<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended March 31, 1998 Commission File No. 0-1748
MAJOR REALTY CORPORATION
------------------------
(Exact name of small business issuer as specified in its charter)
DELAWARE 59-0898509
- ---------------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization
5728 MAJOR BOULEVARD, ORLANDO, FLORIDA 32819
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: 407/351-1111
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act of 1934 during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. YES X NO
--- ---
At May 7, 1998, 6,893,378 shares of common stock of the issuer were outstanding.
Transitional Small Business Disclosure Format (Check One): Yes No X
--- ---
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
Page No.
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<S> <C>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Consolidated Balance Sheets at March 31, 1998 and
December 31, 1997................................................................. 1
Consolidated Statements of Income for the
Three Months Ended March 31, 1998 and 1997........................................ 2
Consolidated Statements of Cash Flows for the
Three Months Ended March 31, 1998 and 1997........................................ 3
Notes to Consolidated Financial Statements........................................... 4
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations ................................................. 12
PART II - OTHER INFORMATION
Item 1. - Legal Proceedings.................................................................... 15
Item 2. - Changes in Securities................................................................ 15
Item 3. - Defaults upon Senior Securities...................................................... 15
Item 4. - Submission of Matters to a Vote
of Security Holders............................................................. 15
Item 5. - Other Information..................................................................... 15
Item 6. - Exhibits and Reports on Form 8-K ..................................................... 15
SIGNATURES ............................................................................................. 23
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
MAJOR REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31, 1998 and December 31, 1997
(in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
----------- ------------
(unaudited) (audited)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 718 $ 242
Mortgage note receivable -- 2,750
Land held for sale or development 4,253 4,231
Land under lease 171 171
Other assets 28 1,188
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$ 5,170 $ 8,582
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable - trade $ 74 $ 13
Accrued expenses 338 705
Convertible mortgage note payable due to related party 2,513 5,416
Deferred income taxes 26 26
------- -------
2,951 6,160
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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 (5,672) (5,469)
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Total stockholders' equity 2,219 2,422
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TOTAL $ 5,170 $ 8,582
======= =======
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE> 4
MAJOR REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the three months ended March 31, 1998 and 1997
(unaudited)
(in thousands; except per share data)
<TABLE>
<CAPTION>
1998 1997
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<S> <C> <C>
Revenues:
Sales of real estate $ -- $ --
Lease income 33 33
Interest and other income 42 75
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Total revenues 75 108
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Costs and Expenses:
Cost of real estate sold:
Improved and unimproved land -- --
Commissions & other expenses -- --
Selling, general and administrative 187 179
Interest cost 91 129
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Total costs and expenses 278 308
------- -------
Loss before provision for income taxes (203) (200)
Provision for income taxes -- --
------- -------
Net loss $ (203) $ (200)
======= =======
Net loss per common share $ (.03) $ (.03)
======= =======
Average number of
common and common
equivalent shares outstanding 6,893 6,893
======= =======
</TABLE>
See Notes to Consolidated Financial Statements.
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<PAGE> 5
MAJOR REALTY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31, 1998 and 1997
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
1998 1997
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<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (203) $(200)
------- -----
Adjustments to reconcile net income (loss) to net
cash used for operating activities:
Depreciation and amortization 4 1
Decrease (Increase) in other assets
and other receivables 1,156 (65)
Increase (decrease) in accounts payable
and accrued liabilities (306) 190
------- -----
Total adjustments 854 126
------- -----
Net cash used for operating activities 651 (74)
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Cash flows from investing activities:
Additions to land held for sale or development (23) (1)
Payments on mortgage notes receivable 2,750 --
------- -----
Net cash (used for) provided by
investing activities 2,727 (1)
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Cash flows from financing activities:
Principal payments of mortgage
notes payable (2,902) --
------- -----
Net cash used for
financing activities (2,902) --
------- -----
Net decrease in cash and cash equivalents 476 (75)
Cash and cash equivalents at beginning
of period 242 320
------- -----
Cash and cash equivalents at end of period $ 718 $ 245
======= =====
</TABLE>
See Note 3 for non-cash activities.
See Notes to Consolidated Financial Statements
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<PAGE> 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1 - Consolidated Financial Statements
The interim consolidated financial statements for Major Realty
Corporation and its subsidiaries (the "Company") are unaudited and should be
read in conjunction with the financial statements and notes thereto contained in
the Company's Form 10-KSB Annual Report for the year ended December 31, 1997.
