<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB/A
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 1)
For the Fiscal Year Ended December 31, 1996
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [No Fee Required]
Commission File Number 0-1748
MAJOR REALTY CORPORATION
(Name of Small Business Issuer in Its Charter)
DELAWARE 59-0898509
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5728 MAJOR BOULEVARD, ORLANDO, FLORIDA 32819
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: 407/351-1111
Securities registered under Section 12(b) of the Exchange Act:
NONE
Securities registered under Section 12(g) of the Exchange Act:
COMMON STOCK, $0.01 PAR VALUE PER SHARE
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MAJOR REALTY CORPORATION
INDEX TO AMENDMENT NO. 1 TO
ANNUAL REPORT
ON FORM 10-KSB/A
<TABLE>
<CAPTION>
<S> <C> <C>
Part II
Item 6. - Management's Discussion and Analysis of Financial Condition
and Results of Operations................................................................. 3
Item 7. - Financial Statements...................................................................... 7
Part III
Item 12.- Certain Relationships and Related Transactions............................................ 25
Part IV
Item 13.- Exhibits and Reports on Form 8-K.......................................................... 27
</TABLE>
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Major Realty Corporation (together with its subsidiaries referred to
herein as the "Company") is amending its Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1996, to provide Items 6, 7, 12, 13 and Exhibits
10.46 through 10.49. The complete text of such items and exhibits is set forth
below.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
NET INCOME
The Company recorded a net loss of $579,000 in 1996, as related to a
net income of $2,664,000 in 1995. The loss in 1996 was due primarily to the
fact that the Company was able to sell only one parcel of land in 1996 for
approximately $411,000. The income in 1995 was due to sales of property for a
total of $6,810,000 which had an aggregate cost basis of $2,678,000. See Note 2
to Consolidated Financial Statements detailing land sales in 1996 and 1995.
REVENUES
The Company's revenues in 1996 were derived from land sales, interest
income from a mortgage note receivable and payments under a ground lease. The
Company's revenues in 1995 were generated primarily by land sales. See "Item 1.
Sale and Disposition of Certain Property" and Note 2 to Consolidated Financial
Statements.
COSTS AND EXPENSES
The cost of real estate sold in 1996 was $198,000, as compared to
$2,678,000 in 1995, reflecting the difference in acquisition cost of the
various parcels sold and the greater amount of property sold in 1995.
Selling, general and administrative costs in 1996 were $674,000 as
compared to $902,000 in 1995. The reduction in selling, general and
administrative costs primarily was attributed to a decrease in legal expenses,
a reduction in employee lease expenses and the generally reduced scope of the
Company's operations.
Interest cost for 1996 was $546,000, a decrease of $465,000 as
compared to interest cost of $1,011,000 for 1995. The decrease was due to the
decreased principal balance of the Company's outstanding debt to Acceptance
Insurance Companies Inc. and a decrease in the interest rate on such debt. See
"Financial Condition and Liquidity" below.
The Company did not capitalize interest in 1996 or 1995. The Company
continues to pursue development opportunities within the context of the
economic realities of the development business and the Company's debt
structure, but will continue to expense interest cost until such time as
realistic opportunities to develop particular properties exist.
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FINANCIAL CONDITION AND LIQUIDITY
The Company relies on internal sources of capital to meet its
operating and debt service requirements. Current internal sources of funds are
cash on hand, proceeds from land sales and lease payments. Due to adverse
economic conditions prevalent in the real estate and financial markets,
development activities with respect to the Company's properties have been
significantly reduced, with none of the Company's properties currently
designated for any significant above-ground development activity.
At December 31, 1996, the Company was indebted to Acceptance pursuant
to a loan restructure arrangement entered into on October 18, 1995, in the
principal amount of $5,064,144, comprised of $747,313 due to Acceptance under
the terms of a February 1995 restructuring and $4,316,881 previously owed to
Citizens Fidelity Bank and Trust Company, now known as PNC Bank, Kentucky, Inc.
("PNC"), which indebtedness was acquired by Acceptance immediately prior to the
restructuring. The aggregate indebtedness of the restructured loan was
represented by a single promissory note, due May 1, 1998, unless there was a
change in control of the Company prior to such time, in which event the
maturity of the loan would be accelerated. The interest rate on the restructured
loan was prime plus 1.5% with interest payable quarterly in arrears. In
January 1996, the Company made a payment of $106,000 for interest relating to
the fourth quarter of 1995. The Company obtained permission to defer the
remaining quarterly interest payments due in 1996 and 1997 to Acceptance on its
$5.1 million mortgage note in the event the Company's cash flow was
insufficient to make such payments, pending the receipt of funds from the sale
of additional properties or other sources. Accordingly, the Company did not
make the $126,000 quarterly interest payments due on April 1, July 1, and
October 1, 1996, and January 1 and April 1, 1997. In September 1996, the
Company made a payment to Acceptance in the amount of $240,000 which was
applied to the deferred interest due from the first two quarters of 1996. The
balance of the deferred interest as of December 31, 1996, was approximately
$263,000.
The Company's obligation to pay the foregoing amount, as well as
additional interest of $123,614 accrued from January 1 through March 31,
1997, was restructured in April 1997, and such aggregate accrued interest and
the $5.1 million principal amount due to Acceptance have been consolidated into
a new promissory note due May 1, 1998, unless there is a change in control of
the Company prior to such time, in which event the maturity of the loan will be
accelerated. The interest rate on the restructured loan is prime plus 2.5%,
with interest accruing and added to principal on a quarterly basis in arrears.
Subject to the Company's right to prepay the note, the outstanding principal
amount of the note (or any portion thereof), plus accrued but unpaid interest,
is convertible into common stock of the Company at the option of Acceptance at
any time upon 20 days prior notice, based upon a price per share equal to the
average closing price of the common stock during the 30-day period immediately
preceding the date of Acceptance's notice of its election to convert. The
Company's indebtedness to Acceptance is secured by a first mortgage on
substantially all of the Company's property, including the certain notes and
mortgages payable to the Company from third parties.
In April 1997, Acceptance provided the Company a $500,000 line of
credit. Under this revolving credit facility, the Company may borrow and
reborrow up to $500,000. All borrowings are due May 1, 1998, unless there is a
change in control of the Company prior to such time, in which event the
maturity of the loan will be accelerated. The interest rate on the line of
credit is prime plus 2.5%, with interest accruing and added to principal on a
monthly basis in arrears. The Company is required to pay a fee to Acceptance
on December 31, 1997, and on the maturity date of the note, equal to 0.5% of the
average unused portion of the line of credit during each period. The Company
paid Acceptance a fee of $15,000 in connection with the restructuring of the
$5.1 million mortgage loan and the establishment of the line of credit.
Under an amendment to the employee lease agreement with Heritage
Network, Incorporated ("Heritage"), effective April 1, 1996, pursuant to which
David L. Treadwell provides services to the Company as its Chairman of the
Board and Chief Executive Officer, the fee to Heritage was reduced to $25,000
per annum, payable monthly, plus a success fee of .5% with respect to
transactions consummated during the term of the Agreement and transactions
contracted for which are closed within a specified period of time after
termination of the Agreement. The renewal
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extended the term of the Agreement until March 31, 1997, and an amendment
executed in March 1997 extends the term of the Agreement until December 31,
1997. See "Note 10 - Related Party Transactions" to Notes to Consolidated
Financial Statements.
The Company's operations are dependent upon its ability to generate
sufficient cash flow to meet its obligations and operating costs on a timely
basis. Management believes that, with reduced operations and the deferrals
previously described, the Company has sufficient capital to allow it to
continue to meet its obligations through December 31, 1997. Thereafter,
operations will depend upon the Company's ability to obtain additional capital
through joint venture arrangements, additional loans, sales of additional
securities or additional properties, or some combination of the foregoing.
There can be no assurance that the Company will be successful in any of such
endeavors.
In October 1995, the Company announced that its Board of Directors had
determined that it was in the best interests of the shareholders to seek a
merger partner or otherwise seek a transaction for the sale of the Company.
David L. Treadwell, Chairman of the Company, cited capital constraints limiting
the feasibility of independently developing the Company's existing properties
as a primary factor in the Board's decision to seek a merger or sale
transaction. Although the Company has had a number of inquiries and has held,
and continues to hold, discussions with potentially interested parties, no
agreement relating to a merger or other substantial transaction has yet been
reached.
IMPACT OF INFLATION AND CHANGING PRICES
The Company's revenues can be affected by inflation in a number of
ways. To the extent that general inflation in the economy has the effect of
increasing the general level of interest rates, the Company's revenues could be
adversely affected, inasmuch as prospective purchasers of land held for sale by
the Company may be unable to secure suitable financing for their purchases.
Also, higher interest rates could affect the ability of the Company to secure
suitable financing for development projects. Conversely, inflation which
results in higher real estate values could serve to enhance the Company's
revenues resulting from sales of property.
Inflation had no material effect on the results of operations in 1996
and 1995.
OTHER
Income Taxes
At December 31, 1996, the Company had net operating loss carryforwards
of approximately $5,746,000 million for income tax purposes that expire through
2007, and investment tax credit
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carryforwards of $172,000 that expire through 2000. Additionally, the Company
had alternative minimum tax credits at December 31, 1996 of $824,000. These
amounts are subject to annual limitations pursuant to provisions of the
Internal Revenue Code relating to cumulative changes in ownership. For
financial reporting purposes a valuation allowance has been recognized to
offset the portion of the deferred tax assets related to those carryforwards
which are dependent upon future events primarily related to the sale or
development of land. See Note 7 to the Consolidated Financial Statements
included under Item 7 - Financial Statements.
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ITEM 7. FINANCIAL STATEMENTS.
The Company's Financial Statements included herein, at December 31,
1996 and 1995 and for the years ended December 31, 1996 and 1995, consist of
the following:
<TABLE>
<S> <C>
Report of Independent Accountants................................................................... 8
Consolidated Balance Sheets......................................................................... 9
Consolidated Statements of Operations............................................................... 10
Consolidated Statements of Stockholders' Equity..................................................... 11
Consolidated Statements of Cash Flows............................................................... 12
Notes to Consolidated Financial Statements.......................................................... 13
</TABLE>
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COOPERS & LYBRAND L.L.P.
REPORT OF INDEPENDENT ACCOUNTANTS
Board of Directors and Stockholders of Major Realty Corporation and Subsidiaries
We have audited the consolidated balance sheets of Major Realty Corporation and
subsidiaries (the Company) as of December 31, 1996 and 1995, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
each of the years then ended. These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of the Company as of
December 31, 1996 and 1995, and the results of their operations and their cash
flows for the years then ended in conformity with generally accepted accounting
principles.
/s/ COOPERS & LYBRAND L.L.P.
Tampa, Florida
February 18, 1997, except for Notes 6 and 10, as to which the date is April 10,
1997
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MAJOR REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS, DECEMBER 31, 1996 AND 1995
(IN THOUSANDS)
------------
<TABLE>
<CAPTION>
1996 1995
---- ----
ASSETS
<S> <C> <C>
CASH AND CASH EQUIVALENTS $ 320 $ 1,006
MORTGAGE NOTES RECEIVABLE 2,750 2,750
LAND HELD FOR SALE OR DEVELOPMENT 4,970 5,121
LAND UNDER LEASE 171 171
OTHER ASSETS 915 674
-------- --------
$ 9,126 $ 9,722
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
ACCOUNTS PAYABLE - TRADE $ 58 $ 129
ACCRUED EXPENSES 790 658
INCOME TAXES PAYABLE -- 78
CONVERTIBLE MORTGAGE NOTES PAYABLE DUE TO RELATED PARTY 5,064 5,064
DEFERRED INCOME TAXES 26 26
-------- --------
5,938 5,955
-------- --------
COMMITMENTS AND CONTINGENCIES (NOTES 8 AND 10)
STOCKHOLDERS' EQUITY:
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK -
$1.00 PAR VALUE; AUTHORIZED, 80,000 SHARES,
NONE OUTSTANDING -- --
COMMON STOCK - $.01 PAR VALUE; AUTHORIZED,
12,000,000 SHARES; ISSUED AND OUTSTANDING,
6,893,378 SHARES 69 69
CAPITAL IN EXCESS OF PAR VALUE 7,822 7,822
ACCUMULATED DEFICIT (4,703) (4,124)
-------- --------
TOTAL STOCKHOLDERS' EQUITY 3,188 3,767
-------- --------
$ 9,126 $ 9,722
======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.
