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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the period from _________ to ____________
Commission File Number 000-22681
FINANTRA CAPITAL, INC.
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(Exact name of small business issuer as specified in its charter)
Delaware 13-3571419
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(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification Number
1100 Ponce de Leon Boulevard, Coral Gables, Florida 33134
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(Address of Principal Executive Offices)
(305) 443-5002
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(Issuer's Telephone Number)
Check whether the issuer (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
Yes X No
--- ---
State the number of shares outstanding of each of the issuer's
classes of common equity, as of the latest practicable date:
Number of Shares Outstanding
Class on August 12, 1998
----- ----------------------------
Common Stock, par value $.01 per share 4,133,027 shares
Transitional Small Business Disclosure Format Yes No X
--- ---
<PAGE>
FINANTRA CAPITAL, INC.
INDEX
PART I FINANCIAL INFORMATION PAGE
Item 1 Condensed Consolidated Financial Statements (Unaudited) 3
Condensed Consolidated Balance Sheet at June 30, 1998 3
Condensed Consolidated Statements of Income for the
Three and Six Months ended June 30, 1998 and 1997 5
Condensed Consolidated Statements of Cash Flows for the
Six Months ended June 30, 1998 and 1997 6
Notes to Condensed Consolidated Financial Statements 7
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 13
PART II OTHER INFORMATION 16
Item 6 Exhibits 16
SIGNATURES 17
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<PAGE>
FINANTRA CAPITAL, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1998
(UNAUDITED)
ASSETS
------
<TABLE>
<CAPTION>
<S> <C>
Current assets:
Cash and cash equivalents $2,458,035
Accounts receivable, net of allowance for doubtful
accounts of $3,000 599,312
Finance receivable 2,859,056
Note receivable - shareholder 10,820
Prepaid expenses 393,354
----------
Total current assets 6,320,577
Property and equipment, at cost, net of accumulated depreciation 137,113
Other assets:
Goodwill, net 2,196,707
Note receivable - stockholders 245,680
Due from affiliates 32,307
Other 103,666
----------
Total other assets 2,578,360
Total assets $9,036,050
==========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE>
FINANTRA CAPITAL, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1998
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Current liabilities:
Notes payable $ 1,190,475
Current portion of long-term debt 61,220
Current portion of obligations to finance companies 50,754
Accounts payable and accrued expenses 366,310
----------
Total current liabilities 1,668,759
Other liabilities:
Long-term debt, net of current portion 60,000
Obligations to finance companies, net of current portion 26,913
Total other liabilities 86,913
Total liabilities 1,755,672
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value, 5,000,000 authorized,
2,958,817 shares issued and outstanding 29,588
Common stock, $.01 par value, 10,000,000 authorized,
3,126,661 shares issued and 292,500 to be issued 31,267
Additional paid-in capital 10,020,591
Treasury stock (37,250)
Accumulated deficit (2,763,818)
----------
Total stockholders' equity 7,280,378
Total liabilities and stockholders' equity $ 9,036,050
===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE>
FINANTRA CAPITAL, INC.
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------------- ------------------------
1998 1997 1998 1997
------ ----- ----- -----
<S> <C> <C> <C> <C>
Revenues $1,354,961 $ 91,123 $2,632,078 $ 230,286
Costs and expenses:
Depreciation 47,327 17,000 93,583 34,000
Interest expense 30,835 18,345 30,835 27,988
General and administrative expenses 1,138,830 48,912 2,335,633 114,763
---------- ---------- ---------- ---------
Total costs and expenses 1,216,992 84,257 2,460,051 176,751
---------- ---------- ---------- ---------
Income (loss) from operations 137,969 6,866 172,027 53,535
---------- ---------- ---------- ---------
Other expenses:
Loss on sale of securities - (33,924) - (40,580)
---------- ---------- ---------- ---------
Total other expenses - (33,924) - (40,580)
---------- ---------- ----------- ---------
Net income (loss) $ 137,969 $ (27,058) $ 172,027 $ 12,955
========== ========== =========== =========
Net income (loss) applicable to common shareholders $ 69,769 $ (100,965) $ 35,627 $(134,922)
========== ========== =========== =========
Net income (loss) per common share $ .02 $ (.06) $ .01 $ (.08)
======== ======= ========= ========
Weighted average number of shares outstanding
and to be issued 3,359,959 1,680,000 3,342,310 1,680,000
========== ========= ========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE>
FINANTRA CAPITAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JUNE 30,
--------------------------
1998 1997
------ -----
<S> <C> <C>
Cash flows from operating activities:
Net cash used by operating activities $ (396,067) $ (34,748)
----------- ---------
Cash flows from investing activities:
Cash acquired in acquisitions 78,584 -
Net advances (to) from affiliates 43,106 (9,786)
Note receivable - stockholders (60,000) -
Purchase of equipment (34,181) -
Purchase of securities available for sale - (75,010)
Proceeds from sale of securities available for sale - 34,401
Proceeds from sale of equipment - 21,000
Notes acquired for cash (2,555,556) -
---------- -------
Net cash used by investing activities (2,528,047) (29,395)
---------- -------
Cash flows from financing activities:
Borrowings on line-of-credit 1,049,950 -
Repayment of notes payable - (60,000)
Proceeds from long-term debt - 160,000
Repayments of long-term debt (46,275) (59,670)
Net proceeds from shareholder loans - 28,500
Payments of preferred dividends (136,400) -
Repayment of shareholder loans - (6,253)
Issuance of common stock 445,321 -
Purchase of treasury stock (37,250) -
---------- -------
Net cash provided by financing activities 1,275,346 62 577
---------- ------
Net (decrease) in cash (1,648,768) (1,566)
Cash - beginning 4,106,803 -
--------- -----------
Cash - end $2,458,035 $ (1,566)
========== ===========
Supplemental disclosure of cash flow information:
Cash paid during the period:
Interest $ - $ 22,866
========== ===========
Supplemental noncash investing and financial activities:
Issuance of common stock for acquisition of
subsidiaries $2,631,862 $ -
========== ===========
Leased equipment received from affiliated
company as payment on intercompany receivable $ - $ 87,758
========== ===========
Obligations to finance companies transferred to
affiliated company $ - $ 27,807
========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<PAGE>
FINANTRA CAPITAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998
NOTE 1 - CORPORATION NAME CHANGE
Effective August 5, 1998, the Company changed its corporate name from Medley
Credit Acceptance Corp. to Finantra Capital, Inc.
NOTE 2 - PRINCIPLES OF CONSOLIDATION
The accompanying financial statements include the accounts of the Company and
its wholly-owned subsidiaries, Premier Provider Services, Inc., Medical Billing
Service Systems, Inc. and Ameri-Cap Leasing Corp., and its 80% owned
subsidiaries, American Investment Management, Inc. ("AIM") and American Factors
Group, Inc.
NOTE 3 - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and Article 10 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required for complete
financial statements. In the opinion of management, all adjustments necessary
for a fair presentation of the results for the interim periods presented have
been included.
These results have been determined on the basis of generally accepted
accounting principles and practices applied consistently with those used in the
preparation of the Company's Annual Financial Statement for the year ended
December 31, 1997. Operating results for the six months ended June 30, 1998,
are not necessarily indicative of the results that may be expected for the year
ending December 31, 1998.
It is recommended that the accompanying condensed consolidated financial
statements be read in conjunction with the financial statements and notes
thereto included elsewhere in this filing.
Certain items in the condensed consolidated financial statements for the
interim period ended June 30, 1997, have been reclassified to conform with the
current presentation. These reclassifications had no effect on net income.
NOTE 4 - ACQUISITIONS
On June 30, 1998, the Company, through a wholly owned subsidiary, Ameri-Cap
Leasing Corp., acquired 80% of the outstanding common stock of MFC Financial
Corp. As consideration, the Company issued 10,000 shares of its common stock.
Additionally, the Company has agreed to acquire the remaining MFC Financial
Corp. shares annually in equal installments over a three-year period from the
date of the closing, with the first installment commencing one year from the
date of closing and on the same day each year thereafter.