In the opinion of management, all adjustments (which include only
normal recurring adjustments except as otherwise disclosed) necessary to present
fairly the financial position, results of operations and cash flows for the
interim periods reported herein have been made. Interim financial statements are
not necessarily indicative of the results which may be reported for the year
ended December 31, 1998.
Note 2 - Per Share Data
Per share data is computed by dividing net income (loss) by the
weighted average number of shares of common stock and common stock equivalents
outstanding during each period. Common stock equivalents include shares issuable
on the exercise of stock options net of shares assumed to have been purchased
from the proceeds. For the three months ended March 31, 1998 and 1997, common
stock equivalents have been excluded from the computation since their effect
would be antidilutive.
Note 3 - Land Held for Sale or Development
During January, 1998, the Company signed a contract for the sale of 3
acres of commercial land located on the west side of Major Boulevard for
$1,200,000. The buyer made a $10,000 deposit and had a 90-day no risk inspection
period in which to look at the property to determine if it wished to proceed
with the purchase. During May the Buyer made an additional $50,000 deposit. The
full $60,000 deposit became non-refundable at that time. Closing is scheduled
for September, 1998.
During February, 1998, the Company signed a contract for the sale of
2.63 acres of commercial land located on the north east corner of Republic Drive
and Carrier Drive located in Orlando, Florida for $750,000.
The buyer made a $10,000 deposit and had a
(Continued)
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<PAGE> 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
3. Land Held for Sale or Development continued:
60-day risk free inspection period in which to look at the property to determine
if it wished to proceed with the contract. During April, 1998, the Buyer made an
additional $40,000 deposit. The full $50,000 deposit became non-refundable at
that time. The closing was scheduled for July, 1998. In May the Buyer requested
a 60 day extension of the closing until September, 1998. The extension was
granted with the agreement that the $50,000 deposit will be released to the
Company in July, 1998.
During February, 1998, the Company signed a contract for the sale of 55
acres gross (16.42 acres net) of multi-family land in the southwestern sector of
Orlando, Florida for $2,040,000. The buyer has a 90-day risk free inspection
period in which to look at the property to determine if it wants to go forward
with the purchase. If the Buyer proceeds with the contract an additional $90,000
deposit will be required. Closing is estimated for August, 1998.
During February, 1998, the Company signed a contract for the sale of
1.74 acres of commercial land located on the west side of Major Boulevard in
Orlando, Florida for $665,000. The buyer made a $10,000 deposit and had a 60-day
no risk inspection period in which to determine if it wished to go forward with
the purchase. In April, 1998, the Buyer made an additional $40,000 deposit. The
full $50,000 deposit became non-refundable at that time. The closing was
scheduled for July, 1998. In May, 1998, the Buyer requested a 30-day extension
to the closing with the agreement to release the $50,000 deposit to the Company
in July, 1998. The agreement also includes the option of a second 30-day
extension which will require an additional $10,000 non refundable deposit to be
released immediately to the Company.
During March 1998, the Company signed a contract for the sale of 6.36
acres of commercial land located at the northeast intersection of Interstate 4
and Kirkman Road in Orlando, Florida for $4,770,000. The buyer has made a
$50,000 deposit and has a 60-day no risk inspection period in which to determine
if it wants to go forward with the purchase. If the buyer proceeds with the
contract an additional $50,000 deposit will be required and the closing would
occur in June, 1998.
(Continued)
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<PAGE> 8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
3. Land Held for Sale or Development continued:
During March, 1998, the Company signed a contract for the sale of 42.03
acres gross (15 acres net) of multi-family land located on Conroy Road in
Orlando, Florida for $1,500,000. The buyer has made a $10,000 deposit and has a
90-day no risk inspection period in which to determine if it wants to go forward
with the purchase. If the buyer proceeds with the contract an additional $90,000
deposit will be required and the closing would occur in September, 1998.
During May 1997, the Company signed a contract for $850,000, for 10.09
acres of multi-family land located on Cason Cove Drive in Orlando. The sale
closed in August, 1997. The sale price was paid in cash at closing.
Approximately $595,000 of the proceeds was used to repay company debt and the
remainder will be used for company operations.
