
services to Presidio, its direct and indirect subsidiaries, as well as to
the Partnership.
The Partnership has invested principally in mortgage loans on properties
owned or acquired by privately syndicated limited partnerships originally
sponsored by Integrated. Transactions entered into between the
Partnership and affiliates of Integrated are subject to inherent
conflicts of interest.
4 INVESTMENTS IN MORTGAGE LOANS AND ALLOWANCE FOR LOAN LOSSES
The Partnership invests in zero-coupon, nonrecourse senior and junior
mortgage loans. Collection of the amounts due on the Partnership's junior
mortgage loans is solely dependent upon the sale or refinancing of the
underlying properties at amounts sufficient to satisfy the Partnership's
mortgage notes after payment of the senior mortgage notes owned by
unaffiliated third parties.
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
4 INVESTMENTS IN MORTGAGE LOANS AND ALLOWANCE FOR LOAN LOSSES (continued)
All of the Partnership's mortgage notes, with the exception of the
Harborista Loan, contain a provision which requires the borrowers to
provide current appraisals based upon certain conditions or in some cases
upon request.
The Partnership has prepared internal appraisals from Twin Oak Plaza
Associates ("Twin Oak"), High Cash Partners, L.P. ("High Cash"), each of
whose general partners are affiliated with the Managing General Partner
of the Partnership. Additionally, all of the loans, with the exception of
the Harborista Loan, contain a provision that requires that if the
appraisal indicates that the value of all indebtedness senior to and
including the Partnership's loan, taking into account principal plus
accrued interest in excess of 5% per annum, exceeds 85% of the then
current appraisal, the borrower must repay the indebtedness to a point
where the 85% loan to value ratio is restored. The Twin Oak and High Cash
borrowers may not have sufficient assets available to restore the 85%
loan to value ratio.
While there are risks inherent in a zero-coupon nonrecourse senior or
junior mortgage loan portfolio, the above described provisions were
intended to provide some mitigation of these risks. However, in the event
a borrower is required to make a payment under such loan provisions,
there can be no assurance that the borrower will be able to make such
payments.
Harborista Loan
A $10,000,000 second mortgage loan (`the Harborista Loan") to Harborista
Associates, L.P. is secured by an office building, commonly known as the
Harbor Plaza, located in Boston, Massachusetts (the "Harbor Plaza"). The
Harborista Loan was funded on February 13, 1989 and bears interest at the
rate of 13.307% per annum, compounded monthly and was originally due on
December 1, 1998, at which time a balloon payment of approximately
$36,000,000 would be due and payable. Harbor Plaza is also encumbered by
a first mortgage loan in the amount of $24,475,000 held by Northwestern
Mutual Life Insurance Co. ("Northwestern"). The first mortgage was due to
mature on December 1, 1995, but was extended until December 1, 1999.
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
4 INVESTMENTS IN MORTGAGE LOANS AND ALLOWANCE FOR LOAN LOSSES (continued)
Harborista Loan (continued)
In 1993, based upon information that the cash flow from the tenant at
Harbor Plaza was far below the amount of rental payments due under the
Master Lease, the condition of the Boston real estate market and the
likelihood that the public works construction which had adversely
affected Harbor Plaza would continue for some time, there was a
substantial likelihood that the Harborista Associates, L.P. would not be
able to refinance the Northwestern Mortgage when it matured. For these
reasons, during 1993 management determined that interest on the
Harborista Loan should cease to accrue and that an allowance for loan
losses was necessary for the entire carrying value of the Harborista Loan
which amounted to $10,618,380. In addition, if 470 Atlantic Management
Corp. ("470"), the Master Lessee of Harbor Plaza, was successful in the
lawsuit referred to below, it may have resulted in an attempted
foreclosure by Northwestern.
On December 13, 1991 a Summons and Complaint was issued by 470. The
defendants in the lawsuit were Harborista Associates L.P., Harbor Plaza
Property Credit Corp., an unsecured lender to Harborista Associates,
L.P., which was also an affiliate of Integrated, and Northwestern. The
Partnership was not named as a defendant in this lawsuit. Each of the
defendants to this lawsuit had filed separate motions to dismiss. In a
joint hearing held in June 1992, the Court denied the motions to dismiss.
An attempt was made to join the Commonwealth of Massachusetts as a
party-defendant in the lawsuit. This attempt to join the Commonwealth to
this action was dismissed by the Court in July, 1993. In its complaint,
470 requested a declaratory judgment that a Substantial Taking (as
defined in the Master Lease) of Harbor Plaza had occurred, thus
permitting 470 to terminate their Master Lease.
Their complaint was as follows:
1 That the Commonwealth of Massachusetts, with respect to the Central
Artery Project and Third Harbor Tunnel Project, has rendered the
continued use of the building as an economically unsound office, so as
to constitute a Substantial Taking and therefore, that the Master
Lease is terminated by its terms.
2 That the essential purpose of the Master Lease has been frustrated by
the actions of the Commonwealth and therefore 470's obligations under
the Master Lease are discharged.
In the complaint, 470 also sought a preliminary injunction prohibiting
Harborista Associates, L.P. from declaring a default under the Master
Lease so long as 470 pays its Master Lease rental payments into an escrow
account or to the Court, pending the final outcome of this lawsuit. In
June, 1993 the Court denied 470's motion to have its rental payments
escrowed.
