-----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, VSEVRr+EB0Gq174W551oh/vDoVuCtgrRUPS7Lm6rmBKkhItqRCovi3obvGi2MBgK 4fQfr/B4FtQUS/Dd8fo+dg== 0000892626-97-000201.txt : 19970617 0000892626-97-000201.hdr.sgml : 19970617 ACCESSION NUMBER: 0000892626-97-000201 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970530 ITEM INFORMATION: Acquisition or disposition of assets ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970616 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-19245 FILM NUMBER: 97624504 BUSINESS ADDRESS: STREET 1: 900 N MICHIGAN AVE CITY: CHICAGO STATE: IL ZIP: 60611 BUSINESS PHONE: 3124404800 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): May 30, 1997 ARVIDA/JMB PARTNERS, L.P. - II ------------------------------------------------------ (Exact name of registrant as specified in its charter) Illinois 0-19245 58-1809884 - ------------------- -------------- -------------------- (State or other) (Commission (IRS Employer Jurisdiction of File Number) Identification No.) Organization 900 N. Michigan Avenue, Chicago, Illinois 60611-1575 ----------------------------------------------------- (Address of principal executive office) Registrant's telephone number, including area code: (312) 915-1987 ------------------------------------------------------------------- ITEM 2. DISPOSITION OF ASSETS. On May 30, 1997, Arvida/JMB Partners, L.P.- II (the "Partnership") closed on the sale of its Talega Property, consisting of approximately 2,290 acres of land in southern Orange County, California and related assets (the "Property"), to Talega Associates, LLC (the "Buyer"). The Buyer is not affiliated with the Partnership or its General Partner, and the sale price was determined by arm's-length negotiations and approved by the Partnership's lender. The gross sale price was $31,100,000. In conjunction with the sale of its Property, the Partnership paid all current and delinquent property taxes, including penalties and interest. The Partnership also reached an agreement with the Santa Margarita Water District resulting in an agreed upon amount due with respect to the Partnership's tax exempt bond financing. This amount was paid at closing, at which time the Partnership received a full and unconditional release from the Santa Margarita Water District. In addition, all contractual obligations of the Partnership with respect to the Property were assumed by the Buyer. The net proceeds from the sale, after prorations and closing costs, totaled $19,144,718. Of this amount, $18,844,718 was applied against the outstanding principal balance on the Partnership's term loans, and $300,000 was deposited to fund the Partnership's expenses. As previously reported, the Partnership had reduced its basis for financial reporting purposes to zero through loss provisions. The sale of the Property resulted in a gain of approximately $32.2 million for financial reporting purposes and an ordinary loss of approximately $154.8 million for Federal income tax purposes. The gain for financial reporting purposes exceeds the gross sale price due to the write- off of an obligation related to the Property for which the Partnership is no longer liable. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements of business acquired Not applicable. (b) Pro Forma Financial Information See attached. (c) Exhibits 2.1. Agreement for Sale and Purchase of Real Property dated October 25, 1996 by and between Arvida/JMB Partners, L.P. - II and Starwood/ Talega Associates, L.L.C. for the sale of certain real property within the Talega Property is incorporated by reference to Exhibit 10.16 to the Partnership's report for September 30, 1996 on Form 10-Q (File No. 0- 19245) filed with the Securities and Exchange Commission dated November 8, 1996. 2.2. Amendment dated March 18, 1997 to Agreement for Purchase and Sale of Real Property by and between Arvida/JMB Partners, L.P.-II and Starwood/Talega Associates, L.L.C. for the sale of certain real property within the Talega Property is incorporated by reference to Exhibit 10.9 to the Partnership's report for December 31, 1996 on Form 10-K (File No. 0-19245) filed with the Securities and Exchange Commission dated March 21, 1997. 