SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 30, 1997
ARVIDA/JMB PARTNERS, L.P. - II
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Illinois 0-19245 58-1809884
- ------------------- -------------- --------------------
(State or other) (Commission (IRS Employer
Jurisdiction of File Number) Identification No.)
Organization
900 N. Michigan Avenue, Chicago, Illinois 60611-1575
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(Address of principal executive office)
Registrant's telephone number, including area code: (312) 915-1987
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<PAGE>
ITEM 2. DISPOSITION OF ASSETS. On May 30, 1997, Arvida/JMB Partners, L.P.-
II (the "Partnership") closed on the sale of its Talega Property,
consisting of approximately 2,290 acres of land in southern Orange County,
California and related assets (the "Property"), to Talega Associates, LLC
(the "Buyer"). The Buyer is not affiliated with the Partnership or its
General Partner, and the sale price was determined by arm's-length
negotiations and approved by the Partnership's lender. The gross sale
price was $31,100,000. In conjunction with the sale of its Property, the
Partnership paid all current and delinquent property taxes, including
penalties and interest. The Partnership also reached an agreement with the
Santa Margarita Water District resulting in an agreed upon amount due with
respect to the Partnership's tax exempt bond financing. This amount was
paid at closing, at which time the Partnership received a full and
unconditional release from the Santa Margarita Water District. In
addition, all contractual obligations of the Partnership with respect to
the Property were assumed by the Buyer. The net proceeds from the sale,
after prorations and closing costs, totaled $19,144,718. Of this amount,
$18,844,718 was applied against the outstanding principal balance on the
Partnership's term loans, and $300,000 was deposited to fund the
Partnership's expenses. As previously reported, the Partnership had
reduced its basis for financial reporting purposes to zero through loss
provisions. The sale of the Property resulted in a gain of approximately
$32.2 million for financial reporting purposes and an ordinary loss of
approximately $154.8 million for Federal income tax purposes. The gain for
financial reporting purposes exceeds the gross sale price due to the write-
off of an obligation related to the Property for which the Partnership is
no longer liable.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of business acquired
Not applicable.
(b) Pro Forma Financial Information
See attached.
(c) Exhibits
2.1. Agreement for Sale and Purchase of Real Property
dated October 25, 1996 by and between Arvida/JMB Partners, L.P. - II and
Starwood/ Talega Associates, L.L.C. for the sale of certain real property
within the Talega Property is incorporated by reference to Exhibit 10.16 to
the Partnership's report for September 30, 1996 on Form 10-Q (File No. 0-
19245) filed with the Securities and Exchange Commission dated November 8,
1996.
<PAGE>
2.2. Amendment dated March 18, 1997 to Agreement for
Purchase and Sale of Real Property by and between Arvida/JMB Partners,
L.P.-II and Starwood/Talega Associates, L.L.C. for the sale of certain real
property within the Talega Property is incorporated by reference to Exhibit
10.9 to the Partnership's report for December 31, 1996 on Form 10-K (File
No. 0-19245) filed with the Securities and Exchange Commission dated March
21, 1997.
2.3. Amendment dated December 9, 1996 to Agreement for
Purchase and Sale of Real Property and Escrow Instructions by and between
Arvida/JMB Partners, L.P.-II and Starwood/Talega Associates, L.L.C. for the
sale of certain real property within the Talega Property is filed herewith.
2.4. Amendment dated May 20, 1997 to Agreement for
Purchase and Sale of Real Property and Escrow Instructions by and between
Arvida/JMB Partners, L.P.-II and Starwood/Talega Associates, L.L.C. for the
sale of certain real property within the Talega Property is filed herewith.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
ARVIDA/JMB PARTNERS, L.P. - II
BY: Arvida/JMB Managers-II, Inc.
