================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
Commission file number: 0-24740
RESURGENCE PROPERTIES INC.
(Exact name of registrant as specified in its charter)
MARYLAND 13-3757163
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
c/o Wexford Management LLC
411 West Putnam Avenue, Greenwich, CT 06830
(Address of principal executive offices)
(203) 862-7000
(Registrant's telephone number, including area code)
None
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such 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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:
As of May 1, 1997, there were 10,000,000 shares of Common Stock, $0.01 par
value, outstanding.
<PAGE>
RESURGENCE PROPERTIES INC.
FORM 10-Q
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 1997
and December 31, 1996
Unaudited Consolidated Statements of Operations for the
Three Months Ended March 31, 1997 and 1996
Unaudited Consolidated Statement of Shareholders'
Equity for the Three Months Ended March 31, 1997
Unaudited Consolidated Statements of Cash Flows for the
Three Months Ended March 31, 1997 and 1996
Notes to Unaudited Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE>
<TABLE>
<CAPTION>
RESURGENCE PROPERTIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share and per share amounts)
March 31, December 31,
1997 1996
--------- ---------
<S> <C> <C>
ASSETS
OPERATING REAL ESTATE PROPERTIES:
Land .................................................... $ 7,841 $ 7,841
Buildings and improvements .............................. 32,710 32,557
--------- ---------
40,551 40,398
Accumulated depreciation and amortization ............... (3,199) (2,893)
--------- ---------
Operating real estate properties, net .......... 37,352 37,505
MORTGAGE LOANS ON REAL ESTATE:
Non-earning ............................................. -- 3,228
Allowance for possible losses ........................... -- (3,198)
--------- ---------
Mortgage loans on real estate, net ...................... -- 30
CASH AND CASH EQUIVALENTS ..................................... 28,373 4,378
ACCOUNTS RECEIVABLE (net of allowance
for doubtful accounts of $111 and $244) ................. 1,079 1,054
ASSETS HELD FOR SALE .......................................... 26,872 49,387
OTHER ASSETS .................................................. 652 932
--------- ---------
TOTAL ASSETS .................................................. $ 94,328 $ 93,286
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Dividends payable ....................................... $ 25,000 $ --
Senior debt ............................................. -- 2,490
Mortgage notes payable .................................. 5,151 5,294
Real estate taxes ....................................... 583 482
Other liabilities ....................................... 702 1,320
--------- ---------
Total liabilities .............................. 31,436 9,586
<PAGE>
<CAPTION>
RESURGENCE PROPERTIES INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share and per share amounts)(continued)
March 31, December 31,
1997 1996
--------- ---------
<S> <C> <C>
COMMITMENTS AND CONTINGENCIES
REDEEMABLE PREFERRED STOCK .................................... 300 300
SHAREHOLDERS' EQUITY:
Common stock, par value $.01; 50,000,000 shares
authorized; 10,000,000 shares issued and outstanding 100 100
Paid-in-capital ......................................... 76,045 101,045
Accumulated deficit ..................................... (13,553) (17,745)
--------- ---------
Total shareholders' equity .................... 62,592 83,400
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .................... $ 94,328 $ 93,286
========= =========
See notes to unaudited consolidated financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
RESURGENCE PROPERTIES INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except share and per share amounts)
For the three months
ended March 31,
1997 1996
------- -------
<S> <C> <C>
REVENUES:
Minimum rents ........................................... $ 2,703 $ 3,989
Recoveries from tenants ................................. 578 846
Mortgage loan interest .................................. -- 445
Investment income ....................................... 124 95
Net gain from asset dispositions ........................ 3,296 975
Other ................................................... 80 86
------- -------
Total revenues ................................. 6,781 6,436
------- -------
EXPENSES:
Property operations ..................................... 1,396 1,904
Interest expense ........................................ 109 1,112
Non-income producing assets ............................. 64 382
Management fees ......................................... 448 512
General and administrative .............................. 167 186
Depreciation and amortization ........................... 398 777
Write-downs for impairment of value ..................... -- 1,709
------- -------
Total expenses ................................. 2,582 6,582
------- -------
INCOME (LOSS) BEFORE INCOME TAXES AND