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<PAGE>
FINANTRA CAPITAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998
NOTE 4 - ACQUISITIONS (CONTINUED)
The acquisition consideration for the balance of the MFC shares shall be an
amount of Company common stock equal to two and one half times the net pre-tax
income of the Company's leasing division in the first year, three times the net
pre-tax income of the Company's leasing division in the second year, and four
times the net pre-tax income of the Company's leasing division in the third
year. The number of shares to be issued shall be based upon the closing share
price of the Company's common stock on the date of each exchange. The
acquisition was accounted for using the purchase method of accounting and
$30,000 in goodwill was recorded which is being amortized over fifteen (15)
years. The results of operations of MFC Financial Corp. are included in the
condensed consolidated statements of income since the date of acquisition.
All acquisitions by the Company during the six months ended June 30, 1998 were
accounted for as purchases and $2,272,455 in goodwill was recorded which is
being amortized over 15 years using the straight line method. Amortization
expense amounted to $37,874. The results of operations are included in the
condensed consolidation statements of income since the date of the
acquisitions. The purchase prices assigned to the net assets acquired were
based on the fair value of such assets and liabilities at the respective
acquisition dates.
On January 1, 1998, the Company completed its acquisitions of Premier Provider
Services, Inc. and Medical Billing Service Systems, Inc. The Company agreed to
issue to the principals of these subsidiaries an aggregate of 585,000 shares of
common stock, each share valued at $4.50, one-half of which were issued upon
the closing of the acquisitions, with the remaining one-half of such shares
being issuable on the first anniversary of such acquisitions. The 292,500
unissued shares have been treated as outstanding at March 31, 1998, and have
been included in earnings per share. In addition, the Company agreed to issue
to the principals of these subsidiaries incentive stock options pursuant to the
Company's option plan to acquire common stock through December 31, 2001, under
certain circumstances, up to an aggregate of 150,000 additional shares of
common stock based upon the subsidiaries' financial performance.
The Company acquired an 80% interest in AIM during the quarter ended March 31,
1998. In consideration the Company agreed to issue to the principal of AIM
shares of the Company's common stock on the first, second and third
anniversaries of acquisition. These shares represent less than 1% of the
outstanding shares of the Company.
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<PAGE>
FINANTRA CAPITAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998
NOTE 4 - ACQUISITIONS (CONTINUED)
The proforma unaudited results of operations for the six months ended June 30,
1997, assuming consummation of the purchase at the beginning of the period, are
as follows:
FOR THE SIX MONTHS ENDED
JUNE 30,
-------------------------
1998 1997
---- -----
Revenues $2,632,078 $ 1,355,423
Net income $ 172,027 $ 319,859
Net income per common share after dividends $ .01 $ .07
========== ===========
The unaudited proforma information does not purport to be indicative of the
results of operations which would have resulted had the acquisitions been
consummated at the date assumed.
NOTE 5 - NOTES PAYABLE
Notes payable consists of the following at June 30, 1998:
$4,000,000 line-of-credit with a financial institution; interest is payable
monthly at prime plus 1 1/2%. The line is secured by certain finance
receivables.
$1,115,475
Note payable
- ------------
Note payable due bank collateralized by certain of the Company's
assets not otherwise pledged and is personally guaranteed by the
Company's principal officer and an affiliate 75,000
----------
Total $1,190,475
==========
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<PAGE>
FINANTRA CAPITAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998
NOTE 6 - OBLIGATIONS TO FINANCE COMPANIES
Obligations to finance companies, secured by rental equipment and related
rental agreements, consist of:
<TABLE>
<CAPTION>
<S> <C>
18.7% obligation payable in monthly installments of
$2,260, including interest, through April 1998. $10,791
23.6% obligation payable in varying monthly installments,
including interest, through November 1999. 19,156
21.2% obligation payable in varying monthly installments,
including interest, through November 1999. 36,722
18.3% obligation payable in varying monthly installments,
including interest, through November 1999. 10,998
-------
77,667
Less: current maturities (50,754)
-------
Long-term obligations $26,913
=======
</TABLE>
NOTE 7 - DIVIDENDS PAYABLE - PREFERRED STOCK
The Company has paid $68,200 of dividends on its preferred stock at June 30,
1998.
NOTE 8 - LONG-TERM DEBT
At June 30, 1998, the Company is obligated to various individuals for amounts
aggregating $121,220. These notes are for various amounts and maturities
through January 1999. Interest is payable at rates ranging from 10% to 13.5%
per annum. The unsecured portion of these notes is $88,724.
NOTE 9 - RELATED PARTY TRANSACTIONS
The Company loaned its principal officer $60,000 as of June 30, 1998. The note
bears interest at 10% per annum with interest only payable quarterly. The
entire unpaid principal balance and accrued interest is due May 5, 2001.
In addition, the Company loaned $200,000 to a company owned by a shareholder of
the Company. The installment note carries a 12% interest rate per annum. The
note will be repaid in monthly installments of $3,500, commencing June 1, 1998
the entire unpaid principal balance, together with accrued interest is due on
May 31, 2001.
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<PAGE>
FINANTRA CAPITAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998
NOTE 10 - EMPLOYEE STOCK OPTIONS
Options to purchase 85,000 shares of the Company's common stock at an average
price per share of approximately $1.22 have been granted to certain of the
Company's officers and key employees.
The Company has elected to account for the stock options under Accounting
Principles Board Option No. 25, "Accounting for Stock Issued to Employees" and
related interpretations. Accordingly, no compensation expense has been
recognized on the stock options.
Had compensation expense for the stock option plan been determined based on the
fair value of the options at the grant date consistent with the methodology
prescribed under Statement of Financial Standards No. 124, "Accounting for
Stock Based Compensation", the Company's net income would have been decreased
by approximately $4,100. The fair value of each option is estimated on the date
of grant using the fair market option pricing model with the assumption:
Risk-free interest rate 5.5%
Expected life (years) 2 to 3
Expected volatility .426
Expected dividends None
A summary of option transactions during the six months ended June 30, 1998 is
shown below:
WEIGHTED
AVERAGE
NUMBER EXERCISE
OF SHARES PRICE
Outstanding at December 31, 1997 - $ -
Granted 85,000 1.22
Exercised - -
Forfeited - -
-------
Outstanding at June 30, 1998 85,000
=======
Exercisable at June 30, 1998 -
=======
Available for issuance at June 30, 1998 85,000
=======
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<PAGE>
FINANTRA CAPITAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998
NOTE 11 - INDUSTRY SEGMENT INFORMATION
The Company currently operates primarily two industry segments: specialty
finance and medical billing and financial administrative services. Revenues,
income from operation, identifiable assets, capital expenditures and
depreciation and amortization pertaining to the industries in which the Company
operates are presented below:
FOR THE SIX MONTHS ENDED
JUNE 30
-----------------------------
1998 1997
---- ----
Industry segments:
Revenues:
Specialty finance $ 513,656 $ 230,286
Medical billing and financial services 2,118,422 -
---------- -----------
Total $2,632,078 $ 230,286
========== ===========
Income (loss) from operations:
Specialty finance $ (244,373) $ 53,535
Medical billing and financial services 416,400 -
---------- -----------
Total $ 172,027 $ 53,535
========== ===========
Identifiable assets:
Specialty finance $5,898,098 $ 1,816,823
Medical billing and financial services 3,137,952 -
--------- -----------
Total $9,036,050 $ 1,816,823
========== ===========
Capital expenditures:
Specialty finance $ 21,175 $ -
Medical billing and financial services 13,016 -
---------- -----------
Total $ 34,191 $ -
========== ===========
Depreciation and amortization:
Specialty finance $ 1,350 $ 34,000
Medical billing and financial services 92,233 -
---------- -----------
Total $ 93,583 $ 34,000
========== ===========
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RECENT DEVELOPMENTS
Effective August 5, 1998, Medley Credit Acceptance Corp., a
Delaware corporation (the "Company"), changed its name to "Finantra Capital,
Inc." In addition, on July 15, 1998, Mr. Evaldo (Fred) Dupuy was appointed as
the fourth director of the Company. Mr Dupuy, age 53, is the owner of several
finance companies and, for the last five years, has been a principal with the
investment banking firm of Coast Partners Securities, Inc., a boutique firm
specializing in securing asset and debt related facilities for its clients. Mr.
