-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ATfOGRcVbF76yGM+R22BCg1bd0yIw5WU1SqIyCQ/akj06YUMBLUVQBYCwv9WzEAK xt2UpP2+v3d4EWKCOEhN6w== 0000892626-97-000271.txt : 19970815 0000892626-97-000271.hdr.sgml : 19970815 ACCESSION NUMBER: 0000892626-97-000271 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARVIDA JMB PARTNERS L P II CENTRAL INDEX KEY: 0000852494 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF NONRESIDENTIAL BUILDINGS [6512] IRS NUMBER: 581809884 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-19245 FILM NUMBER: 97661380 BUSINESS ADDRESS: STREET 1: 900 N MICHIGAN AVE CITY: CHICAGO STATE: IL ZIP: 60611 BUSINESS PHONE: 3124404800 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarter ended June 30, 1997 Commission file number 0-19245 ARVIDA/JMB PARTNERS, L.P.-II (Exact name of registrant as specified in its charter) Delaware 58-1809884 (State of organization) (IRS Employer Identification No.) 900 N. Michigan Avenue., Chicago, IL 60611 (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code 312/440-4800 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such a 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 TABLE OF CONTENTS PART I FINANCIAL INFORMATION Item 1. Financial Statements . . . . . . . . . . . . . . 3 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. . . . . . . . . . . . . . 14 PART II OTHER INFORMATION Item 1. Legal Proceedings. . . . . . . . . . . . . . . . 16 Item 3. Defaults Upon Senior Securities. . . . . . . . . 17 Item 6. Exhibits and Reports on Form 8-K . . . . . . . . 18 PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ARVIDA/JMB PARTNERS, L.P.-II (A LIMITED PARTNERSHIP) AND CONSOLIDATED VENTURE CONSOLIDATED BALANCE SHEETS JUNE 30, 1997 AND DECEMBER 31, 1996 (UNAUDITED) ASSETS ------
JUNE 30, DECEMBER 31, 1997 1996 ------------- ----------- Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . $ 351,091 181,623 Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,307,072 955,077 Trade and other accounts receivable (net of allowance for doubtful accounts of $0 at June 30, 1997 and $76,289 at December 31, 1996) . . . . . . . . . . . . . . . . . 31,103 103,650 Real estate inventories . . . . . . . . . . . . . . . . . . . . . . . 39,683 57,598 Property and equipment held for sale or disposition . . . . . . . . . 2,776,878 2,701,441 Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . 292,469 850,528 ------------ ------------ Total assets. . . . . . . . . . . . . . . . . . . . . . . . . $ 4,798,296 4,849,917 ============ ============ ARVIDA/JMB PARTNERS, L.P.-II (A LIMITED PARTNERSHIP) AND CONSOLIDATED VENTURE CONSOLIDATED BALANCE SHEETS - CONTINUED LIABILITIES AND PARTNERS' DEFICITS ---------------------------------- JUNE 30, DECEMBER 31, 1997 1996 ------------- ----------- Liabilities: Bank overdrafts. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 21,535 10,222 Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . 114,256 129,281 Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,700 33,700 Accrued expenses and other liabilities . . . . . . . . . . . . . . . 24,798,656 30,605,394 Amounts due to affiliates. . . . . . . . . . . . . . . . . . . . . . 7,622,949 7,621,046 Notes and mortgages payable (in default) . . . . . . . . . . . . . . 59,886,713 78,871,459 ------------ ------------ Commitments and contingencies Total liabilities. . . . . . . . . . . . . . . . . . . . . . . 92,477,809 117,271,102 ------------ ------------ Partners' deficits: General Partner and Associate Limited Partner: Capital contributions. . . . . . . . . . . . . . . . . . . . . . . 2,000 2,000 Cumulative net loss. . . . . . . . . . . . . . . . . . . . . . . . (6,597,044) (8,448,354) Cumulative cash distributions. . . . . . . . . . . . . . . . . . . (246,771) (246,771) ------------ ------------ (6,841,815) (8,693,125) ------------ ------------ Limited partners: Capital contributions, net of offering costs . . . . . . . . . . . 209,753,671 209,753,671 Cumulative net loss. . . . . . . . . . . . . . . . . . . . . . . . (281,370,195) (304,260,557) Cumulative cash distributions. . . . . . . . . . . . . . . . . . . (9,221,174) (9,221,174) ------------ ------------ (80,837,698) (103,728,060) ------------ ------------ Total partners' deficits . . . . . . . . . . . . . . . . . . . (87,679,513) (112,421,185) ------------ ------------ Total liabilities and partners' deficits . . . . . . . . . . . $ 4,798,296 4,849,917 ============ ============ The accompanying notes are an integral part of these consolidated financial statements.
ARVIDA/JMB PARTNERS, L.P.-II (A LIMITED PARTNERSHIP) AND CONSOLIDATED VENTURE CONSOLIDATED STATEMENTS OF OPERATIONS THREE AND SIX MONTHS ENDED JUNE 30, 1997 AND 1996 (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30 JUNE 30 -------------------------- -------------------------- 1997 1996 1997 1996 ----------- ---------- ----------- ---------- Revenues: Housing . . . . . . . . . . . . . . . . . . . $ -- -- -- 140,810 Homesites . . . . . . . . . . . . . . . . . . 28,000 598,019 28,000 1,244,069 Land and property . . . . . . . . . . . . . . 31,215,000 20,060,819 31,215,000 20,060,819 Operating properties. . . . . . . . . . . . . 199,336 1,194,787 417,959 2,881,131 Brokerage and other operations. . . . . . . . -- 225,457 -- 561,628 ----------- ---------- ---------- ---------- Total revenues. . . . . . . . . . . . 31,442,336 22,079,082 31,660,959 24,888,457 Cost of revenues: Housing . . . . . . . . . . . . . . . . . . . -- 186,094 -- 333,373 Homesites . . . . . . . . . . . . . . . . . . 22,427 505,439 22,427 1,063,976 Land and property . . . . . . . . . . . . . . (1,143,523) 14,050,234 (1,143,523) 14,050,234 Operating properties. . . . . . . . . . . . . 122,586 1,280,352 230,974 2,559,036 Brokerage and other operations. . . . . . . . -- 241,530 -- 534,794 ----------- ---------- ---------- ---------- Total cost of revenues. . . . . . . . (998,510) 16,263,649 (890,122) 18,541,413 Gross operating profit. . . . . . . . . . . . . 32,440,846 5,815,433 32,551,081 6,347,044 Selling, general and administrative expenses. . (375,614) (857,187) (571,340) (1,339,962) ----------- ---------- ---------- ---------- Net operating income. . . . . . . . . 32,065,232 4,958,246 31,979,741 5,007,082 Interest income . . . . . . . . . . . . . . . . -- 6,309 11,476 15,433 Interest and real estate taxes. . . . . . . . . (3,625,420) (4,700,270) (7,249,545) (9,773,030) ----------- ---------- ---------- ---------- Net income (loss) . . . . . . . . . . $28,439,812 264,285 24,741,672 (4,750,515) =========== ========== ========== ========== Net income (loss) per Limited Partnership Interest. . . . . . . . . . . . . . $ 112.40 4.71 97.77 (10.90) =========== ========== ========== ========== The accompanying notes are an integral part of these consolidated financial statements.
ARVIDA/JMB PARTNERS, L.P.-II (A LIMITED PARTNERSHIP) AND CONSOLIDATED VENTURE CONSOLIDATED STATEMENT OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 1997 AND 1996 (UNAUDITED)
1997 1996 ------------ ----------- Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 24,741,672 (4,750,515) Charges to net income (loss) not requiring cash: Amortization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,196 54,304 Provision for doubtful accounts . . . . . . . . . . . . . . . . . . . . . (17,379) 32,735 Loss on disposition of property and equipment . . . . . . . . . . . . . . 2,789 1,765,143 Write-off of obligation related to Talega Property. . . . . . . . . . . . (1,800,000) -- Changes in: Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (351,995) 1,341,307 Trade and other accounts receivable . . . . . . . . . . . . . . . . . . . 89,928 802,376 Real estate inventories: Additions to real estate inventories. . . . . . . . . . . . . . . . . . -- (4,464,714) Cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,915 15,180,693 Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . 539,863 670,202 Accounts payable, accrued expenses and other liabilities. . . . . . . . . (4,021,765) 8,885,873 Deposits and unearned income. . . . . . . . . . . . . . . . . . . . . . . -- (835,232) Amounts due to affiliates . . . . . . . . . . . . . . . . . . . . . . . . 1,903 196,955 ------------ ----------- Net cash provided by operating activities . . . . . . . . . . . . 19,221,127 18,879,127 ------------ ----------- Investing activities: Proceeds from disposal of property and equipment. . . . . . . . . . . . . -- 1,835,911 Acquisition of property and equipment . . . . . . . . . . . . . . . . . . (78,226) -- ------------ ----------- Net cash provided by (used in) investing activities . . . . . . . (78,226) 1,835,911 ------------ ----------- Financing activities: Payments of notes and mortgages payable . . . . . . . . . . . . . . . . . (18,984,746) (21,068,292) Proceeds from (repayments of) bank overdrafts . . . . . . . . . . . . . . 11,313 (550,666) ------------ ----------- Net cash used in financing activities . . . . . . . . . . . . . . (18,973,433) (21,618,958) ------------ ----------- ARVIDA/JMB PARTNERS, L.P.-II (A LIMITED PARTNERSHIP) AND CONSOLIDATED VENTURE CONSOLIDATED STATEMENT OF CASH FLOWS - CONTINUED 1997 1996 ------------ ----------- Increase (decrease) in cash and cash equivalents. . . . . . . . . . . . . . 169,468 (903,920) Cash and cash equivalents, beginning of year. . . . . . . . . . . . . . . . 181,623 1,387,313 ------------ ----------- Cash and cash equivalents, end of period. . . . . . . . . . . . . . . . . . $ 351,091 483,393 ============ =========== Supplemental disclosure of cash flow information: Cash paid for mortgage and other interest, net of amounts capitalized. . . . . . . . . . . . . . . . . . $ -- -- ============ =========== Non-cash investing and financing activities . . . . . . . . . . . . . . . $ -- -- ============ =========== The accompanying notes are an integral part of these consolidated financial statements.