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
4 INVESTMENTS IN MORTGAGE LOANS AND ALLOWANCE FOR LOAN LOSSES (continued)
Harborista Loan (continued)
Since June 1993, Northwestern and 470 had held private discussions with
the aim of settling this matter out of court. Court action had been
stayed pending these discussions.
In December 1995, this litigation was settled. As part of the settlement,
the Partnership received a payment of $341,038 (included in other income
for 1995 in the accompanying statement of income) in exchange for, among
other things, extending its mortgage until 1999 and subordinating its
lien to any new monies invested in the Harbor Plaza.
Twin Oak loan
The first mortgage on this property, which is held by an unaffiliated
third party, was due to mature on July 1, 1993, however, during 1993,
this loan was extended for three years until July 1, 1996. The Twin Oak
borrower is negotiating an extension of the first mortgage. While
negotiations are in progress, the Twin Oak borrower has deferred some
debt service payments on its first mortgage, and is using the cash flow
to make repairs to the property. If negotiations are not successful, it
is not possible to predict what impact this will have on the Partnership.
In January 1995, the Partnership ceased accruing interest on the Twin Oak
loan due to the fact that McCrory, a tenant occupying approximately 13%
of the retail space, filed a voluntary petition for reorganization under
Chapter 11 of the United States Bankruptcy Code which significantly
reduced the value of the property. McCrory successfully petitioned the
Court to terminate its lease and vacated the premises in March 1995.
As a result of the continued vacancy of the former McCrory space and
uncertainties regarding its lease-up, a decline in the economic
environment in the surrounding area of the Twin Oak Shopping Center and
negotiations with the first mortgage lender regarding an extension of its
loan which was due July 1, 1996, cash flow projections were performed
during the second quarter of 1996 which indicated that the estimated fair
value of the Twin Oak property was approximately $4,530,000 at that time.
The contractual balance of the first mortgage loan at June 30, 1996 was
approximately $3,890,000, necessitating a provision for loan losses of
$1,515,000 to reduce the carrying value of the loan to approximately
$640,000.
As of December 31, 1996, the McCrory space has been leased to Scotty's
Hardware who will begin paying rent to the Twin Oak borrower in April
1997.
Information with respect to the Partnership's mortgage loans is
summarized as follows:
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
4 INVESTMENTS IN MORTGAGE LOANS AND ALLOWANCE FOR LOAN LOSSES (continued)
Twin Oak loan (continued)
Interest recognized by year for each mortgage loan is summarized as
follows:
<TABLE>
<CAPTION>
Year ended December 31,
Description 1996 1995 1994
- ----------- ---- ---- ----
<S> <C> <C> <C>
Shopping Centers
Sierra Marketplace.............. $1,619,880 $1,455,616 $1,308,011
Reno, Nevada
Twin Oak
Ft. Lauderdale, Florida ........ -- -- 225,206
---------- ---------- ----------
$1,619,880 $1,455,616 $1,533,217
========== ========== ==========
</TABLE>
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
4 INVESTMENTS IN MORTGAGE LOANS AND ALLOWANCE FOR LOAN LOSSES (continued)
<TABLE>
<CAPTION>
Mortgage Mortgage Mortgage
Interest Compound Loan Maturity Amount Purchased Placement
Description Rate % Period Type Date Date Advanced Interest Fees
- ----------- ------ ------ ---- ---- ---- -------- -------- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Office Building
Harbor Plaza 13.307 Monthly 2nd 13-Feb-89 1-Dec-98 $10,000,000 $23,513 $594,867
Boston, Mass (a)
Shopping Centers
Sierra Marketplace (b)(c) 11.220 Monthly 1st 10-Feb-89 28-Feb-01 6,500,000 - 385,757
Reno, Nevada
Twin Oak (b) 12.280 Annually 2nd 3-Apr-90 1-May-02 1,200,000 - 71,218
Ft. Lauderdale, Florida
----------- ------- ----------
$17,700,000 $23,513 $1,051,842
=========== ======= ==========
<PAGE>
<CAPTION>
Carrying Value Contractual Balance
----------------------------- ----------------------------
December 31, 1995 and December 31, December 31, December 31, December 31,
Description 1996 Prior Reserves 1996 1995 1996 1995
- ----------- ------------ ----------- ------------ -------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Office Building
Harbor Plaza ............ $ -- $ -- $(10,618,380) $ -- $ -- $ 28,385,002 $ 24,866,545
Boston, Mass (a)
Shopping Centers
Sierra Marketplace (b)(c) 1,619,880 7,473,718 -- 15,979,355 14,359,475 15,688,574 14,030,786
Reno, Nevada
Twin Oak (b) ............ -- 880,460 (1,515,000) 636,678 2,151,678 2,614,938 2,329,981
Ft. Lauderdale, Florida
------------- ------------ ------------ ------------ ----------- ------------ ------------
$ 1,619,880 8,354,178 $(12,133,380) $ 16,616,033 $16,511,153 $ 46,688,514 $ 41,227,312
</TABLE>
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
4 INVESTMENTS IN MORTGAGE LOANS AND ALLOWANCE FOR LOAN LOSSES (continued)
A summary of mortgage loan activity is summarized as follows:
<TABLE>
<CAPTION>
Investment Interest
Method Method Total
---------- ------------ ------------
<S> <C> <C> <C>
Balance, January 1, 1994 ....... $-- $ 13,522,320 $ 13,522,320
Interest recognized ............ -- 1,533,217 1,533,217
---- ------------ ------------
Balance, December 31, 1994 ..... -- 15,055,537 15,055,537
Interest recognized ............ -- 1,455,616 1,455,616
---- ------------ ------------
Balance, December 31, 1995 ..... -- 16,511,153 16,511,153
Interest recognized ............ -- 1,619,880 1,619,880
Provision for loan losses ...... -- (1,515,000) (1,515,000)
---- ------------ ------------
Balance, December 31, 1996 ..... $-- $ 16,616,033 $ 16,616,033
==== ============ ============
</TABLE>
Unaudited financial information for Harbor Plaza, which is a mortgage
loan accounted for under the investment method which exceeds 10% of the
Partnerships original capital contributions, is not presently available.