(The General Partner)
GAILEN J. HULL
By: Gailen J. Hull
Senior Vice President
Dated: June 16, 1997
<PAGE>
PROFORMA FINANCIAL INFORMATION
Arvida/JMB Partners, L.P. - II
(A Limited Partnership)
And Consolidated Venture
Consolidated Balance Sheet
Pro Forma
Historical Adjustments Pro Forma
March 31, for Disposi- March 31,
1997 tion (1) 1997
------------ ------------ -----------
ASSETS
- ------
Cash and cash
equivalents . . . . . . .$ 247,698 247,698
Restricted cash . . . . . . 756,815 300,000 1,056,815
Trade and other accounts
receivable (net of
allowance for doubtful
accounts of $62,690
at March 31, 1997) . . . . 31,041 31,041
Real estate inventories . . 57,598 57,598
Property and equipment
held for sale or
disposition. . . . . . . . 2,701,441 2,701,441
Prepaid expenses and
other assets . . . . . . . 755,415 755,415
------------ ----------- ------------
Total assets. . . . . .$ 4,550,008 300,000 4,850,008
============ =========== ============
LIABILITIES
- -----------
Bank overdrafts . . . . . .$ 6,395 6,395
Accounts payable. . . . . . 132,707 132,707
Deposits. . . . . . . . . . 49,212 49,212
Accrued expenses and
other liabilities. . . . . 34,088,179 (11,599,796) 22,488,383
Amounts due to
affiliates . . . . . . . . 7,623,430 7,623,430
Notes and mortgages
payable (in default) . . . 78,769,410 (18,844,718) 59,924,692
------------ ----------- ------------
Commitments and
contingencies
Total liabilities . . . 120,669,333 (30,444,514) 90,224,819
------------ ----------- ------------
<PAGE>
PROFORMA FINANCIAL INFORMATION
Arvida/JMB Partners, L.P. - II
(A Limited Partnership)
And Consolidated Venture
Consolidated Balance Sheet - Continued
Pro Forma
Historical Adjustments Pro Forma
March 31, for Disposi- March 31,
1997 tion (1) 1997
------------ ------------ -----------
Partners' capital
accounts (deficits):
General Partner and
Associated Limited
Partner:
Capital contributions. . 2,000 2,000
Cumulative net loss. . . (8,720,336) 307,445 (8,412,891)
Cumulative cash
distributions. . . . . (246,771) (246,771)
------------ ----------- ------------
(8,965,107) 307,445 (8,657,662)
------------ ----------- ------------
Limited partners:
Capital contributions. . 209,753,671 209,753,671
Cumulative net loss. . .(307,686,715) 30,437,069 (277,249,646)
Cumulative cash
distributions . . . . . (9,221,174) (9,221,174)
------------ ----------- ------------
(107,154,218) 30,437,069 (76,717,149)
------------ ----------- ------------
Total partners'
deficits . . . . . . .(116,119,325) 30,744,514 (85,374,811)
------------ ----------- ------------
Total liabilities
and partners'
deficits . . . . . . .$ 4,550,008 300,000 4,850,008
============ =========== ============
(1) The 1997 unaudited pro forma consolidated financial statements give
effect to the sale of the Partnership's Talega Property (the "Talega
disposition"), as if the Talega disposition had occurred, for balance sheet
purposes, on March 31, 1997 and, for statement of operation purposes, on
January 1, 1997. The unaudited pro forma consolidated statement of
operations for the year ended December 31, 1996 gives effect to the Talega
disposition as if it had occurred on January 1, 1996.