Dupuy is a member of the Florida Premium Finance Association, Florida
Automobile Dealers Association, Florida Mortgage Brokers Association and the
Asset Based Lender Association.
GENERAL
The Company is a specialty finance company engaged, principally, in
accounts receivable financing (factoring), equipment leasing and traditional
financing business lines. Since the consummation, in late December 1997, of the
Company's initial public offering of approximately $6.8 million of securities
(the "IPO"), the Company's operations have focused primarily on growing an
operation base and establishing a market presence in each of the aforementioned
businesses. The Company's primary strategy for achieving its necessary growth
and market presence has been, among other things, to pursue acquisitions of
existing enterprises which, in the Company's opinion, have immediate earnings
potential and long-term growth possibilities.
While the Company has only a limited operating history in the
accounts receivable financing and traditional financing business lines, the
Company has more seasoned experience in the equipment leasing business. Prior
to the consummation of the Company's IPO, the Company's business and affairs
focused on the financing of (i) dry cleaning equipment to small dry cleaning
business throughout the eastern United States and (ii) refrigeration equipment
sold or leased by an affiliate. The Company has made a business decision to
orderly wind down, commencing during the fiscal year ended December 31, 1997,
its dry cleaning and refrigeration equipment financing operations.
In an effort to grow its accounts receivable financing and
traditional financing business lines, while establishing a market presence for
the same, the Company, during the quarter ended March 31, 1998 ("First Quarter
1998"), consummated several significant transactions. Principal among these
were (i) the Company's formation of its American Factors Group, Inc. subsidiary
("AFG"), an entity specializing in accounts receivable financing, (ii) the
Company's acquisition of a majority interest in Americal Investment Management
("AIM"), a marketer and manager of a variety of financial and insurance related
services, and (iii) the Company's acquisition of Medical Billing Service
Systems, Inc. ("Medical Billing) and Premier Provider Services, Inc.
("Premier"; Medical Billing and Premier are sometimes hereinafter collectively
referred to as the "Medical Billing Subsidiaries"), companies engaged,
generally, in providing back office auditing and other financial administrative
services principally to the medical industry.
In anticipation of expanding its equipment leasing business, the
Company, during the quarter ended June 30, 1998 ("Second Quarter 1998"),
acquired, through its newly-formed wholly-owned subsidiary, Ameri-Cap Leasing
Corp. ("Ameri-Cap"), 80% of the outstanding capital stock of MFC Financial
Corp., a Florida corporation ("MFC"). MFC is engaged in the financing business
generally, including equipment leasing. In consideration for this acquisition,
the Company issued to Messrs. Ron Epstein, Elliot Kalus and Henry Koche, the
stockholders of MFC, an aggregate of 10,000 shares of the Company's Common
Stock. The Company, through Ameri-Cap, has agreed, on each of the first three
anniversaries of the initial closing
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<PAGE>
of this acquisition, to acquire from Messrs. Epstein, Kalus and Koche the
remaining 20% of the capital stock of MFC. The consideration payable for such
remaining 20% interest shall be, on the first anniversary, an aggregate number
of shares of the Company's Common Stock equal to two and one-half times the net
pre-tax income of Ameri-Cap for its first year of operations, on the second
anniversary, an aggregate number of shares of the Company's Common Stock equal
to three times the net pre-tax income of Ameri-Cap for its second year of
operations and on the third anniversary, an aggregate number of shares of the
Company's Common Stock equal to four times the net pre-tax income of Ameri-Cap
for its third year of operations. Shares of the Company's Common Stock will be
valued at the closing sale price on the date of their issuance.
In connection with the MFC acquisition, the Company entered into
three year employment agreements with each of Messrs. Epstein, Kalus and Koche.
These agreements, among other things, entitle Messrs. Epstein, Kalus and Koche
to be granted incentive stock options pursuant to the Company's 1997 Stock
Option Plan based upon Ameri-Cap's annual financial performance and to
participate in a discretionary cash bonus pool for Ameri-Cap's employees if
Ameri-Cap's financial performance justifies the same. These employment
agreements are terminable by the Company for cause, however, if, among other
things, after the six month period immediately following the Company's initial
purchase of its controlling interest in MFC, Ameri-Cap's net monthly sales
volume (defined as the total amount of all leases written in any calendar
month) is less than $500,000 per month in any consecutive three month period or
in a three month aggregate in any 12 month period.
During Second Quarter 1998, the Company also provided a financial
accommodation to an affiliate for a fee equal to $150,000 per annum, which fee
is payable each year the Company continues to extend such financial
accommodation. Specifically, the Company posted a $1.475 million standby letter
of credit on behalf of the affiliate. This letter of credit was posted for the
purpose of securing the performance of certain equipment leases sold by the
affiliate to an unrelated party. The Company's financial exposure under this
letter of credit has been collateralized by the pledge by the affiliate to the
Company of 750,000 shares of the Company's Common Stock owned by the affiliate,
which Common Stock, for purposes of the pledge, has an agreed upon value of
$2.50 per share.
RESULTS OF OPERATIONS
Three Months Ended June 30, 1998 Compared to Three Months Ended June 30, 1997
For Second Quarter 1998, the Company generated revenues of
$1,354,961, an increase of $1,263,838 from revenues of $91,123 for the three
months ended June 30, 1997 ("Second Quarter 1997"). This increase in revenues
was primarily the result of the Company's acquisitions of AIM, the Medical
Billing Subsidiaries and MFC, and the subsequent commencement of the Company's
accounts receivable financing (factoring) and traditional financing business
lines and expanded equipment leasing operations.
During Second Quarter 1998, the Company incurred an increase of
$1,089,918 in general and administrative expenses over Second Quarter 1997
figures, principally as a result of the Company's commencement of its accounts
receivables financing (factoring) and traditional financing business lines and
expanded equipment leasing operations. Principally as a consequence thereof,
the Company recorded net income from operations of $137,969 for Second Quarter
1998 as compared to net income from operations of $6,866 for Second Quarter
1997. When combined with the provision for dividends with respect to shares of
the Company's Series A 10% Convertible Preferred Stock, the Company generated
net income applicable to common shareholders for Second Quarter 1998 of
$69,769, or approximately $.02 per share, as compared to incurring net losses
applicable to common shareholders for Second Quarter 1997 of $100,965, or
approximately $.06 per share.
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<PAGE>
Six Months Ended June 30, 1998 Compared to Six Months Ended June 30, 1997
For the six months ended June 30, 1998 ("Six Months 1998"), the
Company generated revenues of $2,632,078, an increase of $2, 401,792 from
revenues of $230,286 for the six months ended June 30, 1997 ("Six Months
1997"). This increase in revenues was primarily the result of the Company's
acquisitions of AIM, the Medical Billing Subsidiaries and MFC, and the
subsequent commencement of the Company's accounts receivable financing
(factoring) and traditional financing business lines and expanded equipment
leasing operations.