ARVIDA/JMB PARTNERS, L.P.-II (A LIMITED PARTNERSHIP) AND CONSOLIDATED VENTURE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1997 AND 1996 (UNAUDITED) Readers of this quarterly report should refer to the Partnership's audited financial statements for the fiscal year ended December 31, 1996, which are included in the Partnership's 1996 Annual Report on Form 10-K (File No. 0-19245) filed on March 31, 1997, as certain footnote disclosures which would substantially duplicate those contained in such audited financial statements have been omitted from this report. Capitalized terms used but not defined in this quarterly report have the same meanings as in the Partnership's 1996 Annual Report. GENERAL Capitalized Interest and Real Estate Taxes Due to the prohibitions on construction and development imposed on the Partnership by its lender, no amounts of interest or real estate taxes qualified for capitalization in 1996 and 1997. Interest of $4,410,150 and $5,657,189 was incurred for the six months ended June 30, 1997 and 1996, respectively. Interest of $2,139,310 and $2,742,832 was incurred for the three months ended June 30, 1997 and 1996, respectively. The Partnership has not made the required monthly interest payments on its credit facility since September 1994. Real estate taxes of $2,839,395 and $4,115,841 were incurred for the six months ended June 30, 1997 and 1996, respectively. Real estate tax payments of $11,287,186 and $517,359 were made during the six months ended June 30, 1997 and 1996, respectively. Real estate taxes of $1,486,110 and $1,957,438 were incurred for the three months ended June 30, 1997 and 1996, respectively. Real estate tax payments of $11,287,186 and $67,616 were made during the three months ended June 30, 1997 and 1996, respectively. The increase in real estate taxes paid during the three and six months ended June 30, 1997 as compared to the same periods in 1996 is due to the taxes paid in conjunction with the closing on the sale of the Talega Property, as discussed below in Notes and mortgages payable (in default). The preceding analysis of real estate taxes does not include real estate taxes incurred or paid with respect to the Partnership's club facilities (sold in June 1996) and other operating properties as these taxes are included in cost of revenues for operating properties. Property and Equipment and Other Assets No depreciation expense was incurred for the three and six month periods ended June 30, 1997 and 1996. Reference is made to the "Impact of Recently Issued Accounting Standards" note for a discussion of the Partnership's implementation of the Financial Accounting Standards Board's Statement No. 121 ("FASB No. 121"). Amortization of other assets of $18,196 and $54,304 was incurred for the six months ended June 30, 1997 and 1996, respectively. Amortization of other assets of $8,513 and $23,447 was incurred for the three months ended June 30, 1997 and 1996, respectively. CASH, CASH EQUIVALENTS AND RESTRICTED CASH Restricted cash at June 30, 1997 and December 31, 1996 consists primarily of the amount remaining from the original $3 million which was deposited into a restricted collateral account in March 1995 pursuant to an agreement between the Partnership and its lender. Subject to the approval of the Partnership's lender, cash in the restricted collateral account is utilized to fund the Partnership's expenses. Additional amounts were deposited into the restricted collateral account pursuant to the sale of the Partnership's remaining land, cable operation and country club in the Heathrow community in 1996, and the sale of the Talega Property in May 1997. NOTES AND MORTGAGES PAYABLE (IN DEFAULT) The Partnership's credit facilities consist of a $52.5 million term loan, a $67.5 million term loan, a revolving line of credit of approximately $14.3 million and letters of credit securing performance obligations of the Partnership. At June 30, 1997, approximately $10.4 million, $38.0 million and $11.5 million was outstanding under the $52.5 million term loan, the $67.5 million term loan and the revolving line of credit facility, respectively. For the six month period ended June 30, 1997, the effective interest rate for the combined term loans and the revolving line of credit facility was approximately 12.7% per annum. The Partnership has not made the required interest payments on its credit facilities since September 1994. The amount of interest which remains payable at June 30, 1997 totals approximately $21.2 million. In March 1995, the Partnership and its lender entered into Forbearance Agreements pursuant to which, among other things, the Partnership proposed a plan for the orderly disposition of its remaining assets. The Forbearance Agreements were amended in October 1995 and again in September 1996 to provide for, among other things, extensions of the time frame for the orderly disposition of the Partnership's assets. In conjunction with the September 1996 amendment, the Partnership's lender agreed to forgive, waive and cancel a portion of the unpaid interest on the Partnership's credit facilities in the aggregate amount of $20 million, of which $2 million was allocated to interest on the revolving line of credit and $18 million was allocated to interest on one of the term loans. The Partnership and its lender amended the March 1995 Forbearance Agreements to include, among other things, an extension of the existing plan whereby the Partnership would sell its remaining assets by no later than June 30, 1997. The amendment also provides for the forgiveness, by the Partnership's lender, of any remaining outstanding principal balance and accrued interest on the Partnership's credit facilities, upon the satisfaction of certain specified conditions including, among other things, the sale of the Partnership's remaining real estate assets at specified minimum prices, the payment of the net proceeds from such sales to the Partnership's lender, and the assignment of any other net assets of the Partnership to the lender. Such forgiveness of principal and interest would result in an extraordinary gain for financial reporting purposes. The Partnership and its lender are currently negotiating the terms of a further extension of the March 1995 Forbearance Agreements. On May 30, 1997, the Partnership closed on the sale of its Talega Property to an unaffiliated third party for $31.1 million. The terms of the sale were generally in accordance with the agreement made in October 1996 with certain modifications. In conjunction with the sale of the Talega Property, the Partnership paid all current and delinquent property taxes (including penalties and interest thereon). In addition, the Partnership reached an agreement with the Santa Margarita Water District (the "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 District. In addition, all contractual obligations of the Partnership with respect to the Talega Property were assumed by the buyer. The net proceeds from the sale, after prorations and closing costs, totaled approximately $19.1 million. Of this amount, approximately $18.8 million was applied against the outstanding principal balance on the Partnership's term loans, and $0.3 million was deposited to fund the Partnership's expenses. As previously reported, the Partnership had reduced its basis in the Talega Property for financial reporting purposes to zero through loss provisions. Therefore, the sale of the Talega Property resulted in a gain of approximately $32.2 million for financial reporting purposes. The gain exceeds the gross sale price due to the write-off of an obligation related to the Talega Property for which the Partnership is no longer liable. The write-off of this obligation is the cause for the credit balance in Land and property cost of sales on the accompanying consolidated statements of operations for the three and six month periods ended June 30, 1997. This closing is the primary cause for the decrease in Notes and mortgages payable (in default) and Accrued expenses and other liabilities on the accompanying consolidated balance sheets at June 30, 1997 as compared to December 31, 1996. Proceeds from the sales of the Partnership's assets and other collateral securing the credit facilities, net of brokerage commissions and certain other customary selling expenses, are delivered to the lender to be applied against the outstanding principal balances on the term loans. Through June 30, 1997, the Partnership has remitted proceeds totaling approximately $59.2 million from sales made after becoming subject to this requirement in September 1994. On July 15, 1997, the Partnership closed on the sale of its retail shopping plaza at the Heathrow community to an unaffiliated third party for $5.1 million. The net proceeds from the sale, after prorations and closing costs, totaled approximately $5.0 million. Of this amount, $4.9 million was applied against the outstanding principal balance on the Partnership's term loans, and $0.1 million was deposited to fund the Partnership's expenses. Although there can be no assurance, the Partnership is working to dispose of the two remaining lots in Eagle Watch during 1997. It is expected that any proceeds from the sale or other disposition of these lots, in excess of the costs of sale and general and administrative expenses attributable thereto, will be paid to the lender or other creditors of the Partnership. In addition, the Partnership is currently involved in certain litigation, as discussed in Part II. Item 1. Legal Proceedings in this report, to which reference is hereby made. Upon completion of the sale of the Partnership's remaining assets, the Partnership expects to terminate. However, the termination of the Partnership could be delayed until resolution (or other acceptable treatment) of the pending litigation. The Holders of Interests should not expect to receive any future distributions from the Partnership. TRANSACTIONS WITH AFFILIATES The General Partner of the Partnership or its affiliates may be reimbursed for their direct expenses or out-of-pocket expenses relating to the administration of the Partnership and its assets. For the six months ended June 30, 1997, there were no reimbursements due the General Partner of the Partnership or its affiliates for such direct or out-of-pocket expenditures. The total of such reimbursements for the six months ended June 30, 1996 was approximately $3,400, all of which has been paid. In addition, the General Partner and its affiliates are entitled to reimbursements for salaries and salary-related costs relating to the administration of the Partnership and the operation of the Partnership's Properties. Such costs were approximately $8,300 for the six months ended June 30, 1997, all which was paid as of June 30, 1997. The total of such costs for the six months ended June 30, 1996 was approximately $17,300, all of which has been paid. The Partnership also receives reimbursements from, or reimburses, affiliates of the General Partner for certain general and administrative costs including, and without limitation, salary and salary-related costs. The Partnership was entitled to receive from one of its affiliates approximately $0 and $11,700 for the six month periods ended June 30, 1997 and 1996, respectively, for costs incurred by the Partnership on behalf of the affiliate, none of which was outstanding at June 30, 1997. Prior to June 1996, the Partnership and Arvida/JMB Partners, L.P. (a publicly-held limited partnership affiliated with the General Partner, "Arvida/JMB-I") each employed project-related and administrative personnel who performed services on behalf of both partnerships. In addition, certain out-of-pocket expenditures related to such services and other general and administrative expenditures were incurred and charged to each partnership as appropriate. The Partnership reimbursed or received reimbursements from Arvida/JMB-I for such costs (including salary and salary-related costs). Subsequent to June 1996, the Partnership no longer employed any project-related or administrative personnel and incurred no costs on behalf of Arvida/JMB-I. For the six month period ended June 30, 1997, the Partnership was obligated to reimburse Arvida/JMB-I approximately $56,000. At June 30, 1997, approximately $20,500 was unpaid, all of which was paid as of August 8, 1997. The Partnership was not entitled to any reimbursement from Arvida/JMB-I for the six month period ended June 30, 1997. For the six months ended June 30, 1996, the Partnership was obligated to reimburse Arvida/JMB-I approximately $1,178,900 and the Partnership was entitled to receive reimbursements from Arvida/JMB-I of approximately $113,700. At June 30, 1997, approximately $1,800 remains outstanding from the prior year, none of which was paid as of August 8, 1997. Arvida Company ("Arvida"), pursuant to an agreement with