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MAJOR REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
for the years ended December 31, 1996 and 1995
(in thousands except per share data)
----------
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Revenues:
Sales of real estate $ 411 $ 6,810
Lease income 131 150
Interest and other income 297 295
-------- --------
Total revenues 839 7,255
-------- --------
Costs and Expenses:
Costs of real estate sold:
Improved and unimproved land 174 2,189
Commissions and other expenses 24 489
Selling, general & administrative 674 902
Interest cost 546 1,011
-------- --------
Total costs and expenses 1,418 4,591
-------- --------
(Loss) income before provision for income taxes (579) 2,664
Provision for income taxes -- --
-------- --------
Net (loss) income $ (579) $ 2,664
======== ========
Net (loss) income per common share $ (.08) $ .39
======== ========
Average number of
common and common
equivalent shares outstanding 6,893 6,893
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
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MAJOR REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
for the years ended December 31, 1996 and 1995
(in thousands)
-------------
<TABLE>
<CAPTION>
Common Stock Capital in
-------------- Excess of Accumulated Stockholders'
Shares Amount Par Value Deficit Equity
------ ------ --------- ------- ------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1994 6,893 $69 $7,822 $(6,788) $ 1,103
Net income 2,664 2,664
----- --- ------ ------- -------
Balance, December 31, 1995 6,893 69 7,822 (4,124) 3,767
Net (loss) (579) (579)
----- --- ------ ------- -------
Balance, December 31, 1996 6,893 $69 $7,822 $(4,703) $ 3,188
===== === ====== ======= =======
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
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MAJOR REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the years ended december 31, 1996 and 1995
(in thousands)
----------
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Cash Flows from operating activities:
Net (loss) income $ (579) $ 2,664
-------- --------
Adjustments to reconcile net (loss) income to
net cash used for operating activities:
Depreciation and amortization of deferred changes 26 140
Net gain on sales of real estate (235) (4,525)
Net loss on disposals of property and equipment -- 3
Increase in other assets
and other receivables (266) (302)
Increase (decrease) in accounts payable
and accrued expenses 61 (625)
(Decrease) increase in income taxes payable (78) 78
Decrease in deferred income -- (50)
Change in deferred income taxes -- (123)
-------- --------
Total adjustments (492) (5,404)
-------- --------
Net cash used for operating activities (1,071) (2,740)
-------- --------
Cash flows from investing activities:
Additions to land held for sale or development (23) (271)
Proceeds from the sale of land held for sale
or development 409 6,713
Proceeds from mortgage notes receivable -- 1,234
Increase in mortgage notes receivable -- (1,234)
Additions to property and equipment (1) (2)
-------- --------
Net cash provided by
investing activities 385 6,440
-------- --------
Cash flows from financing activities:
Proceeds from convertible mortgage notes
payable due to related party -- 6,025
Principal payments on mortgage notes payable -- (8,999)
Decrease in restricted cash -- 36
-------- --------
Net cash used for
financing activities -- (2,938)
-------- --------
Net (decrease) increase in cash and cash equivalents (686) 762
Cash and cash equivalents at beginning of year 1,006 244
-------- --------
Cash and cash equivalents at end of year $ 320 $ 1,006
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the year for interest $ 346 $ 839
======== ========
</TABLE>
SEE NOTES 3, 6, 7 AND 10 FOR NON-CASH ACTIVITIES.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL
STATEMENTS.
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MAJOR REALTY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies:
Description of Operations - The Company operates within the State of
Florida in the real estate industry. The Company is engaged in the
ownership and development of real estate.
The Company's operations are dependent upon its ability to generate
sufficient cash flow to meet its obligations and operating costs on a
timely basis. Management believes the Company has sufficient capital
resources to allow it to continue to meet its obligations through
1997. Thereafter, operations will depend upon the Company's ability
to obtain additional capital through joint venture arrangements,
additional loans, sales of additional securities or additional
properties, merger partner, transaction for the sale of the Company or
some combination of the foregoing. The Company's loan from Acceptance
in the amount of $5.1 million is due on May 1, 1998, (see Note 6).
There can be no assurance that the Company will be able to secure
sufficient funds to repay or refinance the loan.
In October, 1995, the Company announced that its Board of Directors
had determined that it was in the best interests of the shareholders
to seek a merger partner or otherwise seek a transaction for the sale
of the Company. The Company, cited capital constraints limiting the
feasibility of independently developing the Company's existing
properties as a primary factor in the Board's decision to seek a
merger or sale transaction. Management believes that this announcement
does not have any financial statement impact on the Company.
Recognition of Sales - Sales of real estate are generally recorded
under the accrual method. Under this method, profit is not recognized
until the collectibility of the sales price is reasonably assured and
the earnings process is virtually complete. When the sale does not
meet the requirements for recognition of income, profit is deferred
until such requirements are met.
Generally, collectibility of the sales price is considered assured for
this purpose if there is a cash down payment of 20% or more. The
earnings process generally is considered virtually complete when the
sale has closed, the cash down payment has been received, the mortgage
notes receivable are not subject to existing or future subordination
and the Company has no continuing involvement in the property that
results in the retention of substantial risks or rewards of ownership.
(Continued)
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MAJOR REALTY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. Summary of Significant Accounting Policies (continued):
Cost of Land Held for Sale or Development - Real estate is carried at
the lower of cost or net realizable value. The cost of real estate
includes capitalized interest, real estate taxes and development costs
which are allocated to individual parcels and charged to cost of real
estate sold on a basis approximating the relative sales value method.
These costs were primarily incurred prior to fiscal 1993.
Property and Equipment - Property and equipment is carried at cost,
less accumulated depreciation. Depreciation is computed using the
straight-line method over the estimated useful lives (3 to 10 years)
of the assets. Additions and major replacements or betterments are
added to the asset cost. Repairs and maintenance costs are charged to
expense as incurred. The cost and related allowance for depreciation
and amortization of assets sold or otherwise disposed of are removed
from the related accounts and the resulting gains or losses are
reflected in income.
Deferred Debt Issuance Costs - Debt issuance costs are being amortized
over the life of the related debt on a basis approximating the
interest method.
Net (loss) Income Per Common Share - Net (loss) income per common
share is computed by dividing the net (loss) income by the weighted
average number of shares of common stock and common stock equivalents
outstanding during each period. Common stock equivalents include
shares issuable upon the exercise of employee stock options, net of
shares assumed to have been purchased from the proceeds. Common stock
equivalents have been excluded from the computation of net (loss)
income per share since their effect would be antidilutive or
immaterial for all reporting periods.
Cash Equivalents - Generally, for purposes of the consolidated
statements of cash flows, the Company considers all short-term, highly
liquid investments with a maturity of 3 months or less to be cash
equivalents.
Concentration of Credit Risk - The Company has no financial
instruments which subject it to off-balance sheet risk. Financial
instruments which potentially subject the Company to concentrations of
credit risk consist principally of cash, cash equivalents and the
mortgage notes receivable (see Note 2). The Company maintains its cash
and cash equivalents with high credit quality financial institutions
as determined by management.
(Continued)
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MAJOR REALTY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. Summary of Significant Accounting Policies (continued):
Uses of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
New Accounting Pronouncements - In March 1996, the Financial
Accounting Standards Board issued SFAS No. 128, "Earnings per share"
which is effective for periods ending after December 15, 1997. This
statement establishes standards for computing and presenting earnings
per share data. The Company currently is assessing whether this
pronouncement will impact the presentation of earnings per share data
in future periods.
2. Mortgage Notes Receivable:
Mortgage notes receivable as of December 31, 1996 and 1995 represents
the principal balance due on an 8% non-recourse note with principal
and interest due in April, 1998. The note is collateralized by a first
mortgage on the property received in exchange for the note. The
property is located on the Garrison Channel in Tampa, Florida.
3. Land Held for Sale or Development:
During February 1996, the Company signed a contract for approximately
$411,000, for approximately 2.34 acres of commercial property located
at the northwest corner of the intersection of Conroy Road and
Vineland Road in Orlando. The sale closed in September, 1996. The
sales price was paid in cash at closing. Approximately $240,000 of the
net proceeds was used to repay Company debt.
During August 1996, the Company signed a contract for approximately
$1,050,000, for the sale of approximately 2.5 acres of commercial
property located on the west side of Major Boulevard in Orlando. The
buyer made a $40,000 deposit and had a 90 day inspection period to
determine if it wished to proceed with the contract. On October 15,
1996, the Company received notice from the buyer that it was canceling
the contract. The deposit was refunded to the buyer.
During September 1996, the Company signed two contracts for the sale
of multi-family land in the southwestern sector of Orlando. One
contract was for approximately 55 acres gross (17 acres net) in the
amount of $1,800,000. The other contract was for approximately 43
acres gross (15 acres net) in the amount of $1,350,000. The buyer
placed a $10,000 deposit on each parcel and had a 60 day inspection
period during which it could cancel one or both of the contracts. On
November 13, 1996, the Company received notice from the buyer it was
canceling the contracts. The deposits were refunded to the buyer.
(Continued)
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MAJOR REALTY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. Land Held for Sale or Development (continued):
During May 1995, the Company sold 6.12 acres of vacant land at the
northwest intersection of Major Boulevard and Vineland Road in
Orlando, Florida to Bara Vineland, Inc. for $2,010,000. The buyer had
previously made a $50,000 deposit which became non-refundable during
December 1994. Additional cash in the amount of $650,000 was received
at closing and was used to retire company debt and for operations. The
balance of the purchase price, $1,310,000, was represented by a
promissory note originally due in May, 1996. The note was satisfied at
a discount during October, 1995 for $1,234,000. The difference between
the original amount of the promissory note and the satisfaction amount
has been included in cost of real estate sold.
During August 1995, the Company sold 12.95 acres of multi-family land
located at the northeast corner of Cason Cove Road and Mission Road in
Orlando for $1,000,000 to National HealthCare, L.P. The sales price
was paid in cash at closing. Proceeds from the sale were used to
retire Company debt and for Company operations.
During September 1995, the Company sold 10.36 acres of commercial land
located at the northeast intersection of Interstate 4 and Kirkman Road
in Orlando to Cracker Barrel Old Country Store, Inc. for $6,280,000.
The Company received $2,700,000 cash at closing plus a $3,580,000
non-interest bearing mortgage note which was due in two equal
payments, one in April 1996 and the other in April 1997. On March 27,
1996, Cracker Barrel formally notified the Company of its intent to
default on the mortgage note and reconvey the property to the Company.
Consequently, the Company recorded the sale of only 4.0 acres of land
for $2,700,000 in 1995 and included the remaining 6.36 acres of land
subject to the sale as "Land held for sale or development" at December
31, 1995. Approximately $2,000,000 of the net proceeds was used to
repay Company debt.
During September 1995, the Company sold 1.38 acres of commercial land
located at the northwest corner of the intersection of Conroy Road and
Vineland Road in Orlando for $750,000 to San Alto Construction for the
construction of a 7-11. The sales price was paid in cash at closing.
Proceeds from the sale were used to retire Company debt and for
Company operations.
(Continued)
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MAJOR REALTY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. Land Held for Sale or Development (continued):
During September, 1995, the Company sold 1.06 acres located at the
southeast corner of Vineland Road and Major Boulevard in Orlando to
Orlando Foods, Ltd. for the construction of a Wendy's fast food
restaurant for $350,000. The sales price was paid in cash at closing.
4. Land Under Lease:
The Company leases certain of its land under an operating lease. The
ground lease provided for an initial lease term of 12 years, which
expired during 1995, with options for automatic renewal for six (6)
month increments, unless the lessee gives a 30-day notice of
termination to the Company. The maximum lease term, including all
extensions, may not extend beyond June 2003. Revenues recognized under
the operating lease approximated $131,000 for both years ended
December 31, 1996 and 1995. Land under lease is subordinated to the
mortgages of the lessee.
5. Other Assets:
The components of other assets as of December 31, 1996 and 1995 are
summarized as follows (in thousands):
<TABLE>
<CAPTION>
1996 1995
---- ----
<C> <C> <C>
Accrued interest receivable $ 904 $ 637
Property and equipment, net of accumulated
depreciation of $63 and $59 in
1996 and 1995, respectively 5 10
Deferred debt issuance costs, net of
accumulated amortization of $20 and
$256 in 1996 and 1995, respectively - 20
Other 6 7
----- -----
$ 915 $ 674
===== =====
</TABLE>
-17-
<PAGE> 18
MAJOR REALTY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
6. Convertible Mortgage Notes Payable:
Convertible Mortgage notes payable as of December 31, 1996 and 1995
represents the mortgage note payable due Acceptance Insurance
Companies Inc. ("Acceptance") (See Note 10). Interest expense related
to the convertible mortgage note payable for the years ended December
31, 1996 and 1995 was $503,000 and $236,000, respectively.
During February 1995, the mortgage note payable, due bank, ("the PNC
Bank Note"), was amended to extend the maturity date from January 31,
1995 to January 31, 1996, subject to a maximum outstanding loan
balance of $7,700,000 and the replenishment of an escrowed interest
reserve in the amount of $770,000.
During February 1995, the Company entered into a loan arrangement with
Acceptance whereby Acceptance acquired the Company's promissory note
and mortgage to Valassis Enterprises, L.P. of $282,000, including
accrued interest, and provided additional funds which were used to
repay two promissory notes in the aggregate amount of $103,000,
including accrued interest, held by Acceptance, fund the interest
reserve of $770,000 on the PNC Bank Note, pay real estate taxes in the
amount of $327,000, pay loan closing and extension costs of $75,000
and provide working capital of approximately $43,000. The aggregate
indebtedness to Acceptance in connection with these transactions was
$1,600,000, represented by a single promissory note due in January
1996, which provided for interest, at the rate of twelve percent (12%)
per annum, to accrue monthly and be paid at maturity.
During October 1995, Acceptance acquired the PNC Bank Note with an
outstanding balance of approximately $4,317,000, executing a first
mortgage securing the note and other associated loan documents. As a
result, the Company entered into a debt restructuring agreement with
Acceptance for the Company's $5,064,000 debt to Acceptance ($747,000
due from the February 1995 loan plus the PNC Bank Note).
