SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[ x ] Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the quarterly period ended March 31, 1998
[ ] TRANSITION REPORT UNDER SECTION 10 OR 15(d) OF THE EXCHANGE
ACT OF 1934
Commission File Number 0-28168
JJFN Services, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 11-3289981
(State or other jurisdiction (I.R.S. Identification Number)
of incorporation or organization)
2500 Military Trail North, Suite 260, Boca Raton, Florida 33431-6306
(Address of principal executive offices)
(561)995-0043
(Registrant's Telephone Number, Including Area Code)
Check whether the registrant(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
report(s), and (2) has been subject to such filing requirements for the past
90 days.
Yes __X No
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the last practicable date.
Outstanding Equity Securities at April 9, 1998
Class of Securities Outstanding Shares
Common Stock, $.001 par value, 17,012,005 shares
Preferred Stock, $.01 par value, 400,000 shares
JJFN SERVICES, INC.
INDEX
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements Page Number
Condensed Consolidated Balance Sheets as of 3
March 31, 1998 (unaudited) and June 30, 1997.
Condensed Consolidated Statements of Operations 4
for the three months and nine months ended March 31, 1998,
and the three months and nine months ended March 31, 1997.
(unaudited)
Condensed Consolidated Statements of Cash Flows 5
for the nine months ended March 31, 1998,
and the nine months ended March 31, 1997
(unaudited)
Notes to Condensed Consolidated Financial Statements 6-8
(unaudited)
Item 2. Management's Discussion and Analysis of Financial 9-14
Condition and Results of Operations.
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
No reports on Form 8-K were filed for the three months ended
March 31, 1998.
Signatures 15
Index of Exhibits 16
JJFN SERVICES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31 June 30
ASSETS 1998 1997
----------- -----------
Revenue producing assets:
Model homes on lease $34,758,659 $21,409,249
Less: accumulated depreciation (810,229) (484,176)
----------- -----------
Model homes on lease, net 33,948,430 20,925,073
Real estate under contract for development & sale - 8,591,956
----------- -----------
Total revenue producing assets 33,948,430 29,517,029
----------- -----------
Other assets:
Cash 764,206 831,266
Net assets realizable on divestiture 1,100,000 1,312,500
Deferred charges and other assets 709,025 769,500
----------- -----------
Total other assets 2,573,231 2,913,266
----------- -----------
Total assets $36,521,661 $32,430,295
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgages payable $27,089,873 $22,632,465
Notes payable 1,025,907 1,025,907
Accounts payable & accrued expenses 347,268 467,214
Unearned rental revenue 347,586 215,343
----------- -----------
Total liabilities 28,810,634 24,340,929
----------- -----------
Stockholders' equity:
Convertible preferred stock, $.01 par value
25,000,000 shares authorized
400,000 shares issued and outstanding 4,000 4,000
Common stock, $.001 par value
50,000,000 shares authorized
17,012,005/16,811,990 shares issued and outstanding 17,012 16,812
Additional paid-in capital 8,346,552 8,296,049
Accumulated deficit (656,537) (227,495)
----------- -----------
Total stockholders' equity 7,711,027 8,089,366
----------- -----------
Total liabilities and stockholders' equity $36,521,661 $32,430,295
=========== ===========
See accompanying notes.
(3)
JJFN SERVICES, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months and Nine Months Ended March 31, 1998 and
Three Months and Nine Months Ended March 31, 1997
(Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
1998 1997 1998 1997
--------- ---------- ---------- ----------
Revenues:
Lease revenue $ 883,490 $ 610,492 $ 2,407,195 $1,399,377
Real Estate option fees - 257,759 8,771 558,477
Model Home sales 2,536,886 633,207 6,848,257 1,916,376
Land sales - - 8,591,956 -
Interest Income 29,037 60,137 99,604 72,713
--------- ---------- ---------- ----------
Total Revenues 3,449,413 1,561,595 17,955,783 3,946,943
--------- ---------- ---------- ----------
Costs and expenses:
Interest expense 529,282 493,970 1,422,643 1,094,959
Cost of model homes sold 2,459,922 608,709 6,622,781 1,865,186
Land sales - - 8,591,956 -
Corporate 297,778 353,142 877,473 775,731
--------- ---------- ---------- ----------
Total Operating Expenses 3,286,982 1,455,821 17,514,853 3,735,876
--------- ---------- ---------- ----------
Income from continuing operations 162,431 105,774 440,930 211,067
before depreciation & amortization
Depreciation and amortization 315,284 203,375 869,972 484,196
--------- ---------- ---------- ----------
Loss from continuing operations (152,853) (97,601) (429,042) (273,129)
Loss from divested operations - - - ( 54,444)
Gain on disposal of divested - - - 284,876
operations
--------- ---------- ---------- ----------
Net loss (152,853) (97,601) (429,042) (42,697)
--------- ---------- ---------- ----------
Preferred stock distribution - - 5,000
--------- ---------- ---------- ----------
Loss applicable
common shareholders $(152,853) $ (97,601) $(429,042) $ (47,697)
========== ========== ========== ==========
Earnings (Loss) per share data:
Continuing operations $ (.01) $ (.01) $ (.03) $ (.02)
Divested operations .00 .00 .00 .01
--------- ---------- ---------- ----------
Net loss $ (.01) (.01) $ (.03) $ (.01)
========== ========== ========== ==========
Weighted average number 17,012,005 16,659,990 16,878,423 16,514,370
of shares
(4)
JJFN SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine Months Ended March 31, 1998 and March 31, 1997
(Unaudited)
Nine Months Nine Months
Ended Ended
3/31/98 3/31/97
----------- ----------
Net loss $(429,042) $ (42,697)
----------- ----------
Adjustments to reconcile net loss to net cash
provided by operating activities:
Amortization expense 332,150 171,254
Depreciation expense 537,822 312,941
Gain on sale of model homes (225,476) (51,190)
Gain on disposal of divested operations - (284,876)
Changes in assets and liabilities:
Decrease in miscellaneous assets 30,308 98,436
Increase(decrease) in accounts payable/accrued exp (69,243) 270,506
Increase in unearned rental revenue 132,243 148,211
(Increase)decrease in net operating assets of
divested segment - (195,556)
----------- ----------
Total adjustments 737,804 469,726
----------- ----------
Net cash provided by operating activities 308,762 427,029
----------- ----------
Cash flows from investing activities
Purchase of model homes (6,935,357) (4,056,630)
Proceeds from sale of model homes 6,777,273 1,850,970
Proceeds from sale of land 1,716,956 -
Proceeds from sale of marketable securities - 239,250
Proceeds from note receivable of divested segment 212,500 -
Capital expenditures (606) (23,643)
----------- ----------
Net cash provided by (used in)
investing activities 1,770,766 (1,990,053)
----------- ----------
Cash flows from financing activities:
Proceeds from mortgages payable 3,929,929 1,450,288
Principal payments on mortgages payable (5,819,530) (1,679,493)
Deferred financing costs (256,987) (63,857)
Deferred offering costs - (53,829)
Proceeds from stockholder loans - 1,455,000
Proceeds from issuance of common stock - 700
Preferred distribution - (15,000)
----------- -----------
Net cash (used in) provided by
financing activities (2,146,588) 1,093,809
----------- -----------
Net decrease in cash (67,060) (469,215)
Cash at beginning of period 831,266 770,723
----------- -----------
Cash at end of period $764,206 $ 301,508
=========== ===========
Supplemental disclosure of cash flow information:
Interest paid - $1,417,368 $973,944
See accompanying notes.
(5)
JJFN SERVICES, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1998
(unaudited)
Note 1. Unaudited Interim Financial Statements
The accompanying unaudited financial statements have been prepared in
accordance with the instructions for Form 10-Q and do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments, consisting only of normal recurring adjustments considered
necessary for a fair presentation, have been included. Operating results for
any quarter are not necessarily indicative of the results for any other
quarter or for the full year.
These statements should be read in conjunction with the financial statements
of JJFN Services, Inc. and notes thereto included in the Company's Annual
Report on Form 10-K for the fiscal year ended June 30, 1997.
Note 2. Bankruptcy-Remote Special Purpose Subsidiary
During 1997, the Company formed Model Funding I, LLC ("MFI"), a wholly-owned
bankruptcy remote special purpose subsidiary. MFI was formed for the
exclusive purpose of acquiring model homes and leasing them back to a single
major real estate developer and homebuilder until such time as they are sold
to third parties.
On March 31, 1998, MFI acquired twenty-nine (29) model homes from the
homebuilder for an aggregate purchase price of $7,091,507. Simultaneously,
MFI closed on a $10,000,000 revolving credit facility with a New England
financial institution (a financial services subsidiary of a major U.S.
industrial corporation) and utilized $5.8 million of the facility to finance
the acquisition. The balance necessary to effect the purchase ($1,200,000) was
provided by the Company on a subordinated basis as required by the loan
agreements. The interest on the loan is based on 2 year treasuries plus a
premium fixed at closing.
MFI and the financial institution have mutually agreed to increase the credit
facility up to $20 million for this homebuilder as additional model homes are
acquired. The loan agreements impose severe restrictions applicable only to
MFI. These restrictions are not applicable to the Company. The restrictive
covenants impose limits on the following: (a) employees, (b) operating costs,
(c) asset acquisitions, (c) a single lessee, (d) minimum dollar value of lease
payments, (e) incurring additional debt without prior approval, and
(f) transaction duration.