For Six Months 1998, the Company incurred an increase of $2,220,870
in general and administrative expenses over Six Months 1997 figures,
principally as a result of the Company's commencement of its accounts
receivables financing (factoring) and traditional financing business lines and
expanded equipment leasing operations. Principally as a consequence thereof,
the Company recorded net income from operations of $172,027 for Six Months 1998
as compared to net income from operations of $12,955 for Six Months 1997. When
combined with the provision for dividends with respect to shares of the
Company's Series A 10% Convertible Preferred Stock, the Company generated net
income applicable to common shareholders for Six Months 1998 of $35,627, or
approximately $.01 per share, as compared to incurring net losses applicable to
common shareholders for Six Months 1997 of $134,922, or approximately $.08 per
share.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1998, the Company had total assets of $9,036,050, as
compared to total assets of $4,944,831 at December 31, 1997. This significant
increase in total assets is primarily the result of the Company's acquisition
of AIM and the Medical Billing Subsidiaries during First Quarter 1998 and MFC
during Second Quarter 1998 and the commencement of operations of AFG's accounts
receivable financing (factoring) business. At June 30, 1998, a finance
receivable arising predominantly from AFG's operations in the amount of
$2,859,056 was recorded on the Company's balance sheet. The $2,196,707 of
goodwill, net, recorded on the Company's balance sheet at June 30, 1998
represents the premium over net equity paid by the Company in connection with
its acquisitions of AIM, the Medical Billing Subsidiaries and MFC. The Company
anticipates that its future earnings (assuming its acquired subsidiaries
continue to generate earnings) will offset the amortization associated with the
recording of this goodwill.
At June 30, 1998, the Company had total liabilities of $1,755,672,
as compared to total liabilities of $751,211 at December 31, 1997. This
increase in total liabilities was primarily due to the incurrence of borrowings
under the accounts receivable credit facility established for AFG,
notwithstanding the Company's continued timely satisfaction of other
obligations.
At June 30, 1998, the Company had total stockholders' equity of
$7,280,378, as compared to total stockholders' equity of $4,204,620 at December
31, 1997. The significant increase in stockholders' equity is attributable
directly to the earnings generated by the Company from operations, values
associated with the Company's formation of AFG and acquisition, utilizing
primarily shares of the Company's Common Stock, of AIM, the Medical Billing
Subsidiaries and MFC.
The Company's experience in the specialty finance business has
historically been conducted with a smaller capital base than currently is
available to the Company. As a consequence of the consummation of the IPO, the
Company believes that it is positioned to secure additional lines of credit and
traditional bank financings for the purpose of expanding and developing its
business lines. There can be no assurance, however, that the Company will
successfully implement all or a portion of this anticipated expansion.
-15-
<PAGE>
The Company anticipates, based on its current proposed plans and
assumptions relating to its operations and expansion, that it will be able to
satisfy its currently contemplated cash requirements for approximately the next
12 months from working capital and cash flow. In the event that the Company's
plans change or its assumptions prove to be inaccurate, or working capital and
cash flow prove to be insufficient to fund the Company's operations and
expansion (due to unanticipated expenses, delays, problems or otherwise), the
Company would be required to seek additional funding. Depending upon the
Company's financial strength and the state of the capital markets, the Company
may also determine that it is advisable to raise additional equity capital. The
Company has no current arrangements with respect to, or sources of, any
additional capital, and there can be no assurance that such additional capital
will be available to the Company, if needed, on commercial reasonable terms or
at all. The inability of the Company to obtain additional capital would have a
material adverse effect on the Company and could cause the Company to be unable
to implement its business strategy or proposed expansion or to otherwise
significantly curtail or cease operations.
PART II
OTHER INFORMATION
ITEM 6. EXHIBITS
No. Description
--- -----------
3.1 Certificate of Amendment of Amended and Restated Certificate of
Incorporation, as filed with the Delaware Secretary of State on
August 5, 1998.
10.1 Stock Purchase Agreement, dated June 30, 1998, among Ameri-Cap, Ron
Epstein, Elliot Kalus, Henry Koche and the Company.
10.2 Employment Agreement, dated June 30, 1998, between Ameri-Cap and Ron
Epstein.
10.3 Employment Agreement, dated June 30, 1998, between Ameri-Cap and Elliot
Kalus.
10.2 Employment Agreement, dated June 30, 1998, between Ameri-Cap and Henry
Koche.
27 Financial Data Schedule
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<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this Report to be signed on its behalf of the undersigned, thereunto duly
authorized.
FINANTRA CAPITAL, INC.
Dated: August 13, 1998 By: /s/ Robert D. Press
-------------------
Robert D. Press, Chairman of the Board,
President, Chief Executive Officer and
Chief Financial Officer
(Principal Executive and Financial Officer)
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<PAGE>
EXHIBIT INDEX
-------------
No. Description
- --- -----------
3.1 Certificate of Amendment of Amended and Restated Certificate of
Incorporation, as filed with the Delaware Secretary of State on
August 5, 1998.
10.1 Stock Purchase Agreement, dated June 30, 1998, among Ameri-Cap, Ron
Epstein, Elliot Kalus, Henry Koche and the Company.
10.2 Employment Agreement, dated June 30, 1998, between Ameri-Cap and Ron
Epstein.
10.3 Employment Agreement, dated June 30, 1998, between Ameri-Cap and Elliot
Kalus.
10.2 Employment Agreement, dated June 30, 1998, between Ameri-Cap and Henry
Koche.
27 Financial Data Schedule.
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<PAGE>
CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
MEDLEY CREDIT ACCEPTANCE CORP.
(A DELAWARE CORPORATION)
Medley Credit Acceptance Corp. (the "Corporation"), a corporation
organized and existing under and by virtue of the General Corporation Law of
the State of Delaware
DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation, by action
taken without a meeting in accordance with Section 144(f) of the
General Corporation Law, duly adopted resolutions setting forth
proposed amendments to the Certificate of Incorporation of the
Corporation, declaring said amendments to be advisable and calling
for the consent of the stockholders to the adoption of said
amendments by action of stockholders taken in lieu of a meeting in
accordance with Section 228(a) of the General Corporation Law. The
resolutions setting forth the proposed amendments are as follows:
RESOLVED, that the Board of Directors deems it
advisable and in the best interests of the Corporation
that the Certificate of Incorporation of the
Corporation be amended by changing the Article thereof
numbered "First" so that, as amended, said Article
shall be and read as follows:
The name of the Corporation is Finantra Capital, Inc.
SECOND: That thereafter, pursuant to a resolution of its Board of
Directors, the officers of the Corporation obtained the written
consent of the holders of a majority of the outstanding stock of
the Corporation to the adoption of the foregoing amendment, in
accordance with Section 228(a) of the General Corporation Law.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the
State of Delaware.
IN WITNESS WHEREOF, this Certificate of MEDLEY CREDIT ACCEPTANCE
CORP. has been signed by Robert D. Press, its President, and the corporate seal
of MEDLEY CREDIT ACCEPTANCE CORP. has been affixed hereunto and attested by,
Alyce B. Schreiber, its Secretary, this 4th day of August, 1998.
MEDLEY CREDIT ACCEPTANCE CORP.
By: /s/ Robert D. Press
-----------------------------
Robert D. Press, President
ATTEST:
[SEAL]
By: /s/ Alyce Schreiber
------------------------------------
Alyce Schreiber, Secretary
<PAGE>
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement, dated this 3rd day of June, 1998, is made
and entered into by and between Ameri-Cap Leasing Corp., a Florida corporation
["Buyer"] Ron Epstein ["Epstein"], Elliot Kalus ["Kalus"] and Henry Koche
["Koche"] [collectively referred to as "Seller" and Medley Credit Acceptance
Corp., a Delaware corporation ["Medley"]. [The Buyer and Seller may be referred
to collectively throughout this Agreement as "Parties" for convenience
W I T N E S S E T H:
WHEREAS, the Seller collectively owns 100% of the authorized, issued,
and outstanding shares of MFC Financial Corp. [the "Corporation"], and
WHEREAS, the Corporation is organized and existing under the laws of the
State of Florida and is engaged in the financing business, including but not
limited to equipment leasing, and
WHEREAS, the Buyer is a Florida corporation ant is desirous of
purchasing from the Seller 80% of the authorized, issued, and outstanding
common shares of the Corporation (the "Shares") and the Seller is desirous of
selling same to the Buyer, and
WHEREAS, the Buyer is a wholly owed subsidiary of Medley, and
WHEREAS, Medley is a publically traded over-the-counter company, and
WHEREAS, Epstein, Kalus and Koche are key employees of the Corporation
and the Buyer desires for them to become employees of the Buyer and have agreed
to enter into Employment Agreements, and
WHEREAS, the Buyer shall have an operating committee initially comprised
of Epstein. Kalus and Koche, and
WHEREAS the Panties desire to document their representations,
warranties, covenants, agreements, and conditions relating to the purchase and
sale of the shares in a written agreement.