EXTRAORDINARY GAIN ..................................... 4,199 (146)
Income Taxes ............................................ -- --
------- -------
INCOME (LOSS) BEFORE EXTRAORDINARY GAIN ....................... 4,199 (146)
Extraordinary Gain ...................................... -- 114
------- -------
NET INCOME (LOSS) ............................................. $ 4,199 $ (32)
======= =======
INCOME (LOSS) PER COMMON SHARE (10,000,000 shares outstanding):
INCOME (LOSS) BEFORE EXTRAORDINARY GAIN ....................... $ 0.42 $ (0.01)
EXTRAORDINARY GAIN ............................................ -- 0.01
------- -------
NET INCOME .................................................... $ 0.42 $ 0.00
======= =======
See notes to unaudited consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
RESURGENCE PROPERTIES INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY For the Three Months
Ended March 31, 1997 (Dollars in thousands, except share amounts)
COMMON STOCK PAID - IN ACCUMULATED
SHARES AMOUNT CAPITAL DEFICIT TOTAL
------ ------ ------- ------- -----
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1996 10,000,000 $ 100 $ 101,045 $ (17,745) $ 83,400
Common stock dividends ... -- -- (25,000) -- (25,000)
Preferred stock dividends -- -- -- (7) (7)
Net income ............... 4,199 4,199
Balance, March 31, 1997 .. 10,000,000 $ 100 $ 76,045 $ (13,553) $ 62,592
========== =========== ========== ========== ==========
See notes to unaudited consolidated financial statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
RESURGENCE PROPERTIES INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
For the Three Months
ended March 31,
----------------------
1997 1996
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) ................................................ $ 4,199 $ (32)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization:
Operating real estate properties ........................ 306 714
Other assets ............................................ 92 63
Net gain from asset dispositions ............................ (3,296) (975)
Extraordinary gain .......................................... -- (114)
Write-down for impairment of value .......................... -- 1,709
Straight-line adjustment for stepped rentals ................ 84 (13)
Net changes in operating assets and liabilities ............. (730) (33)
-------- --------
Net cash provided by operating activities ............... 655 1,319
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net proceeds from sales of assets ........................... 25,834 16,930
Net collections on mortgage loans ........................... 299 266
Improvements to operating properties ........................ (153) (634)
Acquisitions ................................................ -- (800)
-------- --------
Net cash provided by investing activities ............... 25,980 15,762
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Senior debt repayments, net ................................. (2,490) (10,200)
Mortgage loan repayments .................................... (143) (2,432)
Preferred stock dividends ................................... (7) (7)
Purchase of interest in senior debt ......................... -- (3,822)
-------- --------
Net cash used for financing activities .................. (2,640) (16,461)
-------- --------
NET INCREASE IN CASH AND CASH EQUIVALENTS ........................ 23,995 620
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ................. 4,378 8,818
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ....................... $ 28,373 $ 9,438
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest ...................................... $ 128 $ 1,141
======== ========
See notes to unaudited consolidated financial statements
</TABLE>
<PAGE>
RESURGENCE PROPERTIES INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
A. ORGANIZATION AND ACCOUNTING POLICIES
Resurgence Properties Inc. and its subsidiaries (the "Company") are
engaged in diversified real estate activities. The Company was
incorporated on March 25, 1994 and began its operations on April 7,
1994, when the Company succeeded to most of the assets of Liberte
Investors ("Liberte") upon consummation of Liberte's bankruptcy plan
("The Plan of Reorganization"). The Company is managed and administered
by Wexford Management LLC ("Wexford").
The accompanying financial statements, notes and discussions should be
read in conjunction with the consolidated financial statements, related
notes and discussions contained in the Company's annual report on Form
10-K for the year ended December 31, 1996.
The interim financial information contained herein is unaudited;
however, in the opinion of management, all adjustments (consisting only
of normal recurring adjustments, other than write-downs for impairment
of value) necessary for the fair presentation of such financial
information have been included.
The December 31, 1996 year-end balance sheet data presented herein was
derived from audited financial statements, but does not include all
disclosures required by generally accepted accounting principles.