<PAGE>
PROFORMA FINANCIAL INFORMATION
Arvida/JMB Partners, L.P. - II
(A Limited Partnership)
And Consolidated Venture
Consolidated Statement of Operations
Pro Forma
Historical Adjustments Pro Forma
March 31, for Disposi- March 31,
1997 tion (1) 1997
------------ ------------ -----------
Revenues:
Housing. . . . . . . . . . $ -- --
Homesites. . . . . . . . . -- --
Operating properties . . . 218,623 218,623
Brokerage and other
operations. . . . . . . . -- --
----------- ----------- -----------
Total revenues. . . . . 218,623 0 218,623
----------- ----------- -----------
Cost of revenues:
Housing. . . . . . . . . . -- --
Homesites. . . . . . . . . -- --
Operating properties . . . 108,388 108,388
Brokerage and other
operations. . . . . . . . -- --
----------- ----------- -----------
Total cost of
revenues . . . . . . . 108,388 0 108,388
----------- ----------- -----------
Gross operating profit. . . 110,235 0 110,235
Selling, general and
administrative expenses. . (195,726) 59,784 (135,942)
----------- ----------- -----------
Net operating loss. . . (85,491) 59,784 (25,707)
Interest income . . . . . . 11,476 -- 11,476
Interest and real estate
taxes. . . . . . . . . . . (3,624,125) 1,895,856 (1,728,269)
----------- ----------- -----------
Net loss. . . . . . . . $(3,698,140) 1,955,640 (1,742,500)
=========== =========== ===========
Net loss per
Limited Partner-
ship Interest. . . . . $ (14.63) 7.26 (7.37)
=========== =========== ===========
(1) The 1997 unaudited pro forma consolidated financial statements give
effect to the sale of the Partnership's Talega Property (the "Talega
disposition"), as if the Talega disposition had occurred, for balance sheet
purposes, on March 31, 1997 and, for statement of operation purposes, on
January 1, 1997. The unaudited pro forma consolidated statement of
operations for the year ended December 31, 1996 gives effect to the Talega
disposition as if it had occurred on January 1, 1996.
<PAGE>
PROFORMA FINANCIAL INFORMATION
Arvida/JMB Partners, L.P. - II
(A Limited Partnership)
And Consolidated Venture
Consolidated Statement of Operations
Pro Forma
Historical Adjustments Pro Forma
December 31, for Disposi- December 31,
1996 tion (1) 1996
------------ ------------ -----------
Revenues:
Housing. . . . . . . . . .$ 140,810 140,810
Homesites. . . . . . . . . 1,243,074 1,243,074
Land and property. . . . . 20,286,616 (225,000) 20,061,616
Operating properties . . . 3,315,655 3,315,655
Brokerage and other
operations. . . . . . . . 767,065 (19,296) 747,769
----------- ----------- -----------
Total revenues. . . . . 25,753,220 (244,296) 25,508,924
----------- ----------- -----------
Cost of revenues:
Housing. . . . . . . . . . 336,186 336,186
Homesites. . . . . . . . . 1,075,568 1,075,568
Land and property. . . . . 14,115,847 14,115,847
Operating properties . . . 3,023,179 3,023,179
Brokerage and other
operations. . . . . . . . 600,742 600,742
----------- ----------- -----------
Total cost of revenues. 19,151,522 0 19,151,522
----------- ----------- -----------
Gross operating profit. . . 6,601,698 (244,296) 6,357,402
Selling, general and
administrative expenses. . (1,999,640) 328,480 (1,671,160)
----------- ----------- -----------
Net operating income. . 4,602,058 84,184 4,686,242
Interest income . . . . . . 28,484 28,484
Interest and real
estate taxes . . . . . . . (12,264,066) 4,879,533 (7,384,533)
----------- ----------- -----------
Loss before extra-
ordinary item. . . . . (7,633,524) 4,963,717 (2,669,807)
Extraordinary item:
Gain on early
extinguishment of
debt. . . . . . . . . 20,000,000 20,000,000
----------- ----------- -----------
Net income. . . . . . . $12,366,476 4,963,717 17,330,193
=========== =========== ===========
Net income per limited
partnership interest
before extraordinary
item . . . . . . . . . $ 64.05 13.62 77.67
=========== =========== ===========
Net income per
limited partnership
interest . . . . . . . $ 64.05 13.62 77.67
=========== =========== ===========
(1) The 1997 unaudited pro forma consolidated financial statements give
effect to the sale of the Partnership's Talega Property (the "Talega
disposition"), as if the Talega disposition had occurred, for balance sheet
purposes, on March 31, 1997 and, for statement of operation purposes, on
January 1, 1997. The unaudited pro forma consolidated statement of
operations for the year ended December 31, 1996 gives effect to the Talega
disposition as if it had occurred on January 1, 1996.