(Continued)
-18-
<PAGE> 19
MAJOR REALTY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
6. Convertible Mortgage Notes Payable (continued):
The interest rate on the restructured loan was prime plus 1.5%,
with interest payable quarterly in arrears. The maturity of the loan
which prior to the restructuring was January 31, 1996, was extended to
May 1, 1998, unless there was a change in control prior to such time,
in which event the maturity of the loan would be accelerated. In April
1996, the Company received permission from Acceptance to defer the
quarterly interest payments due to Acceptance in the event the
Company's cash flow is insufficient to make such payments, pending the
receipt of funds from the sale of additional properties or other
sources. The interest due for the year ended December 31, 1996, was
$263,000 and has been accrued.
The Company's obligation to pay the foregoing amount, as well as
additional interest of $124,000 accrued from January 1
through March 31, 1997, was restructured in April 1997, and such
aggregate accrued interest and the $5.1 million principal amount due
to Acceptance have been consolidated into a new promissory note due
May 1, 1998, unless there is a change in control of the Company prior
to such time, in which event the maturity of the loan will be
accelerated. The interest rate on the restructured loan is prime plus
2.5%, with interest accruing and added to principal on a quarterly
basis in arrears. The Company's indebtedness to Acceptance is secured
by a first mortgage on substantially all of the Company's property,
including the certain notes and mortgages payable to the Company from
third parties. Subject to the Company's right to repay the note, the
outstanding principal amount of the note (or any portion thereof), plus
accrued but unpaid interest, is convertible into Common Stock at the
option of Acceptance at any time upon 20 days prior notice, based upon
a price per share equal to the average closing price of the Common
Stock during the 30-day period immediately preceding the date of
Acceptance's notice of its election to convert.
In April 1997, Acceptance provided the Company a $500,000 line of
credit. Under this revolving credit facility, the Company may
borrow and reborrow up to $500,000. All borrowings are due May 1,
1998, unless there is a change in control of the Company prior to such
time, in which event the maturity of the loan will be accelerated.
The interest rate on the line of credit is prime plus 2.5%, with
interest accruing and added to principal on a monthly basis in
arrears. The Company is required to pay a fee to Acceptance on
December 31, 1997, and on the maturity date of the note, equal to 0.5%
of the average unused portion of the line of credit during each
period. The Company paid Acceptance a fee of $15,000 in connection
with the restructuring of the $5.1 million mortgage loan and the
establishment of the line of credit.
SFAS No. 107, "Disclosure About Fair Value of Financial Instruments,"
requires that the Company disclose estimated fair values for its
financial instruments. Fair value is defined as the price at which a
financial instrument could be liquidated in an orderly manner over a
reasonable time period under present market conditions. Major Realty's
adjustable rate loans reprice frequently at current market rates. The
rates of Major Realty's fixed obligations approximate those rates of
the adjustable loans. Therefore, the fair value of these loans has
been estimated to be approximately equal to their carrying value.
7. Income Taxes:
A summary of the provision for income taxes for the years ended
December 31, 1996 and 1995 follows:
<TABLE>
<CAPTION>
1996 1995
---- ----
Federal and state income taxes
<S> <C> <C>
Current 0 121
Deferred 0 (121)
------ ------
0 0
====== =======
</TABLE>
(Continued)
-19-
<PAGE> 20
MAJOR REALTY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7. Income Taxes (continued):
At December 31, 1996, the Company had net operating loss carryforwards
of approximately $5,746,000 for income tax purposes that expire
through 2007, and investment tax credit carryforwards of $172,000 that
expire through 2000. Additionally, the Company had alternative minimum
tax credits at December 31, 1996 of $824,000. These amounts are
subject to annual limitations pursuant to provisions of the Internal
Revenue Code relating to cumulative changes in ownership. For
financial reporting purposes, a valuation allowance has been
recognized to offset the portion of the deferred tax assets related to
those carryforwards which are dependent upon future events primarily
related to the sale or development of land. The net increase
(decrease) in the valuation allowance for the years ended December 31,
1996 and 1995 is $218,000 and ($980,000), respectively.
Deferred income taxes primarily relate to basis differences between
the amounts recorded for financial reporting purposes and the amounts
recorded for income tax purposes. Significant components of the
Company's deferred tax liabilities and assets as of December 31, 1996
and 1995 are as follows:
<TABLE>
<CAPTION>
1996 1995
---- ----
Deferred tax liabilities:
<S> <C> <C>
Book over tax basis of land held for development (net) $ 96 $(1,193)
-------- --------
Deferred tax assets:
Net operating loss carryforwards 2,412 2,165
Investment tax credit carryforwards 172 172
Alternative minimum tax credit carryforwards 824 824
Deferred compensation liability 75 89
Accrued litigation costs (6) 7
Bad debt reserve 0 29
Accrued real estate taxes 0 5
Mortgage note receivable 0 1,263
Deferred loan costs 6 0
Valuation allowance (3,605) (3,387)
-------- --------
$ (122) $ 1,167
-------- --------
Net deferred tax liability $ (26) $ (26)
======== ========
</TABLE>
(Continued)
-20-
<PAGE> 21
MAJOR REALTY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7. Income Taxes (continued):
The Company's effective tax rate differs from the statutory federal
income tax rate for the following reasons:
<TABLE>
<CAPTION>
1996 1995
-------------- ---------------
Amount % Amount %
<S> <C> <C> <C> <C>
Tax at statutory rate $(198) 34 $ 906 34
State taxes, net of
federal benefit (21) 4 97 4
Effect of net operating
loss carryforwards 219 (38) (1,003) (38)
----- --- ------- ----
Total $ 0 0 $ 0 0
===== === ======= ====
</TABLE>
During the year ended December 31, 1996 and 1995 the Company paid
income taxes of $79,000 and $45,000, respectively.
8. Commitments and Contingencies:
The Company's corporate offices are located in the Major Center Plaza
office building. The lease expires in July 1997. The estimated future
minimum lease obligation for 1997 is $8,500.
Rent expense for 1996 and 1995 was $14,000 and $14,000, respectively.
The Company from time to time is involved in legal actions arising in
the ordinary course of business. With respect to these matters,
management believes that it has adequate legal defenses and/or has
provided adequate accruals for related costs such that the ultimate
outcome will not have a material adverse effect on the Company's
future financial position.
-21-
<PAGE> 22
MAJOR REALTY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. Capital Stock:
During 1990, the Company adopted a new Stock Option Plan (the "1990
Plan") to replace the 1983 Employee Incentive Stock Option Plan. In
addition, the Company previously had a Non-qualified Stock Option Plan
for which no further options were issuable under the plan. The 1990
Plan provides for grants of both incentive stock options and
non-qualified stock options to key employees and one of the Company's
ex-non-employee directors.
The purchase price of the common stock covered by each option granted
shall not be less than the fair market value of the Company's common
stock on the date the option is granted. No option granted may be
exercised more than 10 years after the date of grant.
Options are exercisable at dates established by the Board of
Directors. Under the 1990 Plan, an employee may not be granted
incentive stock options first exercisable during any one calendar year
for common stock with a fair market value (at date of grant) in excess
of $100,000. Options expire upon termination of employment.
The following is a summary of changes in all options during the two
years ended December 31, 1996.
<TABLE>
<CAPTION>
Non Qualified
Option Price
Shares Per Share
------ ---------
<S> <C> <C> <C>
Outstanding at December 31, 1994 250,000 $ 2.00 - $12.50
Expired 100,000 $ 2.00
-------
Outstanding at December 31, 1995 150,000 $ 2.7679 - $12.50
Expired - $ 0
-------
Outstanding at December 31, 1996 150,000 $ 2.7679 - $12.50
=======
</TABLE>
-22-
<PAGE> 23
MAJOR REALTY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
-------------
9. Capital Stock (continued):
During 1990, a non-employee member of the Board of Directors was
granted options to purchase 50,000 shares of common stock. The options
may be exercised at any time for a period not to exceed ten years.
During 1992, the Chairman of the Board (the "Chairman") was granted
options to purchase 100,000 shares of common stock. Options to
purchase 50,000 of these shares vested in March 1993 and options to
purchase the remaining 50,000 shares vested in March 1994. The options
expire upon termination of the agreement between the Company and
Heritage Network, Incorporated (see Note 10). During 1994, the
Chairman was granted an option to purchase an additional 100,000
shares of common stock which were exercisable at any time until the
earlier of the option expiration date of June 30, 1995, or the
termination of the Chairman's relationship with the Company. The
shares were not exercised and expired on June 30, 1995.
No options were exercised during 1996 or 1995.
In October 1995, the Financial Accounting Standards Board issued SFAS
No. 123, "Accounting for Stock-Based Compensation" which is effective
for fiscal years beginning after December 15, 1995. The statement
establishes financial accounting and reporting standards for
stock-based employee compensation plans, but permits an entity to
continue to measure compensation cost as perscribed under APB Opinion
No. 25, provided certain pro forma disclosures are made. Entities
that elect to measure compensation cost using APB Opinion No. 25 must
provide pro forma disclosures for all awards granted in fiscal years
that begin after December 15, 1994. All of the Company's outstanding
options were granted prior to this date, therefore the reporting
requirements under SFAS No. 123, including pro forma disclosure, do not
apply.
10. Related Party Transactions:
During February 1995, the Company entered into a loan arrangement
with Acceptance (See Note 6). The accrued interest due at December 31,
1996 was $263,000.
In April 1997, Acceptance provided the Company a $500,000 line of
credit (See Note 6).
David L. Treadwell ("Treadwell"), the Company's Chairman of the Board
and Chief Executive Officer, is also a member of the board of
directors of Acceptance. Mr. Treadwell performs services pursuant to
an employee lease agreement (the "Agreement") with Heritage Network,
Incorporated ("Heritage"), his primary employer. To assist the
Company's cash flow, Heritage agreed to a deferral of $75,000 of the
$100,000 annual fee due under the Agreement, pending the closing of
future property sales or other transactions. Under three amendments to
the Agreement, the original term of the Agreement was extended through
March 31, 1996, and, beginning on December 31, 1994, interest on all
deferred amounts at the rate of twelve percent (12%) per annum began
to accrue. The Company paid Heritage approximately $25,000 under this
agreement in 1996. Under a fourth amendment to the Agreement
effective April 1, 1996, the fee to Heritage was reduced to $25,000
per annum, payable monthly, plus a success fee of .5% with respect to
transactions consummated during the term of the Agreement and
transactions contracted for which are closed within a specified period
of time after
(continued)
-23-
<PAGE> 24
MAJOR REALTY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
10. Related Party Transactions (continued):
termination of the Agreement. The renewal extends the term of the
Agreement until March 31, 1997, and does away with the requirement
that the Company pay interest on deferred amounts. At December 31,
1996, the Company owed Heritage $21,000 under the Employee Lease
Agreement, including $2,000 in interest. In addition, the Company
reimburses Mr. Treadwell for all reasonable travel expenses including
transportation to and from his home city of Southgate, Michigan. The
Company has also granted Mr. Treadwell options to purchase 200,000
shares of common stock (see Note 9).
On February 13, 1996, the Company paid Heritage $142,000 which
included the deferred payment due as of December 31, 1995 and interest
accrued in the amount of $11,000 as of the same date.
-24-
<PAGE> 25
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
A description of the relationships and affiliations of the directors,
officers and holders of more than 5% of the Common Stock of the Company with
the parties identified in this section are contained in the last paragraph of
this section.
Loan from Acceptance
On February 1, 1995, the Company entered into a loan arrangement with
Acceptance Insurance Companies Inc., ("Acceptance") whereby Acceptance acquired
the Company's promissory note and mortgage to Valassis Enterprises, L.P. (which
had a balance of approximately $282,000 on such date) and provided additional
funds which were used to repay the Major Group Notes held by Acceptance in the
aggregate amount of approximately $103,000, fund the interest reserve for the
Company's loan with PNC Bank ($770,000), pay real estate taxes in the amount of
$326,597, pay loan closing and extension costs of $75,000, and provide working
capital of approximately $43,000. The aggregate indebtedness to Acceptance in
connection with these transactions was $1,600,000, represented by a single
promissory note due January 31, 1996, which provided for interest, at the rate
of twelve percent (12%) per annum, to accrue and be paid at maturity. The note
was secured by a second mortgage on substantially all of the Company's
property.
At December 31, 1996, the Company was indebted to Acceptance pursuant
to a loan restructure arrangement entered into on October 18, 1995, in the
principal amount of $5,064,144, comprised of $747,313 due to Acceptance under
the terms of a February 1995 restructuring and $4,316,881 previously owed to
Citizens Fidelity Bank and Trust Company, now known as PNC Bank, Kentucky, Inc.
("PNC"), which indebtedness was acquired by Acceptance immediately prior to the
restructuring. The aggregate indebtedness of the restructured loan was
represented by a single promissory note, due May 1, 1998, unless there was a
change in control of the Company prior to such time, in which event the
maturity of the loan would be accelerated. The interest rate on the restructured
loan was prime plus 1.5%, with interest payable quarterly in arrears.