Due to the limited nature and short life of MFI's business and the restrictive
covenants of the loan documents, MFI has elected not to depreciate the model
homes acquired.
(6)
Note 3. Commitments & Contingencies
Model home purchase commitments
The Company has committed to acquire model homes at an approximate cost of
$3-5 million from an existing client. It is anticipated that this transaction
will close prior to the end of May 1998. The closing is subject to completion
of due diligence, receipt of satisfactory appraisals, formal documentation,
and successful completion of financing, for which it has received an oral
commitment.
Model home furnishings
The Company has committed to purchase and lease back approximately $3 million in
model home furnishings to an existing client homebuilder. The closing is
subject to completion of due diligence, formal documentation, and successful
completion of financing for which it has received an oral commitment.
Model home sales contracts
The Company has sale contracts pending on seven (7) model homes. The aggregate
sales price for the seven homes is $1,362,000, and the aggregate purchase price
is $1,323,000.
Financing Activities
In order to finance its expansion, the Company conducts ongoing negotiations
with financial institutions to raise funds through debt and/or equity, and
is in various stages of negotiations relating to the following:
1) The Company is pursuing financing options in connection with a planned
land acquisition described in the Real Estate Under Contract Commitments
section of this note. The agreement is to acquire land having a fully-
developed cost of $102,800,000 with a maximum outstanding balance of
$75,000,000-$85,000,000 based on anticipated option takedowns. However, there
is an intent to increase the arrangement to $200,000,000 in net
fully-developed costs. The financing options are as follows:
a) The Company is exploring a syndicated bank loan and is evaluating
indicative term sheets received from potential lenders while conducting
negotiations with other institutions.
b) The Company is evaluating a private placement of notes to be issued by a
wholly-owned, special-purpose vehicle under Rule 144A and anticipates an
investment grade rating on the notes.
2) The Company has entered into an agreement of mutual understanding with a
major international insurance company whereby the parties have committed to
proceed in accordance with the following:
a) The insurance company will provide an "Insurance Surety Bond" in connection
with the planned financing transactions described in paragraph 1 above. The
bond will assure the timely payment of principal and interest on notes
issued by the non-consolidated wholly-owned, bankruptcy-remote,
special-purpose subsidiary of the Company.
b) The agreement is subject to the following conditions; (i) satisfactory
completion of due diligence regarding the assets to be held in the Special
Purpose Entity, (ii) the execution of bank or institutional financing, and
(iii) agreement to final wording of all related legal documentation.
(7)
3) The Company's subsidiary, Model Funding I, LLC, closed on a new $10,000,000
revolving credit facility in March 1998 with a New England based financial
institution. Model Funding I, LLC utilized $5.8 million of the line to
purchase twenty-nine (29) model homes located in the Northeast region of the
United States. The $4.2 million remains available for future model home
acquisitions by MFI or other Special Purpose Entities or the Company. The
Company has a mutual understanding with the financial institution to increase
the aggregate credit facility to $25,000,000 as additional model homes are
acquired.
The Company closed on a new $1.2 million credit facility in March 1998 with a
South-East financial institution, which it utilized to finance four (4) model
homes previously purchased in December 1997 for cash. The cost of funds is
based on 2 Year Treasuries plus a premium fixed at closing. Approximately
$225,000 is still available under this facility. The lender has agreed to
increase the facility on a "as needed" basis.
Surety / Insurance Activities
The Company has received a commitment from a "AA" rated U.S. subsidiary of a
major international insurer to issue a Lease Bond in the amount of
$132,000,000 in conjunction with the pending acquisition of model homes from a
major U.S. homebuilder. The Lease Bond insures the timely payment by the
lessee of the lease payments. In the event of default by the lessee, the
surety has an obligation to continue to make the lease payments. At its sole
option, the surety may acquire the model homes at the Company's original cash
closing purchase price thereby terminating its obligation to make additional
lease payments. The Company negotiates the premium for the surety bonds on a
case by case basis.
The Company has received a commitment from a "BBB" rated major domestic based
insurer to issue a Lease Bond in the amount of $7,300,000. The Company
intends to utilize this commitment in its fourth fiscal quarter for model
homes previously acquired or to be acquired. The Lease Bond insures the timely
payment by the lessee of the lease payments. In the event of default by the
lessee, the surety has an obligation to continue to make the lease payments.
The Company negotiates the premium for the surety bonds on a case by case
basis.
The intent of these types of arrangements is to reduce cost of funds and
thereby increase profitability. The agreements are subject to the following
conditions; (i) satisfactory completion of due diligence regarding the assets
to be acquired , (ii) the execution of bank or institutional financing, and
(iii) agreement to final wording of all related legal documentation.
Real Estate Under Contract Commitments
The Company has executed a letter of intent with a major publicly traded
homebuilder and real estate developer to acquire 4-5 tracts of land having a
fully developed cost of $102,800,000 a with maximum outstanding balance of
$75,000,000 to $85,000,000 based on anticipated option takedowns. The
agreement provides for a unit takedown schedule of finished lots over a period
not to exceed 36 months. The Company intends to seek an increase in the
letter of intent to approximately $200,000,000 in net fully-developed costs.
The closing is subject to completion of due diligence, receipt of satisfactory
appraisals, formal documentation, and successful completion of financing.
The Company has committed to purchase land and provide development funding of
approximately $50,000,000 for one of its existing homebuilder clients. The
closing is subject to completion of due diligence, receipt of satisfactory
appraisals, formal documentation, and successful completion of financing.
(8)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
The Company is engaged in three lines of business.
1) The purchase and leaseback on a "triple net" basis of fully furnished
model homes complete with options and upgrades to major publicly traded
homebuilders and real estate developers.
2) The real estate contract acquisition, development and sale program for
major publicly traded homebuilders and real estate developers. The
Company purchases the real estate, simultaneously enters into a bonded (not
to exceed) development contract with the builder supported by a performance
(completion) bond, who then develops the real estate. The builder
purchases the finished lots from the Company on a scheduled basis usually
not to exceed three (3) years.
3) The purchase and leaseback of model home furnishings to major publicly
traded homebuilders and real estate developers.
Since its inception, the Company and its special purpose bankruptcy remote
subsidiary have purchased a total of 224 model homes and sold 64, resulting in
a portfolio of 160 model homes owned at March 31, 1998. All of the Company's
clients are major publicly traded homebuilders. The following is a summary of
model home purchases and sales by year since inception:
Fiscal Units Amount Units Cost of Model
Year Ended Purchased Purchased Sold Homes Sold
- ---------- --------- ----------- ---- ------------
6/30/96 61 $11,836,729 3 $ 503,165
6/30/97 75 14,512,772 23 4,437,087
6/30/98 (1) 59 13,010,869 38 6,752,966
6/30/98 (2) 29 7,091,507 - -
--------- ----------- ---- ------------
224 $46,451,877 64 $11,693,218
--------- ----------- ---- ------------
Model Homes on Lease at March 31, 1998 - 160 $34,758,659
(1) JJFN Services, Inc. - Nine months ended March 31, 1998.
(2) Model Funding I, LLC - Month ended March 31, 1998.
Since inception, the Company has entered into one land acquisition and
development contract. On July 3, 1997, the developer elected to fully exercise
its option to purchase the approximate 70-acre tract of land. The property was
purchased from the Company for the sum of $8,591,956.
(9)
A summary of the operating results of JJFN Services, Inc. and subsidiaries for
the three months ended March 31, 1998, and March 31, 1997 are presented below.
Three Months Three Months
Ended Ended
March 31 March 31
1998 % 1997 %
--------------------------------
Revenues:
Lease revenue $ 883,490 25% $610,492 39%
Real estate option fees - -% 257,759 16%
Model home sales 2,536,886 74% 633,207 41%
Interest income 29,037 1% 60,137 4%
--------------------------------
Total revenues $3,449,413 100% 1,561,595 100%
Costs and expenses:
Interest expense 529,282 15% 493,970 32%
Cost of model home sales 2,459,922 71% 608,709 39%
Corporate 297,778 9% 353,142 22%
--------------------------------
Total costs and expenses 3,286,982 95% 1,455,821 93%
--------------------------------
Income before depreciation & amortization 162,431 5% 105,774 7%
Depreciation & amortization 315,284 9% 203,375 13%
--------------------------------
Loss from continuing operations $(152,853) (4%) $ (97,601) (6%)
================================
Results of Operations:
Three Months Ended March 31, 1998 compared to March 31, 1997.
For the period from January 1, 1998 through March 31, 1998, the Company
had revenues of $3,449,413 of which lease rentals on model homes totaled
$883,490 and revenues from the sale of model homes were $2,536,886. Net loss
for the period was $152,853. Depreciation and amortization for the quarter
totaled $315,284 resulting in income from operations before depreciation and
amortization of $162,431.
The Company's revenues from rental income increased approximately $273,000 (a
44% increase) during the three months ended March 31, 1998 as compared to
the three months ended March 31, 1997. This increase is due to additional
lease revenues generated from the purchase of $21,776,000 in model homes in
the twelve months ended March 31, 1998.