the Partnership, provides development, construction, management and other personnel and services to the Partnership for all of its projects and operations. Pursuant to such agreement, the Partnership reimburses Arvida for all of its salary and salary-related costs incurred in connection with work performed on behalf of the Partnership. The total of such costs for the six month periods ended June 30, 1997 and 1996 were approximately $21,600 and $157,000, respectively. At June 30, 1997, approximately $3,500 was unpaid, all of which was paid as of August 8, 1997. Pursuant to a requirement under the Partnership's credit facilities, a portion of the reimbursements paid to Arvida and Arvida/JMB-I as well as portions of the Partnership's insurance and loan refinancing costs incurred in 1992 and 1993, have been funded on the Partnership's behalf by advances from the General Partner. Such advances, which do not bear interest, totaled approximately $4,609,400 at June 30, 1997. The repayment of such advances is subordinated to the receipt by the Holders of Interests of certain levels of return, and therefore is not expected to be made. In addition, the Partnership was entitled to receive approximately $12,900 from an affiliate of the General Partner for salary and salary-related costs incurred by the Partnership on behalf of such affiliate of the General Partner, all of which was outstanding at June 30, 1997 and none of which was paid as of August 8, 1997. Prior to the sale during June 1996 of the remaining land within the Heathrow Community, the Partnership incurred certain general and administrative expenses, including insurance premiums, which were paid by the Partnership on behalf of its affiliated homeowners associations. The Partnership receives reimbursements from the affiliates for such costs. For the six months ended June 30, 1996, the Partnership was entitled to receive approximately $5,200 from such affiliates, all of which was received. The Partnership was entitled to receive approximately $400 for the six month period ended June 30, 1997. At June 30, 1997, approximately $1,000 was outstanding, which includes amounts owed from the prior year. Prior to the sale during June 1996 of the remaining land within the Heathrow Community, Arvida provided development management services to the Heathrow joint venture. The payment of the management fees in connection with these services has been deferred. The cumulative amount of such deferred management fees as of June 30, 1997 was approximately $3,005,200. Such deferred fees do not bear interest and remain payable. The ultimate payment of these management fees is not expected to be made as it is subordinated to certain levels of return to the Holders of Interests. In accordance with the Partnership Agreement, the General Partner and Associate Limited Partner have deferred a portion of their distributions of net cash flow from the Partnership totalling approximately $247,000. This amount, which does not bear interest, is not expected to be paid. COMMITMENTS AND CONTINGENCIES As security for performance of certain development obligations, including the Partnership's obligations with respect to the Santa Margarita Water District, the Partnership is contingently liable under standby letters of credit and bonds at June 30, 1997 for approximately $2,491,000 and $558,000, respectively. In connection with the sale of the Talega Property, the purchaser has agreed to indemnify the Partnership against any losses in connection with these standby letters of credit and bonds. The Partnership has been named a defendant in a lawsuit filed in the Circuit Court in and for the Eighteenth Judicial Circuit, Seminole County, Florida entitled Land Investment I, Ltd., Heathrow Land & Development Corporation, Heathrow Shopping Center Associates, and Paulucci Investments v. Arvida/JMB Managers-II, Inc., Arvida/JMB Partners, L.P.-II, Arvida Company and JMB Realty Corporation. The complaint, as amended, includes counts for breach of the management agreement, fraud in the inducement and conspiracy to commit fraud in the inducement, breach of the partnership agreement and constructive trust in connection with the purchase and management of the Heathrow development. Plaintiffs seek, among other things, unspecified compensatory damages, punitive damages, attorneys fees, costs, and such other relief as the Court deems appropriate. The Partnership believes that the lawsuit is without merit and intends to vigorously defend itself in this matter. The Partnership has been advised by Merrill Lynch, Pierce, Fenner & Smith, Incorporated ("Merrill Lynch") that various investors of the Partnership have sought to compel Merrill Lynch to arbitrate claims brought by certain investors of the Partnership, and has been named as a respondent in various arbitrations, representing approximately 11% of the total Interests outstanding. These claimants have sought and are seeking to arbitrate claims involving unspecified damages based on Merrill Lynch's alleged violations of applicable state and/or federal securities laws and alleged violations of the rules of the National Association of Securities Dealers, Inc., together with pendent state law claims. The Partnership believes that Merrill Lynch has resolved some of these claims through litigation and otherwise, and that Merrill Lynch is defending other claims. Merrill Lynch has asked the Partnership and its General Partner to confirm an obligation of the Partnership and its General Partner to indemnify Merrill Lynch in these claims against all loss, liability, claim, damage and expense, including without limitation attorney's fees and expenses, under the terms of a certain Agency Agreement dated October 23, 1989 ("Agency Agreement") with the Partnership relating to the sale of Interests through Merrill Lynch on behalf of the Partnership. The Agency Agreement generally provides that the Partnership and its General Partner shall indemnify Merrill Lynch against losses occasioned by an actual or alleged misstatement or omission of material facts in the Partnership's offering material used in connection with the sale of Interests and suffered by Merrill Lynch in performing its duties under the Agency Agreement, under certain specified conditions. The Agency Agreement also generally provides, under certain conditions, that Merrill Lynch shall indemnify the Partnership and its General Partner for losses suffered by the Partnership and occasioned by certain specified conduct by Merrill Lynch in the course of Merrill Lynch's solicitation of subscriptions for, and sale of, Interests. The Partnership is unable to determine the ultimate investment of investors who have filed arbitration claims as to which Merrill Lynch might seek indemnification in the future. At this time, and based upon the information presently available about the arbitration statements of claims filed by some of these investors, the Partnership and its General Partner believe that they have meritorious defenses to demands for indemnification made by Merrill Lynch and intend to vigorously pursue such defenses. Although there can be no assurance regarding the outcome of the claims for indemnification, at this time, based on information presently available about such arbitration statements of claims, the Partnership and its General Partner do not believe that the demands for indemnification by Merrill Lynch will have a material adverse effect on the financial condition of the Partnership. In addition, the Partnership could potentially be liable for certain amounts incidental to other matters, the amount of which could be substantial. TAX-EXEMPT BOND FINANCING In connection with the development of the Talega Property (which was suspended during 1990), the Partnership had utilized bond financing to construct certain on-site and off-site water and sewer infrastructure improvements which the Partnership would have otherwise been obligated to finance and construct as a condition to obtaining certain approvals for the project. The principal amount of bonds issued was $62 million, and all of the proceeds from the offering have been utilized. In conjunction with the sale of the Talega Property, the Partnership reached an agreement with the 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 District. IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS The Partnership adopted FASB No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of", effective January 1, 1996. In accordance with FASB No. 121, the Partnership discontinued recording depreciation as all of its assets are held for disposal. In addition, in conjunction with the application of this statement, the Partnership reversed the depreciation expense previously recorded in 1996 during the fourth quarter of 1996. The Partnership requires no impairment losses or other adjustments to be recorded as of June 30, 1997 as a result of the application of this statement. Operating results for properties held for sale or disposition are reflected as operating properties revenues and cost of revenues on the accompanying consolidated statements of operations for the three and six month periods ended June 30, 1997 and 1996. During the second quarter of 1997, Statements of Financial Accounting Standards No. 128 ("Earnings per Share") and No. 129 ("Disclosure of Information about Capital Structure") were issued. As the Partnership's capital structure consists of only general and limited partnership interests, the Partnership does not expect any significant impact on its consolidated financial statements upon adoption of these standards when required at the end of 1997. ADJUSTMENTS In the opinion of the General Partner, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation have been made to the accompanying consolidated financial statements as of June 30, 1997 and December 31, 1996 and for the three and six month periods ended June 30, 1997 and 1996. PART I. FINANCIAL INFORMATION ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Reference is made to the notes to the accompanying consolidated financial statements ("Notes") contained in this report for additional information concerning certain of the Partnership's investments. At June 30, 1997 and December 31, 1996, the Partnership had unrestricted cash and cash equivalents of approximately $351,000 and $181,600, respectively. Bank overdrafts representing checks in transit of approximately $21,500 and $10,200 at June 30, 1997 and December 31, 1996, respectively, were repaid from cash on hand in July 1997 and January 1997, respectively. Remaining cash and cash equivalents were available for working capital requirements. The Partnership had suspended cash distributions to its Partners in late 1990 due to, among other things, deteriorating market conditions. The Partnership has been unable to reinstate distributions due to its financial condition and the operations of its Properties, which are also discussed more fully below. In addition, the Partnership is currently in default of the terms of its credit facilities. The source of the Partnership's liquidity is dependent upon its lender continuing to forbear from exercising its remedies under the Partnership's credit facility agreements and permitting the Partnership to use funds in a restricted cash collateral account and certain sales proceeds to finance the Partnership's limited operations, as more fully discussed in Part II - Item 3. (Defaults upon Senior Securities). In March 1995, the Partnership and its lender entered into Forbearance Agreements pursuant to which, among other things, the Partnership proposed a plan for the orderly disposition of its remaining assets. The Forbearance Agreements were amended in October 1995 and again in September 1996 to provide for, among other things, extensions of the time frame for the orderly disposition of the Partnership's assets. In conjunction with the September 1996 amendment, the Partnership's lender agreed to forgive, waive and cancel a portion of the unpaid interest on the Partnership's credit facilities in the aggregate amount of $20 million, of which $2 million was allocated to interest on the revolving line of credit and $18 million was allocated to interest on one of the term loans. The Partnership and its lender amended the March 1995 Forbearance Agreements to include, among other things, an extension of the existing plan whereby the Partnership would sell its remaining assets by no later than June 30, 1997. The amendment also provides for the forgiveness, by the Partnership's lender, of any remaining outstanding principal balance and accrued interest on the Partnership's credit facilities, upon the satisfaction of certain specified conditions including, among other things, the sale of the Partnership's remaining real estate assets at specified minimum prices, the payment of the net proceeds from such sales to