In January 1996, the Company made a payment of $106,000 for interest relating to
the fourth quarter of 1995. The Company obtained permission to defer the
remaining quarterly interest payments due in 1996 and 1997 to Acceptance on its
$5.1 million mortgage note in the event the Company's cash flow was
insufficient to make such payments, pending the receipt of funds from the sale
of additional properties or other sources. Accordingly, the Company did not
make the $126,000 quarterly interest payments due on April 1, July 1, and
October 1, 1996, and January 1 and April 1, 1997. In September 1996, the
Company made a payment to Acceptance in the amount of $240,000 which was
applied to the deferred interest due from the first two quarters of 1996. The
balance of the deferred interest as of December 31, 1996, was $263,000.
The Company's obligation to pay the foregoing amount, as well as
additional interest of $123,614 accrued from January 1 through March 31,
1997, was restructured in April 1997, and such aggregate accrued interest and
the $5.1 million principal amount due to Acceptance have been consolidated into
a new promissory note due May 1, 1998, unless there is a change in control of
the Company prior to such time, in which event the maturity of the loan will be
accelerated. The interest rate on the restructured loan is prime plus 2.5%,
with interest accruing and added to principal on a quarterly basis in arrears.
Subject to the Company's right to prepay the note, the outstanding principal
amount of the note (or any portion thereof), plus accrued but unpaid interest,
is convertible into common stock of the Company at the option of Acceptance at
any time upon 20 days prior notice, based upon a price per share equal to the
average closing price of the common stock during the 30-day period immediately
preceding the date of Acceptance's notice of its election to convert. The
Company's indebtedness to Acceptance is secured by a first mortgage on
substantially all of the Company's property, including the certain notes and
mortgages payable to the Company from third parties.
In April 1997, Acceptance provided the Company a $500,000 line of
credit. Under this revolving credit facility, the Company may borrow and
reborrow up to $500,000. All borrowings are due May 1, 1998, unless there is a
change in control of the Company prior to such time, in which event the
maturity of the loan will be accelerated. The interest rate on the line of
credit is prime plus 2.5%, with interest accruing and added to principal on a
monthly basis in arrears. The Company is required to pay a fee to Acceptance
on December 31, 1997, and on the maturity date of the note, equal to 0.5% of the
average unused portion of the line of credit during each period. The Company
paid Acceptance a fee of $15,000 in connection with the restructuring of the
$5.1 million mortgage loan and the establishment of the line of credit.
-25-
<PAGE> 26
Employee Lease Agreement regarding David Treadwell
David L. Treadwell, Chairman of the Board of Directors, serves as the
Company's Chief Executive Officer pursuant to an Employee Lease Agreement (the
"Agreement") with Mr. Treadwell's primary employer, Heritage Network,
Incorporated ("Heritage"). See "Item 10. Executive Compensation."
The Agreement, which commenced on March 27, 1992, requires Mr.
Treadwell to devote such time to his duties as Chief Executive Officer as he
and the Board of Directors determine to be necessary. The Agreement has been
amended five times and currently provides for a fee of $25,000 per annum,
payable monthly. The Company also is required to pay a success fee of .5% with
respect to transactions consummated during the term of the Agreement and for
transactions contracted for which are closed within a specified period of time
after termination of the Agreement, up to a maximum success fee of $75,000. The
fifth amendment executed in March 1997 extended the term of the Agreement until
December 31, 1997. At December 31, 1996, the Company owed Heritage $21,000
under the Employee Lease Agreement, including $2,000 in interest, for unpaid
fees which previously were deferred.
As part of the original Agreement, Mr. Treadwell was granted the right
to purchase from the Company 100,000 shares of the common stock of the Company,
par value $0.01 per share, for $2.7679 per share. Options to purchase 50,000
shares vested on March 27, 1993, and options to purchase the remaining 50,000
shares vested on March 27, 1994. These options terminate upon Mr. Treadwell's
resignation as Chief Executive Officer of the Company or upon termination of
the Agreement.
Acceptance beneficially owns 33.1% of the common stock of the Company.
Messrs. Bielfield, Coon, McCarthy and Treadwell are directors of Acceptance.
George F. Valassis, who beneficially owns 9.7% of the common stock of the
Company, also beneficially owns 23.1% of the common stock of Acceptance. By
virtue of such positions with or interests in Acceptance, such persons may have
a material indirect interest in the transactions described above between the
Company and Acceptance.
-26-
<PAGE> 27
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
<TABLE>
<CAPTION>
(A) EXHIBITS
<S> <C>
3.1 Certificate of Incorporation of the Company, as amended
(previously filed as an exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1987 and as Exhibit 3.1 to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1987).
3.2 Bylaws of the Company, as amended (previously filed as an
exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1990).
4 Other instruments, notes or extracts from agreements defining
the rights of holders of long-term debt of the Company or its
subsidiaries have not been filed because (i) in each case the
total amount of long-term debt permitted thereunder does not
exceed 10% of the Company's consolidated assets, and (ii) the
Company hereby agrees that it will furnish such instruments,
notes and extracts to the Securities and Exchange Commission
upon its request.
10.1 Form of Indemnity Agreement between the Company and its
directors and certain officers, as utilized since December
12, 1988, (previously filed as an exhibit to the Company's
Annual Report on Form 10-K for the year ended December 31,
1988).
10.2* Salary Continuation Agreement dated November 19, 1986, between the Company
and Alvin L. Lawing, Jr. (previously filed as an exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1987).
10.3 Agreements dated July 8, 1982, between the Company and Oxford
Development Enterprises, Inc., as amended (previously filed
as an exhibit to Registration Statement Number 2-84680).
10.4 Agreement dated June 16, 1978, between the Company, American
Television and Communications Corporation and others
(previously filed as an exhibit to Registration Statement
Number 2-84680).
10.5* 1990 Stock Option Plan (previously filed as an exhibit to the
Company's Proxy Statement dated November 6, 1990, relating to
the Annual Meeting held on November 30, 1990).
</TABLE>
-27-
<PAGE> 28
<TABLE>
<S> <C>
10.6 Assumption and Indemnification Agreement dated April 30,
1990, by and between the Company, MPJV Corporation, a Florida
corporation for the benefit of The Prudential Insurance
Company of America, a New Jersey corporation (previously
filed as an exhibit to the Company's Current Report on Form
8-K dated April 30, 1990).
10.7 Loan Agreement dated as of October 11, 1989, between the
Company and Citizens Fidelity Bank and Trust Company (now
known as PNC Bank, Kentucky, Inc.), Louisville, Kentucky
(previously filed as an exhibit to the Company's Annual
Report on Form 10-K for the year ended December 31, 1989).
10.8 Indemnification Agreement dated April 30, 1990, by and
between Major Center, a Joint Venture, a Florida general
partnership, MPJV Corporation, a Florida corporation, and The
Prudential Insurance Company of America, a New Jersey
corporation (previously filed as an exhibit to the Company's
Current Report on Form 8-K dated April 30, 1990).
10.9 Mortgage Deed and Security Agreement granted October 11,
1989, by the Company in favor of Citizens Fidelity Bank and
Trust Company, Louisville, Kentucky (previously filed as an
exhibit to the Company's Annual Report on Form 10-K for the
year ended December 31, 1989).
10.10 Security Agreement dated November 30, 1990, granted by the
Company in favor of Citizens Fidelity Bank and Trust Company,
Louisville, Kentucky (previously filed as an exhibit to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1990).
10.11 Amendment to Loan Agreement, dated as of November 30, 1990,
between the Company and Citizens Fidelity Bank and Trust
Company, Louisville, Kentucky (previously filed as an exhibit
to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1990).
10.12 Second Amendment to Loan Agreement, dated as of August 29,
1991, between the Company and Citizens Fidelity Bank and
Trust Company, Louisville, Kentucky (previously filed as an
exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1991).
10.13 Amendment to Mortgage Deed and Security Agreement, dated
August 29, 1991, granted by the Company in favor of Citizens
Fidelity Bank and Trust Company, Louisville, Kentucky
(previously filed as an exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1991).
</TABLE>
-28-
<PAGE> 29
<TABLE>
<S> <C>
10.14 Loan Agreement, dated as of March 25, 1992, between the
Company and Valassis Enterprises, L.P. (previously filed as
an exhibit to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1991).
10.15 Note, dated March 25, 1992, given by the Company to Valassis
Enterprises, L.P., in the original principal sum of
$3,000,000.00 (previously filed as an exhibit to the
Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1991).
10.16 Second Mortgage and Security Agreement, dated as of March 25, 1992, given by the
Company to The Major Group, Inc. and Valassis Enterprises, L.P. (previously filed
as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1991).
10.17 Hazardous Materials Indemnification Agreement, dated as of
March 25, 1992, between the Company and Valassis Enterprises,
L.P. (previously filed as an exhibit to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1991).
10.18* Employee Lease Agreement executed as of the 26th day of
March, 1992, between the Company, Heritage Network
Incorporated and David L. Treadwell (previously filed as an
exhibit to the Company's Quarterly Report on Form 10-Q for
the quarter ended March 31, 1992).
10.19 Nonrecourse Purchase Money Mortgage by Chavez
Properties-Garrison Channel, Limited Partnership, a Georgia
limited partnership, in favor of Major Center, A Joint
Venture, dated April 26, 1993 (previously filed as an exhibit
to the Company's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1993).
10.20 Nonrecourse Purchase Money Promissory Note for $2,750,000
from Chavez Properties-Garrison Channel, Limited Partnership,
a Georgia limited partnership, in favor of Major Center, A
Joint Venture, dated April 26, 1993 (previously filed as an
exhibit to the Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1993).
10.21 Amendment to Mortgage Deed and Security Agreement, dated
January 31, 1994, granted by the Company in favor of PNC
Bank, Kentucky, Inc., formerly Citizens Fidelity Bank and
Trust Company, Louisville, Kentucky (previously filed as an
exhibit to the Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1993).
10.22 Second Amendment to Mortgage Note, dated January 31, 1994, by the Company and
PNC Bank, Kentucky, Inc., formerly Citizens Fidelity Bank and Trust Company,
</TABLE>
-29-
<PAGE> 30
<TABLE>
<S> <C>
Louisville, Kentucky (previously filed as an exhibit to the
Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1993).
10.23 Third Amendment to Loan Agreement, dated as of January 31,
1994, by the Company and PNC Bank, Kentucky, Inc., formerly
Citizens Fidelity Bank and Trust Company, Louisville,
Kentucky (previously filed as an exhibit to the Company's
Amendment No. 1 to Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1993).
10.24* Consultant Services Agreement, effective April 1, 1994,
between the Company and Development Consultants, Inc. of
Orlando (previously filed as an exhibit to the Company's
Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1994).
10.25* Amendment No. 1 to Employee Lease Agreement, as of the first
day of April, 1994, between the Company and David L. Treadwell
(previously filed as an exhibit to the Company's Annual Report
on Form 10-KSB for the fiscal year ended December 31, 1994).
10.26* Amendment No. 2 to Employee Lease Agreement, as of January 1,
1995, between the Company and David L. Treadwell (previously
filed as an exhibit to the Company's Annual Report on Form
10-KSB for the fiscal year ended December 31, 1994).
10.27 Amendment to Citizens Agreement, dated as of the first day of
February, 1995, among Valassis Enterprises, L.P., Acceptance
Insurance Companies Inc., the Company and PNC Bank, Kentucky,
Inc., formerly known as Citizens Fidelity Bank and Trust
Company (previously filed as an exhibit to the Company's
Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1994).
10.28 Mortgage Modification and Future Advance Agreement, dated
February 1, 1995, between Acceptance Insurance Companies Inc.
and the Company (previously filed as an exhibit to the
Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1994).
10.29 Assignment of Mortgage and Other Security Documents, dated
January 25, 1995, from Valassis Enterprises, L.P. to
Acceptance Insurance Companies Inc. (previously filed as an
exhibit to the Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1994).
10.30 Renewal and Consolidation Promissory Note, dated February 1,
1995, made by the Company in favor of Acceptance Insurance
Companies Inc. in the original principal
</TABLE>
-30-
<PAGE> 31
sum of $1,600,000.00 (previously filed as an exhibit to the
Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1994).
<TABLE>
<S> <C>
10.31 Third Amendment to Mortgage Note, dated January 31, 1995, by
the Company and PNC Bank, Kentucky, Inc., formerly Citizens
Fidelity Bank and Trust Company, Louisville, Kentucky
(previously filed as an exhibit to the Company's Annual
Report on Form 10-KSB for the fiscal year ended December 31,
1994).
10.32 Fourth Amendment to Loan Agreement, dated as of January 31,
1995, by the Company and PNC Bank, Kentucky, Inc., formerly
Citizens Fidelity Bank and Trust Company, Louisville,
Kentucky (previously filed as an exhibit to the Company's
Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1994).
10.33 Amendment to Mortgage Deed and Security Agreement, dated
January 31, 1995, granted by the Company in favor of PNC
Bank, Kentucky, Inc., formerly Citizens Fidelity Bank and
Trust Company, Louisville, Kentucky (previously filed as an
exhibit to the Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1994).
10.34 Purchase Money Mortgage and Promissory Note for $1,310,000
from Bara Vineland, Inc., a Florida corporation, in favor of
Major Realty Corporation, dated May 5, 1995 (previously filed
as an exhibit to the Company's Quarterly Report on Form
10-QSB for the quarter ended June 30, 1995).
10.35 Collateral Assignment of Nonrecourse Purchase Money
Promissory Note and Mortgage for $1,310,000 from Bara
Vineland, Inc., a Florida corporation, in favor of Major
Realty Corporation, dated May 5, 1995, to PNC Bank, Kentucky,
Inc. (previously filed as an exhibit to the Company's
Quarterly Report on Form 10-QSB for the quarter ended June
30, 1995).