The results for the interim period are not necessarily indicative of
the results to be expected for the year ending December 31, 1997.
The Company has approximately $15.3 million of net operating loss
carry-forwards ("NOL") available for U.S. income tax purposes expiring
in years through 2011. The Company has provided a valuation allowance
to offset the full amount of the net deferred tax assets arising from
book and tax differences including those from the NOL's.
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 128, "Earnings per Share" in February, 1997.
This pronouncement establishes standards for computing and presenting
earnings per share, and is effective for the Company's 1997 year-end
financial statements. The Company's management has determined that this
standard will have no impact on the Company's computation or
presentation of net income per common share.
B. MORTGAGE LOANS ON REAL ESTATE
In February 1997, the Company entered into a settlement agreement on
the Summerhill Del Ray mortgage loan whereby the Company received $300
in cash and a $100 note due in June 1997 in complete satisfaction of
the mortgage loan. The settlement resulted in a net gain of
approximately $268.
<PAGE>
C. ASSETS HELD FOR SALE
For the quarter ended March 31, 1997, the Company sold Abco Plaza,
Bayshore Club Apartments, Riverbend Shopping Center, 1025 Vermont
Avenue and various land assets for net proceeds of approximately
$6,539, $3,843, $620, $12,495 and $2,337, respectively. These sales
resulted in a net gain of $3,028, after deducting closing costs.
D. DIVIDENDS PAYABLE
On March 18, 1997, the Board of Directors declared a special dividend
of $2.50 per Common Share payable on April 14, 1997 to shareholders of
record as of March 28, 1997.
E. SENIOR DEBT
In January 1997, the Company prepaid the outstanding balance of its
Senior Debt, including accrued interest, obtained lien releases on all
of its collateralized assets and terminated the Secured Credit
Agreement. In February 1996, the Company purchased a participating
interest in the Senior Debt in the principal amount of $3,936 for
$3,822 and recognized an extraordinary gain of $114.
F. SUBSEQUENT EVENTS
On April 28, 1997, the Board of Directors approved a plan of complete
liquidation and dissolution of the Company (the "Plan") for submission
to shareholders for their approval at the annual shareholders meeting
which is expected to be held during the third quarter of 1997. The
effective date of the Plan will be upon the affirmative vote of a
majority of the Company's shareholders. Among the key features of the
Plan are: (1) the cessation of all business activities, other than
those in furtherance of the Plan; (2) the sale or disposition of all of
the Company's assets; (3) the satisfaction of all outstanding
liabilities; (4) the payment of liquidating distributions to
shareholders in complete redemption of the Common Stock; and (5) the
authorization of the filing of Articles of Dissolution.
The Board of Directors and Wexford have agreed to an extension of the
management agreement with Wexford, which was due to expire on May 4,
1997, under a reduced fee arrangement through December 31, 1997 (the
"Extended Management Agreement") and to replace all of the Management
Options issued to Wexford with a compensation package designed to
provide the same economic benefits as the Management Options. The
replacement of the Management Options is contingent upon shareholder
approval of the Plan. The Extended Management Agreement provides for a
fee payable to Wexford of $1,152,125 for the year ending December 31,
1997 subject to adjustment based on actual expenses. A copy of
Amendment No. 2 to the management agreement is filed as an exhibit
hereto.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following section includes a discussion and analysis of the results of the
Company for the quarter ended March 31, 1997.
Plan of Liquidation
On April 28, 1997, the Board of Directors approved a plan of complete
liquidation and dissolution of the Company (the "Plan") for submission to its
shareholders for their approval at the annual shareholders meeting expected to
be held during the third quarter of 1997. The effective date of the Plan will be
upon the affirmative vote of a majority of the Company's shareholders. Among the
key features of the Plan are: (1) the cessation of all business activities,
other than those in furtherance of the Plan; (2) the sale or disposition of all
of the Company's assets; (3) the satisfaction of all outstanding liabilities;
(4) the payment of liquidating distributions to shareholders in complete
redemption of the Common Stock; and (5) the authorization of the filing of
Articles of Dissolution.