The Company generated no real estate option fee revenues for the three months
ended March 31, 1998. Real estate option fee revenues of $257,759 were
generated for the prior year quarter end. The decrease was due to the exercise
of the client's option to purchase resulting in the sale of a land parcel for
$8,591,956 on July 3, 1997.
Corporate costs decreased from $353,142 for the quarter ended March 31, 1997
to $297,778 for the quarter ended March 31, 1998, representing a 16% decrease.
The decrease was primarily due to a reduction in personnel. Corporate costs as
a percentage of total revenues decreased 13% for the three months ended March
31, 1998 compared to the prior year period.
(10)
A summary of the operating results of JJFN Services, Inc. and subsidiaries for
the nine months ended March 31, 1998, and March 31, 1997 are presented below.
Nine Months Nine Months
Ended Ended
March 31 March 31
1998 % 1997 %
--------------------------------
Revenues:
Lease revenue $ 2,407,195 13% $1,399,377 36%
Real estate option fees 8,771 -% 558,477 14%
Model home sales 6,848,257 38% 1,916,376 48%
Land sales 8,591,956 48% -
Interest income 99,604 1% 72,713 2%
--------------------------------
Total revenues 17,955,783 100% 3,946,943 100%
Costs and expenses:
Interest expense 1,422,643 8% 1,094,959 28%
Cost of model home sales 6,622,781 37% 1,865,186 47%
Land sales 8,591,956 47% - -%
Corporate 877,473 5% 775,731 20%
--------------------------------
Total costs and expenses 3,286,982 97% 3,735,876 95%
--------------------------------
Income before depreciation & amortization 440,930 3% 211,067 5%
Depreciation & amortization 869,972 5% 484,196 12%
--------------------------------
Loss from continuing operations $(429,042) (2%) $(273,129) (7%)
================================
Results of Operations:
Nine Months Ended March 31, 1998 compared to March 31, 1997.
For the period from July 1, 1997 through March 31, 1998, the Company had
revenues of $17,955,783 of which lease rentals on model homes totaled
$2,407,195, revenues from land sales totaled $8,591,956, revenues from the sale
of model homes were $6,848,257, and revenues from option fees were $8,771. Net
loss for the period was $429,042. Depreciation and amortization for the quarter
totaled $869,972 resulting in income from operations before depreciation and
amortization of $440,930.
The Company's revenues from rental income increased approximately $1,008,000 (a
72% increase) during the nine months ended March 31, 1998 as compared to
the nine months ended March 31, 1997. This increase is due to additional
lease revenues generated from the purchase of $21,776,000 in model homes in
the twelve months ended March 31, 1998.
Real Estate option fee revenues of $8,771 were generated from the real estate
under contract program, versus $558,477 for the prior nine month period. The
decrease was due to the exercise of the client's option to purchase resulting
in the sale of a land parcel for $8,591,956 on July 3, 1997.
(11)
Corporate costs increased from $775,731 for the nine months ended March 31,
1997 to $877,473 (an increase of 13%) for the nine months ended March 31,
1998. This increase was attributable to the selling, general and
administrative costs associated with generating the increased revenue levels.
Corporate costs as a percentage of total revenues decreased 14% for the nine
months ended March 31, 1998 compared to the prior year period.
Model Homes
Model homes on lease have increased to $34,758,659 at March 31, 1998 from
$22,342,583 at March 31, 1997, an increase of 56%.
A breakdown of model home costs and units by state is as follows:
# Model Homes Model Home # Model Homes Model Home
Owned at Cost Owned at Cost
State 3/31/98 3/31/98 3/31/97 3/31/97
- ------------------------------------------------------------------------------
Florida 55 $ 11,330,359 77 $ 13,822,857
New Jersey 54 12,224,844 - -
Colorado 18 3,786,644 18 3,799,355
Pennsylvania 22 5,063,979 - -
Virginia 3 724,327 6 1,495,847
Texas 4 746,124 5 910,481
North Carolina 4 882,382 3 737,288
Georgia - - 5 1,576,755
------- ------------- ------- ------------
Total 160 $ 34,758,659 114 $ 22,342,583
======= ============= ======= ============
A breakdown of lease rental revenues by state is as follows:
Lease Revenues Lease Revenues
From 1/1/98 From 1/1/97
State to 3/31/98 to 3/31/97
- ------------------------------------------------------------------------------
Florida $ 375,569 $ 413,851
New Jersey 249,720 -
Colorado 113,599 109,480
Pennsylvania 66,915 -
Virginia 23,902 42,297
Texas 27,314 20,710
North Carolina 26,471 22,119
Georgia - 2,035
----------- -----------
Total $ 883,490 $ 610,492
=========== ===========
The average purchase price of model homes acquired by the Company since
inception was approximately $207,000. For the quarter ended March 31,
1998, the Company sold fourteen (14) model homes for total sales price of
$2,536,886 less costs of sales of $2,459,922 for a net gain of $76,964.
(12)
Liquidity and Capital Resources
The Company's principal business, leasing of model homes and real estate
under contract, is a capital-intensive operation requiring constant infusions
of cash as the number and size of transactions in which the Company is
involved increases. To date, this business has been financed by capital
contributed, loans made by shareholders, and secured loans from banks.
These capital contributions and loans have been adequate to permit the Company
to carry on operations to date. However, in order to finance the expansion of
operations over the coming fiscal year, additional funds must be raised
through the issuance of debt or equity securities. To fill this need, the
Company anticipates completing a securities offering of $10 million prior to
the end of fiscal 1998. The net proceeds of this offering, together with
existing credit facilities as well as new facilities on an "as needed" basis
coupled with existing cash of approximately $764,000, should enable the
Company to finance its growing level of operations. (See Financing Activities
for additional information.)
The Company has executed a letter of intent with a major publicly traded
homebuilder and real estate developer to acquire 4-5 tracts of land having a
fully developed cost of $102,800,000 a with maximum outstanding balance of
$75,000,000 to $85,000,000 based on anticipated option takedowns. The
agreement provides for a unit takedown schedule of finished lots over a period
not to exceed 36 months. The Company intends to seek an increase in the
letter of intent to approximately $200,000,000 in net fully-developed costs.
The closing is subject to completion of due diligence, receipt of satisfactory
The Company has committed to acquire model homes at an approximate cost of
$3-5 million from an existing client. It is anticipated that this transaction
will close prior to the end of May 1998. The closing is subject to completion
of due diligence, receipt of satisfactory appraisals, formal documentation,
and successful completion of financing, for which it has received an oral
commitment.
The Company expects that it will be able to finance these transactions and
others currently under negotiation through available cash from the sources
described above and from other secured bank loans. In addition, the
Company is exploring the possibility of selling, either publicly or
privately, securities backed by its model home inventory and real estate
and development contracts supported by surety bonds. There can be no
assurance, however, that any of the anticipated sources of funding will
ultimately be available to the Company or that other financing will be
available on acceptable terms or that customers will consummate the
transactions contemplated.
Cash Flow - Nine Months Ended March 31, 1998.
Net cash provided by operating activities comprised net loss of $429,042,
offset by net adjustments for non-cash items of $644,496, plus a net change in
other operating assets and liabilities of $93,308.
Net cash provided by investing activities comprised proceeds from land sales
of $1,716,956 and $6,777,273 from sale of model homes, proceeds of $212,500
from note receivable of divested segment, offset by $6,935,357 in model home
purchases and $606 in capital expenditures.
(13)
Net cash used in financing activities comprised principal payments on
mortgages payable of $5,819,530 and deferred financing costs of $256,987,
offset by proceeds from mortgages payable of $3,929,929.
Trends in Operations
The Registrant's operations continue to grow at an accelerated rate. Such
growth has resulted from the ongoing acquisition of model homes under lease
and from the implementation of the Company's land acquisition and contract
development program. Both programs have generated significant interest from
national home builders and real estate developers. The Company's successful
implementation of these programs has led to increased credit facilities.
For the quarter ended March 31, 1998, purchases of model homes totaled
approximately $7,100,000, increasing total model homes on lease at March
31, 1998 to over $34,750,000. Monthly lease rental revenues on these assets
are in excess of $347,500 per month.
Market Value of Company's Securities
The market value of the Company's securities continues to decline despite the
performance of the Company.
The Company is exploring the following among other options:
1) Stock buyback program.
2) Retention of a financial public relations firm.
3) Retain investment bankers to explore all options to enhance shareholder
value.
4) Apply for listing on a National or Regional stock exchange.
Forward Looking Statements
This report contains certain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") concerning
the Company's operations, economic performance and financial conditions,
including, in particular, the likelihood of the Company's success in
developing and bringing to market the products which it currently has under
development, as well as procuring the necessary financing to acquire these
products. These statements are based upon a number of assumptions and
estimates which are inherently subject to significant uncertainties, and
contingencies, many of which are beyond the control of the Company and reflect
future business decisions which are subject to change. Some of these
assumptions inevitably will not materialize, and unanticipated events will
occur which will affect the Company's results. Consequently, actual results
will vary from the statements contained herein and such variance may be
material. Prospective investors should not place undue reliance on this
information.
(14)
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 of the
undersigned thereunto duly authorized.
JJFN SERVICES, INC.