2.3. Amendment dated December 9, 1996 to Agreement for Purchase and Sale of Real Property and Escrow Instructions by and between Arvida/JMB Partners, L.P.-II and Starwood/Talega Associates, L.L.C. for the sale of certain real property within the Talega Property is filed herewith. 2.4. Amendment dated May 20, 1997 to Agreement for Purchase and Sale of Real Property and Escrow Instructions by and between Arvida/JMB Partners, L.P.-II and Starwood/Talega Associates, L.L.C. for the sale of certain real property within the Talega Property is filed herewith. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ARVIDA/JMB PARTNERS, L.P. - II BY: Arvida/JMB Managers-II, Inc. (The General Partner) GAILEN J. HULL By: Gailen J. Hull Senior Vice President Dated: June 16, 1997 PROFORMA FINANCIAL INFORMATION Arvida/JMB Partners, L.P. - II (A Limited Partnership) And Consolidated Venture Consolidated Balance Sheet Pro Forma Historical Adjustments Pro Forma March 31, for Disposi- March 31, 1997 tion (1) 1997 ------------ ------------ ----------- ASSETS - ------ Cash and cash equivalents . . . . . . .$ 247,698 247,698 Restricted cash . . . . . . 756,815 300,000 1,056,815 Trade and other accounts receivable (net of allowance for doubtful accounts of $62,690 at March 31, 1997) . . . . 31,041 31,041 Real estate inventories . . 57,598 57,598 Property and equipment held for sale or disposition. . . . . . . . 2,701,441 2,701,441 Prepaid expenses and other assets . . . . . . . 755,415 755,415 ------------ ----------- ------------ Total assets. . . . . .$ 4,550,008 300,000 4,850,008 ============ =========== ============ LIABILITIES - ----------- Bank overdrafts . . . . . .$ 6,395 6,395 Accounts payable. . . . . . 132,707 132,707 Deposits. . . . . . . . . . 49,212 49,212 Accrued expenses and other liabilities. . . . . 34,088,179 (11,599,796) 22,488,383 Amounts due to affiliates . . . . . . . . 7,623,430 7,623,430 Notes and mortgages payable (in default) . . . 78,769,410 (18,844,718) 59,924,692 ------------ ----------- ------------ Commitments and contingencies Total liabilities . . . 120,669,333 (30,444,514) 90,224,819 ------------ ----------- ------------ PROFORMA FINANCIAL INFORMATION Arvida/JMB Partners, L.P. - II (A Limited Partnership) And Consolidated Venture Consolidated Balance Sheet - Continued Pro Forma Historical Adjustments Pro Forma March 31, for Disposi- March 31, 1997 tion (1) 1997 ------------ ------------ ----------- Partners' capital accounts (deficits): General Partner and Associated Limited Partner: Capital contributions. . 2,000 2,000 Cumulative net loss. . . (8,720,336) 307,445 (8,412,891) Cumulative cash distributions. . . . . (246,771) (246,771) ------------ ----------- ------------ (8,965,107) 307,445 (8,657,662) ------------ ----------- ------------ Limited partners: Capital contributions. . 209,753,671 209,753,671 Cumulative net loss. . .(307,686,715) 30,437,069 (277,249,646) Cumulative cash distributions . . . . . (9,221,174) (9,221,174) ------------ ----------- ------------ (107,154,218) 30,437,069 (76,717,149) ------------ ----------- ------------ Total partners' deficits . . . . . . .(116,119,325) 30,744,514 (85,374,811) ------------ ----------- ------------ Total liabilities and partners' deficits . . . . . . .$ 4,550,008 300,000 4,850,008 ============ =========== ============ (1) The 1997 unaudited pro forma consolidated financial statements give effect to the sale of the Partnership's Talega Property (the "Talega disposition"), as if the Talega disposition had occurred, for balance sheet purposes, on March 31, 1997 and, for statement of operation purposes, on January 1, 1997. The unaudited pro forma consolidated statement of operations for the year ended December 31, 1996 gives effect to the Talega disposition as if it had occurred on January 1, 1996. PROFORMA FINANCIAL INFORMATION Arvida/JMB Partners, L.P. - II (A Limited Partnership) And Consolidated Venture Consolidated Statement of Operations Pro Forma Historical Adjustments Pro Forma March 31, for Disposi- March 31, 1997 tion (1) 1997 ------------ ------------ ----------- Revenues: Housing. . . . . . . . . . $ -- -- Homesites. . . . . . . . . -- -- Operating properties . . . 