the Partnership's lender, and the assignment of any other net assets of the Partnership to the lender. Such forgiveness of principal and interest would result in an extraordinary gain for financial reporting purposes. The Partnership and its lender are currently negotiating the terms of a further extension of the March 1995 Forbearance Agreements. During June 1996, the Heathrow joint venture, in which the Partnership is the managing general partner, closed on the sale of the remaining land, the country club and certain related assets within the Partnership's Heathrow Community. This sale is the cause for various significant changes on the accompanying consolidated statements of operations for the three and six month periods ended June 30, 1997 as compared to the same periods in 1996. On May 30, 1997, the Partnership closed on the sale of its Talega Property to an unaffiliated third party for $31.1 million. The terms of the sale were generally in accordance with the agreement made in October 1996 with certain modifications. In conjunction with the sale of the Talega Property, the Partnership paid all current and delinquent property taxes (including penalties and interest thereon). In addition, the Partnership reached an agreement with the Santa Margarita Water District (the "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 District. In addition, all contractual obligations of the Partnership with respect to the Talega Property were assumed by the buyer. The net proceeds from the sale, after prorations and closing costs, totaled approximately $19.1 million. Of this amount, approximately $18.8 million was applied against the outstanding principal balance on the Partnership's term loans, and $0.3 million was deposited to fund the Partnership's expenses. This closing is the primary cause for the decrease in Notes and mortgages payable (in default) and Accrued expenses and other liabilities on the accompanying consolidated balance sheets at June 30, 1997 as compared to December 31, 1996. On July 15, 1997, the Partnership closed on the sale of its retail shopping plaza at the Heathrow community to an unaffiliated third party for $5.1 million. The net proceeds from the sale, after prorations and closing costs, totaled approximately $5.0 million. Of this amount, $4.9 million was applied against the outstanding principal balance on the Partnership's term loans, and $0.1 million was deposited to fund the Partnership's expenses. Although there can be no assurance, the Partnership is working to dispose of the two remaining lots in Eagle Watch during 1997. It is expected that any proceeds from the sale or other disposition of these lots, in excess of the costs of sale and general and administrative expenses attributable thereto, will be paid to the lender or other creditors of the Partnership. In addition, the Partnership is currently involved in certain litigation, as discussed in Part II. Item 1. Legal Proceedings in this report, to which reference is hereby made. Upon completion of the sale of the Partnership's remaining assets, the Partnership expects to terminate. However, termination of the Partnership could be delayed until resolution (or other acceptable treatment) of the pending litigation. Holders of Interests should not expect to receive any future distributions from the Partnership. RESULTS OF OPERATIONS The results of operations for the three and six months ended June 30, 1997 and June 30, 1996 reflect the reduced activity of the Partnership due to its financial condition and the prohibition placed on the Partnership by its lender regarding the construction of new homes and the development of homesites within Heathrow. The significant decrease in homesite, operating properties, and brokerage and other operations revenues and cost of revenues generated by the Partnership for the three and six month periods ended June 30, 1997 as compared to the same periods in 1996 is due to the sale in June 1996 of the Partnership's remaining land, cable operations and country club in its Heathrow community. Operating revenues and cost of revenues for the three and six month periods ended June 30, 1997 are attributable to the operations of the retail shopping plaza in the Heathrow community. Homesite revenues and cost of revenues for the three and six months ended June 30, 1997 resulted from the closing of one of the lots in the Eagle Watch Community. The Partnership is currently working to dispose of the two remaining lots in Eagle Watch during 1997. Land and property revenues and cost of revenues for 1997 and 1996 reflect the sales of the Talega Property and the remaining land, cable operations and country club in the Heathrow community, respectively. As previously reported, the Partnership had reduced its basis in the Talega Property for financial reporting purposes to zero through loss provisions. Therefore, the sale of the Property resulted in a gain of approximately $32.2 million for financial reporting purposes. The gain exceeds the gross sale price of $31.1 million due to the write-off of an obligation related to the Property for which the Partnership is no longer liable. The write- off of this obligation is the cause for the credit balance in Land and property cost of sales on the accompanying consolidated statements of operations for the three and six month periods ended June 30, 1997. Land and property revenues for the three and six months ended June 30, 1997 also include proceeds of approximately $0.1 million from the closing on the sales center used in the Partnership's Wesmere community prior to the sale of the remaining land in that community in November 1995. Selling, general and administrative expenses decreased during the three and six month periods ended June 30, 1997 as compared to the same periods in 1996 due to the limited activities of the Partnership. Interest and real estate taxes declined due to a reduction in the debt outstanding during the three and six month periods ended June 30, 1997 as compared to the same periods in 1996. In addition, real estate taxes declined due to the Heathrow sale discussed above, as well as a decline in the taxes attributable to the Partnership's Talega Property as a result of the sale of that Property in May 1997. PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS The Partnership has been named a defendant in a lawsuit filed in the Circuit Court in and for the Eighteenth Judicial Circuit, Seminole County, Florida entitled Land Investment I, Ltd., Heathrow Land & Development Corporation, Heathrow Shopping Center Associates, and Paulucci Investments v. Arvida/JMB Managers-II, Inc., Arvida/JMB Partners, L.P.-II, Arvida Company and JMB Realty Corporation. The complaint, as amended, includes counts for breach of the management agreement, fraud in the inducement and conspiracy to commit fraud in the inducement, breach of the partnership agreement and constructive trust in connection with the purchase and management of the Heathrow development. Plaintiffs seek, among other things, unspecified compensatory damages, punitive damages, attorneys fees, costs, and such other relief as the Court deems appropriate. The Partnership believes that the lawsuit is without merit and intends to vigorously defend itself in this matter. The Partnership is not subject to any other material pending legal proceedings, other than ordinary litigation incidental to the business of the Partnership. However, reference is made to Notes for a discussion of certain claims asserted by Merrill Lynch for indemnification by the Partnership and the General Partner in connection with claims for arbitration filed by certain investors in the Partnership. ITEM 3. DEFAULTS UPON SENIOR SECURITIES The Partnership's $67.5 million term loan had a certain loan-to-value covenant relative to the Partnership's Talega Property. Based upon an independent appraisal of Talega which was prepared on behalf of the Partnership's lender, the Partnership has not been in compliance with this covenant. On March 4, 1994, pursuant to the terms of this loan-to-value covenant, the Partnership received a notice of default from its lender. The Partnership was required to make a term loan payment, including accrued interest, of approximately $59 million in order to cure this default. The Partnership did not have the funds to make such payment. In addition, the Partnership's credit facilities matured on December 30, 1994. However, the Partnership did not have the funds to pay off the balances outstanding under the credit facilities. The Partnership has not made the required interest payments on its credit facilities since September 1994. The aggregate amount outstanding, including principal and all accrued and unpaid interest, on the Partnership's term loans and revolving line of credit at June 30, 1997 is approximately $59.9 million. In addition, as of June 30, 1997, the Partnership is liable under standby letters of credit for approximately $2,491,000. In connection with the sale of the Talega Property, the purchaser has agreed to indemnify the Partnership against any losses in connection with these standby letters of credit. To date, the Partnership's lender has not pursued all of its remedies under the credit facility agreements relative to these defaults, which could include, among other things, the lender realizing upon its security interest in the Partnership's Properties. In March 1995, the Partnership and its lender entered into Forbearance Agreements which were subsequently modified on October 31, 1995 and September 24, 1996. Upon the execution of the September 24, 1996 amended agreements, the Partnership's lender agreed to forgive, waive and cancel a portion of the unpaid interest on the Partnership's credit facilities in the aggregate amount of $20 million, of which $2 million was allocated to interest on the revolving line of credit and $18 million was allocated to interest on one of the term loans. The Partnership and its lender amended the March 1995 Forbearance Agreements to include, among other things, an extension of the existing plan whereby the Partnership would sell its remaining assets by no later than June 30, 1997. The Partnership and its lender are currently negotiating the terms of a further extension of the March 1995 Forbearance Agreements. The Partnership closed on the sale of its Talega Property in May 1997. The net proceeds from the sale, after prorations and closing costs, totaled approximately $19.1 million, of which approximately $18.8 million was applied against the outstanding principal balance on the Partnership's term loans and $0.3 million was deposited to fund the Partnership's expenses. In July 1997, the Partnership closed on the sale of its retail shopping plaza in the Heathrow community. The net proceeds from this sale, after prorations and closing costs, totaled approximately $5.0 million, of which approximately $4.9 million was applied against the outstanding principal balance on the Partnership's term loans and $0.1 million was deposited to fund the Partnership's expenses. It is expected that any proceeds from the sale or other disposition of the two remaining lots in the Partnership's Eagle Watch community, in excess of the costs and general and administrative expenses attributable thereto, will be paid to the lender or other creditors of the Partnership. Reference is made to Part I. Financial Information and Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations for a further discussion of the Partnership's liquidity and capital resources. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 3. Amended and Restated Agreement of Limited Partnership incorporated herein by reference.* 4.1. Assignment Agreement by and among the Partnership, the General Partner, the Initial Limited Partner and the Holders of Interests incorporated herein by reference.* 4.2. Amended and Restated Credit Agreement dated June 23, 1992 between Arvida/JMB Partners, L.P.-II and Continental Bank N.A. and Bank of America National Trust and Savings Association is incorporated herein by reference.** 4.3. Various mortgages and other security interests dated April 30, 1992 related to Arvida/JMB Partners, L.P.-II's Heathrow, Talega, Wesmere, Wycliffe, Eagle Watch, Burnt Hickory Lakes, Rock Creek and SouthRidge Lakes properties which secure loans under the Amended and Restated Credit Agreement referred to in Exhibit 4.2 are incorporated herein by reference.** 4.4. Revolving Loan and Letter of Credit Facility Credit Agreement dated June 23, 1992 between Arvida/JMB Partners, L.P.-II and Continental Bank N.A. and Bank of America National Trust and Savings Association is incorporated herein by reference.** 4.5. Various mortgages and other security interests dated June 23, 1992 related to Arvida/JMB Partners, L.P.