By: /s/John P. Kushay
John P. Kushay, Treasurer
Chief Financial Officer and
Chief Accounting Officer
(Duly Authorized Officer)
Date: April 9, 1998
(15)
Index of Exhibits
Exhibit No. Page
11 Computation of earnings per share. (filed herewith) 17
12 Schedule Identifying Documents Omitted (filed herewith) 18
27 Financial Data Schedule (filed herewith)
30.1 Employment Agreement with David Miller
dated as of July 30, 1997 (filed herewith)
30.2 Employment Agreement with John Kushay
dated as of January 1, 1998 (filed herewith)
(16)
JJFN Services, Inc. - Form 10-Q
Nine Months ended March 31, 1998 and March 31, 1997
Exhibit 11
Nine Months Nine Months
Ended Ended
March 31, March 31,
1998 1997
------------ ------------
Basic
Net loss $ (429,042) $ (42,697)
------------ ------------
Loss applicable
to common shareholders (429,042) (47,697)
============ ============
Weighted average number of common 16,878,423 16,514,370
shares outstanding
------------ ------------
Loss per common share (0.03) (0.01)
============ ============
Diluted loss per common share has not been presented because the effect of
such calculation would be anti-dilutive.
(17)
EXHIBIT 12: For the quarterly report of Form 10Q for the quarter ended
March 31, 1998
Schedule identifying documents omitted.
1. Loan and Security Agreement dated March 26, 1998 between JJFN Services,
Inc. as borrower and North East Financial Institution as lender.
2. Loan and Security Agreement dated March 31, 1998 between Model Funding I,
LLC as borrower and New England Financial Institution as lender dated March
31, 1998 and JJFN services, Inc. as Guarantor.
There are no material differences in the new Loan and Security Agreements.
(18)
Exhibit 30.1
AGREEMENT made as of the 30th day of July, 1997 between JJFN Services,
Inc. a Delaware corporation, with principal offices 2500 Military Trail North,
Suite 260, Boca Raton, Florida 33431 (hereinafter referred to as the Company),
and David Miller, residing at 3565 NW 61st Circle, Boca Raton, Florida 33496
(hereinafter referred to as the Employee).
W I T N E S E T H:
WHEREAS, the Employee shall be employed by the Company as Chairman and
WHEREAS, the Employee has the requisite experience, background and skill
and is willing to formalize his relationship with the Company on the terms and
subject to the conditions herein contained.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereby agree as follows:
1. Recitals confirmed. All of the recitals hereinabove stated are
confirmed by all of the parties hereto as being in all respects true and
correct and the same are hereby incorporated herein by reference into
this agreement (the Agreement).
2. Employment. The Company hereby confirms its employment of the
Employee and the Employee hereby confirms his employment by the Company as the
Chairman of the Company. The Employee shall, in the performance of his duties,
be at all times subject to the direction, supervision and authority of the
Company's Board of Directors.
3. No Breach of Obligation. The Employee represents and warrants to the
Company that he has the requisite skill and experience and is ready, willing
and able to perform those duties attendant to the position for which he is
retained or which may be assigned to him; and that his entry into this
Agreement with the Company does not constitute a breach of any prior
agreement between the Employee and any person, firm or corporation or contain
any restriction or impediment to the ability of the Employee to perform those
duties for which he was hired or which may be assigned to or reasonably
expected of him. The Company acknowledges that the Employee has other
business interest.
4. Services. During the full term of this Agreement, the Employee
shall perform to the best of his ability the following services and duties, the
following being included by way of example and not by way of limitation:
(a) the Employee shall have the responsibility to raise equity
capital for the company, both in the private and public sector. This will be
an ongoing responsibility each year of the contract;
(b) the Employee will be responsible for the production of and
timely distribution of all public reporting required of the Company with
respect to financial data:
(c) the Employee shall consult with and advise the other officers
and employees of the Company, either orally, or, at the request of the Company,
in writing, with respect to such matters as the Board of Directors shall be
requested from time to time, relating to the management and operations of the
Company, sales, marketing and the institution of programs and systems designed
to increase the efficiency of the Company's business and overall management and
operation of the Company.
5. Exclusivity. The Employee agrees that during the term of this
Agreement he will impart and devote up to seventy-five percent (75%) of his
time, energy, skill and attention to the performance of his duties hereunder.
This Paragraph shall not exclude the Employee from serving as an executive
officer and/or serving on the Board of Directors of another company or
companies that are not engaged in similar business venture, not in direct
competition with the Company or subsidiaries if such investments shall be of
a passive nature or shall be in securities of a publicly owned entity.
6. Place of Performance. The Employee agrees to perform his duties
hereunder at the offices of the Company in Boca Raton, Florida, and agrees, to
the extent that it shall be determined necessary and advisably in the sole
discretion of the Company's Board of Directors to travel to any place in the
United States where his presence is or may reasonably be temporarily required
for the performance of his duties hereunder.
7. Compensation. The Company hereby agrees to compensate the Employee
and the Employee hereby accepts for the performance of the services by the
Employee and duties required by the Employee under Paragraph 3 hereof and his
other obligations hereunder as follows:
(a) Salary. Subject to review and upward adjustment from time to
time by the Board of Directors, the Company shall pay to the Employee an annual
salary at the rate of Two Hundred and Twenty-five Thousand Dollars ($225,000)
for the period ending December 31, 1997 of the term of this Agreement.
Commencing January 1,1998 through the tenth year, the Employee's fee shall
increase ten percent (10%) per year. Such fee shall be payable no later than
monthly or earlier in accordance with the regular payroll practice of the
Company;
(b) Bonus. The Employee shall be entitled to participation in a
bonus or other incentive compensation, profit sharing or retirement plan that
the Company shall institute or make generally available to its executives;
(c) Expenses, Accommodations, Insurance and Medical Benefits. The
Company shall pay to the Employee and/or furnish the Employee with the
expenses, accommodations, insurance and medical benefits referenced in
Paragraph 10 of this Agreement;
(d) Vacation and Automobile. The Employee shall be entitled to
the use of any automobile and vacations as provided in Paragraph 11 of this
Agreement.
(e) Disability. The Company shall furnish the Employee with the
disability benefits provided in Paragraph 13 of this Agreement;
(f) Severance. The Company shall pay Employee the severance
compensation enumerated in Paragraph 15(e) of this Agreement;
8. Representation and Warranties of the Employee. By virtue of this
execution hereof, and in order to induce the Company to enter into this
Agreement. The Employee hereby represents and warrants as follows:
(a) The Employee is not presently actively engaged in any
business, employment or venture which is or may be in conflict with the
business of the Company;
(b) The Employee has full power and authority to enter into this
Agreement and to otherwise perform this Agreement in the time and manner
contemplated; and
(c) The Employee's compliance with the terms and conditions of
this Agreement in the time and manner contemplated herein will not conflict
with any instrument or agreement pertaining to the transaction contemplated
herein, and will not conflict in, result in a breach of, or constitute a
default under any instrument to which he is a party.
9. Representation and Warranties of the Company. By virtue of the
execution of this Agreement, the Company hereby represents and warrants to the
Employee as follows:
(a) the Company has full power, right and authority to execute and
perform this Agreement in the time and manner contemplated; and
(b) the execution and performance of this Agreement will not
result in a breach of or violate the provisions of any contract or agreement to
which the Company is a party.
10. Expenses, Accommodations, Insurance, Medical Benefits, and etc.
(a) The Company and the Employee hereby agree and consent that
during the term of this Agreement, the Company shall furnish the Employee with
an executive secretary, office accommodations and such memberships as shall be
suitable to the character of his position and adequate for and reasonably
designed to enhance the performance of his duties. The Company and the
Employee further agree that the Employee shall receive reimbursement, for all
expenses incurred by the Employee in connection with the performance of his
duties hereunder subject to compliance with the Company's procedures; and
the Company shall pay to the Employee directly or reimburse the Employee
for all other reasonable, necessary and proven expenses and disbursements
incurred by the Employee for and on behalf of the Company in the performance
of the Employee's duties during the term of this Agreement;
(b) The Employee agrees and consents to being the subject of such
policy or policies of disability income and/or key man insurance as the Company
shall, in its sole discretion, elect to carry on Employee's life. The Company
shall be the owner and beneficiary of any such policy and/or policies and shall
pay the premiums thereon, and the Employee agrees and consents to such
arrangement. Notwithstanding the foregoing, and so long as adequate and
customary arrangements are made with respect thereto, the Employee's spouse
and/or children may be named co-beneficiaries on such split-dollar insurance
policy or policies as the Employee reasonably desires. The Company shall have
the right and option of selecting the carrier(s) of such insurance and the form
thereof (i.e. whole life, term, etc.). Upon the termination of the Employee's
relationship for any reason provided in this Agreement, he shall have the right
to purchase any and all policies owned by the Company on his life, subject to
the terms of this Agreement, upon paying the Company within thirty (30) days of
such termination an amount equal to cash value, including the cash value of
dividend additions or deposits, if any, of such policy as of the date such
right is exercised, less the amount of any policy loan with accrued interest.
The Company, upon such payment, shall execute the instruments necessary to
transfer such policies to the Employee.