218,623 218,623 Brokerage and other operations. . . . . . . . -- -- ----------- ----------- ----------- Total revenues. . . . . 218,623 0 218,623 ----------- ----------- ----------- Cost of revenues: Housing. . . . . . . . . . -- -- Homesites. . . . . . . . . -- -- Operating properties . . . 108,388 108,388 Brokerage and other operations. . . . . . . . -- -- ----------- ----------- ----------- Total cost of revenues . . . . . . . 108,388 0 108,388 ----------- ----------- ----------- Gross operating profit. . . 110,235 0 110,235 Selling, general and administrative expenses. . (195,726) 59,784 (135,942) ----------- ----------- ----------- Net operating loss. . . (85,491) 59,784 (25,707) Interest income . . . . . . 11,476 -- 11,476 Interest and real estate taxes. . . . . . . . . . . (3,624,125) 1,895,856 (1,728,269) ----------- ----------- ----------- Net loss. . . . . . . . $(3,698,140) 1,955,640 (1,742,500) =========== =========== =========== Net loss per Limited Partner- ship Interest. . . . . $ (14.63) 7.26 (7.37) =========== =========== =========== (1) The 1997 unaudited pro forma consolidated financial statements give effect to the sale of the Partnership's Talega Property (the "Talega disposition"), as if the Talega disposition had occurred, for balance sheet purposes, on March 31, 1997 and, for statement of operation purposes, on January 1, 1997. The unaudited pro forma consolidated statement of operations for the year ended December 31, 1996 gives effect to the Talega disposition as if it had occurred on January 1, 1996. PROFORMA FINANCIAL INFORMATION Arvida/JMB Partners, L.P. - II (A Limited Partnership) And Consolidated Venture Consolidated Statement of Operations Pro Forma Historical Adjustments Pro Forma December 31, for Disposi- December 31, 1996 tion (1) 1996 ------------ ------------ ----------- Revenues: Housing. . . . . . . . . .$ 140,810 140,810 Homesites. . . . . . . . . 1,243,074 1,243,074 Land and property. . . . . 20,286,616 (225,000) 20,061,616 Operating properties . . . 3,315,655 3,315,655 Brokerage and other operations. . . . . . . . 767,065 (19,296) 747,769 ----------- ----------- ----------- Total revenues. . . . . 25,753,220 (244,296) 25,508,924 ----------- ----------- ----------- Cost of revenues: Housing. . . . . . . . . . 336,186 336,186 Homesites. . . . . . . . . 1,075,568 1,075,568 Land and property. . . . . 14,115,847 14,115,847 Operating properties . . . 3,023,179 3,023,179 Brokerage and other operations. . . . . . . . 600,742 600,742 ----------- ----------- ----------- Total cost of revenues. 19,151,522 0 19,151,522 ----------- ----------- ----------- Gross operating profit. . . 6,601,698 (244,296) 6,357,402 Selling, general and administrative expenses. . (1,999,640) 328,480 (1,671,160) ----------- ----------- ----------- Net operating income. . 4,602,058 84,184 4,686,242 Interest income . . . . . . 28,484 28,484 Interest and real estate taxes . . . . . . . (12,264,066) 4,879,533 (7,384,533) ----------- ----------- ----------- Loss before extra- ordinary item. . . . . (7,633,524) 4,963,717 (2,669,807) Extraordinary item: Gain on early extinguishment of debt. . . . . . . . . 20,000,000 20,000,000 ----------- ----------- ----------- Net income. . . . . . . $12,366,476 4,963,717 17,330,193 =========== =========== =========== Net income per limited partnership interest before extraordinary item . . . . . . . . . $ 64.05 13.62 77.67 =========== =========== =========== Net income per limited partnership interest . . . . . . . $ 64.05 13.62 77.67 =========== =========== =========== (1) The 1997 unaudited pro forma consolidated financial statements give effect to the sale of the Partnership's Talega Property (the "Talega disposition"), as if the Talega disposition had occurred, for balance sheet purposes, on March 31, 1997 and, for statement of operation purposes, on January 1, 1997. The unaudited pro forma consolidated statement of operations for the year ended December 31, 1996 gives effect to the Talega disposition as if it had occurred on January 1, 1996. EX-2.3 2 EXHIBIT 2.3 - ----------- STARWOOD/TALEGA ASSOCIATES, L.L.C., a Delaware limited liability company c/o Starwood Capital Group, L.L.C. Three Pickwick Plaza Suite 250 Greenwich, Connecticut 06830 December 9, 1996 Arvida/JMB Partners, L.P.