Results of Operations - General
The Company has disposed of a significant portion of its portfolio
acquired under the plan of reorganization of Liberte Investors. The future
performance of the Company's portfolio of assets will be subject to prevailing
economic conditions and to financial, business and other factors, including the
future performance of the real estate market, the availability of financing to
prospective asset purchasers, the timing of the liquidation of the Company and
to other factors beyond the Company's control. For these reasons, the results of
the Company's operations from period to period may not be comparable.
Three Months Ended March 31, 1997 Compared To Three Months Ended March 31, 1996
For the three months ended March 31, 1997, revenues related to the
operations of the Company's operating properties decreased to $3,281,000 from
$4,835,000 for the same period in the prior year, primarily as a result of the
disposition of eight operating properties (four during the period from April
1996 through December 1996 and four in the first quarter of 1997). For the same
period, property operating expenses correspondingly decreased to $1,396,000 from
$1,904,000 in the prior year, primarily as a result of the disposition of the
eight properties. Depreciation and amortization for the three months ended March
31, 1997 and 1996 amounted to $398,000 and $777,000, respectively. The decrease
in depreciation and amortization is a result of the disposition of the eight
operating properties as mentioned above.
Mortgage loan interest decreased to zero for the three months ended
March 31, 1997 from $445,000 for the same period in the prior year, primarily as
a result of the sale and/or repayment of all of the mortgage loans.
Investment income increased to $124,000 for the three months ended
March 31, 1997 from $95,000 for the same period in the prior year, primarily due
to a higher amount of cash available for investment for the three months ended
March 31, 1997.
Interest expense decreased to $109,000 for the three months ended March
31, 1997 from $1,112,000 for the same period in the prior year, primarily due to
the repayment of the entire outstanding balance of the Senior Debt in January
1997.
<PAGE>
Expenses related to non-income producing assets decreased to $64,000
for the three months ended March 31, 1997 from $382,000 for the same period in
the prior year, primarily as a result of asset sales.
General and administrative expenses, which primarily consist of
insurance, consulting, legal and accounting fees, decreased to $167,000 for the
three months ended March 31, 1997 from $186,000 for the same period in the prior
year, primarily due to a decrease in insurance and legal fees.
In connection with the Company's purchases of interests in the Senior
Debt during the three months ended March 31, 1996, the Company recorded an
extraordinary gain of $114,000.
Capital Expenditures
Capital expenditures for the three months ended March 31, 1997 were
$153,000, of which approximately $119,000 related to tenant improvements. The
balance of the expenditures was for normal property improvements. The source of
funds for such capital expenditures was from cash generated from rents and
proceeds from the sale of assets.
Liquidity and Capital Resources
For the three months ended March 31, 1997, cash and cash equivalents
increased by $23,995,000. $655,000 was provided by operating activities,
$25,980,000 was provided by investing activities and $2,640,000 was used for
financing activities. Cash provided by investing activities consisted primarily
of net proceeds from asset sales of $25,834,000 and net collections on mortgage
loans of $299,000, partially offset by improvements to the operating properties
of $153,000. Cash used for financing activities consisted primarily of net
Senior Debt repayments of $2,490,000 and mortgage repayments of $143,000.
In January 1997, the Company repaid the entire outstanding balance of
its Senior Debt, including accrued interest, obtained lien releases on all of
its collateralized assets and terminated the Secured Credit Agreement.
During the quarter ended March 31, 1997, the Company sold Abco Plaza,
Bayshore Club Apartments, Riverbend Shopping Center, 1025 Vermont Avenue and
various land assets for net proceeds of approximately $6,539,000, $3,843,000,
$620,000, $12,495,000 and $2,337,000, respectively. These sales resulted in a
net gain of $3,028,000, after deducting closing costs.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K:
(a) Not applicable.
Exhibit Number Description
-------------- -----------
10.1 Amendment Number 2, dated May 4, 1997, to the
Management Agreement, dated as of May 4, 1994,
and as amended by Amendment Number 1, dated
March 8, 1995, between Resurgence Properties
Inc., Resurgence Properties Texas, L.P. and
Wexford Management LLC.