10.36 Fifth Amendment to Loan Agreement, dated as of September 1,
1995, by the Company and PNC Bank, Kentucky, Inc., formerly
Citizens Fidelity Bank and Trust Company, Louisville,
Kentucky (previously filed as an exhibit to the Company's
Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1995).
10.37 Purchase Money Mortgage and Promissory Note for $3,580,000
from Cracker Barrel Old Country Store, Inc., a Kentucky
corporation, in favor of Major Realty Corporation, dated
September 1, 1995 (previously filed as an exhibit to the
Company's Quarterly Report on Form 10-QSB for the quarter
ended September 30, 1995).
10.38 Restated and Consolidated Promissory Note, dated October 18,
1995, made by the Company in favor of Acceptance Insurance
Companies Inc. in the original principal
</TABLE>
-31-
<PAGE> 32
<TABLE>
<S> <C>
sum of $5,064,144 (previously filed as an exhibit to the
Company's Quarterly Report on Form 10-QSB for the quarter
ended September 30, 1995).
10.39 Sixth Amendment to Loan Agreement, dated as of October 18,
1995, by the Company and Acceptance Insurance Companies Inc.
(previously filed as an exhibit to the Company's Quarterly
Report on Form 10-QSB for the quarter ended September 30,
1995).
10.40 Mortgage and Note Modification Agreement, dated as of October
18, 1995, by the Company and Acceptance Insurance Companies
Inc. (previously filed as an exhibit to the Company's
Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1995).
10.41 Indemnity Agreement, dated as of April 1, 1994, between the
Company and Development Consultants of Orlando, Inc.
(previously filed as Exhibit 10.61 to the Company's Annual
Report on Form 10-KSB for the fiscal year ended December 31,
1995).
10.42* Amendment No. 1 to Consultant Services Agreement, dated as of
April 1, 1995, between the Company and Development
Consultants of Orlando, Inc. (previously filed as Exhibit
10.62 to the Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1995).
10.43* Amendment No. 3 to Employee Lease Agreement, dated April 1,
1995, between the Company, Heritage Network Incorporated and
David L. Treadwell (previously filed as Exhibit 10.63 to the
Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1995).
10.44* Amendment No. 4 to Employee Lease Agreement, dated as of
April 1, 1996, between the Company, Heritage Network
Incorporated and David L. Treadwell (previously filed as
Exhibit 10.64 to the Company's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 1995).
10.45* Amendment No. 2 to Consultant Services Agreement, dated March
20, 1997, between the Company and Development Consultants of
Orlando, Inc. (previously filed as Exhibit 10.45 to the
Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1996).
10.46* Amendment No. 5 to Employee Lease Agreement, dated as of March
20, 1997, between the Company, Heritage Network Incorporated
and David L. Treadwell.
10.47 Mortgage Modification Agreement, dated as of April 1, 1997,
by the Company and Acceptance Insurance Companies Inc.
10.48 Restated and Consolidated Promissory Note, dated as of April
1, 1997, made by the Company in favor of Acceptance
Insurance Companies Inc. in the original principal sum of
$5,450,728.32.
10.49 Line of Credit Promissory Note, dated as of April 1, 1997,
made by the Company in favor of Acceptance Insurance
Companies Inc. in the original principal sum of $500,000.
22 Subsidiaries of the Company (previously filed as Exhibit
22 to the Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1996).
27 Financial Data Schedule (for SEC use only) (previously filed
as Exhibit 27 to the Company's Annual Report on Form
10-KSB for the fiscal year ended December 31, 1996).
------------------------------------
* Management contract or compensatory plan or arrangement.
</TABLE>
-32-
<PAGE> 33
(B) REPORTS ON FORM 8-K
None.
-33-
<PAGE> 34
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
Company caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized on this 31 day of March, 1997.
MAJOR REALTY CORPORATION
By:/s/ David L. Treadwell
---------------------------------
David L. Treadwell, Chairman
and Chief Executive Officer
In accordance with the requirements of the Exchange Act, this Report
has been signed below by the following persons on behalf of the Company and in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ David L. Treadwell Chairman of the Board of Directors, March 31, 1997
- ------------------------- Chief Executive Officer, Principal
David L. Treadwell Financial Officer, Principal
Accounting Officer
/s/ Jay A. Bielfield Director March 31, 1997
- -------------------------
Jay A. Bielfield
/s/ Kenneth C. Coon Director March 31, 1997
- -------------------------
Kenneth C. Coon
/s/ Michael R. McCarthy Director March 31, 1997
- -------------------------
Michael R. McCarthy
</TABLE>
-34-
<PAGE> 35
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
Registrant caused this Amendment to be signed on its behalf by the undersigned,
thereunto duly authorized on this 11th day of April, 1997.
MAJOR REALTY CORPORATION
By:/s/ David L. Treadwell
----------------------------------
DAVID L. TREADWELL, Chairman
Chief Executive Officer
-35-
<PAGE> 36
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Exhibit Description Numbered Page
------ ------------------- -------------
<S> <C> <C>
3.1 Certificate of Incorporation of the Company, as
amended (previously filed as an exhibit to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1987 and as Exhibit 3.1 to
the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1987).
3.2 Bylaws of the Company, as amended (previously filed
as an exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1990).
4 Other instruments, notes or extracts from agreements
defining the rights of holders of long-term debt of
the Company or its subsidiaries have not been filed
because (i) in each case the total amount of
long-term debt permitted thereunder does not exceed
10% of the Company's consolidated assets, and (ii)
the Company hereby agrees that it will furnish such
instruments, notes and extracts to the Securities
and Exchange Commission upon its request.
10.1 Form of Indemnity Agreement between the Company and
its directors and certain officers, as utilized
since December 12, 1988, (previously filed as an
exhibit to the Company's Annual Report on Form 10-K
for the year ended December 31, 1988).
</TABLE>
-36-
<PAGE> 37
<TABLE>
<S> <C>
10.2* Salary Continuation Agreement dated November 19,
1986, between the Company and Alvin L. Lawing, Jr.
(previously filed as an exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1987).
10.3 Agreements dated July 8, 1982, between the Company
and Oxford Development Enterprises, Inc., as amended
(previously filed as an exhibit to Registration
Statement Number 2-84680).
10.4 Agreement dated June 16, 1978, between the Company,
American Television and Communications Corporation
and others (previously filed as an exhibit to
Registration Statement Number 2-84680).
10.5* 1990 Stock Option Plan (previously filed as an
exhibit to the Company's Proxy Statement dated
November 6, 1990, relating to the Annual Meeting
held on November 30, 1990).
10.6 Assumption and Indemnification Agreement dated April
30, 1990, by and between the Company, MPJV
Corporation, a Florida corporation for the benefit
of The Prudential Insurance Company of America, a
New Jersey corporation (previously filed as an
exhibit to the Company's Current Report on Form 8-K
dated April 30, 1990).
</TABLE>
-37-
<PAGE> 38
<TABLE>
<S> <C>
10.7 Loan Agreement dated as of October 11, 1989, between
the Company and Citizens Fidelity Bank and Trust
Company (now known as PNC Bank, Kentucky, Inc.),
Louisville, Kentucky (previously filed as an exhibit
to the Company's Annual Report on Form 10-K for the
year ended December 31, 1989).
10.8 Indemnification Agreement dated April 30, 1990, by
and between Major Center, a Joint Venture, a Florida
general partnership, MPJV Corporation, a Florida
corporation, and The Prudential Insurance Company of
America, a New Jersey corporation (previously filed
as an exhibit to the Company's Current Report on
Form 8-K dated April 30, 1990).
10.9 Mortgage Deed and Security Agreement granted October
11, 1989, by the Company in favor of Citizens
Fidelity Bank and Trust Company, Louisville,
Kentucky (previously filed as an exhibit to the
Company's Annual Report on Form 10-K for the year
ended December 31, 1989).
10.10 Security Agreement dated November 30, 1990, granted
by the Company in favor of Citizens Fidelity Bank
and Trust Company, Louisville, Kentucky (previously
filed as an exhibit to the Company's Annual Report
on Form 10-K for the fiscal year ended December 31,
1990).
10.11 Amendment to Loan Agreement, dated as of November
30, 1990, between the Company and Citizens Fidelity
Bank and Trust Company, Louisville, Kentucky
(previously filed as an exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1990).
10.12 Second Amendment to Loan Agreement, dated as of
August 29, 1991, between the Company and Citizens
Fidelity Bank and Trust Company, Louisville,
Kentucky (previously filed as an exhibit to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1991).
10.13 Amendment to Mortgage Deed and Security Agreement,
dated August 29, 1991, granted by the Company in
favor of Citizens Fidelity Bank and Trust Company,
Louisville, Kentucky (previously filed as an exhibit
to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1991).
</TABLE>
-38-
<PAGE> 39
<TABLE>
<S> <C>
10.14 Loan Agreement, dated as of March 25, 1992, between
the Company and Valassis Enterprises, L.P.
(previously filed as an exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1991).
10.15 Note, dated March 25, 1992, given by the Company to
Valassis Enterprises, L.P., in the original
principal sum of $3,000,000.00 (previously filed as
an exhibit to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1991).
10.16 Second Mortgage and Security Agreement, dated as of
March 25, 1992, given by the Company to The Major
Group, Inc. and Valassis Enterprises, L.P.
(previously filed as an exhibit to the Company's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1991).
10.17 Hazardous Materials Indemnification Agreement, dated
as of March 25, 1992, between the Company and
Valassis Enterprises, L.P. (previously filed as an
exhibit to the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1991).
</TABLE>
-39-
<PAGE> 40
<TABLE>
<S> <C>
10.18* Employee Lease Agreement executed as of the 26th day
of March, 1992, between the Company, Heritage
Network Incorporated and David L. Treadwell
(previously filed as an exhibit to the Company's
Quarterly Report on Form 10-Q for the quarter ended
March 31, 1992).
10.19 Nonrecourse Purchase Money Mortgage by Chavez
Properties- Garrison Channel, Limited Partnership, a
Georgia limited partnership, in favor of Major
Center, A Joint Venture, dated April 26, 1993
(previously filed as an exhibit to the Company's
Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1993).
10.20 Nonrecourse Purchase Money Promissory Note for
$2,750,000 from Chavez Properties-Garrison Channel,
Limited Partnership, a Georgia limited partnership,
in favor of Major Center, A Joint Venture, dated
April 26, 1993 (previously filed as an exhibit to
the Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1993).
10.21 Amendment to Mortgage Deed and Security Agreement,
dated January 31, 1994, granted by the Company in
favor of PNC Bank, Kentucky, Inc., formerly Citizens
Fidelity Bank and Trust Company, Louisville,
Kentucky (previously filed as an exhibit to the
Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1993)
10.22 Second Amendment to Mortgage Note, dated January 31,
1994, by the Company and PNC Bank, Kentucky, Inc.,
formerly Citizens Fidelity Bank and Trust Company,
Louisville, Kentucky (previously filed as an exhibit
to the Company's Annual Report on Form 10-KSB for
the fiscal year ended December 31, 1993).
</TABLE>
-40-
<PAGE> 41
<TABLE>
<S> <C>
10.23 Third Amendment to Loan Agreement, dated as of
January 31, 1994, by the Company and PNC Bank,
Kentucky, Inc., formerly Citizens Fidelity Bank and
Trust Company, Louisville, Kentucky (previously
filed as an exhibit to the Company's Amendment No. 1
to Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1993).
10.24* Consultant Services Agreement, effective April 1,
1994, between the Company and Development
Consultants, Inc. of Orlando (previously filed as an
exhibit to the Company's Annual Report on Form
10-KSB for the fiscal year ended December 31, 1994).
10.25* Amendment No. 1 to Employee Lease Agreement, as of
the first day of April, 1994, between the Company
and David L. Treadwell (previously filed as an
exhibit to the Company's Annual Report on Form
10-KSB for the fiscal year ended December 31, 1994).
10.26* Amendment No. 2 to Employee Lease Agreement, as of
January 1, 1995, between the Company and David L.
Treadwell (previously filed as an exhibit to the
Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1994).
10.27 Amendment to Citizens Agreement, dated as of the
first day of February, 1995, among Valassis
Enterprises, L.P., Acceptance Insurance Companies
Inc., the Company and PNC Bank, Kentucky, Inc.,
formerly known as Citizens Fidelity Bank and Trust
Company (previously filed as an exhibit to the
Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1994).
10.28 Mortgage Modification and Future Advance Agreement,
dated February 1, 1995, between Acceptance Insurance
Companies Inc. and the Company (previously filed as
an exhibit to the Company's Annual Report on Form
10-KSB for the fiscal year ended December 31, 1994).
</TABLE>
-41-
<PAGE> 42
<TABLE>
<S> <C>
10.29 Assignment of Mortgage and Other Security Documents,
dated January 25, 1995, from Valassis Enterprises,
L.P. to Acceptance Insurance Companies Inc.
(previously filed as an exhibit to the Company's
Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1994).
10.30 Renewal and Consolidation Promissory Note, dated
February 1, 1995, made by the Company in favor of
Acceptance Insurance Companies Inc. in the original
principal sum of $1,600,000.00 (previously filed as
an exhibit to the Company's Annual Report on Form
10-KSB for the fiscal year ended December 31, 1994).