-II's Heathrow, Talega, Wesmere, Wycliffe, Eagle Watch, Burnt Hickory Lakes, Rock Creek and SouthRidge Lakes properties which secure loans under the Revolving Loan and Letter of Credit Facility Credit Agreement referred to in Exhibit 4.4 are incorporated herein by reference.** 4.6. Interim Bank Letter Agreement dated March 25, 1992 between Arvida/JMB Partners, L.P.-II and Continental Bank N.A., Bank of America National Trust and Savings Association, and Unibank is incorporated herein by reference.** 4.7. Promissory Note effective July 1, 1992 between Arvida/JMB Partners, L.P.-II and Arvida/JMB Managers-II, Inc. is herein incorporated by reference. **** 4.8. Forbearance and Modification Agreement (Credit Agreement) dated March 21, 1995 by and among Arvida/JMB Partners, L.P.-II, Heathrow Development Associates, Ltd., Eagle Watch Partners, Bank of America Illinois and Bank of America National Trust and Savings Association is incorporated herein by reference. ***** 4.9. Forbearance and Modification Agreement (Amended and Restated Credit Agreement) dated March 21, 1995 by and among Arvida/JMB Partners, L.P.-II, Heathrow Development Associates, Ltd., Eagle Watch Partners, Bank of America Illinois and Bank of America National Trust and Savings Association is incorporated herein by reference. ***** 4.10. Letter dated September 20, 1994 from the Partnership to Bank of America regarding the Partnership's acknowledgement that all proceeds from the sale of Collateral shall be delivered immediately to Co-Lenders is herein incorporated by reference to Exhibit 4.9 to the Partnership's Report on Form 10-Q (File No. 0-19245) filed on November 11, 1994. 4.11. Letter Agreement dated October 31, 1995 supplementing Forbearance Agreements with Lenders is herein incorporated by reference.****** 4.12. Amendment of Forbearance and Modification Agreement dated September 24, 1996 is herein incorporated by reference to the Partnership's Report for September 30, 1996 on Form 10-Q (File No. 0-19245) dated November 9, 1996. 4.13. Amendment of Forbearance and Modification Agreement dated May 13, 1997 is filed herewith. 4.14. Letter of Credit Reimbursement Agreement among Bank of American National Trust and Savings Association, Bank of America Illinois and Arvida/JMB Partners, L.P.-II dated May 30, 1997 is filed herewith. 4.15. Indemnification Agreement dated May 30, 1997 between Arvida/JMB Partners, L.P.-II and Catellus Residential Group, Standard Pacific of Orange County, Inc. and Starwood Opportunity Fund IV, L.P. is filed herewith. 10.1. Management, Advisory and Supervisory Agreement between the Partnership and Arvida Company is herein incorporated by reference.** 10.2. First Amended and Restated Limited Partnership Agreement of Heathrow Development Associates, Ltd. and Assignment of Partnership Interests dated January 17, 1990 are herein incorporated by reference.** 10.3. Amended and Restated Heathrow Management Agreement dated January 17, 1990 is herein incorporated by reference.** 10.4. Eagle Watch Partners General Partnership Agreement dated December 27, 1989 is herein incorporated by reference.** 10.5. Letter of Credit Agreement dated July 27, 1990 between Arvida/JMB Partners, L.P.-II and Santa Margarita Water District regarding collateral for Tax-Exempt Bond Financing is herein incorporated by reference.** 10.6. Agreement for the Payment of the Diemer Intertie Sublease Payments, Principal and Interest of Bonds of Improvement District No. 7 and Annual Budget Deficits Between Arvida/JMB Partners, L.P.-II and Santa Margarita Water District dated January 15, 1990 is herein incorporated by reference.* 10.7. Stipulation and Settlement dated October 19, 1993 and Final Judgement and Order dated March 31, 1994 pertaining to the class action lawsuit is incorporated herein by reference.**** 10.8. Agreement for Purchase and Sale dated August 14, 1995 by and between Arvida/JMB Partners, L.P.-II and Heritage Development South, Inc. for the sale of certain real property within the Wesmere Community is incorporated herein by reference.****** 10.9. Agreement for Sale and Purchase of Real Property dated March 22, 1996 among Heathrow Development Associates, Ltd., Heathrow Cable Limited Partnership and Associates and Country Club, L.P. and 4/46A Corporation for the sale of the remaining land and certain related assets within the Heathrow Community is incorporated herein by reference to Exhibit 10.15 to the Partnership's report for March 31, 1996 on Form 10-Q (File No. 0-19245) filed with the Securities and Exchange Commission dated May 10, 1996. 10.10 Agreement for Sale and Purchase of Real Property dated May 27, 1997 by and between Heathrow Development Associates, Ltd. and Roliho, Inc. for the sale of the retail shopping plaza at the Heathrow community is incorporated by reference to the Exhibit 2.1 to the Partnership's report on Form 8-K (File No. 0-19245) dated July 15, 1997 filed with the Securities and Exchange Commission. 10.11 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. 10.12 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. 10.13 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 incorporated by reference to Exhibit 2.3 to the Partnership's report on Form 8-K (File No. 0-19245) dated June 16, 1997 filed with the Securities and Exchange Commission. 10.14 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 incorporated by reference to Exhibit 2.4. 27. Financial Data Schedule * Previously filed with the Securities and Exchange Commission as Exhibit 3., 4.1 and 10.11 to the Partnership's Form 10-K (File No. 0-19245) filed on April 12, 1993 and incorporated herein by reference. ** Previously filed with the Securities and Exchange Commission as Exhibits 4.3, 4.4, 4.5, 4.6, 4.7, 10.1, 10.7, 10.8, 10.9 and 10.10, respectively, to the Partnership's Form 10-K Report (File No. 0-19245) filed on April 13, 1992 and are herein incorporated by reference. *** Previously filed with the Securities and Exchange Commission as Exhibits 10.2, 10.3, 10.4, 10.5 and 10.6 to the Partnership's Form 10-K Report (File No. 0-19245) under the Securities Act of 1934 filed on March 28, 1990 and incorporated herein by reference. **** Previously filed with the Securities and Exchange Commission as Exhibits 4.8, 10.12 and 10.13, respectively, to the Partnership's Form 10-K (File No. 0-19245) filed on April 13, 1994 and incorporated herein by reference. ***** Previously filed with the Securities and Exchange Commission as Exhibits 4.9 and 4.10, respectively, to the Partnership's Form 10-Q (File No. 0-19245) filed on November 9, 1995 and incorporated herein by reference. ****** Previously filed with the Securities and Exchange Commission as Exhibits 4.12, 10.14 and 10.15, respectively, to the Partnership's Form 10- K Report (File No. 0-19245) under the Securities Act of 1934 filed on March 25, 1996 and incorporated herein by reference. (b) The following reports on Form 8-K have been filed since the quarter ended March 31, 1997. The Partnership's report dated June 16, 1997 describing the sale of the Talega Property. The Partnership's report dated July 15, 1997 describing the sale of the retail shopping plaza at the Heathrow community. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereto duly authorized. ARVIDA/JMB PARTNERS, L.P.-II BY: Arvida/JMB Managers-II, Inc. (The General Partner) By: GAILEN J. HULL Gailen J. Hull, Vice President Date: August 8, 1997 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person in the capacity and on the date indicated. GAILEN J. HULL Gailen J. Hull, Principal Accounting Officer Date: August 8, 1997 EX-4.13 2 EXHIBIT 4.13 - ------------ (Arvida-II) SECOND AMENDMENT TO FORBEARANCE AGREEMENT AND THIRD AMENDMENT TO MODIFICATION AGREEMENTS - ------------------------------------------------------------------------ THIS SECOND AMENDMENT TO FORBEARANCE AGREEMENT AND THIRD AMENDMENT TO MODIFICATION AGREEMENTS (this "AMENDMENT") is made as of this 13th day of May, 1997, by and among ARVIDA/JMB PARTNERS, L.P.-II, a Delaware limited partnership ("BORROWER"), HEATHROW DEVELOPMENT ASSOCIATES, LTD., a Florida limited partnership ("HEATHROW PARTNERSHIP"), and EAGLE WATCH PARTNERS, a Georgia general partnership ("EAGLE WATCH PARTNERSHIP"), on the one hand, and BANK OF AMERICA ILLINOIS, an Illinois banking corporation ("BAI"), formerly known as Continental Bank N.A. and Continental Bank, in its capacitites as Managing Co-Agent and Lender under the Co-Lenders. Agreement for the benefit of the Lenders and under the Amended and Restated Credit Agreement (as defined herein) and as Agent and Lender under the Credit Agreement (as defined herein), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking association ("BA NT&SA") in its capacities as Co-Agent and Lender under the Co-Lenders' Agreement for the benefit of the Lenders and under the Amended and Restated Credit Agreement and as Lender under the Credit Agreement, on the other hand, Borrower, Heathrow Partnership, and Eagle Watch Partnership may be referred to herein collectively as the "Borrower Parties". BAI and BA NT&SA may be referred to herein collectively as the "CO-LENDERS". RECITALS A. The Co-Lenders and Borrower have entered into the certain Amended and Restated Credit Agreement dated as of June 23, 1992 (the "AMENDED AND RESTATED CREDIT AGREEMENT"), pursuant to which, among other things, (i) Borrower has executed and delivered certain promissory notes in the aggregate principal amount of $130,698,161.30, and (ii) the Borrower Parties have executed and delivered the "SECURITY DOCUMENTS," including the "MORTGAGES" (all as defined in the Amended and Restated Credit Agreement). The indebtedness and obligations of the Borrower Parties under such notes and Security Documents are collectively referred to as the "SENIOR OBLIGATIONS." B. Co-Lenders and Borrower have entered into that certain Credit Agreement dated as of June 23, 1992 (the "CREDIT AGREEMENT"), pursuant to which, among other things, (i) Borrower has executed and delivered certain promissory notes in the aggregate principal amount of $14,301,838.70, and (ii) the Borrower parties have executed and delivered certain mortgages, deeds of trust, and other security instruments creating liens that are junior and subordinate in priority to the liens of the Security Documents and Mortgages referred to in the preceding paragraph. The indebtedness and obligations of the Borrower Parties under such notes, mortgages, deeds of trust and other security instruments are collectively referred to as the "SUBORDINATE OBLIGATIONS." The Senior Obligations and the Subordinate Obligations are sometimes hereinafter collectively called the "CREDIT FACILITIES." C. The Co-Lenders and the Borrower Parties entered into that certain Forbearance and Modification Agreement (Amended and Restated Credit Agreement) dated March 21, 1995 (the "SENIOR FORBEARANCE AND MODIFICATION AGREEMENT") modifying certain terms of the Amended and Restated Credit Agreement and that certain Forbearance and Modification Agreement (Credit Agreement) dated March 21, 1995 (the "SUBORDINATE FORBEARANCE AND MODIFICATION AGREEMENT") modifying certain terms of the Credit Agreement. The Senior Forbearance and Modification Agreement the Subordinate Forbearance and Modification Agreement have been modified by certain letter agreements between the Co-Lenders and the Borrower Parties dated October 3, 1995, October 31, 1995, March 28, 1996, June 3, 1996 and June 6, 1996. D. The Senior Forbearance and Modification Agreement and the Subordinate Forbearance and Modification Agreement were further amended by that certain AMENDMENT TO FORBEARANCE AND MODIFICATION AGREEMENTS dated September 24, 1996 (the "Previous Amendment"), pursuant to which the Co-Lenders agreed, among other things, to forbear from exercising certain rights and remedies for Borrower's Defaults until March 31, 1997. E. The Borrower Parties' obligations under the Credit Agreement and the Amended and Restated Credit Agreement remain in default. The agreement to forbear as set forth in the Previous Amendment has expired and the Co-Lenders have no further obligation to continue to forbear. The Borrower Parties have requested an extension of the forbearance period under the Previous Amendment to June 30, 1997, and the Co-Lenders desire to grant such an extension. AGREEMENTS NOW, THEREFORE, in consideration of the foregoing recitals, the mutual covenants, agreements, representations and warranties set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows; SECTION 1. AMENDMENT. (a) TERMINATION DATE. Subsection (i) of SECTION 1 (c) of the Previous Amendment is hereby amended in its entirety to read as follows: "(i) The close of business on June 30, 1997." (b) NEW CASH FLOW PROJECTIONS. The Cash Flow Projections set forth on Exhibit I attached hereto shall be substituted for the Cash Flow Projections attached as Exhibit A to the Previous Amendment. All references to "Cash Flow Projections" shall be deemed to refer to