(b) None. The Company was not required to file any reports
on Form 8-K during the quarter ended March 31, 1997.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Resurgence Properties Inc.
Date: May 14, 1997 By: /s/ Joseph M. Jacobs
--------------------
Joseph M. Jacobs
Chief Executive Officer and President
(Duly Authorized Officer)
Date: May 14, 1997 By: /s/ Jay L. Maymudes
-------------------
Jay L. Maymudes
Chief Financial Officer, Vice President
and Secretary (Principal Financial and
Accounting Officer and Duly Authorized
Officer)
Exhibit 10.1
RESURGENCE PROPERTIES INC.
411 West Putnam Avenue
Greenwich, Connecticut 06830
May 4, 1997
Wexford Management LLC
411 West Putnam Avenue
Greenwich, Connecticut 06830
Re: Amendment No. 2 to the Management Agreement
Dear Sirs:
Reference is hereby made to the Management Agreement (the
"Management Agreement"), dated as of May 4, 1994, and as amended by Amendment
No. 1, dated March 8, 1995, between Resurgence Properties Inc. ("RPI"), a
Maryland corporation, Resurgence Properties Texas, L.P., a Delaware limited
partnership (RPI and Resurgence Properties Texas, L.P. are hereinafter
collectively referred to as the "Company"), and Wexford Management LLC as
successor to Concurrency Management Corp. ("Wexford" or the "Manager").
Capitalized terms used but not defined herein shall have the meanings specified
in the Management Agreement.
The parties desire to further amend the Management Agreement
pursuant to this Amendment No. 2. Accordingly, the Company and Wexford hereby
agree as follows:
1. Section 4.01 of the Management Agreement is hereby amended and
restated in its entirety as follows:
4.01 Management Fee. From January 1, 1997 through the earlier
of the termination of this Agreement and December 31, 1997, the Management Fee
payable to the Manager shall be (i) $570,500 for the period from January 1, 1997
through May 4, 1997, (ii) $246,000 for the period from May 5, 1997 through June
30, 1997, (iii) $223,750 for the period from July 1, 1997 through September 30,
1997, and (iv) $111,875 for the period from October 1, 1997 through December 31,
1997, for a total of $1,152,125, subject to upward or downward adjustment, upon
expiration or termination of this Agreement, to Actual Expenses (as defined
below). The Management Fee shall be payable monthly in arrears on the first
(1st) day of each calendar month; provided, however, that in respect of any
partial month the Management Fee payable for such month shall be pro rated based
on the actual number of days in such month prior to the date of expiration or
termination.
Within 90 days after the expiration or termination of this
Agreement, Wexford or a majority of the non-Wexford affiliated members of the
Board of Directors of the Company may request that the outside accountants for
the Company review the calculation of Actual Expenses, which review shall be
final and binding. Any adjustment payment shall be made within 15 days of the
delivery of such certification to Wexford and the Board of Directors of the
Company. "Actual Expenses" shall be equal to the sum of (i) the cost to Wexford
(exclusive of any salary or health or other benefits payable to or on account of
Jacobs and Holtz) for the period January 1, 1997 through the earlier of the
termination of this Agreement and December 31, 1997 in providing services to the
Company under this Agreement, plus (ii) the sum of the annual salaries for
Jacobs and Holtz (regardless of whether such salaries have been or will be paid
<PAGE>
by the Manager and so long as Holtz remains employed by the Manager) in the
amounts of (a) $125,000 and $41,667, respectively, for the period from January
1, 1997 through May 4, 1997, (b) $62,500 and $20,833, respectively, for the
period from May 5, 1997 through June 30, 1997, (c) $46,875 and $15,625,
respectively, for the period from July 1, 1997 through September 30, 1997, and
(d) $23,438 and $7,813, respectively, for the period from October 1, 1997
through December 31, 1997 (aggregating $257,813 and $85,938 for Jacobs and
Holtz, respectively, for 1997), plus health and other benefits payable in
connection therewith.