EXHIBIT 2.3
- -----------
STARWOOD/TALEGA ASSOCIATES, L.L.C.,
a Delaware limited liability company
c/o Starwood Capital Group, L.L.C.
Three Pickwick Plaza
Suite 250
Greenwich, Connecticut 06830
December 9, 1996
Arvida/JMB Partners, L.P.-II,
a Delaware limited partnership
c/o JMB Realty
900 North Michigan Avenue
Chicago, Illinois 60611-1575
Attention: Stephen A. Lovelette
Re: Agreement for Purchase and Sale of Real Property
and Escrow Instructions by and between Arvida/JMB Partners, L.P.-II, a
Delaware limited partnership ("Seller") and Starwood/ Talega Associates,
L.L.C., a Delaware Limited liability company ("Buyer"), dated October 25,
1996 ("Agreement").
Ladies and Gentlemen:
Reference is made to the Agreement. All capitalized terms which are
used, but not defined herein, shall have the meanings ascribed to such
terms in the Agreement. Pursuant to Section 3.06(a) of the Agreement,
Buyer hereby gives Seller written notice of its election to proceed with
the transaction contemplated by the Agreement conditioned upon Seller
agreeing to the following amendments to the Agreement:
1. Section 2.04 of the Agreement shall be amended by deleting
"Thirty-Three Million and No/100 Dollars ($33,000,000.00)" from such
section and inserting "Thirty-Two Million and No/100 Dollars
($32,000,000.00)" in its place.
2. Section 2.05(a) of the Agreement shall be amended by adding the
following at the end of such section: "On or before January 2, 1996, Buyer
shall deposit with Escrow Holder the additional sum of Two Hundred Fifty
Thousand and No/100 Dollars ($250,000.00), which sum shall thereafter be
included within the definition of "Deposit". On or before January 15,
1996, Buyer shall deposit with Escrow Holder the additional sum of Two
Hundred Fifty Thousand and No/100 Dollars ($250,000.00), which sum shall
thereafter be included within the definition of "Deposit".
3. Section 2.05(b) of the Agreement shall be amended by deleting
"Twenty-Six Million Five Hundred Thousand and No/100 Dollars
($26,500,000.00)" from such section and inserting "Thirty-One Million and
No/100 Dollars ($31,000,000.00)" in its place;
<PAGE>
4. Section 2.05(c) of the Agreement shall be amended by deleting
such section in its entirety;
5. Section 4.05 of the Agreement shall be amended by deleting
"December 16, 1996" from such section and inserting "February 4, 1997" in
its place;
6. Section 2.06 of the Agreement is hereby amended by deleting
"Three Hundred Thirty Thousand and No/100 Dollars ($330,000.00) and One
Hundred Sixty-Five Thousand and No/100 Dollars ($165,000.00)" and inserting
"Three Hundred Twenty Thousand and No/100 Dollars ($320,000.00) and One
Hundred-Sixty Thousand and No/100 Dollars ($160,000.00)" in its place.
6. The Agreement shall be amended by deleting the text of Sections
4.07(a) and 4.08(g) and inserting "Intentionally Deleted" in each of their
places; and
7. The Agreement shall be amended by deleting Exhibit B in its
entirety. Except as otherwise provided herein, the terms and conditions of
the Agreement shall remain in full force and effect.
Please acknowledge your consent to the foregoing amendments by
executing this letter in the space provided below on or before 5:00 p.m.
(Chicago time) December 13, 1996. If we do not receive an executed copy of
this letter prior to such time, this notice shall no longer be effective
and the Agreement shall be deemed terminated pursuant to Section 3.06(b).
STARWOOD/TALEGA ASSOCIATES L.L.C.,
a Connecticut limited liability company
By: Starwood Opportunity Fund IV, L.P.,
a Delaware limited partnership
By: SOFI IV Management, L.L.C.,
a Connecticut limited
liability company
By: Starwood Capital Group, L.L.C.,
a Connecticut limited liability
company
By: /s/ EUGENE A. GORAB
Eugene A. Gorab,
Its: Managing Director
2
<PAGE>
ACCEPTED and AGREED to this
13th day of December, 1997
ARVIDA/JMB PARTNERS, L.P.-II
a Delaware limited partnership
By: Arvida/JMB Managers-II, Inc.
a Delaware corporation, its
General Partner
By: /s/ STEPHEN A. LOVELETTE
Stephen A. Lovelette
Its: Vice President
cc: Arvida Company, Attention: General Counsel
Gregory W. Sanders, Esq.