5 ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consist of the following:
<TABLE>
<CAPTION>
December 31,
---------------------------
1996 1995
-------- --------
<S> <C> <C>
Overhead reimbursements .................. $ 73,041 $ 53,913
Professional fees ........................ 35,312 34,610
Printing charges ......................... 8,466 8,846
Other .................................... 13,979 3,209
-------- --------
$130,798 $100,578
======== ========
</TABLE>
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
6 COMMITMENTS AND CONTINGENCIES
Status of Integrated
On February 13, 1990, Integrated, the sole shareholder of the Managing
General Partner, filed a voluntary petition for reorganization under
Chapter 11 of the United States Bankruptcy Code. While Integrated's
Bankruptcy did not directly affect the Partnership's operations, it has
resulted in certain changes.
On August 8, 1994, the Bankruptcy Court confirmed a Plan of
Reorganization (the "Steinhardt Plan") proposed by Steinhardt Management
Company, Inc. and the Official Committee of Subordinated Bondholders and
on November 3, 1994 the Steinhardt Plan was consummated. Presidio
purchased substantially all of the assets of Integrated, including its
interest in the Managing General Partner. Presidio is a British Virgin
Islands corporation owned 12% by IR Partners, a general partnership, and
88% by former creditors of Integrated.
The Partnership filed a Proof of Claim against Integrated in the
Integrated's Chapter 11 proceeding with respect to certain potential and
unliquidated claims and disputes involving Integrated and its affiliates.
These claims and disputes have not resulted in any adjustments to the
accompanying financial statements, nor is it possible to determine at
this time whether such adjustments may be warranted in the future. A
portion of this claim has been allowed in the amount of $691,791. Under
the Steinhardt Plan, a cash distribution equal to approximately 35.8% of
the allowed claim was made to the Partnership. In December 1994, the
Partnership received $247,613 in full settlement of the portion of this
allowed claim, which is included in other income in the statement of
income for the year ended December 31, 1994.
7 RECONCILIATION OF NET INCOME AND NET ASSETS PER FINANCIAL STATEMENTS TO
TAX BASIS
The Partnership files its tax returns on an accrual basis. Additionally,
the Partnership presently recognizes interest income on all of its
investments in mortgage loans using the interest method for tax purposes.
For financial statement purposes, mortgage loans accounted for under the
investment method recognize income as described in Note 2.
<PAGE>
RESOURCES ACCRUED MORTGAGE INVESTORS 2 L.P.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
A reconciliation of net income per financial statements to the tax basis
of accounting is as follows:
<TABLE>
<CAPTION>
Year ended December 31
1996 1995 1994
---------- ---------- ----------
<S> <C> <C> <C>
Net income per
financial statements .............. $ 123,888 $1,765,545 $1,723,537
Interest income recognized for tax
purposes in excess of amounts
recognized for financial statements 3,682,033 3,249,413 2,642,468
Provision for loan losses ............ 1,515,000 -- --
---------- ---------- ----------
Net income per tax basis ............. $5,320,921 $5,014,958 $4,366,005
========== ========== ==========
</TABLE>
7 RECONCILIATION OF NET INCOME AND NET ASSETS PER FINANCIAL STATEMENTS TO
TAX BASIS (continued)
The differences between the Partnership's net assets per financial
statements and tax basis of accounting are as follows:
<TABLE>
<CAPTION>
December 31
--------------------------
1996 1995
----------- -----------
<S> <C> <C>
Net assets per financial statements .............. $19,370,218 $19,246,330
Interest income recognized for tax purposes
in excess of amounts recognized for financial
statements ..................................... 18,602,113 14,920,080
Allowance for loan losses ........................ 12,133,380 10,618,380
Syndication costs ................................ 2,230,944 2,230,944
----------- -----------
Net assets per tax basis ......................... $52,336,655 $47,015,734
=========== ===========
</TABLE>
<PAGE>
PART III
Item 10. Directors and Executive Officers of Registrant.
There are no officers or directors of Registrant. The Managing General Partner
has overall administrative responsibility for Registrant's operations and for
the selection, evaluation, negotiation and disposition of Mortgage Loans. The
Associate General Partner will not devote any material amount of its business
time and attention to the affairs of Registrant. The Managing General Partner is
a wholly-owned subsidiary of Presidio and was incorporated in Delaware in
September 1985. The Managing General Partner also serves as the investment
general partner of Resources Accrued Mortgage Investor L.P. -- Series 86 ("RAM
86").