During October, 1997, the Company signed a contract for $700,000, for
1.75 acres of commercial land located on the west side of Major Boulevard in
Orlando. The buyer made a $10,000 deposit and had a 60-day risk free inspection
period to determine if it wished to proceed with the contract. In December,
1997, the Buyer notified the Company of its wish to terminate the contract. The
deposit was refunded to the Buyer.
During November 1997, the Company signed a contract for $700,000, for 2
acres of commercial land located on the east side of Major Boulevard in Orlando.
The buyer made a $10,000 deposit and had a 45-day risk free inspection period to
look at the property to determine if it wished to proceed with the contract.
During December, 1998, the Buyer made an additional $50,000 deposit. The full
$60,000 deposit became non-refundable at that time. In April 1998, the buyer
requested an extension of the closing until May, 1998, which was granted and
required a $2,500 extension fee which was not credited toward the sale price.
The sale closed in May, 1998, with the sale price paid in cash at the closing.
Approximately $483,000 of the proceeds was used to repay company debt and the
remainder will be used for company operations.
(Continued)
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<PAGE> 9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
--------------
(unaudited)
Note 3 - Land Held for Sale or Development (continued)
During November 1997, the Company signed a contract for $800,000, for 3
acres of commercial land located on the east side of Major Boulevard in Orlando.
The buyer made a $10,000 deposit and had a 45-day risk free inspection period to
look at the property to determine if it wished to proceed with the contract.
During December, 1998, the Buyer made an additional $20,000 deposit. The full
$30,000 deposit became non-refundable at that time. Closing was scheduled for
April, 1998. In April, 1998, the buyer requested a 60-day extension and placed a
$16,000 fee which is not deemed earnest money and will not be credited toward
the purchase price. Closing is scheduled for June 1998.
During November 1997, the Company signed a contract for $700,000, for 2
acres of commercial land located on the east side of Major Boulevard in Orlando.
The buyer made a $10,000 deposit and had a 60-day risk free inspection period to
look at the property to determine if it wished to proceed with the contract.
During January, 1998, the Buyer made an additional $50,000 deposit and the
inspection period was extended until February 5, 1998. On February 5, 1998 the
contract was amended to reduce the sales price to $675,000. The closing was
scheduled for April, 1998. The buyer requested an extension of the closing which
required a $1,000 fee. The sale closed in May, 1998. The sale price was paid in
cash at closing. Approximately $462,000 of the proceeds was used to repay
company debt and the remainder will be used for company operations.
Note 4 - Related Party Transactions
During February 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. 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 due in connection with the Company's indebtedness to PNC Bank,
Kentucky, Inc. (the "PNC Bank Note"), pay real
(Continued)
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<PAGE> 10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
-------------
(unaudited)
Note 4 - Related Party Transactions (Continued)
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, and an assignment of the 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).
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 was insufficient to make such payments,
pending the receipt of funds from the sale of additional properties or other
sources.
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 31, 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. Subject to the Company's right to
repay the note, the outstanding principal amount of the note (or any portion
(Continued)
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<PAGE> 11
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
-------------
(unaudited)
Note 4 - Related Party Transactions (Continued)
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. The accrued interest on the note at March 31, 1998 was
$58,000.
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 31, 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 was required to pay a fee to Acceptance on
December 31, 1997, and will be required to pay an additional fee 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 fee payable with respect to the unused portion of
the line on December 31, 1997, was $900 and was paid in January 1998. 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.
On April 23, 1997, the Company borrowed $300,000 on the line of credit
to pay 1996 Real Estate taxes due in the amount of $261,000 and to provide
working capital. On August 25, 1997, the Company repaid Acceptance the $300,000
on the line of credit and $12,000 in accrued interest on the advance and the
unused portion of the line of credit. At March 31, 1998, the interest accrued on
the line of credit was $500.
Acceptance has agreed to extend the terms of the original promissory
note and the line of credit promissory note until May 31, 1999, in the event the
Merger Transaction with PBD Holdings, Inc. is not consummated (See Note 5).
Acceptance beneficially owns 33.1% of the common stock of the Company.
All of the Company's directors also 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
(Continued)
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<PAGE> 12
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
-------------
(unaudited)
Note 4 - Related Party Transactions (Continued)
interests in Acceptance, such persons may have a material indirect interest in
the transactions described above between the Company and Acceptance.
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, Prechter Holdings, Inc.