2. Section 4.02 of the Management Agreement is amended by adding the
following:
The aggregate of (i) the Management Options that have not been
granted, (ii) the Management Options that have been granted but have been
forfeited and (iii) the Management Options that have been granted but with
respect to which a Replacement Agreement, in the form of Exhibit A or Exhibit B,
hereto has been or will be executed and delivered to RPI by a holder thereof
(the "Replaced Options") are hereby canceled and replaced by an obligation of
RPI to pay a cash fee (the "Management Distributions") in an amount determined
by multiplying a fraction, the numerator of which is the Replaced Options and
the denominator of which is 1,111,111 by ten (10%) percent of all distributions
made to the shareholders of RPI (inclusive of the $2.50 per share dividend paid
to shareholders of RPI on April 14, 1997 and any other dividends paid to
shareholders of RPI prior to the effective date of this Section 2) in excess of
$8.50 per share (the "Threshold Distribution"). The Management Distributions
shall be fully vested.
Jacobs may grant rights ("Rights") in the Management
Distributions in the same manner and with the same terms as provided for the
Management Options. Jacobs shall be entitled to receive the balance of the
Management Distributions with respect to which Rights have not been granted and
with respect to which granted Rights have been terminated.
The Management Distributions shall be paid to each holder of
Rights concurrently with the payment of the related distributions to the
shareholders of RPI once the Threshold Distribution has been made.
3. Section 4.08 of the Management Agreement is hereby deleted and
removed in its entirety from the Management Agreement.
4. Section 5.01 of the Management Agreement is hereby amended and
restated in its entirety as follows:
5.01 Primary Term and Renewals. This Agreement shall become
effective on the date the Company executes this Agreement and shall continue in
full force and effect until the earlier of (i) December 31, 1997, (ii) the
effective date of the Articles of Dissolution filed by RPI with the Maryland
State Department of Assessments and Taxation, (iii) such later date as extended
in writing by the Manager and the Company (it being agreed that neither party
shall have any obligation whatsoever to extend this Agreement), unless, in each
such case, otherwise terminated as provided in Sections 5.02 or 5.03 below.
5. Section 5.02 of the Management Agreement is hereby amended and
restated in its entirety as follows:
<PAGE>
Section 5.02 The Company's Right of Termination.
Notwithstanding anything to the contrary contained in this Agreement, the
Company may terminate this Agreement at any time, with or without cause, and
without any penalty, by either (i) the affirmative vote of the majority of the
members of the Board of Directors of RPI, or (ii) the affirmative vote or
written consent of a majority of the stockholders of RPI. Such termination shall
not affect the right of the Manager to receive any compensation due hereunder
through such date of termination, or the obligations of the Company under
Sections 3.01, 3.03 and 4.02.
6. All other terms and conditions of the Management Agreement shall
remain in full force and effect as provided therein.
7. The effective date of Section 1 and Section 3 of this Amendment No.
2 to the Management Agreement shall be the date on which it has been executed
and delivered by each of the Manager and the Company. The effective date of the
remainder of this Amendment No. 2 to the Management Agreement shall be the date
on which the Plan of Complete Liquidation and Dissolution of the Company shall
have been approved by the affirmative vote of the holders of a majority of the
outstanding shares of the Company's common stock, par value $.01 per share,
entitled to vote thereon.
Very truly yours,
RESURGENCE PROPERTIES INC.
By:_______________________
Name:
Title:
RESURGENCE PROPERTIES TEXAS, L.P.
By: RESURGENCE TX GP, INC.,
General Partner
By:________________________
Name:
Title:
AGREED AND ACCEPTED:
WEXFORD MANAGEMENT LLC
By:_______________________________
Name:
Title:
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS OF THE MARCH 31, 1997 FORM 10Q OF RESURGENCE PROPERTIES INC. AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 28,373,000
<SECURITIES> 0
<RECEIVABLES> 1,190,000
<ALLOWANCES> (111,000)
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 94,328,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
300,000
<COMMON> 100,000
<OTHER-SE> 62,192,000
<TOTAL-LIABILITY-AND-EQUITY> 94,328,000
<SALES> 0
<TOTAL-REVENUES> 6,781,000
<CGS> 0
<TOTAL-COSTS> 1,396,000
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</TABLE>