Based on a review of Forms 3 and 4 and amendments thereto furnished to
Registrant pursuant to Rule 16a-3(e) under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), during its most recent fiscal year and Forms 5
and amendments thereto furnished to Registrant with respect to its most recent
fiscal year and written representations received pursuant to Item 405(b)(2)(i)
of Regulation S-K, none of the directors or officers of the General Partners, or
beneficial owners of more than 10% of the Units failed to file on a timely basis
reports required by Section 16(a) of the Exchange Act during the most recent
fiscal or prior fiscal years. However, no written representations were received
from the partners of the former Associate General Partner.
As of March 15, 1997, the names and ages of, as well as the positions held by,
the officers and directors of the Managing General Partner were as follows:
<TABLE>
<CAPTION>
Has served as a
Director and/or
Name Age Position Officer since
---- --- -------- -------------
<S> <C> <C> <C>
Frank Goveia 50 Director October 1986
- -------------------------------- --------------------------------------------- --------------------
Frederick Simon 42 President February 1996
- -------------------------------- --------------------------------------------- --------------------
Jay L. Maymudes 36 Director, Vice President, Secretary and November 1994
Treasurer
- -------------------------------- --------------------------------------------- --------------------
Arthur H. Amron 40 Vice President and Assistant Secretary November 1994
- -------------------------------- --------------------------------------------- --------------------
Robert Holtz 29 Vice President November 1994
- -------------------------------- --------------------------------------------- --------------------
Mark Plaumann 41 Vice President March 1995
- ---------------------------------- ---------- -----------------------------------------------------
</TABLE>
<PAGE>
Frank Goveia has served as Chief Operating Officer and Senior Vice President of
Wexford since January 1996. From July 1994 to December 1995, Mr. Goveia was a
Vice President of Wexford Management Corp. Mr. Goveia was associated with
Integrated from February 1983 to November 1994, and was a Senior Vice President
since 1990, primarily involved in financial reporting and controls.
Frederick Simon was a Senior Vice President of Wexford Management Corp. from
November 1995 to December 1995. Since January 1996, Mr. Simon has been a Senior
Vice President of Wexford. He is also a Vice President of Resurgence Properties
Inc. ("Resurgence"), a company engaged in diversified real estate activities.
From January 1994 through November 1995, Mr. Simon was an independent real
estate investor. From 1984 through 1993, Mr. Simon was Executive Vice President
and a Partner of Greycoat Real Estate Corporation, the United States arm of
Greycoat PLC, a London stock exchange real estate investment and development
company.
Jay L. Maymudes has been the Chief Financial Officer, a Vice President and
Treasurer of Presidio since its formation in August 1994 and the Chief Financial
Officer and a Vice President of Resurgence since July 1994, Secretary of
Resurgence since January 1995 and Assistant Secretary from July 1994 to January
1995. Since January 1, 1996, Mr. Maymudes has been the Chief Financial Officer
and a Senior Vice President of Wexford and was the Chief Financial Officer and a
Vice President of Wexford Management Corp. from July 1994 to December 1995. From
December 1988 through June 1994, Mr. Maymudes was the Secretary and Treasurer,
and since February 1990 was the Senior Vice President of Dusco, Inc., a real
estate investment advisor.
Arthur H. Amron has been a Vice President of certain subsidiaries of Presidio
since November 1994. Since January 1996, Mr. Amron has been a Senior Vice
President and the General Counsel of Wexford. Also, from November 1994 to
December 1995, Mr. Amron was the General Counsel and, since March 1995, a Vice
President of Wexford Management Corp. From 1992 through November 1994, Mr. Amron
was an attorney with the law firm of Schulte, Roth and Zabel. Previously, Mr.
Amron was an attorney with the law firm of Debevoise & Plimpton.
Robert Holtz has been a Vice President and Secretary of Presidio since its
formation in August 1994 and a Vice President and Assistant Secretary of
Resurgence since its formation in March 1994. Since January 1, 1996, Mr. Holtz
has been a Senior Vice President and member of Wexford and was a Vice President
of Wexford Management Corp. from May 1994 to December 1995. From 1989 through
May 1994, Mr. Holtz was employed by, and since 1993 was a Vice President of,
Bear Stearns Real Estate Group, Inc., where he was responsible for analysis,
acquisitions and management of the assets owned by Bear Stearns Real Estate and
its clients.
Mark Plaumann has served as Director and Vice President of Presidio since March
1995. Mr. Plaumann has been a Senior Vice President of Wexford since January
1996. From February 1995 through December 1995, Mr. Plaumann had been a Senior
Vice President of Wexford Management Corp. Mr. Plaumann was employed by Alvarez
and Marsel, Inc. as a Managing Director from February 1990 through January 1995,
by American Healthcare Management Inc. from February 1985 to January 1990 and by
Ernst & Young from January 1973 to February 1985.
There are no family relationships between any executive officer and any other
executive officer or director of the Managing General Partner.
<PAGE>
In December 1994, Z Square G Partners II notified Registrant of its withdrawal
as the Associate General Partner of Registrant. The withdrawal became effective,
after 60 days prior written notice to Limited Partners, on February 28, 1995.