-II, a Delaware limited partnership c/o JMB Realty 900 North Michigan Avenue Chicago, Illinois 60611-1575 Attention: Stephen A. Lovelette Re: Agreement for Purchase and Sale of Real Property and Escrow Instructions by and between Arvida/JMB Partners, L.P.-II, a Delaware limited partnership ("Seller") and Starwood/ Talega Associates, L.L.C., a Delaware Limited liability company ("Buyer"), dated October 25, 1996 ("Agreement"). Ladies and Gentlemen: Reference is made to the Agreement. All capitalized terms which are used, but not defined herein, shall have the meanings ascribed to such terms in the Agreement. Pursuant to Section 3.06(a) of the Agreement, Buyer hereby gives Seller written notice of its election to proceed with the transaction contemplated by the Agreement conditioned upon Seller agreeing to the following amendments to the Agreement: 1. Section 2.04 of the Agreement shall be amended by deleting "Thirty-Three Million and No/100 Dollars ($33,000,000.00)" from such section and inserting "Thirty-Two Million and No/100 Dollars ($32,000,000.00)" in its place. 2. Section 2.05(a) of the Agreement shall be amended by adding the following at the end of such section: "On or before January 2, 1996, Buyer shall deposit with Escrow Holder the additional sum of Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00), which sum shall thereafter be included within the definition of "Deposit". On or before January 15, 1996, Buyer shall deposit with Escrow Holder the additional sum of Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00), which sum shall thereafter be included within the definition of "Deposit". 3. Section 2.05(b) of the Agreement shall be amended by deleting "Twenty-Six Million Five Hundred Thousand and No/100 Dollars ($26,500,000.00)" from such section and inserting "Thirty-One Million and No/100 Dollars ($31,000,000.00)" in its place; 4. Section 2.05(c) of the Agreement shall be amended by deleting such section in its entirety; 5. Section 4.05 of the Agreement shall be amended by deleting "December 16, 1996" from such section and inserting "February 4, 1997" in its place; 6. Section 2.06 of the Agreement is hereby amended by deleting "Three Hundred Thirty Thousand and No/100 Dollars ($330,000.00) and One Hundred Sixty-Five Thousand and No/100 Dollars ($165,000.00)" and inserting "Three Hundred Twenty Thousand and No/100 Dollars ($320,000.00) and One Hundred-Sixty Thousand and No/100 Dollars ($160,000.00)" in its place. 6. The Agreement shall be amended by deleting the text of Sections 4.07(a) and 4.08(g) and inserting "Intentionally Deleted" in each of their places; and 7. The Agreement shall be amended by deleting Exhibit B in its entirety. Except as otherwise provided herein, the terms and conditions of the Agreement shall remain in full force and effect. Please acknowledge your consent to the foregoing amendments by executing this letter in the space provided below on or before 5:00 p.m. (Chicago time) December 13, 1996. If we do not receive an executed copy of this letter prior to such time, this notice shall no longer be effective and the Agreement shall be deemed terminated pursuant to Section 3.06(b). STARWOOD/TALEGA ASSOCIATES L.L.C., a Connecticut limited liability company By: Starwood Opportunity Fund IV, L.P., a Delaware limited partnership By: SOFI IV Management, L.L.C., a Connecticut limited liability company By: Starwood Capital Group, L.L.C., a Connecticut limited liability company By: /s/ EUGENE A. GORAB Eugene A. Gorab, Its: Managing Director 2 ACCEPTED and AGREED to this 13th day of December, 1997 ARVIDA/JMB PARTNERS, L.P.