11. Vacations and Automobile. During the term of this Agreement, the
Employee shall receive four (4) weeks of vacation per year at such time as he
shall elect. The Employee hereby agrees to utilize his best efforts to take
his vacation time in non-consecutive weeks. The Employee shall be entitled
to accumulate any unused vacation time from year to year during the term of
this Agreement; and upon termination shall be paid the full value thereof at
the salary rate in effect on the date of termination. The Employee shall be
entitled to the use of any automobile and all expenses necessary to operate
and maintain such automobile or to be paid a flat sum of $500.00 per month
adjusted to reflect any increases in the CPI.
12. Proprietary Rights. The Employee shall at no time before or after the
termination of his relationship hereunder use or divulge or make known to
anyone without the express written consent of the Board of Directors of the
Company (except to those duly authorized by Company to have access thereto)
any marketing systems, programs or methods, customer or client lists,
computer programs, configuration, systems or procedures, ideas, formulae,
inventions, discoveries, improvement, secrets, processes, technical or other
information of the Company or any accounts, customer or client lists,
transactions of business affairs of the Company. All ideas, marketing
systems, computer programs, configurations, systems or procedures, programs
or methods, formulae, inventions, discoveries, improvements, secret as or
processes whether or not patentable or copyrightable, made or developed by
the Employee during the term of this Agreement or within one year after its
expiration or termination and relating to the business of the Company shall
be the exclusive property of the Company, whether or not any claim of the
Employee to compensation under Paragraph 7 hereof has been or will be
satisfied, and the Employee agrees to provide the Company at its request and
expense such instruments and evidence as it may reasonably request to
perfect, enforce and maintain the Company's rights to such property. At the
conclusion of his contract by the Company, the Employee shall forthwith
surrender to the Company all letters, brochures, agreements and documents of
every character relating to the business affairs and properties of the
Company and then in his possession and shall not, without the Company's prior
written consent, retain or disclose any copies thereof.
13. Disability. If during the term of this Agreement and in the opinion
of the Board of Directors of the Company as confirmed by competent medical
evidence, the Employee shall become physically or mentally incapacitated to
perform his duties for the Company hereunder for a continuous period then the
following shall apply: (a) for the first year of such disability the Employee
shall receive his full salary; (b) for the second through tenth year of the
Employee's disability (but in no event beyond the termination date of this
agreement) the Employee shall receive seventy-five (75%) percent of his full
salary. Upon the Employee's resumption of full contract, he shall commence
again to receive his full salary. The Employee hereby agrees to submit
himself for appropriate medical examination by his personal physician as
necessary to implement and give effect to the purposes of this Paragraph 13.
In the event of termination as provided herein, the full term compensation
provisions of paragraph 7 shall apply.
14. Competition. During the ten (10) year term of this Agreement , or
upon the termination of his relationship, whichever event shall occur later and
for a period of twenty-four (24) consecutive months thereafter, the Employee
shall not, without the prior express written consent of the Company, engage
(either as an employee, consultant, agent proprietor, officer, director,
partner, or stockholder, of any corporation, firm or business) in any business
which is in direct competition or threatening to be in competition with the
Company.
The Employee further covenants that during the stated term of this
Agreement and for twenty-four (24) month period thereafter, he will not solicit
any clients or customers known by him to be clients or customers of the
Company, for competitive business. The foregoing restrictions shall not
apply to a termination of the Employee by the Company without cause or
termination of the contract by the Employee because of breach of agreement by
the Company.
15. Term and Termination. This Agreement shall be deemed to be
effective as of the date of its execution and shall continue in full force and
effect until the last day of the month after then tenth (10th) anniversary
thereof unless sooner terminated as hereinafter set forth:
(a) Termination by the Company for Cause.
(1) The Company may terminate the Employee for cause (as
defined in sub-paragraph (b) below) upon compliance with the provisions of sub-
paragraph (c). Upon such termination, the Company shall have no further
obligations to the Employee, except for the compensation or other benefits due
for a period prior to the date of Termination.
(2) Cause shall mean: (i) the Employee's willful and continued failure to
perform any of his duties with the Company (other than as a result of the
Employee's incapacity due to illness or injury or not permitted by law, as
defined in Paragraph 13 after a demand for performance is delivered to the
Employee by the Board of Directors (by a duly adopted resolution), which
specifically identified the manner in which the Board of Directors believes
that the Employee has not performed any of his duties; or (ii) the Employee's
willful engaging in misconduct which is materially injurious to the Company,
monetarily or otherwise. For purposes of this sub-paragraph (a), no act or
failure to act on the Employee's part shall be considered "willful" unless
the act or failure to act by the Employee is done in bad faith and with
absolute certainty that such action or omission was not in the best interest
of the Company, and any failure by the Employee to perform any of his duties
set forth herein shall be conclusively deemed not to be willful failure to
perform where the failure results from the Employee's illness or injury as
set forth a written opinion from the Employee's personal physician.
(3) Termination for Cause shall be effected only if: (i) the
Company has delivered to the Employee a copy of a Notice of Termination by
certified mail return receipt request, which complies with Paragraph 16 hereof
and which gives the Employee, at least thirty (30) business days' prior notice,
the opportunity, together with the Employee's counsel, to be heard before the
Board of Directors and (ii) of the Board of Directors (after such notice and
opportunity to be heard), adopts a resolution concurred in but not less than
two-thirds of all of the directors of the Company then in office, including at
least two-thirds of all of the directors who are not officers of the Company,
that in the good faith opinion of the Board of Directors, the Employee was
guilty of conduct set forth above in clause (i) and (ii) of the first sentence
of subparagraph (b), and specifying the particulars thereof in detail.
(b) Termination by the Employee for Good Reason.
(1) The Employee may terminate his agreement for Good Reason
(as defined in subparagraph (b) below) by giving the Company a Notice of
Termination which complies with Paragraph 16 hereof. Upon such termination the
Employee shall have the rights described in sub-paragraph (c) hereof.
(2) Good Reason: shall mean: (i) the Employee being removed, or not being
re-elected, as a director, or as Chairman as described in Paragraph 2 hereof,
except in connection with termination of the Employee's employment by the
Company for Cause or Disability or by the Employee without Good Reason; (ii)
the assignment to the Employee, without his express written consent, of any
duties other than those permitted by Paragraph 4; (iii) the Company's
requiring the Employee to maintain his principal office or conduct his
principal activities anywhere other than at the Company's principal executive
offices, (iv) the failure of the Company to obtain the assumption and
agreement to perform this Agreement by any successor as contemplated in
Paragraph 18 hereof; (v) repudiation by the Company of any material
obligation of the Company under Paragraph 7 hereof; or (vi) the delivery of a
Notice of Termination by the Company pursuant to paragraph 16(a) (3), above
(except that the delivery of such Notice shall be retroactively deemed not to
constitute Good Reason if within sixty (60) days after the Board of Director
shall make the determination described in paragraph 16(a)(3) (after the
opportunity to be heard provided for therein) and such determination is not
thereafter reversed by an arbitration decision) or final judgment of a court
of competent jurisdiction.
(c) Termination by Change or Control. In the event the Company
experiences a Change of Control as hereinafter defined, the Employee shall have
the right and option, in his sole unfettered discretion, to declare this
Agreement breached by the Company. Upon the occurrence of such a course of
action, the Employee shall be entitled to receive all of the compensation and
remuneration provided in Subparagraph (e) of this Paragraph.
(d) Change in Control. For purposes of this Agreement a Change in
Control will be deemed to have occurred:
(1) if following (i) a tender or exchange offer for voting
securities of the Company, (ii) a proxy contest for the election of directors
of the Company or (iii) a merger or consolidation or sale of all or
substantially all of the business or assets of the Company, the directors of
the Company immediately prior to the initiation of such event cease to
constitute a majority of the Board of Directors of the Company upon the
occurrence of such event or within one year after such event, or
(2) if any person or group (as defined under the
beneficial ownership rules of Sections 13(d) (3) and 14(d)(2) of the Securities
Exchange Act of 1934 and Rule 13(d)(3) thereunder) acquires ownership or
control, or power to control, twenty-five percent (25%) or more of the
outstanding voting securities of the Company without prior approval or
ratification by a majority of the Company's directors in office at the time of
such event.
(e) The Employee's Rights Upon Certain Terminations. If the
Company terminates the Employee's contract hereunder, otherwise than for cause
pursuant to Paragraph 15(a) or for Disability pursuant to Paragraph 1, or if
the Employee terminates his contract for Good Reason pursuant to Paragraph
15(b) or pursuant to Paragraph 15(c):
(1) The Company shall continue to pay to the Employee his
full base compensation, at the rate in effect on the Date of Termination, for
the period (the "Post termination Period") from the Date of Termination until
July 30, 2007, the expiration date of this agreement. Notwithstanding anything
to the contrary which may be contained herein, if the Employee shall have died
prior to July 30, 2007, then, and in such event, such payment of the Employee's
full base compensation pursuant to this Paragraph 16 shall continue to be made
to the Employee's estate until July 30, 2007;
(2) The Employee shall be entitled to the full amount which would have
been due him under any bonus or profit sharing plan, or similar arrangement,
in which he was participating prior to the Date of Termination, for the full
ten (10) year term of this Agreement, without any proration or reduction
because of the Employee's not being retained during the full term;
(3) The Employee shall also be entitled to the full amount of any
contingent compensation of benefit which would have become vested had his
relationship continued throughout the Post Termination Period;
(4) The Company shall also pay to the Employee an amount
equal to all legal fees and expenses incurred by the Employee as a result of
such termination (including all fees and expenses, if any, incurred in
contesting or disputing any such termination or in seeking to obtain or enforce
or retain any right or benefit provided by this agreement);
(5) The Company shall maintain full force and effect, for the Employee;
continued benefit throughout the Post-Termination Period, all life and health
insurance and other benefit plans in which the Employee was entitled to
participate immediately prior to the Date of Termination, provided that the
Employee's continued participation is possible under the general terms and
conditions of such plans. If the Employee's participation in any such plan is
barred for any reason whatsoever, the Company shall arrange to provide the
Employee with benefits substantially similar to those which he is entitled to
receive under such plan;
(6) The Employee shall not be required to mitigate the
amount of any payment provided for in this Paragraph 15 be reduced by any
compensation earned bt the Employee in any manner after the Date of Termination.