Upon the effective date of such withdrawal, Presidio Associate GP Corp. became
the Associate General Partner. As of March 15, 1997 the names of, as well as the
positions held by the officers and directors of the Associate General Partner,
were as follows:
<TABLE>
<CAPTION>
Has served as a
Director and/or
Name Age Position Officer since
---- --- -------- -------------
<S> <C> <C> <C>
Robert Holtz 29 Director and President March 1995
----------------------------------------------------------------------------------------------------
Mark Plaumann 41 Director and Vice President March 1995
----------------------------------------------------------------------------------------------------
Jay L. Maymudes 36 Vice President, Secretary and Treasurer March 1995
----------------------------------------------------------------------------------------------------
Arthur H. Amron 40 Vice President and Assistant Secretary March 1995
----------------------------------------------------------------------------------------------------
</TABLE>
See the biographies of the above named officers and directors in the preceding
section.
Many of the above officers and directors of the Managing General Partner and
Associate General Partner are also officers and/or directors of the general
partners of other public partnerships affiliated with Presidio or of various
subsidiaries of Presidio.
Item 11. Executive Compensation.
Registrant is not required to and did not pay remuneration to the officers and
directors of the Managing General Partner or the general partners of the former
Associate General Partner. Certain officers and directors of the Managing
General Partner receive compensation from the Managing General Partner and/or
its affiliates (but not from Registrant) for services performed for various
affiliated entities, which may include services performed for Registrant;
however, the Managing General Partner believes that any compensation
attributable to services performed for Registrant is not material. See Item 13,
"Certain Relationships and Related Transactions."
Item 12. Security Ownership of Certain Beneficial Owners and Management.
As of March 1, 1997, only the following entity was known by Registrant to be the
beneficial owner of more than 5% of the Units of Registrant.
<TABLE>
<CAPTION>
Number of Units Percentage of Units
Limited Partner Owned Outstanding
- --------------- ----- -----------
<S> <C> <C>
Los Angeles County 12,000 6.39%
Painting Industry Pension Trust Fund
P.O. Box 7887
3601 Alameda Avenue #300
Burbank, CA 91510
</TABLE>
<PAGE>
As of March 1, 1997, neither of the General Partners nor their officers and
directors was known by Registrant to beneficially own Units or shares of
Presidio, the parent of the General Partners.
As of March 1, 1997 there were outstanding 8,766,569 shares of Class A common
stock of Presidio (the "Shares"). The following table sets forth certain
information known to Registrant with respect to beneficial ownership of the
Shares of Presidio as of March 1, 1997, by each person who beneficially owns 5%
or more of the Class A Shares, U.S. $.01 par value. The holders of Class A
Shares are entitled to elect three out of the five members of the Presidio's
Board of Directors with the remaining two directors being elected by holders of
the Class B Shares, U.S. $.01 par value of Presidio.
<TABLE>
<CAPTION>
Beneficial Ownership Number of
Name of Beneficial Owner Shares Percentage Outstanding
- ------------------------ ------ ----------------------
<S> <C> <C>
Thomas F. Steyer/Fleur A. Fairman 4,553,560(1) 51.8%
John M. Angelo/Michael L. Gordon 1,231,762(2) 14.0%
Intermarket Corp. 1,000,918(3) 11.4%
M. H.Davidson & Co. 474,205(4) 5.4%
(1) As the managing partners of each of Farallon Capital Partners, L.P.
("FCP"), Farallon Capital Institutional Partners, L.P. ("FCIP"), Farallon
Capital Institutional Partners II, L.P. ("FCIP II") and Tinicum Partners,
L.P. ("Tinicum"), (collectively, the "Farallon Partnerships"), may each
be deemed to own beneficially for purposes of Rule 13d-3 of the Exchange
Act the 1,397,318, 1,610,730, 607,980 and 241,671 shares held,
respectively, by each of such Farallon Partnerships.
Farallon Capital Management, LLC ("FCMLLC"), the investment advisor to
certain discretionary accounts which collectively hold 695,861 shares and
Enrique H. Boilini, David I. Cohen, Joseph F. Downes, Jason M. Fish,
Andrew B. Fremder, William F. Mellin, Steven L. Millham, Meridee A. Moore
and Thomas F. Steyer, as a managing member of FCMLLC (collectively, the
"Managing Members") may be deemed to be the beneficial owner of all of
the shares owned by such discretionary accounts. FCMLLC and each Managing
Member disclaims any beneficial ownership of such shares.
Farallon Partners, LLC ("FPLLC") (the general partner of FCP, FCIP, FCIP
II and Tinicum), and each of Fleur A. Fairman, Mr. Boilini, Mr. Cohen,
Mr. Downes, Mr. Fish, Mr. Fremder, Mr. Mellin, Mr. Millham, Ms. Moore and
Mr. Steyer, each as managing member of FPLLC (collectively, the "Managing
Members"), may be deemed to be the beneficial owner of all of the shares
owned by FCP, FCIP, FCIP II and Tinicum. FPLLC and each managing Member
disclaims any beneficial ownership of such shares.
<PAGE>
(2) John M. Angelo and Michael L. Gordon, the general partners and
controlling persons of AG Partners, L.P., which is the general partner of
Angelo, Gordon & Co., L.P., may be deemed to have beneficial ownership
under Section 13(d) of the Exchange Act of the securities beneficially
owned by Angelo, Gordon & Co., L.P. and its affiliates. Angelo, Gordon &
Co., L.P., a registered investment advisor, serves as general partner of
various limited partnerships and as investment advisor of third party
accounts with power to vote and direct the disposition of Class A Shares
owned by such limited partnerships and third party accounts.