(formerly, Heritage Network, Incorporated) ("Prechter Holdings"). 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 Board of Directors determine to
be necessary. The Agreement, as currently amended, provides for an annual fee of
$25,000, payable monthly. The Company also is to pay a success fee of .5% with
respect to transactions which are consummated during the term of the Agreement
or closed within a specified period of time after termination of the Agreement,
up to a maximum success fee of $75,000. The last amendment to the Agreement,
executed in March 1997, extended the term of the Agreement until December 31,
1997, with automatic successive one month extensions. Either party may
terminate the Agreement at any time, with or without cause, upon 30 days'
notice. The Agreement will automatically terminate in the event that Mr.
Treadwell ceases to be employed by Prechter Holdings or he ceases to serve as
Chief Executive Officer of the Company, either voluntarily, due to his illness,
incapacity or death, or his removal as Chief Executive Officer by the Board of
Directors of the Company. Prechter Holdings was owed $30,000 under the Agreement
for 1997. At December 31, 1997, the Company owed Prechter Holdings approximately
$19,000 for unpaid fees and interest previously deferred under the Agreement. In
February, 1998, the Company paid its obligation to Prechter Holdings in the
amount of $19,123, including $373 accrued interest.
As part of the original Agreement, Mr. Treadwell was granted the right
to purchase from the Company 100,000 shares of common stock of the Company, par
value $0.01 per share, for $2.7679 per share. These options, all of which are
vested, terminate upon Mr. Treadwell's resignation as Chief Executive Officer of
the Company or upon termination of the Agreement.
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<PAGE> 13
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
-------------
(unaudited)
Note 5 - Other
The 8% mortgage note receivable due in April 1998, reflected on the
balance sheets as of December 31, 1997 was satisfied in January 1998, in the
amount of $3,927,941, including $1,177,941 of interest, which was discounted.
Proceeds were used to retire Company debt in the amount of $3,142,353, pay real
estate taxes in the amount of $229,725, with the balance to be used for Company
operations.
On March 5, 1998, the Company entered into an agreement and plan of
merger with PBD Holdings, L.P. ("Holdings"), an affiliate of Pembroke Companies,
Inc. and Blackacre Capital Group, L.P., pursuant to which a subsidiary of
Holdings will be merged into the Company, and all of the outstanding shares of
common stock of the Company ("Common Stock") will be converted into the right to
receive $1.25 per share in cash (the "Merger Transaction"). The Merger
Transaction has been approved by stockholders holding a majority of the
outstanding shares of Common Stock. The Company mailed an Information Statement
on April 23, 1998, to all stockholders of record March 2, 1998 describing their
rights with respect to the Merger Transaction. If the Merger Agreement is
terminated by the Company due to the material breach thereof by Holdings,
Holdings is required promptly to pay to the Company as liquidated damages a fee
in cash in an amount equal to $500,000, plus all out-of-pocket expenses incurred
in connection with the negotiation of the Merger by the Company, including,
without limitation, reasonable fees and expenses of legal counsel, accountants
and other professionals in connection with the negotiation and execution of the
Agreement in Principle, the Merger Agreement and all of the transactions
contemplated therein. Holdings has deposited $500,000 with an escrow agent to be
used as part of the consideration to be paid to the Company's stockholders in
the Merger Transaction or as a portion of such fee. If the Merger Agreement is
terminated by Holdings due to the material breach thereof by the Company, the
Company is required promptly to pay to Holdings as liquidated damages a fee in
cash in an amount equal to $500,000, plus all out-of-pocket expenses incurred in
connection with the negotiation of the Merger by Holdings, including, without
limitation, reasonable fees and expenses of legal counsel, accountants and other
professionals in connection with the negotiation and execution of the Agreement
in Principle, the Merger Agreement and all of the transactions contemplated
therein. Consummation of the Merger Transaction is subject to numerous
conditions.
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<PAGE> 14
Item 2. - Management's Discussion and Analysis of
Financial Condition and Results of Operations
RESULTS OF OPERATIONS
NET INCOME
The Company recorded a net loss of $203,000, or ($.03) per share for
the three months ended March 31, 1998, as compared to a net loss of $200,000, or
($.03) per share for the same three month period in 1997. The 1998 and 1997 net
losses are due to the fact the Company had no land sales during either period.
REVENUES
Substantially all of the Company's revenues for the three months ended
March 31, 1998, were generated by a ground lease, a mortgage note receivable and
interest on a mortgage note receivable.
COSTS AND EXPENSES
For the three months ended March 31, 1998, selling, general and
administrative costs were $187,000, as compared to $179,000 during the
comparable period of the prior year.