-II a Delaware limited partnership By: Arvida/JMB Managers-II, Inc. a Delaware corporation, its General Partner By: /s/ STEPHEN A. LOVELETTE Stephen A. Lovelette Its: Vice President cc: Arvida Company, Attention: General Counsel Gregory W. Sanders, Esq. H. William Walker, Jr., Esq. David B. Bryant, Esq. 3 EX-2.4 3 EXHIBIT 2.4 - ----------- ARVIDA/JMB PARTNERS, L.P.-II a Delaware limited partnership c/o JMB Realty 900 North Michigan Avenue Chicago, Illinois 60611-1575 May 20, 1997 Starwood/Talega Associates, L.L.C. a Delaware limited liability company c/o Starwood Capital Group, L.L.C. Three Pickwick Plaza Suite 250 Greenwich, Connecticut 06830 Attention: Jeff Dishner Re: Agreement for Purchase and Sale of Real Property and Escrow Instructions by and between Arvida/JMB Partners, L.P.-II, a Delaware limited partnership ("Seller") and Starwood/Talega Associates, L.L.C., a Delaware limited liability company ("Buyer"), dated October 25, 1996, as amended (the "Agreement") Ladies and Gentlemen: Reference is made to the Agreement, under which by letter of April 30, 1997 (the "Default Declaration"), Seller declared Buyer in default. Buyer has denied any default. For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Buyer and Seller hereby agree that the Agreement is ratified and amended as set forth below, and all prior amendments to the Agreement, other than Paragraphs 8, 10, 11, 12, 13, 14 and 15 of the letter agreement between Seller and Buyer dated March 18, 1997, are declared null and void and superseded hereby. All capitalized terms which are used but not defined herein have the meanings ascribed to such terms in the Agreement. 1. Section 2.04 of the Agreement is amended by deleting the text thereof in its entirety and substituting the following in its place: The purchase price to be paid by Buyer for the Property shall be the sum of Thirty-One Million One Hundred Thousand and No/100 Dollars ($31,100,000.00) ("Purchase Price"), as hereinafter provided. 2. Section 2.05(a) of the Agreement is amended by deleting the text thereof in its entirety and substituting the following in its place: Buyer has tendered the sum of One Million and No/100 Dollars ($1,000,000.00) (the "Deposit") to First American Title Insurance Company, 144 East 5th Street, Santa Ana, California 92701 (the "Escrow Holder"). By execution of this Letter Agreement, Seller and Buyer hereby (a) agree that the Deposit, together with all interest accrued thereon, has been and is fully earned by Seller, subject only to return to Escrow Holder in the event or the occurrence, after the date of this Letter Agreement and prior to Closing, of either (i) default by Seller pursuant to the Agreement as amended by this Letter Agreement, or (ii) failure of a condition set forth in Section 2.03 (a), (b) or (c) of the Agreement as amended by this Letter Agreement, and (b) irrevocably instruct Escrow Holder, forthwith upon receipt of a copy, or counterparts, of this Letter Agreement executed by Seller and Buyer, to disburse the Deposit, together with all interest accrued thereon through the date of such disbursement, by wire transfer to Seller's mortgage lender's account in accordance with the following wire instructions: Bank of America Illinois ABA Routing #071-0000-39 840 South Canal Street 2nd Floor Chicago, IL 60697 Attn: Nina Contraras Reference: Ban Control Account #36-20239 Arvida/Talega Sale to be received by Seller's mortgage lender not later than 12:01 p.m., Central Standard Time, on May 21, 1997 (with respect to which time is of the essence), in consideration of Seller's (a) waiver of Buyer's default as set forth in the Default Declaration and (b) agreement herein to reinstate the Agreement; and said sum is now and hereafter at all times will be deemed fully earned by, and the separate property of Seller, the receipt and sufficiency of which consideration Buyer hereby acknowledges; and Buyer hereby waives and disclaims any right, now or hereafter, to claim against or seek refund of the Deposit and accrued interest, whether pursuant to the terms of or under the Agreement, as amended, or otherwise, other than as a result of the occurrence, after the date of this Letter -2- Agreement and prior to Closing, of (i) default by Seller pursuant to the Agreement