(3) Intermarket Corp. serves as General Partner for certain limited
partnerships and as investment advisor to certain corporations and
foundations. As a result of such relationships, Intermarket Corp. may be
deemed to have the power to vote and the power to dispose of Class A
shares held by such partnerships, corporations and foundations.
(4) Marvin H. Davidson, Thomas L. Kempner Jr., Stephen M. Dowicz, Scott E.
Davidson and Michael J. Leffell, the general partners, members and
stockholders of certain entities that are general partners or investment
advisors of Davidson Kempner Endowment Partners, L.P., Davidson Kempner
Partners, L.P., Davidson Kempner Institutional Partners, L.P., M.H.
Davison and Co. Davidson Kempner International Ltd. (collectively, the
"Investment Funds"), may be deemed to be the beneficial owners under
Sections 13(d) of the Exchange Act of the securities beneficially owned
by the Investment Funds and their affiliates.
In addition, Mr. Kempner owns 800 shares and may be deemed to
beneficially own certain securities held by certain foundations and
trusts. Mr. Kempner disclaims beneficial ownership of such shares.
</TABLE>
All of Presidio's Class B Shares are owned by IR Partners. Such Class B Shares
are convertible in certain circumstances into 1,200,000 Class A Shares; however,
such shares are not convertible at present. IR Partners is a general partnership
whose general partners are Steinhardt Management, certain of its affiliates and
accounts managed by it and Roundhill Associates. Roundhill Associates, is a
limited partnership whose general partner is Charles E. Davidson, the principal
of Presidio Management, the Chairman of the Board of Presidio and a Member of
Wexford. Joseph M. Jacobs, the Chief Executive Officer and President of Presidio
and a Member and the President of Wexford, has a limited partner's interest in
Roundhill Associates. Pursuant to Rule 13d-3 under the Exchange Act, each of
Michael H. Steinhardt, the controlling person of Steinhardt Management and its
affiliates and Charles E. Davidson may be deemed to be beneficial owners of such
1,200,000 shares.
Shares held by each Class A Director of Presidio were issued pursuant to a
Memorandum of Understanding Regarding Compensation of Class A Directors of
Presidio. (See "Executive Compensation - Compensation of Directors.")
The address of Thomas F. Steyer and the other individuals mentioned in footnote
1 to the table above (other than Fleur A. Fairman) is c/o Farallon Capital
Partners, L.P., One Maritime Plaza, San Francisco, California 94111 and the
address of Fleur A. Fairman is c/o Farallon Capital Management, Inc., 800 Third
Avenue, 40th Floor, New York, New York 10022. The address of Angelo, Gordon &
Co., L.P. and its affiliates is 245 Park Avenue, 26th Floor, New York, New York
10167. The address for Intermarket Corp. Is 667 Madison Avenue, New York, New
York 10021. The address for M. H. Davidson and Co. is 885 Third Avenue, New
York, New York, 10022.
<PAGE>
Item 13. Certain Relationships and Related Transactions.
The General Partners, during Registrant's year ended December 31, 1996, earned
or received compensation or payments for services from or with respect to
Registrant (or Integrated or Presidio) as follows:
<TABLE>
<CAPTION>
Capacity in Which Served
Name of Recipient or Services Performed Compensation
----------------- --------------------- ------------
<S> <C> <C>
RAM Funding, Inc. Managing General Partner (1)
Presidio AGP Corp. Associate General Partner (1)
<PAGE>
(1) The General Partners were not entitled to any payment for services
from or with respect to Registrant, Integrated or Presidio. However,
the General Partners, pursuant to the Partnership Agreement, are
entitled to receive 2.5% of Registrant's income, loss, capital and
distributions (2.45% to the Managing General Partner and .05% to the
Associate General Partner) including without limitation Registrant's
cash flow from operations and disposition proceeds. No distributions
are expected to be made from operations inasmuch as all interest and
principal due on the Mortgage Loans is deferred until maturity,
unless there are prepayments of Mortgage Loans. For the year ended
December 31, 1996, the General Partners were allocated an aggregate
of $133,023 of taxable income ($130,362 to the Managing General
Partner and $2,661 to the Associate General Partner).
</TABLE>
In addition, certain officers and directors of the General Partners receive
compensation from the General Partners and/or their affiliates (but not from
Registrant) for services performed for various affiliated entities, which may
include services performed for Registrant.
<PAGE>
PART IV
Item 14. Exhibits, Financial Statements Schedules and Reports on Form 8-K
(a)(1) Financial Statements
See Item 8, "Financial Statements and Supplementary Data."
(a)(2) Financial Statement Schedules
None.
All schedules have been omitted because they are inapplicable, not
required, or the information is included in the Financial Statements
or Notes thereto.
(a)(3) Exhibits
3. Certificate of Limited Partnership filed August 14, 1986
(incorporated by reference to Exhibit 3B as filed as part of
Pre-Effective Amendment No. 1 filed on May 14, 1987 ("Pre-Effective
Amendment") to the Registration Statement) and Amendments to
Certificate of Limited Partnership filed on March 12, 1987, May 7,
1987 (incorporated by reference as filed as part of Pre-Effective
Amendment to the Registration Statement) and February 5, 1988
(incorporated by reference to Post-Effective Amendment No. 2 to the
Registration Statement).