the Cash Flow Projections attached hereto as Exhibit I. (c) FORGIVENESS DATE. The first sentence of Section 7(c) of the Previous Amendment shall be revised to refer to "June 30, 1997," rather than "March 31, 1997," so that such sentence shall read as follows: "(c) The Co-Lenders agree to forgive, waive and relinquish all of the then unpaid principal balances of the Credit Facilities together with all then accrued and unpaid interest thereon, all then accrued and unpaid letter of credit fees and all other amounts then owing and unpaid in respect of the Credit Facilities, upon the Forgiveness Date (as defined below); provided, however, that if the Forgiveness Date has not occurred by June 30, 1997, then the Co-Lenders' obligations under this Section 7(c) shall terminate and the forgiveness, waiver and relinquishment set forth in this Secion 7(c) shall be null and void and of no force or effect; provided further, that the Co- Lenders' agreement is made subject to the express condition subsequent that Borrower shall fully and timely satisfy its obligations under Section 7(d) below." SECTION 2. PRIOR AGREEMENTS: (a) Except as modified hereby, the Forbearance Agreements, the Credit Agreement, the Amended and Restated Credit Agreement, the Previous Amendment and all other agreements between the Co-Lenders and the Borrower Parties relating to the Senior Obligations and the Subordinate Obligations (collectively, the "AMENDED AGREEMENT") shall remain in full force and effect. (b) Notwithstanding any other provision hereof, Section 2.04 of the Senior Forbearance and Modification Agreement shall remain in effect and shall supersede any provision hereof. Specifically, this Amendment shall not constitute a written agreement granting to the Borrower Parties any rights to the forbearance of the Co-Lenders. SECTION 3. MISCELLANEOUS. (a) This Amendment is subject to the provisions of Section 9.29 of the Forbearance Agreements. (b) This Amendment may be executed in counterparts, and all counterparts shall constitute but one and the same document. (c) If any court of competent jurisdiction determines any provisions of this Amendment to be invalid, illegal or unenforceable, that portion shall be deemed severed from the remainder of this Amendment and the remainder of this Amendment shall remain in full force and effect as though such invalid, illegal or unenforceable portion had never been a part of this Amendment. (d) Time is of the essence of this Amendment and each and every provision hereof. IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above. ARVIDA/JMB PARTNERS, L.P.-II a Delaware limited partnership By: Arvida/JMB Managers-II, Inc., General Partner By: s/Stephen A. Lovelette Name: STEPHEN A. LOVELETTE Title: HEATHROW DEVELOPMENT ASSOCIATES, LTD., a Florida limited partnership By: Arvida/JMB Partners, L.P.-II, General Partner By: Arvida/JMB Managers-II, Inc., General Partner By: s/Stephen A. Lovelette Name: STEPHEN A. LOVELETTE Title: EAGLE WATCH PARTNERS, a Georgia general partnership By: Arvida/JMB Partners, L.P.-II, General Partner By: Arvida/JMB Managers-II, Inc., General Partner By: s/Stephen A. Lovelette Name: STEPHEN A. LOVELETTE Title: BANK OF AMERICA ILLINOIS, an Illinois banking corporation in its capacity as Managing Co-Agent By: s/Charles D. Graber Name: CHARLES D. GRABER Title: Vice President BANK OF AMERICA ILLINOIS an Illinois banking corporation in all capacties hereunder other than as Managing Co-Agent By: s/ Name: Title: BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking association By: s/ Name: Title: By: s/ Name: Title: EXHIBIT I =========== CASH FLOW PROJECTIONS
ARVIDA/JMB PARTNERS II CASH FLOW PROJECTIONS REVENUE:(000's) JULY AUG SEPT OCT - ---------------------- ------ ------ ------ 1 Heathrow Waters Edge SFR's 0 0 0 0 2 Heathrow Lakeside SFR's 0 0 0 0 3 Heathrow Water's Edge Lots 0 0 0 0 4 Heathrow Lakeside Lots 0 0 0 0 5 Heathrow Wyntree Lots- Retail 0 0 0 0 6 Heathrow Stonebridge Lots-Retail 0 0 0 0 7 Heathrow Woods I Lots- Retail 0 0 0 0 8 Heathrow Woods II-Raw Land 0 0 0 0 9 Heathrow Tract 26-Raw Land 0 0 0 0 10 Heathrow Tract 5-Raw Land 0 0 0 0 11 Heathrow Raw Land-All Other 0 50 0 0 ------ ------ ------ ------ Subtotal Heathrow Land & SFR's 0 50 0 0 ------ ------ ------ ------ 12 Heathrow Market Square 30 30 (120) 30 13 Heathrow Golf Club 0 0 0 0 14 Heathrow Sales Center 0 0 0 0 15 Heathrow Cable 0 0 0 0 ------ ------ ------ ------ Subtotal Heathrow Operating Property 30 30 (120) 30 ------ ------ ------ ------ 16 Wesmer SFR's 0 0 90 0 17 Wesmer Land 0 0 0 0 ------ ------ ------ ------ Subtotal Wesmore 0 0 90 0 ------ ------ ------ ------ ARVIDA/JMB PARTNERS II CASH FLOW PROJECTIONS REVENUE:(000's) JULY AUG SEPT OCT - ---------------------- ------ ------ ------ 18 Eagle Watch Lots-Retail (Atlanta) 0 30 30 30 19 Rock Creek Lots-Retail (Atlanta) 0 0 0 0 ------ ------ ------ ------ Subtotal Atlanta Projects 0 30 30 30 ------ ------ ------ ------ 20 Other Income 0 0 0 0 21 Talega 0 0 0 0 ------ ------ ------ ------ Total Revenue 30 110 0 60 ====== ====== ====== ====== ARVIDA/JMB PARTNERS II CASH FLOW PROJECTIONS REVENUE:(000's) NOV DEC JAN FEB - ---------------------- ------ ------ ------ 1 Heathrow Waters Edge SFR's 0 0 0 0 2 Heathrow Lakeside SFR's 0 0 0 0 3 Heathrow Water's Edge Lots 0 0 0 0 4 Heathrow Lakeside Lots 0 0 0 0 5 Heathrow Wyntree Lots- Retail 0 0 0 0 6 Heathrow Stonebridge Lots-Retail 0 0 0 0 7 Heathrow Woods I Lots- Retail 0 0 0 0 8 Heathrow Woods II-Raw Land 0 0 0 0 9 Heathrow Tract 26-Raw Land 0 0 0 0 10 Heathrow Tract 5-Raw Land 0 0 0 0 11 Heathrow Raw Land-All Other 0 0 0 0 ------ ------ ------ ------ Subtotal Heathrow Land & SFR's 0 0 0 0 ------ ------ ------ ------ 12 Heathrow Market Square 5,000 0 0 0 13 Heathrow Golf Club 0 0 0 0 14 Heathrow Sales Center 0 0 0 0 15 Heathrow Cable 0 0 0 0 ------ ------ ------ ------ Subtotal Heathrow Operating Property 5,000 0 0 0 ------ ------ ------ ------ 16 Wesmer SFR's 0 0 0 0 17 Wesmer Land 0 0 0 0 ------ ------ ------ ------ Subtotal Wesmore 0 0 0 0 ------ ------ ------ ------ ARVIDA/JMB PARTNERS II CASH FLOW PROJECTIONS REVENUE:(000's) NOV DEC JAN FEB - ---------------------- ------ ------ ------ 18 Eagle Watch Lots-Retail (Atlanta) 0 0 0 0 19 Rock Creek Lots-Retail (Atlanta) 0 0 0 0 ------ ------ ------ ------ Subtotal Atlanta Projects 0 0 0 0 ------ ------ ------ ------ 20 Other Income 0 0 0 0 21 Talega 0 0 0 11,000 ------ ------ ------ ------ Total Revenue 5,000 0 0 11,000 ====== ====== ====== ====== ARVIDA/JMB PARTNERS II CASH FLOW PROJECTIONS SUBTOTAL ACTUALS REVENUES:(000's) MAR BUDGET JUL-FEB MAR - ---------------------- ------ ------ ------ 1 Heathrow Waters Edge SFR's 0 0 0 0 2 Heathrow Lakeside SFR's 0 0 0 0 3 Heathrow Water's Edge Lots 0 0 0 0 4 Heathrow Lakeside Lots 0 0 0 0 5 Heathrow Wyntree Lots- Retail 0 0 0 0 6 Heathrow Stonebridge Lots-Retail 0 0 0 0 7 Heathrow Woods I Lots- Retail 0 0 0 0 8 Heathrow Woods II-Raw Land 0 0 0 0 9 Heathrow Tract 26-Raw Land 0 0 0 0 10 Heathrow Tract 5-Raw Land 0 0 0 0 11 Heathrow Raw Land-All Other 0 50 0 0 ------ ------ ------ ------ Subtotal Heathrow Land & SFR's 0 50 0 0 ------ ------ ------ ------ 12 Heathrow Market Square 0 4,970 209 30 13 Heathrow Golf Club 0 0 85 0 14 Heathrow Sales Center 0 0 0 0 15 Heathrow Cable 0 0 0 0 ------ ------ ------ ------ Subtotal Heathrow Operating Property 0 4,970 294 30 ------ ------ ------ ------ 16 Wesmer SFR's 0 90 0 0 17 Wesmer Land 0 0 0 0 ------ ------ ------ ------ Subtotal Wesmore 0 90 0 0 ------ ------ ------ ------ ARVIDA/JMB PARTNERS II CASH FLOW PROJECTIONS SUBTOTAL ACTUALS REVENUES:(000's) MAR BUDGET JUL-FEB MAR - ---------------------- ------ ------ ------ 18 Eagle Watch Lots-Retail (Atlanta) 0 90 0 0 19 Rock Creek Lots-Retail (Atlanta) 0 0 0 0 ------ ------ ------ ------ Subtotal Atlanta Projects 0 90 0 0 ------ ------ ------ ------ 20 Other Income 0 0 131 0 21 Talega 0 11,000 66 0 ------ ------ ------ ------ Total Revenue 0 16,200 491 30 ====== ====== ====== ====== ARVIDA/JMB PARTNERS II CASH FLOW PROJECTIONS FORECAST BUDGET SUBTOTAL REVENUES:(000's) APR MAY JUNE FORECAST - ---------------------- ------ ------ ------ 1 Heathrow Waters Edge SFR's 0 0 0 0 2 Heathrow Lakeside SFR's 0 0 0 0 3 Heathrow Water's Edge Lots 0 0 0 0 4 Heathrow Lakeside Lots 0 0 0 0 5 Heathrow Wyntree Lots- Retail 0 0 0 0 6 Heathrow Stonebridge Lots-Retail 0 0 0 0 7 Heathrow Woods I Lots- Retail 0 0 0 0 8 Heathrow Woods II-Raw Land 0 0 0 0 9 Heathrow Tract 26-Raw Land 0 0 0 0 10 Heathrow Tract 5-Raw Land 0 0 0 0 11 Heathrow Raw Land-All Other 0 0 0 0 ------ ------ ------ ------ Subtotal Heathrow Land & SFR's 0 0 0 0 ------ ------ ------ ------ 12 Heathrow Market Square 30 30 5,000 5,090 13 Heathrow Golf Club 0 0 0 0 14 Heathrow Sales Center 0 0 0 0 15 Heathrow Cable 0 0 0 0 ------ ------ ------ ------ Subtotal Heathrow Operating Property 30 30 5,000 5,090 ------ ------ ------ ------ 16 Wesmer SFR's 0 100 0 100 17 Wesmer Land 0 0 0 0 ------ ------ ------ ------ Subtotal Wesmore 0 100 0 100 ------ ------ ------ ------ ARVIDA/JMB PARTNERS II CASH FLOW PROJECTIONS FORECAST BUDGET SUBTOTAL REVENUES:(000's) APR MAY JUNE FORECAST - ---------------------- ------ ------ ------ 18 Eagle Watch Lots-Retail (Atlanta) 0 60 0 60 19 Rock Creek Lots-Retail (Atlanta) 0 0 0 0 ------ ------ ------ ------ Subtotal Atlanta Projects 0 60 0 60 ------ ------ ------ ------ 20 Other Income 0 0 0 0 21 Talega *20,600 0 0 20,600 ------ ------ ------ ------ Total Revenue 20,630 190 5,000 25,850 ====== ====== ====== ====== ARVIDA/JMB PARTNERS II CASH FLOW PROJECTIONS EXPENSE:(000's) JULY AUG SEPT OCT - ---------------------- ------ ------ ------ 22 Lake 500A Grading 160 5 0 0 23 Tract C- Roadway 0 0 0 0 ------ ------ ------ ------ Total Development 160 5 0 0 ====== ====== ====== ====== 24 Real Estate Taxes 0 0 0 0 25 Insurance 30 0 0 30 26 Marketing/ Sales Office Expense 0 0 0 0 27 Homeowners Assoc. Deficit 0 0 0 0 28 Eagle Watch Maintenance 3 3 3 3 29 Talega Maintenance 30 30 30 30 30 Audit & Tax 0 0 0 0 31 Warranty 10 10 10 0 ------ ------ ------ ------ Total Indirects 233 48 43 63 ------ ------ ------ ------ 32 Litigation 0 175 50 50 33 Overhead 75 40 90 40 ------ ------ ------ ------ Total Expenses 488 93 133 103 ====== ====== ====== ====== Net Cash Flow (438) 17 (133) (43) ====== ====== ====== ====== ARVIDA/JMB PARTNERS II CASH FLOW PROJECTIONS EXPENSE:(000's) NOV DEC JAN FEB - ---------------------- ------ ------ ------ 22 Lake 500A Grading 0 0 0 0 23 Tract C- Roadway 0 0 0 0 ------ ------ ------ ------ Total Development 0 0 0 0 ====== ====== ====== ====== 24 Real Estate Taxes 0 0 0 0 25 Insurance 0 0 30 0 26 Marketing/ Sales Office Expense 0 0 0 0 27 Homeowners Assoc. Deficit 0 0 0 0 28 Eagle Watch Maintenance 0 0 0 0 29 Talega Maintenance 30 30 30 0 30 Audit & Tax 0 15 15 45 31 Warranty 0 0 0 0 ------ ------ ------ ------ Total Indirects 30 45 75 45 ------ ------ ------ ------ 32 Litigation 50 50 50 50 33 Overhead 40 90 40 40 ------ ------ ------ ------ Total Expenses 70 136 115 86 ====== ====== ====== ====== Net Cash Flow 4,930 (136) (115) 10,915 ====== ====== ====== ====== ARVIDA/JMB PARTNERS II CASH FLOW PROJECTIONS SUBTOTAL ACTUALS REVENUES:(000's) MAR BUDGET JUL-FEB MAR - ---------------------- ------ ------ ------ 22 Lake 500A Grading 0 165 150 0 23 Tract C- Roadway 0 0 (24) 0 ------ ------ ------ ------ Total Development 0 165 128 0 ====== ====== ====== ====== 24 Real Estate Taxes 0 0 (57) 81 25 Insurance 0 90 43 0 26 Marketing/ Sales Office Expense 0 0 (1) 0 27 Homeowners Assoc. Deficit 0 0 0 5 28 Eagle Watch Maintenance 0 12 7 0 29 Talega Maintenance 0 210 224 30 30 Audit & Tax 50 125 42 10 31 Warranty 0 30 19 5 ------ ------ ------ ------ Total Indirects 50 832 403 141 ------ ------ ------ ------ 32 Litigation 50 525 81 0 33 Overhead 285 720 343 50 ------ ------ ------ ------ Total Expenses 316 1,877 827 191 ====== ====== ====== ====== Net Cash Flow (316) 14,321 (336) (191) ====== ====== ====== ====== ARVIDA/JMB PARTNERS II CASH FLOW PROJECTIONS FORECAST BUDGET SUBTOTAL REVENUES:(000's) APR MAY JUNE FORECAST - ---------------------- ------ ------ ------ 22 Lake 500A Grading 0 0 0 0 23 Tract C- Roadway 0 0 0 0 ------ ------ ------ ------ Total Development 0 0 0 0 ====== ====== ====== ====== 24 Real Estate Taxes 0 0 0 81 25 Insurance 20 0 10 30 26 Marketing/ Sales Office Expense 0 0 0 0 27 Homeowners Assoc. Deficit 0 0 0 15 28 Eagle Watch Maintenance 1 0 0 1 29 Talega Maintenance 30 0 0 60 30 Audit & Tax 0 15 0 25 31 Warranty 5 5 5 20 ------ ------ ------ ------ Total Indirects 58 20 15 232 ------ ------ ------ ------ 32 Litigation 180 85 135 400 33 Overhead 16 16 56 138 ------ ------ ------ ------ Total Expenses 262 121 206 770 ====== ====== ====== ====== Net Cash Flow 20,378 69 4,794 25,080 ====== ====== ====== ====== - -------------------- *Sale did not occur in April; It is anticipated to occur on or about May 30, 1997 with $19,000 in Revenues.