Interest costs for the three months ended March 31, 1998 and March 31,
1997 were $91,000 and $129,000, respectively. The decrease is due to a
substantial decrease of the Company's mortgage note payable.
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 the lack of
availability to the Company of construction and long-term financing, 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.
On 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
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<PAGE> 15
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%, and
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, or 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 31, 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.
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 31, 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 fee payable with
respect to the unused portion of the line on December 31, 1997, was $900 and
was paid in January 1998. The Company paid Acceptance a fee of
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<PAGE> 16
$15,000 in connection with the restructuring of the $5.1 million mortgage loan
and the establishment of the line of credit.
Acceptance has agreed to extend the terms of the original promissory
note and the line of credit promissory note until May 31, 1999, in the event the
Merger Transaction with PBD Holdings, described below, is not consummated.
Under an amendment to the employee lease agreement with Prechter
Holdings, Inc. (formerly, Heritage Network, Incorporated) ("Prechter Holdings"),
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 Prechter Holdings 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 employee lease
agreement is terminable by either party on thirty days notice. See "Note 4 -
Related Party Transactions" to Notes to Consolidated Financial Statements.
On March 5, 1998, the Company entered into an agreement and plan of
merger with PBD Holdings, L.P., an affiliate of Pembroke Companies, Inc. and
Blackacre Capital Group, L.P., pursuant to which a subsidiary of PBD Holdings
will be merged into the Company, and all of the outstanding shares of common
stock of the Company ("Common Stock") will be converted into the right to
receive $1.25 per share in cash (the "Merger Transaction"). The Merger
Transaction has been approved by stockholders holding a majority of the
outstanding shares of Common Stock. The Company mailed an Information Statement
on April 23, 1998, to all stockholders of record March 2, 1998 describing their
rights with respect to the Merger Transaction. See "Note 5 - Other" to Notes to
the Consolidated Financial Statements. One of the conditions to the obligation
of PBD Holdings to close the Merger Transaction is that holders of not more than
15% of the outstanding shares of Common Stock seek dissenters' rights under
Delaware law with respect to their shares. As of the close of business on May
13, 1998, which was the last day on which stockholders could give notice of
their intent to seek dissenters' rights, the holders of approximately 1,867,000
shares of Common Stock, or approximately 27.1% of the outstanding shares, had
delivered notices to the Company of their intent to seek dissenters' rights with
respect to their shares. The Termination Date for the Merger Transaction is May
19, 1998, at which time either the Company or PBD Holdings may terminate the
Merger Transaction if PBD Holdings has not waived this closing condition and
consummated the Merger Transaction. There can be no assurance that PBD Holdings
will waive such condition and seek to consummate the Merger Transaction.
In the event that the Merger Transaction is not consummated, the
Company's future operations will be 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 May 31, 1999. 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.
- 14 -
<PAGE> 17
PART II - OTHER INFORMATION
ITEM 1. - LEGAL PROCEEDINGS
None
ITEM 2. - CHANGE IN SECURITIES
None
ITEM 3. - DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. - OTHER INFORMATION
None
ITEM 6. - EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Exhibit Description
------ -------------------
<S> <C>
2.1 Agreement and Plan of Merger among the Company, PBD Holdings,
L.P. and Pembroke Acquisition, Inc., dated as of March 4, 1998
(previously filed as Exhibit 2.1 to the Company's Annual
Report on Form 10-KSB for the fiscal year ended
December 31, 1997).
2.2 Amendment No. 1 dated as of March 26, 1998, to Agreement and
Plan of Merger among the Company, PBD Holdings, L.P. and
Pembroke Acquisition, Inc., dated as of March 4, 1998
(previously filed as Exhibit 2.2 to the Company's Annual Report
on Form 10-KSB for the fiscal year ended December 31, 1997).
2.3 Amendment No. 2 dated as of May 14, 1998, to Agreement and
Plan of Merger among the Company, PBD Holdings, L.P. and
Pembroke Acquisition, Inc., dated as of March 4, 1998.
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).
</TABLE>
- 15 -
<PAGE> 18
<TABLE>
<S> <C>
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).
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).
</TABLE>
- 16 -
<PAGE> 19
<TABLE>
<S> <C>
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).
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).
</TABLE>
- 17 -
<PAGE> 20
<TABLE>
<S> <C>
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, 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 Exhibit 10.43 to the Company's
Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1994).