4.
(A) Amended and Restated Agreement of Limited Partnership (incorporated
by reference to Exhibit 3A as filed as part of Post-Effective
Amendment No. 2 filed on March 23, 1988 ("Post-Effective Amendment
No. 2") to the Registration Statement).
(B) Amendment No. 1 to Amended and Restated Partnership Agreement dated
as of June 1, 1988, incorporated by reference to Exhibit 4(B) of the
1988 10-K.
(C) Amendment No. 2 to Amended and Restated Partnership Agreement
(incorporated by reference to Supplement No. 1 dated August 12, 1988
to the Prospectus as filed pursuant to Rules 424(b)(3) and 424(c).
10.
(A) Agreement with Associate General Partner dated as of May 17, 1988
among Integrated, RAM Funding, Inc. and Z Square G Partners II,
incorporated by reference to Exhibit 10(B) of the 1988 10-K.
(B) Mortgage Services Agreement dated as of April 12, 1988 between
Registrant and RAM Funding, Inc., incorporated by reference to
Exhibit 10(C) of the 1988 10-K.
(C) Deed of Trust, Assignment of Rents, Fixture Filing and Security
Agreement among High Cash Partners, L.P., Truster; First Commercial
Title, Inc., Trustee and Resources Accrued Mortgage Investors 2 L.P.,
Beneficiary, dated February 10, 1989 (incorporated by reference to
Exhibit 10(a) of Registrant's Current Report on Form 8-K dated
February 13, 1989 (hereinafter referred to as the February 13, 1989
Form 8-K)).
<PAGE>
(D) Registered Note among High Cash Partners L.P. and Resources Accrued
Mortgage Investors 2 L.P., dated February 10, 1989 (incorporated by
reference to Exhibit 10(b) of the February 13, 1989 Form 8-K).
(E) Assignment of Leases and Rents among High Cash Partners L.P. and
Resources Accrued Mortgage Investors 2 L.P., dated February 10, 1989
(incorporated by reference to Exhibit 10(c) of the February 13, 1989
Form 8-K).
(F) Power of Sale Mortgage, Assignment of Rents and Security Agreement
(also constituting a financing statement) from Harborista Associates
Limited Partnership Mortgagor, to Resources Accrued Mortgage
Investors 2 L.P. Mortgagee, dated January 31, 1989 (incorporated by
reference to Exhibit 10(d) of the February 13, 1989 Form 8-K).
(G) Note among Harborista Associates Limited Partnership and Resources
Accrued Mortgage Investors 2 L.P. dated January 31, 1989
(incorporated by reference to Exhibit 10(e) of the February 13, 1989
Form 8-K).
(H) Assignment of Leases and Rents from Harborista Associates Limited
Partnership Assigns to Resources Accrued Mortgage Investors 2 L.P.,
Assignee, dated January 31, 1989 (incorporated by reference to
Exhibit 10(f) of the February 13, 1989 Form 8-K).
(I) Mortgage, Assignment of Rents and Security Agreement dated as of
April 1, 1990 between Twin Oak Plaza Associates, L.P. and Resources
Accrued Mortgage Investors 2 L.P. (incorporated by reference to
Exhibit 10(A) of the April 3, 1990 Form 8K).
(J) Note as of April 3, 1990 between Twin Oak Plaza Associates, L.P. and
Resources Accrued Mortgage Investors 2 L.P. (incorporated by
reference to Exhibit 10(B) of the April 3, 1990 Form 8K).
(K) Loan Commitment dated as of April 11, 1990 between Twin Oak Plaza
Associates, L.P. and Resources Accrued Mortgage Investitures 2 L.P.
(incorporated by reference to Exhibit 10(D) of the April 3, 1990 Form
8K).
(L) Amendment to Agreement dated as of June 20, 1990 among Registrant,
the Managing General Partner and Rosenberg and Rosenberg, Ltd.
(incorporated by reference to Exhibit 10(O) to Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1990.)
(M) Amended and Restated Intercreditor Agreement between The Northwestern
Mutual Life Insuance Company and Registrant, dated as of November 1,
1994.
(N) Amendment of Mortgage, Note and Other Loan Documents between
Harborista Associates Limited Partnership and Registrant, dated as of
November 1, 1994.
(b) Reports on Form 8-K
Registrant filed the following reports on Form 8-K during the last
quarter of the fiscal year:
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized, on the 29th day of March, 1997.
RESOURCES ACCRUED MORTGAGE
INVESTORS 2 L.P.
By: RAM FUNDING, INC.,
Managing General Partner
By: /s/Frederick Simon Date: March 29, 1997
------------------
Frederick Simon
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Registrant and in
their capacities as directors and/or officers (with respect to the Managing
General Partner) and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/Frank Goveia Director and Vice President March 29, 1997
Frank Goveia (Principal Executive Officer)
/s/Jay L. Maymudes Director, Vice President, March 29, 1997
- ------------------
Jay L. Maymudes Secretary and Treasurer
(Principal Financial Officer
and Principal Accounting Officer)
<PAGE>
EXHIBIT INDEX
Exhibit
- -------
3. Certificate of Limited Partnership filed August 14, 1986
(incorporated by reference to Exhibit 3B as filed as part of
Pre-Effective Amendment No. 1 filed on May 14, 1987 ("Pre-Effective
Amendment") to the Registration Statement) and Amendments to
Certificate of Limited Partnership filed on March 12, 1987, May 7,
1987 (incorporated by reference as filed as part of Pre-Effective
Amendment to the Registration Statement) and February 5, 1988
(incorporated by reference to Post-Effective Amendment No. 2 to the
Registration Statement).