EX-4.14 3 EXHIBIT 4.14 - ------------ (Arvida-II) LETTER OF CREDIT REIMBURSEMENT AGREEMENT Among BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, BANK OF AMERICA ILLINOIS and ARVIDA/JMB PARTNERS, L.P.-II relating to the Talega Project Orange County, California Dated as of May 30, 1997 LETTER OF CREDIT REIMBURSEMENT AGREEMENT ======================= THIS LETTER OF CREDIT REIMBURSEMENT AGREEMENT (this "Reimbursement Agreement"), dated as of May 30, 1997, is made by and between ARVIDA/JMB PARTNERS, L.P. II, a Delaware limited partnership ("Borrower") on the one hand, and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking association, and BANK OF AMERICA ILLINOIS, an Illinois banking corporation, formerly known as Continental Bank N.A. and Continental Bank (collectively, the "Bank"). In consideration of the mutual agreements set forth herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Borrower and Bank hereby covenant and agree as follows: 1. DEFINITIONS. 1.1 DEFINED TERMS. For purposes of this Reimbursement Agreement, the following capitalized terms shall have the following respective defined meanings: "BANK" means collectively Bank of America Illinois, an Illinois banking corporation, formerly known as Continental Bank N.A. and Continental Bank, and Bank of America National Trust and Savings Association, a national banking association, in their capacities as Managing Co-Agents. "BANKING DAY" means any day other than Saturday, Sunday, or other day on which banking institutions in Los Angeles, California are obligated by law to close or on which banking institutions in Los Angeles, California are authorized to close by law and Bank is closed. "BORROWER" means Arvida/JMB Partners, L.P. II, a Delaware limited partnership. "CASH COLLATERALIZE" means to pledge and deposit with Bank, as additional collateral for the Letter of Credit Obligations, cash or deposit account balances pursuant to documentation in a form and substance acceptable to Bank. "DEFAULT RATE" means three (3) percentage points over the Reference Rate. "EVENT OF DEFAULT" means any of the events described in SECTION 4.1 below. "INDEMNIFICATION AGREEMENT" means that certain Indemnification Agreement dated as of May 30, 1997, by Catellus Residential Group, Standard Pacific of Orange County, Inc., and Starwood Opportunity Fund IV, L.P., in favor of Borrower. "LC PAYMENT DATE" shall have the meaning set forth in SECTION 2 below. "LETTER OF CREDIT OBLIGATIONS" means the sum of (a) the aggregate undrawn amount of the Letters of Credit, PLUS (b) the amount of all unreimbursed drawings under any of the Letters of Credit. "LETTERS OF CREDIT" means those certain letters of credit set forth on the schedule attached hereto as EXHIBIT "A." "MATURITY DATE" means June 30, 1997. "REFERENCE DATE" means the rate of interest publicly announced from time to time by Bank as its "reference rate," which is based upon various factors including the Bank's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below the announced rate. Any change in the Reference Rate announced by Bank shall take effect at the opening of business on the day specified in the public announcement of such change. "REIMBURSEMENT AGREEMENT" means this Letter of Credit Reimbursement Agreement, as originally executed or as supplemented, modified or amended from time to time. 1.2 ACCOUNTING TERMS. All accounting terms not specifically defined in this Reimbursement Agreement shall be construed in conformity with generally acceptable accounting principles. 2. DRAWINGS AND REIMBURSEMENTS. In the event that Bank honors a drawing under any of the Letters of Credit, Borrower shall reimburse Bank for the full amount of such drawing by 9:00 a.m. Los Angeles time on the same date (the "LC Payment Date") such drawing is honored by Bank under such Letter of Credit. In the event Borrower fails to reimburse Bank for any such drawing by 9:00 a.m. Los Angeles time on the LC Payment Date, then such drawing shall be payable by Borrower on demand by Bank and shall bear interest at the Default Rate until paid in full as provided further in SECTION 4.3(a) below. The obligations of Borrower to reimburse Bank under this Reimbursement Agreement and any other agreement or instrument relating to any of the Letters of Credit shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Reimbursement Agreement. 3. CANCELLATION OF LETTERS OF CREDIT. On or before the Maturity Date, Borrower shall cause the beneficiaries of the Letters of Credit to return the Letters of Credit to Bank marked "cancelled." In the event that Borrower is unable to cause the beneficiaries of the Letters of Credit to return the Letters of Credit to Bank by the Maturity Date, then Borrower shall Cash Collateralize the Letters of Credit not so returned by not later that 5:00 p.m. Los Angeles time on the Maturity Date. 4. DEFAULT; REMEDIES. 4.1 EVENT OF DEFAULT. An "Event of Default" shall occur hereunder (a) upon the failure of Borrower to reimburse Bank for drawings under any of the Letters of Credit pursuant to the terms of SECTION 2 above, and (b) upon the failure of Borrower to Cash Collateralize the Letters of Credit to the extent required pursuant to SECTION 3 above. 4.2 REMEDIES. Upon the occurrence of any Event of Default, Bank shall have such rights or remedies as Bank may have under this Reimbursement Agreement or otherwise at law or in equity, including but not limited to the right to institute an action against Borrower for specific performance of the terms and provisions of this Reimbursement Agreement. Notwithstanding the foregoing, Bank agrees that, prior to enforcing any remedy against Borrower, Bank shall seek to satisfy the obligations of Borrower hereunder by enforcing the rights of Bank under any Guaranty of even date herewith made by Catellus Residential Group, Standard Pacific Corporation and Starwood Opportunity Fund IV, LP in favor of Bank. 4.3 LATE CHARGE; DEFAULT INTEREST RATE. (a) Upon the occurrence and during the continuation of an Event of Default hereunder, the Letter of Credit Obligations shall bear interest at the Default Rate. (b) Borrower acknowledges and agrees that (i) Bank's actual damages resulting from any default or delinquency of Borrower as set forth in SECTION 4.3(a) above and that relate to lost use of funds or costs of internal administration of delinquent payments hereunder or relating to such default would be extremely difficult to ascertain, and (ii) under the circumstances in existence as of the date hereof, the accrual of interest hereunder at the Default Rate constitutes a reasonable liquidation of such damages. The provisions of the SECTION 4.3 are in addition to the other rights and remedies conferred upon Bank under this Reimbursement Agreement and shall not limit Bank's right to compel prompt performance hereunder or be deemed to conflict with the provisions of SECTION 5.11 of this Reimbursement Agreement. 5. MISCELLANEOUS. 5.1 PAYMENT IN U.S. CURRENCY. All sums due hereunder shall be payable in lawful money of the United States of America. 5.2 COSTS OF COLLECTION. Borrower promises to pay all cost and expenses of collection, including without limitation (a) reasonable attorneys' fees, in the event of collection under this reimbursement Agreement; (b) reasonable attorneys' fees, as determined by the judge of the court, or any arbitrator or judicial referee, and all other costs, expenses and fees incurred by Bank in the event suit or proceeding is instituted to collect any sums due and payable under this Reimbursement Agreement; and (c) reasonable attorneys' fees, incurred by Bank in connection with any bankruptcy, insolvency or reorganization proceeding or receivership involving Borrower or any affiliate of Borrower, including without limitation attorneys' fees incurred in making any appearance in any such proceeding or in seeking relief from any stay or injunction issued in or arising out of any such proceeding. 5.3 WAIVER OF NOTICE, ETC. Borrower consents to offsets of any sums owed to it by Bank at any time. No single or partial exercise of, or forbearance from exercising, any power hereunder or under any guaranty, or other agreement or instrument securing or pertaining to this Reimbursement Agreement shall preclude other or further exercises thereof or the exercise of any other power. 5.4 NO WAIVER BY BANK. Delay or failure by Bank to exercise any option or election herein given to Bank shall not constitute a waiver of the right to subsequently exercise such option or any other option or election herein given to Bank. 5.5 SUCCESSORS AND ASSIGNS; NUMBER; GENDER. The use of the term "Borrower" shall be deemed to include the successors and assigns of the undersigned. The use of terms in any gender or number shall include, in all instances, the masculine, feminine, and neuter gender and the plural and single number. 5.6 NOTICES. Except as otherwise provided herein, all notices or communications between Bank and Borrower required or permitted hereunder shall be in writing and personally delivered or sent by certified mail, return receipt requested, postage prepaid, or transmitted by electronic facsimile transmission (with electronic confirmation of receipt), or sent by reputable overnight courier (such as Federal Express, UPS or DHL), to the following addresses: If to Bank: Bank of America National Trust and Savings Association 600 Wilshire Boulevard, Suite 500 Los Angeles, California Telefacsimile No.: (213) 228-6318 Attention:Jeannette Jordan Vice President with a copy to: Morrison & Foerster LLP 19900 MacArthur Boulevard, Twelfth Floor Irvine, California 92612 Telefacsimile No.: (714) 251-0900 Attention: Ronald J. Defelice, Esq. If to Borrower: ARVIDA/JMB Partners, L.P. II c/o JMB Realty 900 North Michigan Avenue Chicago, Illinois 60611-1575 Telefacsimile No.: (312) 915-2310 Attention: Stephen A. Lovelette with a copy to: Nossaman, Gunther, Knox & Elloit, LLP 18101 Von Karman Avenue, Suite 1800 Irvine, California 92612 Telefacsimile No.: (714) 833-7878 Attention: Gregory W. Sanders, Esq. A notice shall be effective on the date of personal delivery if personally delivered before 5:00 p.m., otherwise on the day following personal delivery, or when received, if transmitted by electronic facsimile transmission (with electronic confirmation of receipt), or two (2) business days following the date the notice is postmarked, if mailed, or on the day following delivery to the applicable overnight courier, if sent by overnight courier. Either party may change the address to which notices are to be given to it by giving notice of such change of address in the manner set forth above for giving notice. 5.7 GOVERNING LAW. The Reimbursement Agreement shall be governed by and construed under the laws of the State of California and the laws of the Untied States of America prevailing in California including, but not limited to, the "Uniform Custom and Practice for Documentary Credits (1993 Revision) International Chamber of commerce Publication No. 500." 5.8 JOINT AND SEVERAL OBLIGATIONS. If Borrower consists of more than one (1) person or entity, each shall be jointly and severally liable to Bank hereunder. 5.9 PERFORMANCE OF ACTS ON BUSINESS DAYS. In the event that the final date for payment of any amount hereunto falls on a Saturday, Sunday or state or federal holiday, such payment may be made on the next succeeding Bank Day. 5.10 COMPUTATION OF INTEREST. The computation of interest hereunder shall be based on a year of three hundred sixty (360) days and a thirty (30) day month. 5.11 TIME OF ESSENCE. Time is of the essence of the performance of each provision hereof. 5.12 PLACE OF PAYMENT. All payments due hereunder shall be sent to Bank c/o Loan Accounting Department CLASS Unit 1503, 333 South Broadway, 26th Floor, Los Angeles, California 90017, Attention MaSe Lorenzo, or to such other place as Bank may designate in writing from time to time. 5.13 COUNTERPARTS. This Agreement may be executed in counterparts, which of which shall be deemed an original and all of which, together, shall constitute but one and the same agreement. 