</TABLE>
- 18 -
<PAGE> 21
<TABLE>
<S> <C>
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 Exhibit 10.44 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 Exhibit 10.46 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 Exhibit 10.47 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 Exhibit 10.48 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
Exhibit 10.49 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 Exhibit 10.50 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 Exhibit 10.51 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 Exhibit 10.52 to the Company's Annual
Report on Form 10-KSB for the fiscal year ended December 31,
1994).
</TABLE>
- 19 -
<PAGE> 22
<TABLE>
<S> <C>
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 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).
</TABLE>
- 20 -
<PAGE> 23
<TABLE>
<S> <C>
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 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 March 20,
1997, between the Company, Heritage Network Incorporated and
David L. Treadwell (previously filed as Exhibit 10.46 to the
Company's Amendment No. 1 to Annual Report on Form 10-KSB/A
for the fiscal year ended December 31, 1996).
10.47 Mortgage Modification Agreement, dated as of April 1, 1997, by
the Company and Acceptance Insurance Companies Inc. (previously
filed as Exhibit 10.47 to the Company's Amendment No. 1 to Annual
Report on Form 10-KSB/A for the fiscal year ended December 31, 1996).
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
(previously filed as Exhibit 10.48 to the Company's Amendment
No. 1 to Annual Report on Form 10-KSB/A for the fiscal year
ended December 31, 1996).
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 (previously
filed as Exhibit 10.49 to the Company's Amendment No. 1 to
Annual Report on Form 10-KSB/A for the fiscal year ended
December 31, 1996).
10.50* Amendment No. 3 to Consultant Services Agreement, dated
January 1, 1998, between the Company and Development
Consultants of Orlando, Inc. (previously filed as Exhibit 10.50
to the Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1997).
27 Financial Data Schedule for Quarter ended March 31, 1998 (for
SEC purposes only).
</TABLE>
- 21 -
<PAGE> 24
---------------------------------------------------
* Management contract or compensatory plan or arrangement.
(B) REPORTS ON FORM 8-K
None
- 22 -
<PAGE> 25
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned thereunto duly
authorized.
MAJOR REALTY CORPORATION
(Registrant)
May 14, 1998 By: /s/ David L. Treadwell
- -------------------- ----------------------------
Date David L. Treadwell, Chairman
(Chief Executive Officer and
Principal Financial Officer)
- 23 -
<PAGE> 26
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Exhibit Description Numbered Page
------ ------------------- -------------
<S> <C> <C>
2.1 Agreement and Plan of Merger among the Company, PBD Holdings,
L.P. and Pembroke Acquisition, Inc., dated as of March 4, 1998
(previously filed as Exhibit 2.1 to the Company's Annual Report
on Form 10-KSB for the fiscal year ended December 31, 1997).
2.2 Amendment No. 1 dated as of March 26, 1998, to Agreement and
Plan of Merger among the Company, PBD Holdings, L.P. and
Pembroke Acquisition, Inc., dated as of March 4, 1998
(previously filed as Exhibit 2.2 to the Company's Annual Report
on Form 10-KSB for the fiscal year ended December 31, 1997).
2.3 Amendment No. 2 dated as of May 14, 1998, to Agreement and Plan
of Merger among the Company, PBD Holdings, L.P. and Pembroke
Acquisition, Inc., dated as of March 4, 1998.
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).
</TABLE>
- 24 -
<PAGE> 27
<TABLE>
<S> <C>
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).
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).
</TABLE>
- 25 -
<PAGE> 28
<TABLE>
<S> <C>
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).
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).
</TABLE>
- 26 -
<PAGE> 29
<TABLE>
<S> <C>
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).
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 Exhibit 10.43 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 Exhibit 10.44 to the Company's Annual
Report on Form 10-KSB for the fiscal year ended December 31,
1994).
</TABLE>
- 27 -
<PAGE> 30
<TABLE>
<S> <C>
10.26* Amendment No. 2 to Employee Lease Agreement, as of January 1,
1995, between the Company and David L. Treadwell (previously
filed as Exhibit 10.46 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 Exhibit 10.47 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 Exhibit 10.48 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
Exhibit 10.49 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 Exhibit 10.50 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 Exhibit 10.51 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 Exhibit 10.52 to the Company's Annual
Report on Form 10-KSB for the fiscal year ended December 31,
1994).