10.31 Third Amendment to Mortgage Note, dated January 31,
1995, by the Company and PNC Bank, Kentucky, Inc.,
formerly Citizens Fidelity Bank and Trust Company,
Louisville, Kentucky (previously filed as an exhibit
to the Company's Annual Report on Form 10-KSB for
the fiscal year ended December 31, 1994).
10.32 Fourth Amendment to Loan Agreement, dated as of
January 31, 1995, by the Company and PNC Bank,
Kentucky, Inc., formerly Citizens Fidelity Bank and
Trust Company, Louisville, Kentucky (previously
filed as an exhibit to the Company's Annual Report
on Form 10-KSB for the fiscal year ended December
31, 1994).
10.33 Amendment to Mortgage Deed and Security Agreement,
dated January 31, 1995, granted by the Company in
favor of PNC Bank, Kentucky, Inc., formerly Citizens
Fidelity Bank and Trust Company, Louisville,
Kentucky (previously filed as an exhibit to the
Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1994).
10.34 Purchase Money Mortgage and Promissory Note for
$1,310,000 from Bara Vineland, Inc., a Florida
corporation, in favor of Major Realty Corporation,
dated May 5, 1995 (previously filed as an exhibit to
the Company's Quarterly Report on Form 10-QSB for
the quarter ended June 30, 1995).
10.35 Collateral Assignment of Nonrecourse Purchase Money
Promissory Note and Mortgage for $1,310,000 from
Bara Vineland, Inc., a Florida corporation, in favor
of Major Realty Corporation, dated May 5, 1995, to
PNC Bank, Kentucky, Inc. (previously filed as an
exhibit to the Company's Quarterly Report on Form
10-QSB for the quarter ended June 30, 1995).
</TABLE>
-42-
<PAGE> 43
<TABLE>
<S> <C>
10.36 Fifth Amendment to Loan Agreement, dated as of
September 1, 1995, by the Company and PNC Bank,
Kentucky, Inc., formerly Citizens Fidelity Bank and
Trust Company, Louisville, Kentucky (previously
filed as an exhibit to the Company's Quarterly
Report on Form 10-QSB for the quarter ended
September 30, 1995).
10.37 Purchase Money Mortgage and Promissory Note for
$3,580,000 from Cracker Barrel Old Country Store,
Inc., a Kentucky corporation, in favor of Major
Realty Corporation, dated September 1, 1995
(previously filed as an exhibit to the Company's
Quarterly Report on Form 10-QSB for the quarter
ended September 30, 1995).
10.38 Restated and Consolidated Promissory Note, dated
October 18, 1995, made by the Company in favor of
Acceptance Insurance Companies Inc. in the original
principal sum of $5,064,144 (previously filed as an
exhibit to the Company's Quarterly Report on Form
10-QSB for the quarter ended September 30, 1995).
10.39 Sixth Amendment to Loan Agreement, dated as of
October 18, 1995, by the Company and Acceptance
Insurance Companies Inc. (previously filed as an
exhibit to the Company's Quarterly Report on Form
10-QSB for the quarter ended September 30, 1995).
10.40 Mortgage and Note Modification Agreement, dated as
of October 18, 1995, by the Company and Acceptance
Insurance Companies Inc. (previously filed as an
exhibit to the Company's Quarterly Report on Form
10-QSB for the quarter ended September 30, 1995).
10.41 Indemnity Agreement, dated as of April 1, 1994,
between the Company and Development Consultants of
Orlando, Inc. (previously filed as Exhibit 10.61 to
the Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1995).
10.42* Amendment No. 1 to Consultant Services Agreement,
dated as of April 1, 1995, between the Company and
Development Consultants of Orlando, Inc. (previously
filed as Exhibit 10.62 to the Company's Annual
Report on Form 10-KSB for the fiscal year ended
December 31, 1995).
10.43* Amendment No. 3 to Employee Lease Agreement, dated
April 1, 1995, between the Company, Heritage Network
Incorporated and David L. Treadwell (previously
filed as Exhibit 10.63 to the Company's Annual
Report on Form 10-KSB for the fiscal year ended
December 31, 1995).
</TABLE>
-43-
<PAGE> 44
<TABLE>
<S> <C>
10.44* Amendment No. 4 to Employee Lease Agreement, dated
as of April 1, 1996, between the Company, Heritage
Network Incorporated and David L. Treadwell
(previously filed as Exhibit 10.64 to the Company's
Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1995).
10.45* Amendment No. 2 to Consultant Services Agreement,
dated March 20, 1997, between the Company and
Development Consultants of Orlando, Inc.
(previously filed as Exhibit 10.45 to the Company's
Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1996).
10.46* Amendment No. 5 to Employee Lease Agreement, dated
as of March 20, 1997, between the Company, Heritage
Network Incorporated and David L. Treadwell.
10.47 Mortgage Modification Agreement, dated as of April
1, 1997, by the Company and Acceptance Insurance
Companies Inc.
10.48 Restated and Consolidated Promissory Note, dated as
of April 1, 1997, made by the Company in favor of
Acceptance Insurance Companies Inc. in the original
principal sum of $5,450,728.32.
10.49 Line of Credit Promissory Note, dated as of April 1,
1997, made by the Company in favor of Acceptance
Insurance Companies Inc. in the original principal
sum of $500,000.
22 Subsidiaries of the Company (previously filed
as Exhibit 22 to the Company's Annual Report on
Form 10-KSB for the fiscal year ended December 31,
1996).
27 Financial Data Schedule (for SEC use only)
(previously filed as Exhibit 27 to the Company's
Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1996).
</TABLE>
- ---------------------------------------------------
* Management contract or compensatory plan or arrangement.
-44-
<PAGE> 1
Exhibit 10.46
AMENDMENT NO. 5
TO
EMPLOYEE LEASE AGREEMENT
This Amendment No. 5 to Employee Lease Agreement, entered into as of
March 20, 1997, by and between MAJOR REALTY CORPORATION, a Delaware corporation
(hereinafter referred to as "Major"), HERITAGE NETWORK INCORPORATED, a Michigan
corporation (hereinafter referred to as "Heritage") and DAVID L. TREADWELL
("Treadwell").
W I T N E S S E T H;
WHEREAS, Major, Heritage and Treadwell are parties to that certain
Employee Lease Agreement dated as of March 26, 1992, as amended by Amendment
No. 1 dated as of April 1, 1994, Amendment No. 2 dated as of January 1, 1995,
Amendment No. 3 dated as of April 1, 1995, and Amendment No. 4 dated as of
April 1, 1996 (the "Agreement"); and
WHEREAS, the parties desire to modify Sections 4 and 5 of the
Agreement regarding the lease term and annual lease fee, respectively, and to
make other modifications to the Agreement;
NOW, THEREFORE, for and in consideration of the mutual covenants
hereinafter set forth, and as provided by Section 10.(d) of the Agreement,
Major, Heritage and Treadwell hereby mutually agree to amend the Agreement as
follows:
1. Section 4, "Term of Agreement," is hereby deleted and
replaced in its entirety by the following provisions:
This Agreement shall commence on April 1, 1996, and shall
continue through December 31, 1997. The term hereof automatically
shall be extended beyond December 31, 1997, for successive additional
periods of one (1) month. Either party may terminate this Agreement at
any time, with or without cause, by giving 30 days' advance written
notice to the other party. This Agreement shall automatically
terminate in the event that (i) Treadwell ceases to be employed by
Heritage; (ii) Treadwell ceases to serve as chief executive officer of
Major, either voluntarily or due to his illness, incapacity or death;
or (iii) Treadwell is removed as chief executive officer of Major by
the Board of Directors of Major.
2. Subsection (a) of Section 5, "Cash Compensation," is
hereby deleted and replaced in its entirety by the following
provisions:
(a) Cash Compensation. Major agrees to pay to Heritage
an annual fee of $25,000 for the services of Treadwell during
the term hereof, payable in monthly installments of $2,083.33
on the last day of each month, beginning on April 30, 1997.
<PAGE> 2
In addition, in the event that, prior to December 31, 1997, there is a
Change in Control of Major, Heritage shall be entitled to a fee in an
amount equal to one-half of one percent (0.5%) of the fair value of
the outstanding common stock of Major at the time of the Change in
Control, as determined by the consideration given in the Change of
Control transaction, up to a maximum fee of $75,000.00.
For purposes of this Note, a "Change in Control" shall be
deemed to have occurred:
(1) if any person (as used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended ("Exchange Act") in effect
on the date hereof) or any group of persons acting in concert, other
than Major Realty, or any subsidiary of Major Realty, or employee
benefit plan (as defined in Section 3(3) of ERISA) maintained by Major
Realty, or Mortgagee becomes the "beneficial owner" (as defined in
Rule 13d-3 of the Exchange Act, except that a person also shall be
deemed to be the beneficial owner of all securities which such person
may have a right to acquire, whether or not such right is presently
exercisable) directly or indirectly, of securities of Major Realty
representing 50% or more of the combined voting power of all classes
of Major Realty's then outstanding securities ordinarily having the
power to vote in the election of directors; or
(2) upon the sale, in a single transaction or a series of
related transactions, of all or substantially all of Major Realty's
assets as they exist on the date hereof and the distribution of the
net proceeds thereof to Major Realty's stockholders, after payment or
provision for payment of Major Realty's debts; or
(3) in the event that, prior to December 31, 1997, Major has
entered into a contract relating to one of the transactions set forth
in subsections (1) and (2); provided, however, that the fee shall be
payable only upon the happening and at the time of the closing of such
transaction.
3. Except as otherwise provided herein, the Agreement shall remain in
full force and effect. Upon execution of this Amendment No. 5 by all of the
parties hereto, and thereafter, any reference to the Agreement shall be deemed
to be a reference to the Agreement as amended hereby.
-2-
<PAGE> 3
IN WITNESS HEREOF, the parties hereto have executed this Amendment No.
5 to Employee Lease Agreement as of the date first set forth above.
MAJOR REALTY CORPORATION HERITAGE NETWORK INCORPORATED
By: /s/ David L. Treadwell By: /s/ David L. Treadwell
--------------------------- --------------------------------
David L. Treadwell, David L. Treadwell, President
Chairman of the Board
/s/ David L. Treadwell
---------------------------------
DAVID L. TREADWELL
-3-
<PAGE> 1
Exhibit 10.47
After recording, return to:
Donn E. Davis, Esquire
Crosby, Guenzel, Davis, Kessner & Kuester
134 South 13th Street, Suite 400
Lincoln, Nebraska 68508
PREPARED BY:
Gregory C. Yadley, Esquire
Shumaker, Loop & Kendrick, LLP
Barnett Plaza, Suite 2800
101 East Kennedy Boulevard
Tampa, Florida 33602
MORTGAGE MODIFICATION AGREEMENT
This Agreement is made as of this first day of April, 1997, by and
between ACCEPTANCE INSURANCE COMPANIES INC., a Delaware corporation, having an
office at 222 South 15th Street, Suite 600 North, Omaha, Nebraska 68102
(hereinafter referred to as "Mortgagee"), and MAJOR REALTY CORPORATION, a
Delaware corporation, having an office at 5728 Major Boulevard, Suite 306,
Orlando, Florida 32819-7996 (hereinafter referred to as "Mortgagor").
The parties recite, declare and agree:
(1) Mortgagee is the holder of that certain Mortgage Deed and Security
Agreement executed by Mortgagor in favor of PNC Bank, Kentucky, Inc., a
Kentucky corporation, formerly known as Citizens Fidelity Bank and Trust
Company ("PNC"), dated October 11, 1989, and recorded on October 12, 1989, in
Official Records Book 4123, Page 1379, as modified by that certain Amendment to
Mortgage Deed and Security Agreement dated August 29, 1991, and recorded on
August 30, 1991, in Official Records Book 4321, Page 983, as further modified
by that certain Notice of Limitation of Future Advances recorded on March 30,
1992, in Official Records Book 4391, Page 3509, as further modified by that
certain Modification of Mortgage Deed and Security Agreement dated October 5,
1992, and recorded on October 7, 1992, in Official Records Book 4471, Page
2237, as further modified by that certain Amendment to Mortgage Deed and
Security Agreement dated as of January 31, 1994, and recorded March 1, 1994, in
Official Records Book 4705, Page 657, as further modified by that certain
Amendment to Mortgage Deed and Security Agreement dated as of January 31, 1995,
and recorded on February 2, 1995, in Official Records Book 4851, Page 969, and
as further modified by that certain Notice of Limitation of Future
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Advances dated as of January 31, 1995, and recorded February 3, 1995, in
Official Records Book 4851, Page 3487, and as further modified by that certain
Mortgage and Note Modification Agreement executed by Mortgagor in favor of
Mortgagee dated as of October 18, 1995, and recorded on October __, 1995, in
Official Records Book ____, Page ____, and as further modified by those certain
releases executed and recorded by PNC Bank, Kentucky, Inc. (formerly known as
Citizens Fidelity Bank and Trust Company) and by Mortgagee, from time to time,
all of the Public Records of Orange County, Florida (hereinafter collectively
referred to as the "Mortgage"), which is a lien on the property described in
Exhibit "A."