NOW THEREFORE; in consideration of the mutual promises and covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties agree as follows:
1. RECITALS: The above and foregoing recitals are true and correct and
are incorporated herein.
<PAGE>
2. SALE AND TRANSFER OF STOCK: The Seller shall sell, transfer and
convey to the Buyer and the Buyer shall purchase and acquire from the Seller
80% of the authorized, issued and outstanding common shares of the Corporation
consisting of_____ shares (the "Shares").
3. PURCHASE PRICE AND METHOD OF PAYMENT: The purchase price for the
Shares shall be 10,000 shares of Medley's common stock which will be
transferred on the closing date to each Seller on a pro rata basis in exchange
for the Seller's stock in the Corporation being sold pursuant to this
Agreement. The Seller acknowledges that the Medley common stock being exchanged
have not been registered under the Securities Act of 1933 (the "Act") for
resale and may not be offered or sold except pursuant to an effective
registration under the Act or to the extent applicable, Rule 144 under the Act
or such other exemption from registration as may be given in an option of
counsel acceptable for Medley.
4. BUYER'S OBLIGATION TO ACQUIRE BALANCE OF SELLER'S SHARES: The Buyer
agrees to acquire the balance of the Seller's shares in the Corporation
annually in equal installments 0 ver a three year period from the date of
closing, with the first installment commencing one-year from the date of
closing and on the same day each year thereafter. The acquisition consideration
for the balance of the Seller's shares shall be an amount of Medley common
stock equal to two and one-half times the net pre-tax income of the Leasing
Division in the first year, three times the net pre-tax income of the Leasing
Division in the second year, and four times the net pre-tax income of the
Leasing Division in the third year. The Buyer and Seller agree that the number
of shares to be issued shall be based upon the closing share price of Medley's
common stock on the date of each exchange
5. DUE DILIGENCE PERIOD AND RIGHT OF TERMINATION:
(A) By Buyer: The Seller and Buyer hereby acknowledge that the
Buyer, as of the effective date of this Agreement, has not had the opportunity
to review and evaluate all aspects of the Corporation, as represented by the
Seller. Therefore, the Buyer shall have, from the effective date through the
end of business 10 days thereafter (Due Diligence Period) to inspect and assess
all aspects of the Corporation, financial and otherwise, and to make such
investigations as the Buyer deems necessary in the Buyer's sole discretion. The
Seller agrees to assist the Buyer in reviewing all records of the Corporation
and to aid and assist the Buyer in reviewing all records of the Corporation and
to aid and assist the Buyer in arranging meetings and providing documents,
records, and/or information reasonably required by the Buyer or the Buyer's
attorneys or other agents including accountants, in order that the Buyer may
determine the viability of the transaction contemplated by this Agreement.
During the Due Diligence Period, Seller shall advise the Buyer of any negative
information learned by the Seller which would have a material, financial impact
upon the Seller. In the event the Buyer determines in its sole and absolute
discretion that the representations made by the Seller prior to execution of
this Agreement or those made in this Agreement are false, misleading or
incomplete so that the acquisition of the Shares would have a negative
financial impact on the Buyer or Medley, the
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<PAGE>
Buyer may notify the Seller in writing prior to the termination of the Due
Diligence Period and the Buyer may at the Buyer's sole discretion terminate
this Agreement. The Buyer's failure to provide written notice of termination
within the time period set forth in this section shall be deemed conclusive
evidence that the Buyer has waived his right to terminate as contained herein.
(B) By Seller: During the due diligence period described in A,
above, the Seller shall have the right to assess all aspects of the Buyer and
Medley as the Seller deems appropriate. Buyer and Medley agree to assist Seller
in reviewing all records necessary for its due diligence by making these
records available to Seller, attorneys, accounts, or other agents. In the event
the Seller determines in their sole opinion that the representations made by
the Buyer or Medley are false, misleading or incomplete so that the Seller
would sustain an economic loss on the exchange of the Seller's shares for that
of Medley, the Seller shall notify the Buyer in writing prior to the
termination of the due diligence period, and Sellers may at their sole
discretion terminate this Agreement.
6. CLOSING DATE: The Closing under this Agreement shall take place on or
before June 30, 1998 at the Law Offices of Maynard J. Hellman, Esquire, 1100
Ponce de Leon Boulevard, Coral Gables, Florida 33134 or at such other time and
place as shall be set forth in a writing signed by the Parties hereto.
7. REPRESENTATIONS AND WARRANTIES OF SELLER: The Seller represents and
warrants to the Buyer as follows:
(a) The Corporation is a validly existing Corporation in good
standing under the laws of the State of Florida and is validly conducting
business pursuant to the laws of the State of Florida.
(b) The Seller has the power to enter into and carry out their
obligations under this Agreement.
(c) The Corporation holds all licenses necessary to conduct the
business of the Corporation and complies with all laws, rules and regulations
presently established by all governmental agencies in connection with same.
(d) The Shares being sold by the Seller to the Buyer are fully
paid and non assessable.
(e) The aggregate number of shares that the Corporation is
authorized to have issued and outstanding as of the date hereof are shares of
common stock, which are presently all issued and outstanding and held
collectively in the name of the Seller.
-3-
<PAGE>
(f) The only stock authorized to be outstanding by the Corporation
is one class of common stock represented by the shares owned by the Seller.
(g) The Seller is and will be on the closing date the sole owners
of all of the authorized, issued. and outstanding shares of the common stock of
the Corporation, free and clear of any and all liens and encumbrances.
(h) That as of the date of executing, this Agreement as well as on
the date of closing, the Corporation shall have no debts, liabilities, or
obligations for which payment needs to be made except for those debts,
liabilities. and obligations set forth on Exhibit "A" attached to this
Agreement.
(i) The Seller does not have any knowledge or any basis for the
assertion of any material liability against the Corporation.
(j) The Corporation is not subject to any order, judgment, decree,
stipulation, or any other agreements untie any governmental body or agency with
respect to the Corporation unless set forth in this Agreement.
(k) The Corporation is not a party to any long-term contract or
commitment unless specifically set forth in this Agreement on Exhibit "B"
attached hereto.
(1) Neither the Sellers nor the Corporation have received notice
nor have any claims been made against the Corporation or the Sellers by any
governmental authority to the effect that the Corporation or the business of
the Corporation fails to comply in any material respect to any law, rule,
regulation, or ordinance or that a license, permit, or order which is not in
the possession of the Corporation is necessary for the Corporation to conduct
its business.
(m) On the day of closing, the Seller will have the full and
unrestrictive legal and equitable title to the shares being sold to the Buyer,
free and clear of all liens and encumbrances.
(n) Any action required to be taken by the Corporation in order to
complete the transaction contemplated in this Agreement has been or will be by
the closing date duly approved by the Board of Directors and Shareholders of
the Corporation.
(o) The Sellers represent that there are no liabilities, including
but not limited to liabilities for federal, state, and local taxes, penalties,
assessments, lawsuits or claims against the Corporation or the Sellers, whether
such liabilities, suits, or claims are contingent or absolute, direct or
indirect, matured or unmatured, which could in any way affect the shares being
conveyed hereunder, the assets of the Corporation, or the Corporation's ability
to conduct its business.
-4-
<PAGE>
(p) The Articles of Incorporation and By-laws attached to this
Agreement as Exhibit "C" are complete and accurate as of the date hereof and
contain all amendments through the date hereof. The Minute Book of the
Corporation is complete and accurate and reflects all proceedings of
Shareholders and Directors of the Corporation through the date of this
Agreement.
(q) The transfer and delivery of the shares to the Buyer, pursuant
to this Agreement will be valid and will vest title to the shares in the Buyer
free and clear of all liens, encumbrances, conditions, and restrictions of any
kind.