</TABLE>
- 28 -
<PAGE> 31
<TABLE>
<S> <C>
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 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).
</TABLE>
- 29 -
<PAGE> 32
<TABLE>
<S> <C>
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 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).
</TABLE>
- 30 -
<PAGE> 33
<TABLE>
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10.46* Amendment No. 5 to Employee Lease Agreement, dated March 20,
1997, between the Company, Heritage Network Incorporated and
David L. Treadwell (previously filed as Exhibit 10.46 to the
Company's Amendment No. 1 to Annual Report on Form 10-KSB/A
for the fiscal year ended December 31, 1996).
10.47 Mortgage Modification Agreement, dated as of April 1, 1997, by
the Company and Acceptance Insurance Companies, Inc.
(previously filed as Exhibit 10.47 to the Company's
Amendment No. 1 to Annual Report on Form 10-KSB/A
for the fiscal year ended December 31, 1996).
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
(previously filed as Exhibit 10.48 to the Company's
Amendment No. 1 to Annual Report on Form 10-KSB/A for the
fiscal year ended December 31, 1996).
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 (previously
filed as Exhibit 10.49 to the Company's Amendment No. 1
to Annual Report on Form 10-KSB/A for the fiscal year
ended December 31, 1996).
10.50* Amendment No. 3 to Consultant Services Agreement, dated
January 1, 1998, between the Company and Development
Consultants of Orlando, Inc. (previously filed as Exhibit 10.50
to the Company's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1997).
27 Financial Data Schedule (for SEC use only).
</TABLE>
---------------------------------------------------
* MANAGEMENT CONTRACT OR COMPENSATORY PLAN OR ARRANGEMENT.
- 31 -
<PAGE> 1
EXHIBIT 2.3
AMENDMENT NO. 2
TO
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT NO. 2 to that certain AGREEMENT AND PLAN OF MERGER
dated as of March 4, 1998, as amended by Amendment No. 1 to Agreement and Plan
of Merger dated as of March 26, 1998 (collectively, the "Merger Agreement"),
among Major Realty Corporation, a Delaware corporation (the "Company"), PBD
Holdings, L.P., a Delaware limited partnership ("BUYER"), and Pembroke
Acquisition, Inc., a Delaware corporation and a wholly owned subsidiary of
Buyer ("MERGER SUBSIDIARY") is made and entered into as of this 14th day of
May, 1998, by and among the Company, Buyer an Merger Subsidiary.
WHEREAS, the Company, Buyer and the Merger Subsidiary have entered
into the Merger Agreement and now mutually desire to amend certain provisions
thereof in order to accomplish the purposes thereof.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, the parties hereto agree as follows:
1. Section 9.01 of the Merger Agreement is hereby
amended by changing the Termination Date of May 15, 1998, set forth in
subparagraph (b)(ii) thereof, to May 19, 1998.
2. Except as otherwise provided herein, the Merger
Agreement shall remain in full force and effect.
3. This Amendment No. 2 may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
4. This Amendment No. 2 shall become effective upon
execution by all of the parties hereto, and thereafter any reference to the
Merger Agreement shall be deemed to be a reference to the Merger Agreement as
amended hereby.
[Remainder of page intentionally left blank.
Next Page is signature page.]
<PAGE> 2
IN WITNESS WHEREOF, each of the corporate parties hereto have caused
this Amendment to the Merger Agreement to be executed by their respective duly
authorized officer or officers as of the day and year first above written.
"BUYER"
PBD HOLDINGS, L.P.
By: PBD Holdings, Inc., General Partner
By: /s/ Lawrence J. Cohen
--------------------------------------
Lawrence J. Cohen, President
"MERGER SUBSIDIARY"
PEMBROKE ACQUISITION, INC.
By: /s/ Lawrence J. Cohen
--------------------------------------
Lawrence J. Cohen, President
MAJOR REALTY CORPORATION
By: /s/ David L. Treadwell
--------------------------------------
David L. Treadwell, Chairman
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 718
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 718
<PP&E> 4,316
<DEPRECIATION> 61
<TOTAL-ASSETS> 5,170
<CURRENT-LIABILITIES> 412
<BONDS> 2,513
0
0
<COMMON> 69
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 5,170
<SALES> 0
<TOTAL-REVENUES> 75
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 187
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 91
<INCOME-PRETAX> (203)
<INCOME-TAX> 0
<INCOME-CONTINUING> (203)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (203)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