16. Notice of Termination. Any purported termination of the Employee
shall be communicated by written Notice of Termination from one party to the
other party hereto. For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in specific detail the facts and
circumstances claimed to provide a basis for termination of the Employee under
the provision so indicated. No purported termination by the Company of the
Employee shall be effective if it is not affected pursuant to a Notice of
Termination satisfying the requirements of this Paragraph 16.
17. Date of Termination. Date of Termination: shall mean the date on
which a Notice of Termination is given.
18. Successors: Binding Agreement.
(a) The Company shall required any purchaser of all or substantially all
of the business of the Company, by agreement or form and substance
satisfactory to the Employee, to assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required
to perform if no such purchase had taken place. If no agreement the full
amount will become due and payable. As used in this Agreement, "Company"
shall mean the Company as hereinabove defined, and any successor to the
Company's business or assets which executes and delivers this Agreement
provided for in the Paragraph 18(a) or which otherwise becomes bound by all
the terms and provisions of this Agreement by operation of law;
(b) This Agreement shall inure to the benefit of and to be enforceable by
the Employee's personal or legal representative, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Employee had
continued to live, all such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of this Agreement to the Employee's
devisee, legatee or other designee, or, if there be no such designee, to his
estate.
19. Arbitration. The Employee shall have the right to submit any
determination by the Board of Directors terminating his contract for Cause, or
any other dispute hereunder, to arbitration by a single arbitrator in Florida
under the laws of the American Arbitration Association. Any award in such
arbitration may be enforced in any court of competent jurisdiction.
20. Entire Agreement. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof, shall
supersede any prior agreements and understandings between the parties with
respect to such subject matter, and no statement, representation, warranty or
covenant has been made by either party except as expressly set forth herein.
21. Modification. This Agreement shall not be changed or terminated
orally. All of the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective heirs
and personal representatives of the Employee and the successors and assigns
of the Company.
22. Laws of the State of Florida. This Agreement is being delivered in
the State of Florida and shall be construed and enforced in accordance with
the State of Florida, irrespective of the State of Incorporation of the
Company or the place domicile or residence of the Employee. In the event of
a controversy arising out of the interpretation, construction, performance or
breach of this Agreement, the parties hereby agree and consent to the
jurisdiction and venue of the Circuit Court of the State of Florida, Palm
Beach County and/or the United States District Court for the District of
Florida and further agree and consent that personal service process in any
such action or proceeding outside of the County of Palm Beach shall be
tantamount to service in person within the County of Palm Beach and shall
confer personal jurisdiction upon either of said courts.
23. Notices. Any notice to be given by any party hereunder to any other
shall be in writing, hand delivered, mailed by certified or registered mail,
return receipt requested or by an overnight delivery service and, shall be
addressed to the other at the address as hereinbefore stated or to such other
address as may have been furnished by any party to the other in writing, and
shall be deemed to be given on the date of receipt thereof in accordance with
the foregoing.
24. Additional Instruments. Each of the parties shall from time to
time, at the request of the others, execute, acknowledge and deliver to the
other party any and all further instruments that may be reasonably required to
give full effect and force to the provisions of this Agreement.
25. Originals This Agreement may be executed in counterparts each of
which so executed shall be deemed an original and constitute one and the same
agreement.
26. Address of Parties. Each party shall at all times keep the other
informed of its principal place of business or residence if different from that
stated herein, and shall promptly notify the other of any change, giving of the
new principal place of business or residence.
27. Modification and Waiver. A modification or waiver of any of the
provisions of this Agreement shall be effective only if made in writing and
executed with the same formality as this Agreement. The failure of any party
to insist upon strict performance of any of the provisions of this Agreement
shall not be constructed as a waiver of any subsequent default of the same or
similar nature or of any other nature or kind.
28. Remedies on Breach. The Employee hereby agrees that it may not be
possible for the Company to be adequately compensated in damages for any breach
by the Employee of any of the representations, warranties, terms or any
conditions contained in this Agreement and accordingly the Employee hereby
agrees and consents that in the event of any such breach, the Company in
addition to any other remedies it may have, shall be entitled to injunction or
other equitable relief restraining such breach.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
ATTEST:
By:/s/Joan Kushay By:/s/Samuel G. Weiss
Assistant Secretary President
(Corporate Seal)
By:/s/David Miller, Employee
Exhibit 30.2
AGREEMENT made as of the 1st day of January 1998, between JJFN Services, Inc. a
Delaware corporation, with principal offices at 2500 Military Trail North,
Suite 260, Boca Raton, Florida 33432 (hereinafter referred to as the
Company); and JOHN KUSHAY, residing at 618 Cypress Green Circle, Wellington,
Florida 33414 hereinafter referred to as the Employee).
W I T N E S S E T H :
WHEREAS, the Employee shall be employed by the Company as Chief
Financial Officer/Treasurer/Vice President and
WHEREAS, the Employee has the requisite experience, background and skill
and is willing to formalize his relationship with the Company on the terms and
subject to the conditions herein contained.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, the parties hereby agree as follows:
1. Recitals Confirmed. All of the recitals hereinabove stated are
confirmed by all of the parties hereto as being in all respects true and
correct and the same are hereby incorporated herein by reference into
this agreement (the Agreement).
2. Employment. The Company hereby confirms its employment of the
Employee and the Employee hereby confirms his employment by the Company as the
Chief Financial Officer/Treasurer/Vice President of the Company. The Employee
shall, in the performance of his duties, be at all times subject to the
direction, supervision and authority of the Company's Board of Directors.
3. No Breach of Obligation. The Employee represents and warrants to the
Company that he has the requisite skill and experience and is ready, willing
and able to perform those duties attendant to the position for which he is
hired or which may be assigned to him; and that his entry into this Agreement
with the Company does not constitute a breach of any agreement with any other
person, firm or corporation, nor does any prior agreement between the
Employee and any person, firm or corporation contain any restriction or
impediment to the ability of the Employee to perform those duties for which
he was hired or which may be assigned to or reasonably expected of him. The
Company acknowledges that the employee has other business interests.
4. Services. During the full term of this Agreement, the Employee shall
perform to the best of his ability the following services and duties, in such
manner and at such times as the Company may direct; the following being
included by way of example and not by way of limitation:
(a) The Employee shall, together and in connection with the other executive
officers of the Company, supervise and direct all accounting and reporting
aspects of and share responsibility for the conduct and supervision of all
administrative areas of the Company's operations;
(b) The Employee shall aid and assist the administration of the
Company's sales, marketing programs and other similar and related aspects
of the Company's operations;
(c) The Employee shall promote the Company's relations with its
clients, employees, potential clients and others;
(d) The Employee shall consult with and advise the other officers and
employees of the Company, either orally, or, at the request of the Company, in
writing, with respect to such matters as the Board of Directors shall be
requested from time to time, relating to the management and operation of the
Company, sales, marketing and the institution of programs and systems designed
to increase the efficiency of the Company's business and the overall management
and operation of the Company.
5. Exclusivity. The Employee agrees that during the term of this
Agreement he will impart and devote substantially all of his business time,
energy, skill and attention to the performance of his duties hereunder. This
Paragraph shall not exclude the Employee from serving as an executive officer
and/or serving on the Board of Directors of another company or companies not
engaged in a similar business. This Paragraph shall not prohibit the Employee
from making positive investments in business ventures not in direct competition
with the company or subsidiaries if such investments shall be of a passive
nature or shall be in securities of a publicly owned entity.
6. Place of Performance. The Employee agrees to perform his duties
hereunder at the offices of the Company, in Boca Raton, Florida, and agrees, to
the extent that it shall be determined necessary and advisable in the sole
discretion of the Company's Board of Directors to travel to any place in the
United States or to any foreign country where his presence is or may reasonably
be temporarily required for the performance of his duties hereunder.
7. Compensation. The Company hereby agrees to compensate the Employee
and the Employee hereby accepts for the performance of the services by the
Employee and duties required by the Employee under Paragraph 4 hereof and his
other obligations hereunder as follows:
(a) Salary. Subject to review and upward adjustment from time to time
by the Board of Directors, the Company shall pay to the Employee an annual
salary of $91,000.00 during the first year of the term of this Agreement.