(r) The Corporation will not issue any additional shares of its
common stock prior to the closing. There are no outstanding options, contracts,
commitments, warrants or other rights of any character affecting or relating in
any manner to the common stock of the Corporation.
(s) The documents, agreements, and materials delivered or to be
delivered by the Seller to the Buyer in furtherance of the Buyer's Due
Diligence examination of the Corporation shall be complete and accurate in all
material respects and will not have been amended or modified by any oral
agreements.
(t) Financial Statements: The Corporation has furnished the Buyer
with Financial Statements of the Corporation as of _____________________. The
Financial Statements fairly present the financial condition of the Corporation
on such date. To the best of the Seller's knowledge, there are no matters
pending which would have an adverse or material affect on the Financial
Statements of the Corporation.
(u) Subsequent to the date of the Corporation's last Financial
Statement, the business of the Corporation has been conducted in its ordinary
course of business and to the best of the Seller's knowledge there has been no
material loss of any of the Corporation's customers and clients which would
have an adverse affect on the Corporation's future income and profitability.
The representations and warranties set forth above shall survive the
closing.
8. REPRESENTATIONS AND WARRANTIES OF THE BUYER: The Buyer represents and
warrants to the Sellers as follows:
(a) The Buyer is a Corporation, duly organized and validly
existing in good standing under the laws of the State of Florida with full
power and authority to own and lease properties and to carry on its business.
(b) The execution, delivery, and performance of this Agreement has
been duly approved or will be duly approved by all requisite corporate actions
by the closing date.
-5-
<PAGE>
(c) The Buyer has the power to enter into and carry out its
obligations under this Agreement.
(d) The common stock of Medley being transferred to the Seller
will be fully paid and non-assessable.
(e) The authorized capital stock of the Buyer consists of one
class of common stock having one million shares authorized at $.01 per share
all of which stock is owned by Medley.
(f) The Buyer is not subject to any order, judgment, decree,
stipulation or other agreement which would prohibit the transaction
contemplated under this Agreement.
(g) Any action required to be taken by the Buyer in order to
complete the action contemplated in this Agreement has been or will be by the
closing date duly approved by the Board of Directors of the Buyer.
(h) The transfer and delivery of the shares contemplated under
this Agreement will vest title to said shares in the Seller free of all liens,
encumbrances, conditions and restrictions except those pertaining to the
Federal Securities Act of 1933, as amended and such State Securities laws as
may be applicable.
(i) Buyer represents that it is not executing this Agreement with
the intention of selling or otherwise transferring Corporation or Buyer.
9. REPRESENTATIONS AND WARRANTIES OF MEDLEY: Medley represents and
warrants to the Seller as follows:
(a) Medley is a duly organized and existing corporation under the
laws of the State of Delaware and is authorized to conduct business in the
state of Florida.
(b) Medley has the power and authority to enter into this
Agreement and the execution delivery and performance of this Agreement has been
duly approved or will be duly approved by all requisite corporate actions by
the closing date.
(c) The authorized capital stock of Medley consists of the
following:
1. 15 million shares of Common Stock having a
par value of $.001
per share
2. five million shares of Preferred Stock
3. five million Warrants
-6-
<PAGE>
(d) Medley is a publicly traded company and to the best of its
knowledge all filings with the Securities and Exchange Commission or other
public and private governing bodies were accurate as of the date of their
filing.
(e) The documents, agreements and materials delivered to the
Seller in furtherance of the Seller's due diligence of Medley and the Buyer are
complete and accurate in all material respects.
(f) Medley represents that it will use its best efforts to support
the operations of the Buyer and Seller in future business dealings including
but not limited to:
1. Making available initial working capital up to
$150,000 for leasing operations.
2. Arranging for a warehouse line of credit in a maximum
amount available to increase the leasing business.
3. Arranging for bank or other institutional lines of
credit in a maximum amount available for the future
growth of the leasing business.
10. CONDITIONS PRECEDENT AT CLOSING: The Buyer's obligation to close the
transaction contemplated by this Agreement is subject to the following
conditions:
(a) The Buyer has not terminated this Agreement during its Due
Diligence Period.
(b) The representations and warranties of the Seller contained in
this Agreement are true and correct in all material respects on the closing
date.
(c) Any and all agreements to be performed by the Seller prior to
the closing date have been performed.
11. INDEMNIFICATION:
(a) By The Seller: Subject to the items disclosed in this
Agreement, the Seller shall defend, indemnify, and hold the Buyer or Medley and
any of the Buyer's or Medley's successors and assigns, harmless against all
damages, losses, costs or expenses (including reasonable attorney's fees at all
levels of trial or appeal incurred in defending any claim for such damage,
loss, cost, or expense incurred by the Buyer or Medley resulting from or in
respect to:
(1) Any breach of the Sellers' representations, warranties,
or covenants in this Agreement or any untruth or inaccuracy thereof.
-7-
<PAGE>
(2) Any claim by a broker, agent, or finder alleged to be
employed by, representing, or otherwise involved with the Corporation or the
Sellers relating to this transaction.
(b) By Buyer and Medley: Subject to the items disclosed in this
Agreement, the Buyer and Medley shall defend, indemnify, and hold the Seller
harmless against all damages, losses costs, or expenses, including reasonable
attorneys' fees at all levels of trial or appeal incurred in defending any
claim for damage, loss, cost or expense incurred by Seller resulting from or
in respect to:
(1) Any breach of the Buyer or Medley's representations,
warranties or covenants in this Agreement or any untruth or inaccuracy thereof.
Notice of claims: In the event any party (Indemnified Party) shall receive any
written notice of any claim or proceeding against them (or in the case of Buyer
the Corporation shall receive notice of a claim or proceeding), the Indemnified
Party shall give the Indemnifying Party written notice of any such claim or
demand and the Indemnifying Party shall have the right to contest or defend any
action brought against the Indemnified Party at the Indemnifying Party's own
expense provided, that should the Indemnifying Party fail to notify the
Indemnified Party of the assumption of the defense of any action within 10 days
of the Indemnified Party giving written notice to the Indemnifying Party, then
the Indemnified Party shall have the right to take any such action it deems
reasonable to defend, contest, settle or compromise any action or claim made
against the Indemnified Party. If the Indemnifying Party defends any action for
which indemnification is claimed, the Indemnified Party shall be entitled to
participate at its own expense in the defense of such action; provided,
however, that the Indemnifying Party shall bear the fees and expenses of the
Indemnified Party's counsel should there exist a conflict of interest between
Indemnified Party and indemnifying Party which would render it inappropriate
for counsel selected by the Indemnifying Party to represent the Indemnified
Party.
2. EMPLOYMENT OF SELLERS: The Buyer recognizes the Importance of the
Sellers for the on-going business of the Corporation. The Corporation
simultaneously with the closing of the transaction contemplated by this
Agreement shall enter into written Employment Agreements with the Sellers upon
the terms and conditions set forth in this Agreement as Exhibits "D".
13. At the Closing, the following instruments shall be executed and
delivered:
(a) Certificates representing the Shares of the Corporation being
exchanged, duly endorsed by the Sellers in favor of the Buyer with all required
transfer tax stamps affixed.
(b) A Resolution of the Board of Directors of the Corporation
authorizing the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby certified as of the closing date by an
officer of the Corporation as having been adopted being in full force and
effect and unmodified on the closing date.
-8-
<PAGE>
(c) An affidavit by the Sellers affirming that the warranties and
representations of the Sellers are true and correct on the closing date.
(d) A certificate by the Board of Directors of the Corporation to
the effect that the representations and warranties of the Corporation are true
and correct in all material respects as of the closing date
(e) Certificates representing 10,000 shares of Medley being duly
endorsed. being transferred to the Epstein, Kalus and Koche in such prorate
amounts as they direct in writing with all required transfer tax stamps
affixed, if required.
(f) A resolution of the Board of Directors of the Buyer
authorizing the transaction.
(g) A resolution of the Board of Directors of Medley authorizing
the transaction.