H. William Walker, Jr., Esq.
David B. Bryant, Esq.
3
EXHIBIT 2.4
- -----------
ARVIDA/JMB PARTNERS, L.P.-II
a Delaware limited partnership
c/o JMB Realty
900 North Michigan Avenue
Chicago, Illinois 60611-1575
May 20, 1997
Starwood/Talega Associates, L.L.C.
a Delaware limited liability company
c/o Starwood Capital Group, L.L.C.
Three Pickwick Plaza
Suite 250
Greenwich, Connecticut 06830
Attention: Jeff Dishner
Re: Agreement for Purchase and Sale of Real Property and Escrow
Instructions by and between Arvida/JMB Partners, L.P.-II, a Delaware
limited partnership ("Seller") and Starwood/Talega Associates, L.L.C., a
Delaware limited liability company ("Buyer"), dated October 25, 1996, as
amended (the "Agreement")
Ladies and Gentlemen:
Reference is made to the Agreement, under which by letter of April
30, 1997 (the "Default Declaration"), Seller declared Buyer in default.
Buyer has denied any default. For good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Buyer and Seller
hereby agree that the Agreement is ratified and amended as set forth below,
and all prior amendments to the Agreement, other than Paragraphs 8, 10, 11,
12, 13, 14 and 15 of the letter agreement between Seller and Buyer dated
March 18, 1997, are declared null and void and superseded hereby. All
capitalized terms which are used but not defined herein have the meanings
ascribed to such terms in the Agreement.
1. Section 2.04 of the Agreement is amended by deleting the text
thereof in its entirety and substituting the following in its place:
The purchase price to be paid by Buyer for the
Property shall be the sum of Thirty-One Million One Hundred Thousand and
No/100
<PAGE>
Dollars ($31,100,000.00) ("Purchase Price"), as
hereinafter provided.
2. Section 2.05(a) of the Agreement is amended by deleting the
text thereof in its entirety and substituting the following in its place:
Buyer has tendered the sum of One Million and
No/100 Dollars ($1,000,000.00) (the "Deposit") to First American Title
Insurance Company, 144 East 5th Street, Santa Ana, California 92701 (the
"Escrow Holder").
By execution of this Letter Agreement, Seller and Buyer hereby (a) agree
that the Deposit, together with all interest accrued thereon, has been and
is fully earned by Seller, subject only to return to Escrow Holder in the
event or the occurrence, after the date of this Letter Agreement and prior
to Closing, of either (i) default by Seller pursuant to the Agreement as
amended by this Letter Agreement, or (ii) failure of a condition set forth
in Section 2.03 (a), (b) or (c) of the Agreement as amended by this Letter
Agreement, and (b) irrevocably instruct Escrow Holder, forthwith upon
receipt of a copy, or counterparts, of this Letter Agreement executed by
Seller and Buyer, to disburse the Deposit, together with all interest
accrued thereon through the date of such disbursement, by wire transfer to
Seller's mortgage lender's account in accordance with the following wire
instructions:
Bank of America Illinois
ABA Routing #071-0000-39
840 South Canal Street
2nd Floor
Chicago, IL 60697
Attn: Nina Contraras
Reference: Ban Control Account #36-20239
Arvida/Talega Sale
to be received by Seller's mortgage lender not later than 12:01 p.m.,
Central Standard Time, on May 21, 1997 (with respect to which time is of
the essence), in consideration of Seller's (a) waiver of Buyer's default as
set forth in the Default Declaration and (b) agreement herein to reinstate
the Agreement; and said sum is now and hereafter at all times will be
deemed fully earned by, and the separate property of Seller, the receipt
and sufficiency of which consideration Buyer hereby acknowledges; and Buyer
hereby waives and disclaims any right, now or hereafter, to claim against
or seek refund of the Deposit and accrued interest, whether pursuant to the
terms of or under the Agreement, as amended, or otherwise, other than as a
result of the occurrence, after the date of this Letter
-2-
<PAGE>
Agreement and prior to Closing, of (i) default by Seller pursuant to the
Agreement as amended by this Letter Agreement, or (ii) failure of a
condition set forth in Section 2.03 (a), (b) or (c) of the Agreement as
amended by this Letter Agreement. Notwithstanding the foregoing, if Escrow
Holder requires any additional instructions or evidence of authority to
disburse and wire the Deposit and accrued interest to Seller's mortgage
lender (which instructions Seller and Buyer intend hereby to waive), Buyer
agrees immediately upon request of Escrow Holder or Seller to satisfy such
additional requirements. The terms of this Letter Agreement, other than
the foregoing invocable instructions to Escrow Holder, will not be
effective or enforceable by Buyer against Seller until said sum has been
paid in full to and received by Seller as provided in this Paragraph 2.