(2) Mortgagee is the owner and holder of that certain Restated and
Consolidated Promissory Note executed by Mortgagor in favor of Mortgagee dated
as of October 18, 1995, in the original principal amount of $5,064,144.29, as
modified and replaced by that certain Restated and Consolidated Promissory
Note, in the original principal amount of $5,450,728.32, dated of even date
herewith (hereinafter referred to as the "Note").
(3) Mortgagee is the holder of a Uniform Commercial Code Financing
Statement Form UCC-1 filed on _______________________, 1993 at No.
93-0000113664 of the Records of the Florida Secretary of State, and assigned to
Mortgagee by a Uniform Commercial Code Full Assignment Financing Statement Form
UCC-3 filed on ______________________, 1995, at No. _______________________ of
the Records of the Florida Secretary of State (hereinafter collectively
referred to as the "State Financing Statement").
(4) (a) Mortgagee is the holder of a Uniform Commercial Code Financing
Statement Form UCC-1 recorded in Official Records Book 4123, Page 1454, amended
by a Uniform Commercial Code Continuation Financing Statement Form UCC-3
recorded in Official Records Book 4802, Page 789, and assigned to Mortgagee by
a Uniform Commercial Code Full Assignment Financing Statement Form UCC-3
recorded on __________________, 1995, in Official Records Book ____, Page ____,
all in and upon the Public Records of Orange County, Florida; and
(b) Mortgagee is the holder of a Uniform Commercial Code
Financing Statement Form UCC-1 recorded in Official Records Book 4567, Page
2802, and assigned to Mortgagee by a Uniform Commercial Code Full Assignment
Financing Statement Form UCC-3 recorded in Official Records Book ____, Page
____, all in and upon the Public Records of Orange County, Florida;
(the foregoing financing statements, together with the State Financing
Statement hereinafter collectively referred to as the "Financing Statement").
(5) Documentary stamps have been paid and canceled on the
Note.
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(6) There is presently due and owing the sum of Five Million Four
Hundred Fifty Thousand Seven Hundred Twenty Eight and 32/100 Dollars
($5,$5,450,728.32) upon the Note.
(7) Mortgagee presently holds the Note and the Mortgage and is legally
entitled to enforce collection of the indebtedness evidenced and secured
thereby in accordance with the terms therein.
NOW, THEREFORE, in consideration of the mutual promises herein
contained and other valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties agree as follows:
1. The foregoing recitals are made a part of this Mortgage
Modification Agreement as if they were more specifically set forth
below.
2. All of the terms and conditions of the Financing
Statement shall remain in full force and effect.
3. The Mortgage hereby is modified and amended as follows:
A. Provided that no default exists under the Mortgage or the
Note, Mortgagor shall be entitled to partial releases of all or any
portion of the Property from the lien of the Mortgage upon payment to
AIC of an amount equal to 75% of the net proceeds of the sale of such
Property, which payment shall be applied, first, against the
outstanding balance of that certain Line of Credit Promissory Note
dated as of April 1, 1997, if any, and, next, against the outstanding
balance of the Note.
B. All references in the Mortgage to the Note shall be
deemed to mean the Restated and Consolidated Promissory Note,
of even date herewith, in the principal amount of Five Million
Four Hundred Fifty Thousand Seven Hundred Twenty Eight and
32/100 Dollars ($5,450,728.32)
4. The indebtedness evidenced by the Note and Mortgage, as modified by
this Agreement, shall continue to be secured by the Mortgage, as modified.
Mortgagor and Mortgagee agree that to the extent, if any, that this Agreement
increases Mortgagor's obligation under the Note, said increases are future
advances as contemplated by the Note and Mortgage.
5. Nothing set forth in this Agreement shall be construed or deemed to
release or discharge any liens or rights or remedies that Mortgagee heretofore
had, may now have or may hereafter acquire against any property, Mortgagor or
any other person who is now or may hereafter become liable to Mortgagee upon
any debt affected by
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<PAGE> 4
this Agreement and Mortgagee hereby expressly reserves its rights against any
such party and property.
6. Mortgagor hereby acknowledges that (i) Mortgagor has no defense,
offset or counterclaim with respect to the payment of any sum owed to
Mortgagee, or with respect to any covenant in the Note or the Mortgage; (ii)
Mortgagee, on and as of the date hereof, has fully performed all obligations to
Mortgagor which it may have had or has on and as of the date hereof; (iii)
other than as expressly set forth herein, by entering into this Agreement,
Mortgagee does not waive any condition or obligation in the Note or the
Mortgage; and (iv) if Mortgagee shall waive or fail to enforce any of the
conditions or provisions of this Agreement, the Note or the Mortgage, such
waiver shall not be deemed to be a continuing waiver and shall never be
construed as such, and Mortgagee shall at any time, without further or other
notice, (regardless of any prior waiver by Mortgagee or default of Mortgagor or
delay of Mortgagee in exercising any right, privilege or option) have the right
to insist upon the enforcement of such conditions or provisions.
7. Mortgagor will do, execute and deliver, or will cause to be done,
executed and delivered all such further acts, documents (including
certificates, declarations, affidavits, reports and opinions) and things as the
Mortgagee reasonably may request for the purpose of giving effect to this
Agreement or for the purpose of establishing compliance with the
representations, warranties and conditions of this Agreement.
8. Any provision in this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
9. All of the terms and conditions of the Mortgage and the other loan
documents executed in connection therewith (the "Loan Documents"), other than
as herein modified, shall remain in full force and effect. In the event of any
conflict or inconsistency between (a) any of the terms of that certain Loan
Agreement dated as of October 11, 1989, between Mortgagor and PNC, as modified
by that certain Amendment to Loan Agreement dated as of November 30, 1990, as
further modified by that certain Second Amendment to Loan Agreement dated as of
August 29, 1991, as further modified by that certain Third Amendment to Loan
Agreement dated as of January 31, 1994, as further modified by that certain
Fourth Amendment to Loan Agreement dated as of January 31, 1995, as further
modified by that certain Fifth Amendment to Loan Agreement dated as of
September 1, 1995, and as further modified by that certain Sixth Amendment to
Loan Agreement dated October 18, 1995 (hereinafter collectively referred to as
the "Loan Agreement"), and (b) any provision of this
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Agreement or the Note, the terms of this Agreement and the Note shall prevail
and be controlling.
10. If any provision of this Agreement or any other Loan Document or
the application thereof shall, for any reason and to any extent, be invalid or
unenforceable, neither the remainder of the instrument in which such provision
is contained, nor the application of the provision to other persons, entities
or circumstances, nor any other instrument referred to hereinabove shall be
affected thereby, but instead shall be enforced to the maximum extent permitted
by law.
11. It is the intent of the parties that this instrument shall not
constitute a novation and shall in no way adversely affect the lien priority of
the Mortgage or the Loan Documents. In the event that this Agreement or any
part hereof shall be construed by a court of competent jurisdiction as
operating to effect the lien priority of the Mortgage or the Loan Documents or
any of them over the claims which would otherwise be subordinate thereto, then,
to the extent so ruled by such court and to the extent that third persons
acquiring an interest in such property as is encumbered by the Mortgage or the
respective Loan Documents between the time of execution of the Mortgage or the
Loan Documents and the execution hereof are prejudiced thereby, this Agreement
or such portion hereof as shall be so construed shall be void and of no force
and effect and this Agreement shall constitute, as to that portion, a
subordinate lien on the collateral described therein, incorporating by
reference the terms of the Mortgage or the Loan Documents and which Mortgage or
Loan Documents then shall be enforced pursuant to the terms therein contained,
independent of this Agreement; provided, however, that notwithstanding the
foregoing, the parties hereto, as between themselves, shall be bound by all
terms and conditions hereof until all indebtedness owing from Mortgagor to
Mortgagee shall have been paid in full.
12. No provision in this Agreement, the Note or the Mortgage shall be
amended, waived, modified, discharged or terminated except by an instrument in
writing and signed by the parties hereto.
13. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their heirs, personal representatives,
successors and assigns.
14. This Agreement and all documents delivered pursuant hereto shall
unless otherwise stated be governed by and construed in accordance with the
laws of the State of Florida.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
ACCEPTANCE INSURANCE COMPANIES INC.,
a Delaware corporation
By: /s/ Kenneth C. Coon
----------------------------------
Kenneth C. Coon, Chairman
and Chief Executive Officer
MAJOR REALTY CORPORATION,
a Delaware corporation
By: /s/ David L. Treadwell
----------------------------------
David L. Treadwell, Chairman
and Chief Executive Officer
STATE OF NEBRASKA
COUNTY OF ___________________
The foregoing instrument was acknowledged before me this ___ day of
April, 1997, by Kenneth C. Coon, the Chairman and Chief Executive Officer of
ACCEPTANCE INSURANCE COMPANIES INC., a Delaware corporation, on behalf of the
corporation. Such person is personally known to me or has produced
____________________________ as identification.
------------------------------
Notary Public
My Commission Expires:
STATE OF MICHIGAN
COUNTY OF ___________________
The foregoing instrument was acknowledged before me this ___ day of
April, 1997, by David L. Treadwell, the Chairman and Chief Executive Officer of
MAJOR REALTY CORPORATION, a Delaware corporation, on behalf of the corporation.
Such person is personally known to me or has produced
____________________________ as identification.
------------------------------
Notary Public
My Commission Expires:
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Exhibit 10.48
RESTATED AND CONSOLIDATED PROMISSORY NOTE
$5,450,728.32 As of April 1, 1997
Southfield, Michigan
FOR VALUE RECEIVED, the undersigned, Major Realty Corporation, a
Delaware corporation ("Major Realty" or "Major"), promises to pay to the order
of ACCEPTANCE INSURANCE COMPANIES INC., a Delaware corporation ("AIC") at 222
South 15th Street, Suite 600 North, Omaha, Nebraska 68102, on May 31, 1998, the
sum of FIVE MILLION, FOUR HUNDRED FIFTY THOUSAND, SEVEN HUNDRED TWENTY EIGHT
AND 32/100 DOLLARS ($5,450,728.32), together with interest on the unpaid
principal balance remaining from time to time, from the date hereof at the rate
set forth herein.
Interest on the unpaid principal balance of this Note shall accrue and
be calculated on a daily basis, based upon a three hundred sixty (360) day
year, and shall be paid upon the actual number of days upon which the principal
balance remains outstanding from time to time, at a rate per annum equal to 250
basis points in excess of the "prime rate" of Citibank, N.A., as announced from
time to time by such financial institution (with any change in such rate to be
effective on the date of any such change). Interest in the foregoing amount
shall be compounded quarterly in arrears on the first day of July, October,
January and April, commencing July 1, 1997.
Notwithstanding anything herein to the contrary, this Note immediately
shall be due and payable in the event of a Change in Control of Major Realty.
For purposes of this Note, a "Change in Control" shall be deemed to have
occurred:
(1) if any person (as used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended ("Exchange Act") in effect
on the date hereof) or any group of persons acting in concert, other
than Mortgagor, or any subsidiary of Mortgagor, or employee benefit
plan (as defined in Section 3(3) of ERISA) maintained by Major Realty,
or AIC becomes the
-----------------------------------------------------------------------
THIS NOTE IS A RESTATEMENT, CONSOLIDATION AND REPLACEMENT OF (1) THAT CERTAIN
RENEWAL AND CONSOLIDATION PROMISSORY NOTE DATED AS OF OCTOBER 19, 1995, IN THE
ORIGINAL PRINCIPAL AMOUNT OF $5,064,144.29, MADE BY MAJOR REALITY IN FAVOR OF
AIC, AND (2) THAT CERTAIN PROMISSORY NOTE DATED AS OF APRIL 1, 1997, IN THE
ORIGINAL PRINCIPAL AMOUNT OF $386,584.03, MADE BY MAJOR REALITY IN FAVOR OF
AIC. NO ADDITIONAL FUNDS HAVE BEEN ADVANCED HEREBY. FLORIDA DOCUMENT TAX WAS
PAID IN CONNECTION WITH THE EXECUTION OF THE ORIGINAL PROMISSORY NOTES REPLACED
BY THIS RESTATED AND CONSOLIDATED PROMISSORY NOTE.
<PAGE> 2
"beneficial owner" (as defined in Rule 13d-3 of the Exchange Act,
except that a person also shall be deemed to be the beneficial owner
of all securities which such person may have a right to acquire,
whether or not such right is presently exercisable) directly or
indirectly, of securities of Major Realty representing fifty percent
(50%) or more of the combined voting power of all classes of Major
Realty's then outstanding securities ordinarily having the power to
vote in the election of directors ("voting stock"); or
(2) upon the sale, in a single transaction or a series of
related transactions, of fifty percent (50%) or more of Major Realty's
assets as they exist on the date hereof and valued at book value on
the date hereof.
IT IS SPECIFICALLY AGREED THAT TIME IS OF THE ESSENCE OF THIS NOTE.
For purposes of this Note the term "Business Day" means a day that is not a
Saturday, a Sunday or a day on which institutional lenders are closed pursuant
to authorization or requirement of law.