(h) A certificate by the Board of Directors of the Buyer to the
effect that the representations and warranties of the Corporation are true and
correct in all material respects as of the closing date.
(i) A certificate by the Board of Directors of Medley to the
effect that the representations and warranties of the Corporation are true and
correct in all material respects as of the closing date
14. COVENANT OF FURTHER ASSURANCES: After the closing, each party to this
Agreement shall, at the reasonable request of the other party and without
further consideration furnish, executed and deliver such documents,
instruments, certificates, notices or other further assurances as the
requesting party shall reasonably request as necessary or desirable to effect
complete consummation of this Agreement and the transaction contemplated
herein.
15. NOTICES: Except as otherwise provided for herein, all notices,
requests, demands and other communications hereunder shall be in writing and
will be deemed to have been duly given if personally delivered, or when
transmitted by facsimile with confirmation of receipt from one party to the
other or when received if mailed by the United States first class certified or
registered mail, postage prepaid, with return receipt requested and marked
delivered or refused, or via an overnight delivery service with proof of
delivery or refusal of delivery, to the other parties at the following
addresses:
To the Buyer: Medley Credit Acceptance Corporation
1100 Ponce de Leon Blvd.
Coral Gables, Florida 33134
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<PAGE>
with a copy to: Maynard J. Hellman, Esq.
1100 Ponce de Leon Blvd.
Coral Gables, Florida 33134
To the Sellers: Ron Epstein
7150 W. 20th Avenue
Suite 302
Hialeah, Florida 33106
Elliot Kalus
7150 W. 20th Avenue
Suite 302
Hialeah, Florida 33106
Henry Koche
7150 W. 20th Avenue
Suite 302
Hialeah, Florida 33106
To the Corporation: MFC Financial Corp.
7150 W. 20th Avenue
Suite 302
Hialeah, Florida 33016
with a copy to: David H. Reimer, Esq.
Reimer & Rosenthal, P.A.
15175 Eagle Nest Lane, Suite 101
Miami Lakes, FL 33014
16. MISCELLANEOUS PROVISIONS:
(a) Assignment: No party may assign its obligations or rights
under this Agreement without the written consent of the other parties.
(b) Modification: There are no other agreements, promises or
undertakings between the parties except as specifically set forth herein. No
alteration, change, modification or amendment to this Agreement shall be made
except in writing and signed by the parties hereto.
(c) Severability: If any provision or paragraph of this Agreement
is deemed to be unlawful or unenforceable by any court, administrative agency
or statute, law or ordinance, the said provision or paragraph shall be severed
from this Agreement without affecting the enforceability of the remainder of
this Agreement. The parties shall make a good faith effort to
-10-
<PAGE>
redraft the severed provision or paragraph consistent with the party's original
intention but in such a way as to be lawful and enforceable.
(d) Binding Effect: This Agreement supersedes and cancels any and
all other agreements referring to the subject matter herein. This Agreement
shall be binding upon and inure to the benefit of the respective parties, the
successors and assigns, if applicable as well as to the he and legal
representatives of the parties hereto, if applicable.
(e) Construction: This Agreement shall be construed and enforced
under the laws of the state of Florida.
(f) Counterparts: This Agreement may be executed in several
counterparts, each of which shall be deemed an original but all of which
counterparts collectively shall constitute one instrument representing the
agreement between the parties.
(g) Captions and Headings: The captions and headings of each
section or subsection in this Agreement arc for convenience of reference only
and shall in no manner or way whatsoever effect the interpretation or meaning
of such section or subsection.
(h) Exhibits: The exhibits attached hereto together with all
documents incorporated by reference herein form an integral part of this
Agreement and are hereby incorporated herein wherever reference is made to them
to same extent as if they were set out in full at the point at which such
reference is made.
(i) Attorney's Fees: The prevailing party in any litigation arising
out of the terms of this Agreement shall be entitled to reimbursement of
reasonable attorney's fees and costs at the trial and appellate court level.
-11-
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto executed this Agreement the
date above written:
AMERI-CAP FINANCE GROUP, INC.
a Florida corporation
By:__________________________
Robert D. Press, President
_____________________________
RON EPSTEIN
_____________________________
ELLIOT KALUS
_____________________________
HENRY KOCHE
MEDLEY CREDIT ACCEPTANCE CORP.
a Delaware corporation
By:__________________________
Robert D. Press, President
-12-
[INSERT DOCUMENT TEXT HERE]
<PAGE>
EMPLOYMENT AGREEMENT
This Employment Agreement [the "Agreement"] is made and entered
into as of this 30th day of June, 1998 by and between AMERI-CAP LEASING CORP.,
a Florida corporation [the "Company"] and RON EPSTEIN ["Employee"].
W I T N E S SE T H :
WHEREAS, Employee is experienced in the development, marketing and
operating a medical equipment leasing business, and
WHEREAS, the Company desires to retain, engage and employ Employee
and Employee desires to be so retained, engaged and employed by the Company in
such capacity as may be determined by the Board of Directors of the Employer
upon the terms and conditions set forth in this Agreement, and
WHEREAS, Employee by reason of the nature of Employee's duties and
responsibilities will be provided access to the Company's trade secrets and
other confidential and proprietary information which the Company and its
parent, Medley Credit Acceptance Corp. desires to maintain confidential.
NOW, THEREFORE, in consideration of the mutual promises, covenants
and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties agree
as follows:
1. The above and foregoing recitals are true and correct and are
incorporated herein.
2. Relationship of the Parties: The Employer hereby employs, hires
and engages Employee as an employee and the Employee hereby accepts and agrees
to such hiring, engagement and employment subject to the supervision and
pursuant to the orders, advice and discretion of the Employer's Board of
Directors The Employee shall also perform such other duties as are customarily
performed by one holding such position in other, same or similar businesses as
that engaged in by the Employer.
3. Duties: During the term of the Employee's employment, the
Employee shall be responsible for the development, refinement and
implementation of the Company's equipment leasing program and the compliance of
such program with governmental laws, rules and regulations. The Employee shall
work on a full time basis and carry out his employment in a good and
professional manner and to the reasonable satisfaction of the Company's Board
of Directors.
<PAGE>
4. Term: The term of the Employee's employment shall be tor a tem,
of three years commencing upon the execution of this Agreement and subject to
the termination provisions set forth in this Agreement, provided however, that
the term of this Agreement shall be automatically extended for additional one
year terms unless the Company or Employee gives written notice to the other no
later than thirty (30) days prior to the expiration of any term electing to
decline such extension.
5. Compensation:
-------------
A. The Company covenants and agrees that in consideration of
the services performed and to be performed hereunder, it will pay to Employee,
during the term of Employee's employment under this Agreement, at the Company's
regular and customary intervals for payment of compensation to employees? but
not less than twice per month, an annual base salary in the sum of $100,000.00.
6. Benefits: The Employee shall be entitled to the following
benefits during the period of his employment hereunder;
A. Employee shall be entitled in accordance with the Company's
general policies for executives to participate in paid vacation leave, health,
casually, disability and life insurance programs and any other benefits as are
made available from time to time by the Company to other employees or
executives.
B. During the term of his employment the Employee shall be
entitled to reimbursement of all reasonable expenses actually paid or incurred
by Employee in the course of and pursuant to the performance of his duties
hereunder. Any single expense in excess of Five Hundred and 00/100 ($500.00)
Dollars shall be verbally approved in advance by the Board Chairman or other
person designated by the Company to approve such expenditure.
C. Employee shall be entitled to two (2) weeks paid vacation in
the first twelve (12) month period during the term of this Agreement and three
(3) weeks in each twelve (12) month term thereafter. Paid vacation shall be
prorated in any calendar year during which the Employee is employed under this
Agreement for less than an entire year. The Employee shall also he entitled to
all paid holidays given by the Company to its executives or employees. In the
event any annual accrued vacation time is unused at the conclusion of a
calendar year the unused time may be carried over into the next calendar year
or years until utilized.