3. Section 2.05(b) of the Agreement is amended by deleting the
text thereof in its entirety and substituting the following in its place:
"The sum of Thirty Million One Hundred Thousand Dollars ($31,100,000.00),
less the amount disbursed by Escrow Holder to Seller pursuant to Letter
Agreement between Seller and Buyer dated May 21, 1997, will be paid on the
Closing Date by wire transfer to Escrow Holder for deposit in escrow"; and
Section 2.05(c) is deleted in its entirety.
4. Section 2.06 of the Agreement is amended by deleting the first
clause of the second sentence thereof and substitution in its place:
"Brokerage Commissions in the amount of Two Hundred Thirty Three Thousand
Two Hundred Fifty Dollars ($233,250.00) ("Brokerage Commissions") shall be
payable to each of O'Donnell, Atkins Company and The Overland Company by
Escrow Holder from proceeds due Seller at Closing, if any, hereunder, and
from no other source, in accordance with Section 4.08(f) of this
Agreement..."
5. Section 4.05 of the Agreement is amended by deleting the text
thereof in its entirety and inserting the following in its place: "The
consummation of the transactions contemplated by this Agreement will take
place at the office of Escrow Holder on May 30, 1997, time being of the
essence with respect thereto; and if Buyer fails to close on or before May
30, 1997, for any reason other than the occurrence after May 21, 1997, of
either (a) a default by Seller, or (b) the failure of a condition set forth
in Section 2.03(a)-(c) of the Agreement, as amended by the Letter Agreement
between Seller and Buyer dated May 21, 1997, this Agreement will be null
and void and neither party will have any further rights or obligations
hereunder, except with respect to the indemnity set forth in the last two
sentences of Section 3.05."
6. Seller acknowledges that the condition to Seller's obligations
pursuant to the Agreement set forth in Section 2.02(a) thereof has been
satisfied subject only to performance by the District of its agreements
with Seller pursuant to the Compromise Settlement and Mutual Release
Agreement between Seller and the District, a copy of which is attached
hereto as Exhibit A: and the condition to Seller's obligations pursuant to
the Agreement set forth in Section 2.02(b) thereof has been satisfied.
-3-
<PAGE>
7. Sections 2.03(d) and (f) of the Agreement are deleted in their
entirety.
8. Sections 3.03, 3.04, 3.05 (except the last two sentences
thereof), 3.06 and 3.07 of the Agreement are deleted in their entirety.
Buyer acknowledges that all conditions and obligations of Seller for which
provision is made in Article III of the Agreement, including without
limitation all preclosing obligations of Seller pursuant to Section 3.01
and 3.02 (but excluding Seller's obligation to pay any unpaid amounts due
for the Title Report, Title Commitment or Survey), have been fully and
timely performed and satisfied, and Buyer waives and disclaims any right to
terminate, or avoid performance of Buyer's obligations pursuant to, the
Agreement pursuant to the provisions of said Article III.