4.
(A) Amended and Restated Agreement of Limited Partnership (incorporated
by reference to Exhibit 3A as filed as part of Post-Effective
Amendment No. 2 filed on March 23, 1988 ("Post-Effective Amendment
No. 2") to the Registration Statement).
(B) Amendment No. 1 to Amended and Restated Partnership Agreement dated
as of June 1, 1988, incorporated by reference to Exhibit 4(B) of the
1988 10-K.
(C) Amendment No. 2 to Amended and Restated Partnership Agreement
(incorporated by reference to Supplement No. 1 dated August 12, 1988
to the Prospectus as filed pursuant to Rules 424(b)(3) and 424(c).
10.
(A) Agreement with Associate General Partner dated as of May 17, 1988
among Integrated, RAM Funding, Inc. and Z Square G Partners II,
incorporated by reference to Exhibit 10(B) of the 1988 10-K.
(B) Mortgage Services Agreement dated as of April 12, 1988 between
Registrant and RAM Funding, Inc., incorporated by reference to
Exhibit 10(C) of the 1988 10-K.
(C) Deed of Trust, Assignment of Rents, Fixture Filing and Security
Agreement among High Cash Partners, L.P., Truster; First Commercial
Title, Inc., Trustee and Resources Accrued Mortgage Investors 2 L.P.,
Beneficiary, dated February 10, 1989 (incorporated by reference to
Exhibit 10(a) of Registrant's Current Report on Form 8-K dated
February 13, 1989 (hereinafter referred to as the February 13, 1989
Form 8-K)).
(D) Registered Note among High Cash Partners L.P. and Resources Accrued
Mortgage Investors 2 L.P., dated February 10, 1989 (incorporated by
reference to Exhibit 10(b) of the February 13, 1989 Form 8-K). \pnf5
(E) \pnf5Assignment of Leases and Rents among High Cash Partners L.P.
and Resources Accrued Mortgage Investors 2 L.P., dated February 10,
1989 (incorporated by reference to Exhibit 10(c) of the February 13,
1989 Form 8-K).
<PAGE>
(F) Power of Sale Mortgage, Assignment of Rents and Security Agreement
(also constituting a financing statement) from Harborista Associates
Limited Partnership Mortgagor, to Resources Accrued Mortgage
Investors 2 L.P. Mortgagee, dated January 31, 1989 (incorporated by
reference to Exhibit 10(d) of the February 13, 1989 Form 8-K).
(G) Note among Harborista Associates Limited Partnership and Resources
Accrued Mortgage Investors 2 L.P. dated January 31, 1989
(incorporated by reference to Exhibit 10(e) of the February 13, 1989
Form 8-K).
(H) Assignment of Leases and Rents from Harborista Associates Limited
Partnership Assigns to Resources Accrued Mortgage Investors 2 L.P.,
Assignee, dated January 31, 1989 (incorporated by reference to
Exhibit 10(f) of the February 13, 1989 Form 8-K).
(I) Mortgage, Assignment of Rents and Security Agreement dated as of
April 1, 1990 between Twin Oak Plaza Associates, L.P. and Resources
Accrued Mortgage Investors 2 L.P. (incorporated by reference to
Exhibit 10(A) of the April 3, 1990 Form 8K).
(J) Note as of April 3, 1990 between Twin Oak Plaza Associates, L.P. and
Resources Accrued Mortgage Investors 2 L.P. (incorporated by
reference to Exhibit 10(B) of the April 3, 1990 Form 8K).
(K) Loan Commitment dated as of April 11, 1990 between Twin Oak Plaza
Associates, L.P. and Resources Accrued Mortgage Investitures 2 L.P.
(incorporated by reference to Exhibit 10(D) of the April 3, 1990 Form
8K).
(L) Amendment to Agreement dated as of June 20, 1990 among Registrant,
the Managing General Partner and Rosenberg and Rosenberg, Ltd.
(incorporated by reference to Exhibit 10(O) to Registrant's Annual
Report on Form 10-K for the fiscal year ended December 31, 1990.)
(M) Amended and Restated Intercreditor Agreement between The Northwestern
Mutual Life Insuance Company and Registrant, dated as of November 1,
1994.
(N) Amendment of Mortgage, Note and Other Loan Documents between
Harborista Associates Limited Partnership and Registrant, dated as of
November 1, 1994.
* Filed herewith
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary information extracted from the financial
statements of the December 31, 1996 Form 10K of Resources Accrued Mortgage
Investors 2 L.P. and is qualified in its entirety by reference for such
statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 2,873,084
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,884,983
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 19,501,016
<CURRENT-LIABILITIES> 130,798
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 19,370,218
<TOTAL-LIABILITY-AND-EQUITY> 19,501,016
<SALES> 0
<TOTAL-REVENUES> 1,794,213
<CGS> 0
<TOTAL-COSTS> 1,670,325
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 123,888
<INCOME-TAX> 0
<INCOME-CONTINUING> 123,888
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 123,888
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