as amended by this Letter Agreement, or (ii) failure of a condition set forth in Section 2.03 (a), (b) or (c) of the Agreement as amended by this Letter Agreement. Notwithstanding the foregoing, if Escrow Holder requires any additional instructions or evidence of authority to disburse and wire the Deposit and accrued interest to Seller's mortgage lender (which instructions Seller and Buyer intend hereby to waive), Buyer agrees immediately upon request of Escrow Holder or Seller to satisfy such additional requirements. The terms of this Letter Agreement, other than the foregoing invocable instructions to Escrow Holder, will not be effective or enforceable by Buyer against Seller until said sum has been paid in full to and received by Seller as provided in this Paragraph 2. 3. Section 2.05(b) of the Agreement is amended by deleting the text thereof in its entirety and substituting the following in its place: "The sum of Thirty Million One Hundred Thousand Dollars ($31,100,000.00), less the amount disbursed by Escrow Holder to Seller pursuant to Letter Agreement between Seller and Buyer dated May 21, 1997, will be paid on the Closing Date by wire transfer to Escrow Holder for deposit in escrow"; and Section 2.05(c) is deleted in its entirety. 4. Section 2.06 of the Agreement is amended by deleting the first clause of the second sentence thereof and substitution in its place: "Brokerage Commissions in the amount of Two Hundred Thirty Three Thousand Two Hundred Fifty Dollars ($233,250.00) ("Brokerage Commissions") shall be payable to each of O'Donnell, Atkins Company and The Overland Company by Escrow Holder from proceeds due Seller at Closing, if any, hereunder, and from no other source, in accordance with Section 4.08(f) of this Agreement..." 5. Section 4.05 of the Agreement is amended by deleting the text thereof in its entirety and inserting the following in its place: "The consummation of the transactions contemplated by this Agreement will take place at the office of Escrow Holder on May 30, 1997, time being of the essence with respect thereto; and if Buyer fails to close on or before May 30, 1997, for any reason other than the occurrence after May 21, 1997, of either (a) a default by Seller, or (b) the failure of a condition set forth in Section 2.03(a)-(c) of the Agreement, as amended by the Letter Agreement between Seller and Buyer dated May 21, 1997, this Agreement will be null and void and neither party will have any further rights or obligations hereunder, except with respect to the indemnity set forth in the last two sentences of Section 3.05." 6. Seller acknowledges that the condition to Seller's obligations pursuant to the Agreement set forth in Section 2.02(a) thereof has been satisfied subject only to performance by the District of its agreements with Seller pursuant to the Compromise Settlement and Mutual Release Agreement between Seller and the District, a copy of which is attached hereto as Exhibit A: and the condition to Seller's obligations pursuant to the Agreement set forth in Section 2.02(b) thereof has been satisfied. -3- 7. Sections 2.03(d) and (f) of the Agreement are deleted in their entirety. 8. Sections 3.03, 3.04, 3.05 (except the last two sentences thereof), 3.06 and 3.07 of the Agreement are deleted in their entirety. Buyer acknowledges that all conditions and obligations of Seller for which provision is made in Article III of the Agreement, including without limitation all preclosing obligations of Seller pursuant to Section 3.01 and 3.02 (but excluding Seller's obligation to pay any unpaid amounts due for the Title Report, Title Commitment or Survey), have been fully and timely performed and satisfied, and Buyer waives and disclaims any right to terminate, or avoid performance of Buyer's obligations pursuant to, the Agreement pursuant to the provisions of said Article III. Buyer accepts the physical condition and legal status (including under all planning, building, zoning, environmental land use and other applicable laws, ordinances and regulations) of the Property existing as of the effective date of this Letter Agreement. 