Buyer accepts the physical condition and legal status (including under all
planning, building, zoning, environmental land use and other applicable
laws, ordinances and regulations) of the Property existing as of the
effective date of this Letter Agreement.
9. Section 4.07 or the Agreement is amended by deleting the first
two sentences thereof and substituting the following their place: "On or
prior to the Closing Date Buyer shall deposit with Escrow Holder the
balance of the Purchase Price due at Closing in accordance with Section
2.05(b)."
10. Buyer waives any right to assert, or to make claim against
Seller with respect to any misrepresentation or breach of as warranty or
covenant of Seller based upon, related to or arising our of the provisions
of Section 5.01 or 6.01 of the Agreement based upon facts or circumstances
of which Buyer has or has had actual knowledge on or before the effective
date of this Letter Agreement, and Buyer acknowledges and agrees that to
Buyer's Knowledge Seller has timely complied with all of its covenants and
agreements set forth in the Agreement and all Seller Axillary documents to
the effective date of this Letter Agreement. Further, the last sentence of
Section 5.01 is amended to add "Jeff Dishner" after "Eugene A. Gorab and
S. John Robinson."
11. Section 7.01 of the Agreement is deleted. Seller agrees that
payment of the Deposit, and interest accrued thereon to Seller pursuant to
Paragraph 2 of this Letter Agreement constitutes full settlement of all
obligations of Buyer to Seller in the event that Buyer fails to close
pursuant to the Agreement.
12. The provisions of Section 8.02 of the Agreement are
incorporated herein by reference and applicable hereto as if set forth
herein in full.
13. Notwithstanding the provisions of Section 8.14 of the
Agreement, simultaneously with Closing Buyer may assign the Agreement to
the person or entity to whom or which title is conveyed at Closing,
provided that Buyer will remain liable for all obligations "Buyer" under
the Agreement.
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<PAGE>
14. Except as amended and modified hereby, the Agreement is
ratified and affirmed and remains in good standing and in full force and
effect.
Please acknowledge your consent to the foregoing amendments by
executing this Letter Agreement in the space provided below and delivering
the executed counterpart to Stephen A. Lovelette at the Seller's address
set forth above, and to Escrow Holder at its address set forth in Section
2.05(a) of the Agreement, on or before 12:01 p.m., Central Standard Time,
on May 21, 1997, as to which time is of the essence; and if an executed
counterpart has not theretofore been received, and/or if Seller has not
received the Deposit and accrued interest as set forth in Paragraph 2
above, this Letter Agreement will be null and void and the settlement offer
which is evidenced hereby automatically will be withdrawn. This Letter
Agreement is delivered to you incident to and in furtherance of pending
settlement discussions with respect to the dispute between Seller and Buyer
concerning the rights and obligations, is any, of Seller and Buyer pursuant
to the Agreement; and unless and until Seller has received a counterpart
copy of this Letter Agreement fully executed by Buyer, and the Deposit and
interest accrued thereon have been paid to and received by Seller as set
forth in Paragraph 2 of this Letter Agreement, this Letter Agreement will
not be effective, neither Buyer nor Brokers will not have any rights or
[ Remainder of this page left blank ]
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<PAGE>
claims pursuant to this Letter Agreement, and the existence or terms hereof
will not be used by or admissible in evidence against Seller in any
litigation or dispute concerning the Agreement.
ARVIDA/JMB PARTNERS, L.P.-II, a
Delaware limited partnership
By: Arvida/JMB Managers-II Inc., a
Delaware corporation,
its General Partner
/s/ STEPHEN A. LOVELETTE
By: Stephen A. Lovelette
Its: Vice President
ACCEPTED and AGREED to this
__________ day of May, 1997
STARWOOD/TALEGA ASSOCIATES L.L.C.,
a Connecticut limited liability company
By: Starwood Opportunity Fund IV, L.P. a
Delaware limited partnership
By: SOFI IV Management, L.L.C., a
Connecticut limited liability company
By: Starwood Capital Group, L.L.C.,
a Connecticut limited liability
company
By: /s/ JEFF DISHNER
Jeff Dishner
Its: Senior Vice President
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