During the second through the five year, the Employee's salary shall increase
ten (10%) percent per year. Such salary shall be payable weekly in accordance
with the regular payroll practices of the Company;
(b) Bonus. The Employee shall be entitled to participation in a bonus or
other incentive compensation, profit sharing or retirement plan that the
Company shall institute or make generally available to its executives;
(c) Expenses, Accommodations, Insurance and Medical Benefits.
The Company shall pay to the Employee and/or furnish the Employee with the
expenses, accommodations, insurance and medical benefits referenced in
Paragraph 10 of this Agreement;
(d) Vacation and Automobile. The Employee shall be entitled to the
use of an automobile and the vacations as provided in Paragraph 11 of this
Agreement; and
(e) Disability. The Company shall furnish the Employee with the
disability benefits provided in Paragraph 13 of this Agreement.
(f) Severance. The Company shall pay to the Employee the severance
compensation enumerated in Paragraph 15(c) of this Agreement.
8. Representations and Warranties of the Employee. By virtue of his
execution hereof, and in order to induce the Company to enter into this
Agreement, the Employee hereby represents and warrants as follows:
(a) The Employee is not presently actively engaged in any business,
employment or venture which is or may be in conflict with the business of the
Company;
(b) The Employee has full power and authority to enter this Agreement,
to enter into the employ of the Company and to otherwise perform this Agreement
in the time and manner contemplated; and
(c) The Employee's compliance with the terms and conditions of this
Agreement in the time and manner contemplated herein will not conflict with any
instrument or agreement pertaining to the transaction contemplated herein, and
will not conflict in, result in a breach of, or constitute a default under any
instrument to which he is a party.
9. Representations and Warranties of the Company. By virtue of the
execution of this Agreement, the Company hereby represents and warrants to the
Employee as follows:
(a) The Company has full power, right and authority to execute and
perform this Agreement in the time and manner contemplated; and
(b) The execution and performance of this Agreement will not result in
a breach of or violate the
provisions of any contract or agreement to which the Company is a party.
10. Expenses, Accommodations, Insurance, Medical Benefits, and etc.
(a) The Company and the Employee hereby agree and consent that during
the term of this Agreement, the Company shall furnish the Employee with an
office and accommodations and such memberships as shall be suitable to the
character of his position and adequate for and reasonably designed to enhance
the performance of his duties. The Company and the Employee further agree that
the Employee shall receive reimbursement, for all reasonable expenses incurred
by the Employee in connection with the performance of his duties hereunder
subject to compliance with the Company's procedures; and the Company shall pay
to the Employee directly or reimburse the Employee for all other reasonable,
necessary and proven expenses and disbursements incurred by the Employee for
and on behalf of the Company in the performance of the Employee's duties during
the term of this Agreement.
(b) The Employee agrees and consents to being the subject of such policy or
policies of disability income and/or key man insurance as the Company shall,
in its sole discretion, elect to carry on the Employee's life. The Company
shall be the owner and beneficiary of any such policies and/or policies and
shall pay the premiums thereon; and the Employee agrees and consents to such
arrangement. Notwithstanding the foregoing, and so long as adequate and
customary arrangements are made with respect thereto, the Employee's spouse
and/or children may be named co-beneficiaries on such split-dollar insurance
policy or policies as the Employee reasonably desires. The Company shall have
the right and option of selecting the carrier(s) of such insurance and the
form thereof (i.e. whole life, term, etc. Upon the termination of the
Employee's employment for any reason provided in this Agreement, he shall
have the right to purchase any and all policies owned by the Company on his
life, subject to the terms of this Agreement, upon paying the Company within
thirty (30) days of such termination an amount equal to the cash value,
including the cash value of dividend additions or deposits, if any, of such
policy as of the date such right is exercised, less the amount of any policy
loan with accrued interest. The Company, upon such payment, shall execute
the instruments necessary to transfer such policies to the Employee.
11. Vacations and Automobile. During the term of this Agreement, the Employee
shall receive four (4) weeks of vacation per year at such time as he shall
elect.The Employee hereby agrees to utilize his best efforts to take his
vacation time in non-consecutive weeks. The Employee shall be entitled to
accumulate any unused vacation time from year to year during of the term of
this Agreement; and upon termination shall be paid the full value thereof at
the salary rate in effect on the date of termination.
12. Proprietary Rights. The Employee shall at no time before or after the
termination of his employment hereunder use or divulge or make known to
anyone without the express written consent of the Board of Directors of the
Company (except to those duly authorized by Company to have access thereto)
any accounting systems, financial systems, marketing systems, programs or
methods, customer or client lists, computer programs, configurations, systems
or procedures, ideas, formulae, inventions, discoveries, improvements,
secrets, processes or technical or other information of the Company or any
accounts, customer or client lists, transactions of business affairs of the
Company. All ideas, marketing systems, computer programs, configurations,
systems or procedures, programs or methods, formulae, inventions,
discoveries, improvements, secrets or processes whether or not patentable or
copyrightable, made or developed by the Employee during the term of this
Agreement or within one year after its expiration or termination and relating
to the business of the Company shall be the exclusive property of the
Company, whether or not any claim of the Employee to compensation under
Paragraph 7 hereof has been or will be satisfied, and the Employee agrees to
provide the Company at its request and expense such instruments and evidence
as it may reasonably request to perfect, enforce and maintain the Company's
rights to such property. At the conclusion of his employment by the Company,
the Employee shall forthwith surrender to the Company all letters, brochures,
agreements and documents of every character relating to the business affairs
and properties of the Company and then in his possession and shall not,
without the Company's prior written consent, retain or disclose any copies
thereof.
13. Disability. If during the term of this Agreement and in the opinion
of the Board of Directors of the Company as confirmed by competent medical
evidence, the Employee shall become physically or mentally incapacitated to
perform his duties for the Company hereunder for a continuous period, then the
following shall apply: (a) for the first year of such disability the Employee
shall receive his full salary; (b) for the second through fourth year of the
Employees (disability but in no event beyond the termination date of this
Agreement) the Employee shall receive fifty (50%) percent of his full salary.
The amount paid under this paragraph 13 shall be reduced by the amount of any
disability insurance proceeds received by Employee from any insurance policy
paid for the by Company. Upon the Employee's resumption of full employment, he
shall commence again to receive his full salary. The Employee hereby agrees to
submit himself for appropriate medical examination by his personal physician as
necessary to implement and give effect to the purposes of this Paragraph 13. In
the event of termination as provided herein, the full term compensation
provisions of Paragraph 7 shall apply.
14. Competition. During the five (5) year term of this Agreement, or
upon the termination of his employment, whichever event shall occur later and
for a period of twenty-four (24) consecutive months thereafter, the Employee
shall not, without the prior express written consent of the Company, engage
(either as an employee, consultant, agent, proprietor, officer, director,
partner, or stockholder, of any corporation, firm or business) in any business
which is in competition or threatening to be in competition with the Company
within any other state or other jurisdiction in which the Company is engaged in
such operations.
The Employee further covenants that during the stated term of this Agreement
and for the twenty-four (24) month period thereafter, he will not solicit any
clients or customers, known by his to be clients or customers of the Company,
for competitive business. The foregoing restrictions shall not apply to a
termination of the Employee's employment by the Company without cause or a
termination of the employment by the Employee because of breach of agreement
by the Company.
15. Term and Termination. This Agreement shall be deemed to be effective as
of the date of its execution and shall continue in full force and effect
until the last day of the month after the fifth (5th) anniversary thereof
unless sooner terminated as hereinafter set forth:
(a) Termination by the Company for Cause.
(1) The Company may terminate the Employee's employment for Cause
(as defined in sub-paragraph (2) below) upon compliance with the provisions of
sub-paragraph (3). Upon such termination, the Company shall have no further
obligations to the Employee, except for compensation or other benefits due for
the period prior to the date of Termination.
(2) Cause: shall mean: (i) the Employee's willful and continued failure to
perform any of his duties with the Company (other than as a result of the
Employee's incapacity due to illness or injury, as defined in Paragraph 13
after a demand for performance is delivered to the Employee by the Board of
Directors (by a duly adopted resolution), which specifically identified the
manner in which the Board of Directors believes that the Employee has not
performed any of his duties; or (ii) the Employee's willful engaging in
misconduct which is materially injurious to the Company, monetarily or
otherwise. For purposes of this subparagraph (b), no act or failure to act on
the Employee's part shall be considered "willful" unless the act of failure to
act by the Employee is done in bad faith and with absolute certainty that such
action or omission was not in or opposed to the best interests of the Company,
and any failure by the Employee to perform any of the Employee duties set
forth herein shall be conclusively deemed not to be a willful failure to
perform where the failure results from the Employee's illness or injury as
set forth in a written opinion of the Employee's personal physician.
(3) Termination for Cause shall be effective only if: (i) the Company has
delivered to the Employee a copy of a Notice of Termination which complies
with Paragraph 16 hereof and which give the Employee, at least thirty (30)
business days' prior notice, the opportunity, together with the Employee's
counsel to be heard before the Board of Directors; and (ii) the Board of
Directors (after such notice and opportunity to be heard), adopts a resolution
concurred in but not less than two-thirds of all of the directors of the
Company then in office, including at least two-thirds of all of the directors
who are not officers of the Company, that in the good faith opinion of the
Board of Directors, the Employee was guilty of conduct set forth above in
clause (i) and (ii) of the first sentence of sub-paragraph (2), and
specifying the particulars thereof in detail.