9. Section 4.07 or the Agreement is amended by deleting the first two sentences thereof and substituting the following their place: "On or prior to the Closing Date Buyer shall deposit with Escrow Holder the balance of the Purchase Price due at Closing in accordance with Section 2.05(b)." 10. Buyer waives any right to assert, or to make claim against Seller with respect to any misrepresentation or breach of as warranty or covenant of Seller based upon, related to or arising our of the provisions of Section 5.01 or 6.01 of the Agreement based upon facts or circumstances of which Buyer has or has had actual knowledge on or before the effective date of this Letter Agreement, and Buyer acknowledges and agrees that to Buyer's Knowledge Seller has timely complied with all of its covenants and agreements set forth in the Agreement and all Seller Axillary documents to the effective date of this Letter Agreement. Further, the last sentence of Section 5.01 is amended to add "Jeff Dishner" after "Eugene A. Gorab and S. John Robinson." 11. Section 7.01 of the Agreement is deleted. Seller agrees that payment of the Deposit, and interest accrued thereon to Seller pursuant to Paragraph 2 of this Letter Agreement constitutes full settlement of all obligations of Buyer to Seller in the event that Buyer fails to close pursuant to the Agreement. 12. The provisions of Section 8.02 of the Agreement are incorporated herein by reference and applicable hereto as if set forth herein in full. 13. Notwithstanding the provisions of Section 8.14 of the Agreement, simultaneously with Closing Buyer may assign the Agreement to the person or entity to whom or which title is conveyed at Closing, provided that Buyer will remain liable for all obligations "Buyer" under the Agreement. -4- 14. Except as amended and modified hereby, the Agreement is ratified and affirmed and remains in good standing and in full force and effect. Please acknowledge your consent to the foregoing amendments by executing this Letter Agreement in the space provided below and delivering the executed counterpart to Stephen A. Lovelette at the Seller's address set forth above, and to Escrow Holder at its address set forth in Section 2.05(a) of the Agreement, on or before 12:01 p.m., Central Standard Time, on May 21, 1997, as to which time is of the essence; and if an executed counterpart has not theretofore been received, and/or if Seller has not received the Deposit and accrued interest as set forth in Paragraph 2 above, this Letter Agreement will be null and void and the settlement offer which is evidenced hereby automatically will be withdrawn. This Letter Agreement is delivered to you incident to and in furtherance of pending settlement discussions with respect to the dispute between Seller and Buyer concerning the rights and obligations, is any, of Seller and Buyer pursuant to the Agreement; and unless and until Seller has received a counterpart copy of this Letter Agreement fully executed by Buyer, and the Deposit and interest accrued thereon have been paid to and received by Seller as set forth in Paragraph 2 of this Letter Agreement, this Letter Agreement will not be effective, neither Buyer nor Brokers will not have any rights or [ Remainder of this page left blank ] -5- claims pursuant to this Letter Agreement, and the existence or terms hereof will not be used by or admissible in evidence against Seller in any litigation or dispute concerning the Agreement. ARVIDA/JMB PARTNERS, L.P.-II, a Delaware limited partnership By: Arvida/JMB Managers-II Inc., a Delaware corporation, its General Partner /s/ STEPHEN A. LOVELETTE By: Stephen A. Lovelette Its: Vice President ACCEPTED and AGREED to this __________ day of May, 1997 STARWOOD/TALEGA ASSOCIATES L.L.C., a Connecticut limited liability company By: Starwood Opportunity Fund IV, L.P. a Delaware limited partnership By: SOFI IV Management, L.L.C., a Connecticut limited liability company By: Starwood Capital Group, L.L.C., a Connecticut limited liability company By: /s/ JEFF DISHNER Jeff Dishner Its: Senior Vice President -6- -----END PRIVACY-ENHANCED MESSAGE-----