This Note is secured by a Mortgage and Note Modification Agreement
dated of even date, executed by Major Realty in favor of AIC which modifies
that certain Mortgage and Security Agreement dated October 11, 1989, and
recorded on October 12, 1989, in Official Records Book 4123, Page 1379, as
modified by that certain Amendment to Mortgage Deed and Security Agreement
dated August 29, 1991, and recorded on August 30, 1991, in Official Records
Book 4321, Page 983, as further modified by that certain Notice of Limitation
of Future Advances recorded on March 30, 1992, in Official Records Book 4391,
Page 3509, as further modified by that certain Modification of Mortgage Deed
and Security Agreement dated October 5, 1992, and recorded on October 7, 1992,
in Official Records Book 4471, Page 2237, as further modified by that certain
Amendment to Mortgage Deed and Security Agreement dated as of January 31, 1994,
and recorded March 1, 1994, in Official Records Book 4705, Page 657, as further
modified by that certain Amendment to Mortgage Deed and Security Agreement
dated as of January 31, 1995, and recorded on February 2, 1995, in Official
Records Book 4851, Page 969, and as further modified by that certain Notice of
Limitation of Future Advances dated as of January 31, 1995, and recorded
February 3, 1995, in Official Records Book 4851, Page 3487, and as further
modified by that certain Mortgage and Note Modification Agreement executed by
Mortgagor in favor of Mortgagee dated as of October 18, 1995, and recorded on
October __, 1995, in Official Records Book ____, Page ____, and as further
modified by those certain releases executed and recorded by PNC Bank, Kentucky,
Inc. (formerly known as Citizens Fidelity Bank and Trust Company) and by
Mortgagee, from time to time, all of the Public Records of Orange County,
Florida (collectively, the "Mortgage").
This Note may be prepaid in whole or in part at any time without
penalty, upon five (5) days notice to AIC. All payments on this Note shall be
applied first to payment of interest and then to
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<PAGE> 3
payment of principal. If any payment is not made in full within fifteen (15)
Business Days after the same is due, the holder of this Note shall have the
option to declare the entire principal and accrued interest immediately due and
payable upon notice to maker. Failure to exercise said option shall not
constitute a waiver of the subsequent right to exercise same.
Subject always to Major Realty's right to prepay this Note in whole or
in part as set forth above, AIC shall have the right (but not the obligation),
upon twenty (20) days' notice to Major Realty, to exchange and convert, in one
or more installments, all or a portion of the outstanding indebtedness due
under this Note (principal plus accrued but unpaid interest) into shares of the
common stock, par value $0.01 per share, of Major Realty (the "Common Stock").
In the event that AIC elects to convert all or a portion of the indebtedness
into the Common Stock, the conversion price shall be equal to the average
closing price of the Common Stock as reported by NASDAQ during the thirty (30)
day period immediately preceding the date of AIC's notice to Major Realty of
its election. If only a portion of the indebtedness is converted into Common
Stock, the amount converted shall be credited first against accrued and unpaid
interest, and then against the principal due hereunder. Any portion of the
outstanding balance due under this Note that is not converted into Common stock
in accordance with this provision shall remain outstanding, accrue interest and
be paid in accordance with the terms of this Note. Upon conversion of all of
the outstanding indebtedness under this Note or otherwise upon satisfaction of
all obligations and indebtedness under this Note, AIC shall return the original
Note to Major Realty marked "Paid and Canceled" and shall execute, acknowledge
and deliver to Major Realty a satisfaction of mortgage, UCC-3 Termination
Statement, and such additional documents as may be required to indicate that
the Note has been paid in full and that the lien of the Mortgage has been
released of record.
In the event of default and acceleration of payment of the unpaid
principal balance of the indebtedness evidenced by this Note, the interest rate
on this Note shall be increased as of the date of default to the then current
rate of interest plus three percent (3%) or the highest rate allowed by law,
whichever is lower.
In no event shall the holder of this Note be entitled to receive, nor
shall the maker or any endorser or guarantor of its obligation be obligated to
pay, any amount as interest in excess of the highest lawful rate permitted by
applicable law. If the holder of this Note should receive an amount which would
exceed the highest lawful rate, the amount which would constitute excess
interest shall be returned forthwith.
All persons or entities now or at any time liable, whether
primarily or secondarily, for the payment of the indebtedness
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<PAGE> 4
hereby evidenced, for themselves, their heirs, legal representatives,
successors and assigns, respectively, hereby (1) expressly waive presentment,
demand for payment, notice of dishonor, protest, notice of nonpayment or
protest, and diligence in collection; (2) consent that the time of all payments
or any part thereof may be extended, rearranged, renewed or postponed by the
holder hereof and further consent that any real or personal property securing
this Note or any part of such security may be released, exchanged, added to or
substituted by the holder of this Note, without in any way modifying, altering,
releasing, affecting or limiting their respective liability or the lien of any
instrument securing this indebtedness; (3) agree that the holder of this Note
shall not be required first to institute any suit, or to exhaust any of its
remedies against the maker of this Note or any other person or party to become
liable hereunder, in order to force payment of this Note; (4) agree that the
maker of this Note may be released by the holder hereof from any or all
liability under this instrument, and such release shall not in any way affect
or modify the liabilities of the remaining parties hereto; and (5) agree that
if this Note becomes in default and is placed in the hands of any attorney for
collection, to pay all costs and expenses of collection of said monies by legal
action, foreclosure or otherwise, including, but not limited to, attorneys'
fees for negotiations, trial, appellate and bankruptcy proceedings, including
fees incurred for collection and proof of attorneys' fees, and other legal
services, shall be paid by the undersigned. Attorneys' fees shall also include
hourly charges for paralegals and other staff members operating under the
supervision of an attorney.
Any obligor to this Note shall be in default hereunder upon: (a)
nonpayment of any interest or principal hereunder within fifteen (15) Business
Days of the date such payment is due or (b) any default under the terms and
conditions of the Mortgage.
AIC, BY ITS ACCEPTANCE HEREOF, AND MAJOR REALTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS NOTE, THE MORTGAGE SECURING THIS NOTE, AND ANY OTHER
AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS
OF EITHER PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE ACCEPTANCE OF
THIS NOTE BY AIC.
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This Note may not be negotiated, assigned or otherwise transferred
without the prior written consent of Major Realty.
MAJOR REALTY CORPORATION,
a Delaware corporation
ATTEST:
By: /s/ David L. Treadwell
----------------------------------
David L. Treadwell, Chairman
and Chief Executive Officer
/s/ Gregory C. Yadley
- -------------------------------
Gregory C. Yadley, Secretary
[SEAL]
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<PAGE> 1
Exhibit 10.49
LINE OF CREDIT PROMISSORY NOTE
$500,000.00 As of April 1, 1997
Southfield, Michigan
FOR VALUE RECEIVED, the undersigned, Major Realty Corporation, a
Delaware corporation ("Major Realty"), promises to pay to the order of
ACCEPTANCE INSURANCE COMPANIES INC., a Delaware corporation ("AIC") at 222
South 15th Street, Suite 600 North, Omaha, Nebraska 68102, on May 31, 1998, the
sum of FIVE HUNDRED THOUSAND AND 00/100 DOLLARS ($500,000.00), or, if less, the
aggregate unpaid principal amount of all advances ("Advances"; and,
individually, an "Advance") made by AIC to Major Realty pursuant to this Note,
with interest thereon from the date funds are advanced hereunder at the rate
hereinafter provided. AIC's records as to the amount outstanding and the
interest payable hereunder shall be conclusive, absent manifest error.
Each Advance hereunder shall be in a minimum amount of $100,000, and
in such larger amounts that are multiples of $10,000. Notwithstanding that this
Note evidences borrowings in the principal amount of $500,000, the actual
indebtedness from time to time evidenced hereby shall be the sum of all
Advances and readvances made by AIC to Major Realty less any repayments made by
Major Realty through and including May 31, 1998. It is the intent and purpose
of this Note to provide a line of credit until May 31, 1998, which Major Realty
may draw against and which AIC will advance and readvance from time to time and
which Major Realty shall repay from time to time so that the principal amount
outstanding hereunder may fluctuate in accordance with such advances,
readvances, payments and repayments, but the aggregate principal amount
outstanding under this Note shall not at any time exceed the principal sum of
$500,000.
Interest on any and all funds advanced hereunder shall accrue and be
calculated on a daily basis, based upon a three hundred sixty (360) day year,
and shall be paid upon the actual number of days upon which the principal
balance remains outstanding from time to time, at a rate per annum equal to 250
basis points in excess of the "prime rate" of Citibank, N.A., as announced from
time to time by such financial institution (with any change in such rate to be
effective on the date of any such change). Interest in the foregoing amount
shall be compounded monthly in arrears, commencing on May 1, 1997.
Notwithstanding anything herein to the contrary, this Note immediately
shall be due and payable in the event of a Change in Control of Major Realty.
For purposes of this Note, a "Change in Control" shall be deemed to have
occurred:
<PAGE> 2
(1) if any person (as used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended ("Exchange Act") in effect
on the date hereof) or any group of persons acting in concert, other
than Major Realty, or any subsidiary of Major Realty, or employee
benefit plan (as defined in Section 3(3) of ERISA) maintained by Major
Realty, or AIC becomes the "beneficial owner" (as defined in Rule
13d-3 of the Exchange Act, except that a person also shall be deemed
to be the beneficial owner of all securities which such person may
have a right to acquire, whether or not such right is presently
exercisable) directly or indirectly, of securities of Major Realty
representing fifty percent (50%) or more of the combined voting power
of all classes of Major Realty's then outstanding securities
ordinarily having the power to vote in the election of directors; or
(2) upon the sale, in a single transaction or a series of
related transactions, of fifty percent (50%) or more of Major Realty's
assets as they exist on the date hereof and valued at book value on
the date hereof.
In addition to borrowings under this Note, and interest thereon, Maker
shall pay to AIC on December 31, 1997, and on the maturity date of this Note, a
fee equal to (x) the average unused portion of the line of credit made
available hereby during the period, times (y) one-half of one percent (0.5%).
IT IS SPECIFICALLY AGREED THAT TIME IS OF THE ESSENCE OF THIS NOTE.
For purposes of this Note the term "Business Day" means a day that is not a
Saturday, a Sunday or a day on which institutional lenders are closed pursuant
to authorization or requirement of law.
This Note may be prepaid in whole or in part at any time without
penalty, upon five (5) days notice to AIC. All payments on this Note shall be
applied first to payment of interest and then to payment of principal. If any
payment is not made in full within fifteen (15) Business Days after the same is
due, the holder of this Note shall have the option to declare the entire
principal and accrued interest immediately due and payable upon notice to
maker. Failure to exercise said option shall not constitute a waiver of the
subsequent right to exercise same.
In the event of default and acceleration of payment of the unpaid
principal balance of the indebtedness evidenced by this Note, the interest rate
on this Note shall be increased as of the date of default to the then current
rate of interest plus three percent (3%) or the highest rate allowed by law,
whichever is lower.
In no event shall the holder of this Note be entitled to receive, nor
shall the maker or any endorser or guarantor of its obligation be obligated to
pay, any amount as interest in excess of the highest lawful rate permitted by
applicable law. If the holder
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<PAGE> 3
of this Note should receive an amount which would exceed the highest lawful
rate, the amount which would constitute excess interest shall be returned
forthwith.
All persons or entities now or at any time liable, whether primarily
or secondarily, for the payment of the indebtedness hereby evidenced, for
themselves, their heirs, legal representatives, successors and assigns,
respectively, hereby (1) expressly waive presentment, demand for payment,
notice of dishonor, protest, notice of nonpayment or protest, and diligence in
collection; (2) consent that the time of all payments or any part thereof may
be extended, rearranged, renewed or postponed by the holder hereof and further
consent that any real or personal property securing this Note or any part of
such security may be released, exchanged, added to or substituted by the holder
of this Note, without in any way modifying, altering, releasing, affecting or
limiting their respective liability or the lien of any instrument securing this
indebtedness; (3) agree that the holder of this Note shall not be required
first to institute any suit, or to exhaust any of its remedies against the
maker of this Note or any other person or party to become liable hereunder, in
order to force payment of this Note; (4) agree that the maker of this Note may
be released by the holder hereof from any or all liability under this
instrument, and such release shall not in any way affect or modify the
liabilities of the remaining parties hereto; and (5) agree that if this Note
becomes in default and is placed in the hands of any attorney for collection,
to pay all costs and expenses of collection of said monies by legal action,
foreclosure or otherwise, including, but not limited to, attorneys' fees for
negotiations, trial, appellate and bankruptcy proceedings, including fees
incurred for collection and proof of attorneys' fees, and other legal services,
shall be paid by the undersigned. Attorneys' fees shall also include hourly
charges for paralegals and other staff members operating under the supervision
of an attorney.
Any obligor to this Note shall be in default hereunder upon nonpayment
of any interest or principal hereunder within fifteen (15) Business Days of the
date such payment is due.
AIC, BY ITS ACCEPTANCE HEREOF, AND MAJOR REALTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS NOTE AND ANY OTHER AGREEMENT CONTEMPLATED TO BE EXECUTED
IN CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS OF EITHER PARTY. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE ACCEPTANCE OF THIS NOTE BY AIC.
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<PAGE> 4
This Note may not be negotiated, assigned or otherwise transferred
without the prior written consent of Major Realty.
MAJOR REALTY CORPORATION,
a Delaware corporation
By: /s/ David L. Treadwell
-----------------------------------
David L. Treadwell, Chairman
ATTEST:
/s/ Gregory C. Yadley
- ------------------------------
Gregory C. Yadley, Secretary
[SEAL]
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