(b) Termination by the Employee for Good Reason.
(1) The Employee may terminate his employment for Good Reason (as defined in
subparagraph (2) below) by giving the Company a Notice of Termination which
complies with Paragraph 16 hereof. Upon such termination, the Employee shall
have the rights described in sub- paragraph (3) hereof.
(2) Good Reason: shall mean: (i) the Employee being removed, or not being
re-elected, to the positions as described in Paragraph 2 hereof, except in
connection with termination of the Employee's employment by the Company for
Cause or Disability or by the Employee without Good Reason; (ii) the
assignment to the Employee, without his express written consent, of any
duties other than those permitted by Paragraph 4; (iii) the Company's
requiring the Employee to maintain his principal office or conduct his
principal activities anywhere other than at the Company's principal executive
offices, (iv) the failure of the Company to obtain the assumption and
agreement to perform this Agreement by any successor as contemplated in
Paragraph 18 hereof; (v) repudiation by the Company of any material
obligation of the Company under Paragraph 7 hereof; or (vi) the delivery of a
Notice of Termination by the Company pursuant to Paragraph 17(a)(3), above
(except that the delivery of such Notice shall be retroactively deemed not to
constitute Good Reason if within sixty (60) days after the Board of Directors
shall make the determination described in paragraph 17(a) (3) (after the
opportunity to be heard provided for therein) and such determination is not
thereafter reversed by an arbitration decision or final judgment of a court
of competent jurisdiction).
(c) Termination by Change of Control. In the event the Company
experiences a Change of Control as hereinafter defined, the Employee shall have
the right and option, in his sole unfettered discretion, to declare this
Agreement breached by the Company. Upon the occurrence of such a course of
action, the Employee shall be entitled to receive all of the compensation and
remuneration provided in Subparagraph (c) of this Paragraph 16.
(1) Change in Control. For purposes of this Agreement a Change in
Control will be deemed to have occurred
(a) if following (i) a tender or exchange offer for voting securities of the
Company, (ii) a proxy contest for the election of directors of the Company or
(iii) a merger or consolidation or sale of all or substantially all of the
business or assets of the Company, the directors of the Company immediately
prior to the initiation of such event cease to constitute a majority of the
board of directors of the Company upon the occurrence of such event or within
one year after such event, or (b) if any "person" or "group" (as defined
under the beneficial ownership rules of Sections 13(d) (3) and 14(d) (2) of
the Securities Exchange Act of 1934 and Rule 13d3 thereunder) acquires
ownership or control, or power to control, twenty-five percent (25%) or more
of the outstanding voting securities of the Company without prior approval or
ratification by a majority of the Company's directors in office at the time of
such event.
(d) The Employees Rights Upon Certain Terminations. If the Company
terminates the Employee's employment hereunder, otherwise than for Cause
pursuant to Paragraph 15(a) or for Disability pursuant to Paragraph 1, or if
the Employee terminates his employment for Good Reason pursuant to Paragraph
15(b) or pursuant to Paragraph 15(c):
(1) The Company shall continue to pay to the Employee his full base
compensation, at the rate in effect on the Date of Termination, for the period
(the Post Termination Period) from the Date of Termination until January 1,
2003 the expiration date of this agreement. Notwithstanding anything to the
contrary which may be contained herein, if the Employee shall have died prior
to January 1, 2003, then, and in such event, such payment of the Employee's
full base compensation pursuant to this Paragraph 16 shall continue to be
made to the Employee's estate until January 1, 2003.
(2) The Employee shall be entitled to the full amount which would have been
due his under any bonus or profit sharing plan, or similar arrangement, in
which he was participating prior to the Date of Termination, for the full
five (5) year term of this Agreement, without any proration or reduction
because of the Employee not being employed during the full term;
(3) the Employee shall also be entitled to the full amount of any
contingent compensation or benefit which would have become vested had his
employment continued throughout the Post-Termination Period;
(4) the Company shall also pay to the Employee an amount equal to
all legal fees and expenses incurred by the Employee as a result of such
termination (including all fees and expenses, if any, incurred in contesting or
disputing any such termination or in seeking to obtain or enforce or retain any
right or benefit provided by this Agreement);
(5) the Company shall maintain in full force and effect, for the Employee;
continued benefit throughout the Post-Termination Period, all life and health
insurance and other benefit plans in which the Employee was entitled to
participate immediately prior to the Date of Termination, provided that the
Employee continued participation is possible under the general terms and
conditions of such plans. If the Employee's participation in any such plan is
barred for any reason whatsoever, the Company shall arrange to provide the
Employee with benefits substantially similar to those which he is entitled to
receive under such plan;
(6) the Employee shall not be required to mitigate the amount of any payment
provided for in this Paragraph 16, by seeking other employment or otherwise,
nor shall the amount of any payment provided for in this Paragraph 16 be
reduced by any compensation earned by the Employee in any manner after the
Date of Termination.
16. Notice of Termination. Any purported termination of the Employee's
employment shall be communicated by written Notice of Termination from one
party to the other party hereto. For purposes of this Agreement, a "Notice
of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
specific detail the facts and circumstances claimed to provide a basis for
termination of the Employee's employment under the provision so indicated.
No purported termination by the Company of the Employee's employment shall be
effective if it is not effected pursuant to a Notice of Termination
satisfying the requirements of this Paragraph 16.
17. Date of Termination. Date of Termination shall mean the date on which a
Notice of Termination is given.
18. Successors; Binding Agreement.
(a) The Company shall require any purchaser of all or substantially all of the
business of the Company, by agreement or form and substance satisfactory to
the Employee, to assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform
it if no such purchase had taken place. If no agreement the full amount will
become due and payable. As used in this Agreement, Company shall mean the
Company as hereinabove defined, and any successor to the Company's business
or assets which executes and delivers this Agreement provided for in the
Paragraph 19(a) or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.
(b) This Agreement shall insure to the benefit of and to be
enforceable by the Employee's personal or legal representative, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Employee should die while any amount would still be payable to him hereunder if
the Employee had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
Employee's devisee, legatee or other designee or, if there be no such designee,
to his estate.
19. Arbitration. The Employee shall have the right to submit any
determination by the Board of Directors terminating his employment for Cause,
or any other dispute hereunder, to arbitration by a single arbitrator in
Florida under the laws of the American Arbitration Association. Any award in
such arbitration may be enforced in any court of competent jurisdiction.
20. Entire Agreement. The Agreement sets forth the entire understanding
of the parties with respect to the subject matter hereof, shall supersede any
prior agreements and understandings between the parties with respect to such
subject matter, and no statement, representation, warranty or covenant has been
made by either party except as expressly set forth herein.
21. Modification. This Agreement shall not be changed or terminated orally.
All of the terms and provisions of this Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective heirs and
personal representatives of the Employee and the successors and assigns of the
Company.
22. Laws of the State of Florida. The Agreement is being delivered in the
State of Florida and shall be construed and enforced in accordance with the
laws of the State of Florida, irrespective of the state of incorporation of
the Company or the place of domicile or residence of the Employee. In the
event of a controversy arising out of the interpretation, construction,
performance or breach of this Agreement, the parties hereby agree and consent
to the jurisdiction and venue of the Circuit Court of the State of Florida,
Palm Beach County and/or the United States District Court for the District of
Florida and further agree and consent that personal service or process in any
such action or proceeding outside of the County of Palm Beach shall be
tantamount to service in person within the County of Palm Beach and shall
confer personal jurisdiction upon either of said courts.
23. Notices. Any notice to be given by any party hereunder to any other
shall be in writing, mailed by certified or registered mail, return receipt
requested, shall be addressed to the other at his address as hereinbefore
stated or to such other address as may have been furnished by any party to
the other in writing, and shall be deemed to be given on the date of mailing
thereof in accordance with the foregoing.
24. Additional Instruments. Each of the parties shall from time to time,
at the request of the others, execute, acknowledge and deliver to the other
party any and all further instruments that may be reasonably required to give
full effect and force to the provisions of this Agreement.
25. Originals. The Agreement may be executed in counterparts each of
which so executed shall be deemed an original and constitute one and the same
agreement.
26. Address of Parties. Each party shall at all times keep the other
informed of its principal place of business or residence if different from that
stated herein, and shall promptly notify the other of any change, giving the
address of the new principal place of business or residence.
27. Modification and Waiver. A modification or waiver of any of the
provisions of this Agreement shall be effective only if made in writing and
executed with the same formality as this Agreement. The failure of any party
to insist upon strict performance of any of the provisions of this Agreement
shall not be construed as a waiver of any subsequent default of the same or
similar nature or of any other nature or kind.
28. Remedies on Breach. The Employee hereby agrees that it may not be
possible for the Company to be adequately compensated in damages for any breach
by the Employee of any of the representations, warranties, terms or conditions
contained in this Agreement and accordingly the Employee hereby agrees and
consents that in the event of any such breach, the Company, in addition to any
other remedies it may have, shall be entitled to injunctive or other equitable
relief restraining such breach.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
ATTEST:
BY:/s/Samuel G. Weiss By:/s/David Miller
Secretary Chairman
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