5.14 EXCULPATION. Notwithstanding anything herein contained to the contrary, the Bank agrees that (a) all liability of any person with respect to this agreement shall be satisfied only out of any assets of the Borrower and that no constituent partner of the Borrower shall have any personal liability with respect to this Agreement, all such personal liability being expressly waived by the Bank, and (2) in no event shall a negative capital account or any other funding obligations of any constituent partner of Borrower be deemed to an asset or the property of the Borrower. IN WITNESS WHEREOF, Borrower and Bank have has executed this Reimbursement Agreement on the year and date first hereinabove set forth. BORROWER: 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 Name: Title: BANK: BANK OF AMERICA ILLINOIS, an Illinois banking corporation in its capacity as Managing Co-Agent By: Name: Title: BANK OF AMERICA ILLINOIS, an Illinois banking corporation in all capacities hereunder other than as Managing Co-Agent BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking association By: Name: Title: IN WITNESS WHEREOF, Borrower and Bank have has executed this Reimbursement Agreement on the year and date first hereinabove set forth. BORROWER: ARVIDA/JMB PARTNERS, L.P. II, a Delaware limited partnership By: Arvida/JMB Managers II, Inc., a Delaware corporation, its General Partner By: Name: Title: BANK: BANK OF AMERICA ILLINOIS, an Illinois banking corporation in its capacity as Managing Co-Agent By: s/CHARLES D. GRABER Name: Charles D. Graber Title: Vice President BANK OF AMERICA ILLINOIS, an Illinois banking corporation in all capacities hereunder other than as Managing Co-Agent BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking association By: Name: Title: IN WITNESS WHEREOF, Borrower and Bank have has executed this Reimbursement Agreement on the year and date first hereinabove set forth. BORROWER: ARVIDA/JMB PARTNERS, L.P. II, a Delaware limited partnership By: Arvida/JMB Managers II, Inc., a Delaware corporation, its General Partner By: Name: Title: BANK: BANK OF AMERICA ILLINOIS, an Illinois banking corporation in its capacity as Managing Co-Agent By: Name: Title: BANK OF AMERICA ILLINOIS, an Illinois banking corporation in all capacities hereunder other than as Managing Co-Agent BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national banking association By: s/JEANNETTE JORDAN Name: Jeannette Jordan Title: Vice President EXHIBIT "A" LETTERS OF CREDIT ================= Obligee: County of Orange, EMA/Regulation/Grading Section Agreement #: LASB214312 Instrument type:Letter of Credit Amount: $21,030.00 Reason: Grading performance Obligee: County of Orange, EMA/Regulation/Grading Section Agreement #: LASB214313 Instrument type:Letter of Credit Amount: $101,520.00 Reason: Grading performance Obligee: County of Orange, EMA/Regulation/Grading Section Agreement #: LASB214314 Instrument type:Letter of Credit Amount: $101,520.00 Reason: Grading performance Obligee: County of Orange, EMA/Regulation/Grading Section Agreement #: LASB214315 Instrument type:Letter of Credit Amount: $271,800.00 Reason: Grading performance Obligee: County of Orange, EMA/Regulation/Grading Section Agreement #: LASB214316 Instrument type:Letter of Credit Amount: $537,480.00 Reason: Grading performance Obligee: City of San Clemente Agreement #: LASB214677 Instrument type:Letter of Credit Amount: $1,500,000.00 Reason: Grading Erosion control & Landscaping-311401 Avenida Pico Obligee: Amwest Surety Agreement #: 220668 Instrument type:Letter of Credit Amount: $100,000 Exhibit "A" EX-4.15 4 EXHIBIT 4.15 - ------------ (Arvida-II) INDEMNIFICATION AGREEMENT ========================= THIS INDEMNIFICATION AGREEMENT (the "Agreement") is entered into on this 30th day of May, 1997 (the "Effective Date"), by and among Arvida/JMB Partners, L.P. II, a Delaware limited partnership ("Indemnitee'), on the one hand, and Catellus Residential Group, a California corporation, Standard Pacific of Orange County, Inc., a Nevada Corporation, and Starwood Opportunity Fund IV, L.P., a Delaware limited partnership (collectively, the "Indemnitor"), on the other hand. RECITALS ======== A. Indemnitee is currently the obligor under those certain letters of credit set forth on the schedule attached hereto as Exhibit "A" (the "Letters of Credit"), and those certain performance bonds set forth on the schedule attached hereto as Exhibit "B" attached hereto (the "Bonds"). The Letters of Credit and Bonds were issued for the benefit of the County of Orange and the City of San Clemente, respectively, to secure the performance by Indemnitee of certain obligations and conditions relating the proposed development of certain real property located in Orange County, California (the "Property"). B. Indemnitee intends to sell the Property to Talega Associates, L.L.C., a Delaware limited liability company ("Talega"). In connection with the purchase and sale of the Property, and as an accommodation to Talega, Indemnitee will keep the Letters of Credit and the Bonds outstanding by no later than June 30, 1997, at which time Talega will replace the Letters of Credit and the Bonds with new performance bonds. C. Although Indemnitee will remain obligated to the issuer of the Letters of Credit and the Bonds, the parties intend that such obligations will actually by the sole responsibility of Indemnitor. Accordingly, Indemnitor desires to assume any and all obligations of Indemnitee under the Letters of Credit and the Bonds, and to indemnify Indemnitee as set forth herein. NOW, THEREFORE, in consideration of the foregoing, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, Indemnitor and Indemnitee hereby agree as follows: AGREEMENTS ========== 1. ASSUMPTION. Indemnitor hereby assumes, from and after the Effective Date, all obligations of Indemnitee with respect to the Letters of Credit and the Bonds, and agrees to be obligated under each of them, all as though the Indemnitor had been the original obligor under the Letters of Credit and the Bonds. 2. INDEMNITY. Indemnitor hereby agrees to indemnify, defend and hold harmless Indemnitee and its past, present and future employees, officers, directors, attorneys, affiliates, representatives, subsidiaries and agents (each and "Indemnified Party," collectively, the "Indemnified Parties"), from and against any and all demands, losses, claims, costs, suits, damages, liabilities and expenses (each a "Liability," collectively, the "Liabilities") arising out of, relating to, or in any manner connected with any draws on the Letters of Credit, or claims made under the Bonds, from and after the Effective Date. 3. DEFENSE OF INDEMNIFIED PARTIES. In the event that any suit or other proceeding is brought against any of the Indemnified Parties at any time on account of any of the Liabilities, Indemnitor shall, upon the request of an Indemnified Party against whom any suit or proceeding is brought (each a "Defending Indemnitee"), (i) assume the defense of the Defending Indemnitee, (ii) defend the Defending Indemnitee, at Indemnitor's expense, with counsel selected by Indemnitor and approved by Indemnitee in its reasonable discretion and (iii) pay all judgments, fines, penalties, and other fees and expenses in connection therewith. 4. RELEASE OF INDEMNITEE'S OBLIGATIONS. On or before June 30, 1997 the Indemnitor shall cause the beneficiaries under the Letters of Credit to return the Letters of Credit to the issuer thereof marked "canceled," and shall either substitute the Bonds with new performance bonds acceptable to the beneficiaries thereof or release the Indemnitee from any and all obligations under the Bonds. From and after the Effective Date, Indemnitor and Indemnitee shall cooperate with each other, without compensation, and shall execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, any and all such further assignments, approvals, consents, and any and all other documents and do any and all other acts as may be necessary to carry out the intent and purpose of this Section 4. In the event that the Indemnitor is not able to cause the beneficiaries to return the Letters of Credit and to either replace the Bonds or release the Indemnitee from all obligations under the Bonds by June 30, 1997, then prior to 5:00 p.m. on June 30, 1997, the Indemnitor shall deposit with the Indemnitee, or at the option of the Indemnitor, deposit directly with the issuer of the Letters of Credit, as additional collateral for the obligations under the Letters of Credit and Bonds, pursuant to documentation in a form and substance acceptable to Indemnitee or the issuers of the Letters of Credit, as applicable a cash deposit in an amount equal to the aggregate face amount of the Letters of Credit and the Bonds. 5. MISCELLANEOUS. (a) Interpretation; Governing Law. This Agreement shall be construed as if prepared by both parties and interpreted and governed by the laws of the State of California. (b) Severability. In the event that any phrase, clause, sentence, paragraph, section or other portion of this Agreement shall become illegal, null or void, or against public policy, for any reason, or shall be held by any court of competent jurisdiction to be illegal, null or void, or against public policy, the remaining portions of this Agreement shall not be affected. (c) Attorneys' Fees. In the event of any legal action or other proceeding between the parties (including any appellate proceedings arising therefrom or relating thereto), arising out of, relating to or in any manner connected with this Agreement, the prevailing party shall be entitled to the payment by the losing party of its reasonable attorneys' fees, court costs and litigation expenses. (d) Entire Agreement; Amendments. This Agreement is intended by the parties to be the final expression of their agreement with respect to the subject matter hereof, and is intended as the complete and exclusive statement of the terms of the agreement between the parties. As such, this Agreement supersedes any prior understanding between the parties, whether oral or written. Any amendments to this Agreement shall be in writing and shall be signed by all parties hereto. (e) Joint and Several Liability. To the extent that the Indemnitor consists of more than one person or entity, each shall be joint and severally liable to Indemnitee hereunder. (f) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed on original and all of which, together, shall constitute but one and the same agreement. (g) Assignment. The Indemnitor hereby acknowledges and agrees that the rights of Indemnitee pursuant to this Agreement may be assigned to Bank of America National Trust and Savings Association without the prior approval of the Indemnitor. IN WITNESS WHEREOF, the parties hereto have delivered and executed this Agreement as of the date first written above. INDEMNITEE: ARVIDA/JMB PARTNERS, L.P. II, a Delaware limited partnership By: Arvida/JMB Managers II, Inc. a Delaware corporation, its General Partner By: Name: Title: By: Name: Title: INDEMNITOR: CATELLUS RESIDENTIAL GROUP, a California corporation By: s/ Name: Title: By: s/PATRICK B. PATTERSON Name: Patrick B. Patterson Title: Chief Financial Officer STANDARD PACIFIC OF ORANGE COUNTY, INC., a Nevada corporation By: Name: Title: By: Name: Title: IN WITNESS WHEREOF, the parties hereto have delivered and executed this Agreement as of the date first written above. INDEMNITEE: ARVIDA/JMB PARTNERS, L.P. II, a Delaware limited partnership By: Arvida/JMB Managers II, Inc. a Delaware corporation, its General Partner By: Name: Title: By: Name: Title: INDEMNITOR: CATELLUS RESIDENTIAL GROUP, a California corporation By: Name: Title: By: Name: Title: STANDARD PACIFIC OF ORANGE COUNTY, INC., a Nevada corporation By: s/SCOTT D. STOWELL Name: Scott D. Stowell Title: President By: Name: Title: IN WITNESS WHEREOF, the parties hereto have delivered and executed this Agreement as of the date first written above. INDEMNITEE: 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 Name: Stephen A. Lovelette Title: By: Name: Title: INDEMNITOR: CATELLUS RESIDENTIAL GROUP, a California corporation By: Name: Title: By: Name: Title: STANDARD PACIFIC OF ORANGE COUNTY, INC., a Nevada corporation By: Name: Title: By: Name: Title: STARWOOD OPPORTUNITY FUND IV, L.P., a Delaware limited partnership By: SOFIIY Management, L.L.C., its general partner By: Starwood Capital Group, L.L.C. Name: Title: General Manager By: s/J.R. ROSENTHAL Name: J.R. Rosenthal Title: Chief Operating Officer EXHIBIT "A" LETTERS OF CREDIT ================= Obligee: County of Orange, EMA/Regulation/Grading Section Agreement #: LASB214312 Instrument type: Letter of Credit Amount: $21,030.00 Reason: Grading performance Obligee: County of Orange, EMA/Regulation/Grading Section Agreement #: LASB214313 Instrument type: Letter of Credit Amount: $101,520.00 Reason: Grading performance Obligee: County of Orange, EMA/Regulation/Grading Section Agreement #: LASB214314 Instrument type: Letter of Credit Amount: $140,640.00 Reason: Grading performance Obligee: County of Orange, EMA/Regulation/Grading Section Agreement #: LASB214315 Instrument type: Letter of Credit Amount: $271,800.00 Reason: Grading performance Obligee: County of Orange, EMA/Regulation/Grading Section Agreement #: LASB214316 Instrument type: Letter of Credit Amount: $537,480.00 Reason: Grading performance Obligee: City of San Clemente Agreement #: LASB214677 Instrument type: Letter of Credit Amount: $1,500,000.00 Reason: Grading erosion control & Landscaping-311401 Avenida Pico Obligee: Amwest Surety Agreement #: 220668 Instrument type: Letter of Credit Amount: $100,000 Exhibit "A" EXHIBIT "B" Bonds ===== Obligee: County of Orange Agreement #: 4454 Instrument type: Pacific States Bond Amount: $350,000.00 Reason: Public property encroachment permit-Avenida Pico Obligee: County of Orange Agreement #: 5677825-0001 Instrument type: Safeco Bond Amount: $38,000.00 Reason: USGS monumentation to record Talega finance map Obligee: County of Orange Flood Control District Agreement #: 018001093 Instrument type: Amwest surety bond Amount: $100,000.00 Reason: Performance, labor and maintenance bond for storm drain facilities Exhibit "B" EX-27 5
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE REGISTRANT'S FORM 10-Q FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS INCLUDED IN SUCH REPORT. 6-MOS DEC-31-1997 JUN-30-1997 1,658,163 0 31,103 0 39,683 0 2,776,878 0 4,798,296 0 0 0 0 0 (87,679,513) 4,798,296 31,660,959 31,660,959 (890,122) (890,122) 7,809,409 0 0 24,741,672 0 24,741,672 0 0 0 24,741,672 97.77 97.77
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