7. Incentive Stock Option Program: Employee shall be entitled to
participate in the incentive Stock Option Program of the Company's parent,
Medley Credit Acceptance Corp. The number of incentive stock options
distributable by the Company will be based upon the Company's annual net income
as follows:
-2-
<PAGE>
If the Net Income of the Company is in excess of:
$500,000 75,000 ISO's
$1 million 100,000 ISO's
$1.5 million 125,000 ISO's
$2.0+ million 150,000 ISO's
The Incentive Stock Option Program shall be funded with common shares of the
C:ompany's parent Medley Credit Acceptance Corp., pursuant to the terms of that
certain stock option plan for Medley Credit Acceptance Corp. dated December 31,
1996, as amended from time to time. The distribution of the ISO's to individual
employees of the Company shall be determined by the Company's Leasing, Division
Operating Committee composed of Ron Epstein, Elliot Kalus and Hank Koche.
8. Cash Bonus Fund: As an additional incentive to compensate the
Employee for performance, the Company shall establish annually a discretionary
cash bonus fund for its leasing division employee executives in an amount of up
to ten percent (10%) of the pre-tax net income earned by the Company's Leasing
division during the previous calendar year. The entitlement amount and to who
the distribution of the cash bonus funds shall be made shall be determined at
the discretion of the leasing division's operating committee.
9. Disability: In the event that Employee shall become
incapacitated by reason of mental or physical disability during the term of his
employment such that he is prevented from performing his principal duties and
services hereunder for a period of sixty (60) consecutive days or for shorter
periods aggregating ninety (90) days during any twelve (12) month period, the
Company thereafter shall have the right to terminate Employee's employment
under this Agreement by sending written notice of such termination to Employee
or his legal representative and thereupon his employment shall hereunder
immediately terminate. Upon such termination Employee shall be entitled to
receive and shall be paid by the Company his salary in effect on the date of
termination paid at the Company's regular and customary intervals for the
payment of salaries for the lesser of three (3) months or the remaining terms
of' this Agreement. ln addition, during, such period, Employee shall continue
to receive his benefits described in this Agreement as in effect at the date of
termination.. Immediately following the expiration of such applicable period
the Employee shall no longer be entitled to further Company benefits. The
Employee agrees to accept the payments described herein in full discharge and
release of the Company of and from any further obligations under this
Agreement. Such discharge and release shall not affect any rights or remedies
which may be available to Employee or the Company otherwise than under this
Agreement.
10. Termination For Cause:
A. The Company shall have the right to terminate the employment
Employee hereunder at any time for cause [as used herein, "cause"] if:
-3-
<PAGE>
1. Employee shall be convicted by a court of competent and
final jurisdiction of any crime [whether or not involving the Company] which
constitutes a felony in the jurisdiction involved or shall be habitually drunk
or intoxicated in public or otherwise commit acts of moral turpitude in such a
manner as to adversely reflect upon the reputation of the Company; or
2. Employee shall commit any act of embezzlement or similar
material dishonest and injurious conduct against the Company; or
3. Employee shall demonstrate willful and injurious
misconduct in connection with the performance of his duties and
responsibilities under, or assigned pursuant to this Agreement; or
4. Employee shall demonstrate reckless or grossly negligent
and injurious conduct in connection with the performance of, or a gross
disregard for, his duties and responsibilities under, or assigned pursuant to
this Agreement; or
5. In the event, alter the first six (6) months following the
Commencement Date of this Agreement, the net monthly sales volume [total amount
of all leases written in any calendar month of the Company is less than
$500,000.00 per month in any consecutive month period or in a three (3) month
aggregate in any twelve (12) month period.
B. In the event that the employment of Employee shall be
terminated by the Company for cause pursuant to Paragraph 10A hereof, Employee
shall be entitled to receive his salary then in effect through the dale of such
termination. Employee shall accept the payments pursuant to this paragraph in
full discharge and release of the Company of and from any further obligations
under this Agreement. Nothing contained in this paragraph shall constitute a
waiver or release by the Company of any rights or claims it may have against
the Employee, including, but not limited to, any claims or rights pursuant to
the provisions set forth in this Agreement.
11. Best Efforts of Employee: The Employee agrees that Employee
will at all times, faithfully, industriously and to the best of his ability,
experience and talents, perform all of the express and implicit teens hereof,
to the reasonable satisfaction of the Company. The duties to be rendered by the
Employee shall be rendered at the principal address of the Company or at such
other place or places as the Company shall require. lt is understood that the
Employee must devote his full time and effort to the business of the Company.
12. Employee's Limitations on Ability to Make Company Commitments:
The Employee shall have the legal authority to enter into contracts and
commitments for and on behalf of the Company. However, the Employee shall not
cater into any contract or commitment on behalf of the Company which would
violate the parameters of the Company's lease underwriting guidelines or be in
derogation of the express requirements of the Company's credit committee with
respect to the leasing of equipment or an expenses in excess of One Thousand
-4-
<PAGE>
Dollars ($1,000.00) for non business related expenditures excluding authorized
Employee reimbursements pursuant to paragraph 6B without the express written
consent of the Company's Board of Directors or the Company's Credit Committee.
13. Trust Funds: All money belonging to the Company which comes into the
possession of Employee shall be received by Employee in trust for the Company
and Employee shall immediately deliver said funds to the Company for deposit.
All of such funds shall be considered "'Trust Funds".
14. Covenants. Representations and Warranties of Employee: The
Employee represents and warrants to the Company as follows:
A. Employee has the power and authority to enter into this
Agreement and perform its duties hereunder.
B. Employee shall use his best efforts to comply with all laws,
regulations. rules and ordinances pertaining to the Company's business.
15. Restrictive Covenants:
A. Employee recognizes and acknowledges that as a consequence of
his duties hereunder, Employee will be provided access to or will come in
contact with confidential information of or regard the Company and its parent,
Medley Credit Acceptance Corp., from time to time. Accordingly, Employee agrees
that he will not, during or after the term of his engagement except with prior
written consent of the Company, disclose any confidential information relating
to the Company or its Parent. The provisions of this section shall not apply to
information which Employee is required to disclose by law or by order a court
of competent jurisdiction but only to the extent required by law or by order
and when reasonably possible, only if Employee shall give the Company prior
notice of such intended disclosure so that the Company has the opportunity to
seek a protective order if it deems such appropriate.
B. As used in this Agreement, "confidential information" shall
mean and include studies, plans, reports, records, promotional materials,
agreements, memoranda, documents, information related to Company activities,
systems, finances, client lists, research data personnel data, financing
sources. and such other related information not of a public knowledge.
C. For so long as the Employee is employed hereunder, Employee
shall not engage either as principal, agent or consultant or through any
corporation, firm or organization in which he is or may be an officer,
director, employee, shareholder, partner, member or with which he is otherwise
affiliated in any business for profit which is engaged in any activity or
business similar to that of the Employer. Notwithstanding the foregoing, Ron
Epstein may continue to run off the existing leases in Clearlake Financial
Corp. which exist as of the date hereof.
-5-
<PAGE>
D. The Employee covenants and agrees that for a period of two
(2) years from the date of his termination of employment with the Company,
either voluntary or involuntary that he will not directly or indirectly solicit
or aid in the solicitation of any Company client who dealt with the Company
during the period of time that the Employee was in the employ of the Company
for the purpose of attempting to arrange the refinance of any unexpired lease
procured by the Company. In addition, the Company has the right for a period of
up to six months to prohibit the Employee from soliciting any type of leasing
business so long, as the Company continues to pay Employee his compensation
during the period of restriction.
E. It is agreed by the Employee that should he violate the
provisions of this section, the Company shall have the right to obtain an order
from a court of competent jurisdiction enjoining him from violating any and all
of the provisions of this section or of this Agreement and the Company's
application for such a writ of injunction shall be deemed without prejudice to
any all other rights, remedies or actions which may accrue in favor of the
Company as a result of the Employee's breach of this provision or of the terms
of this Agreement. In the event the Company is required to institute any
litigation commencing the terms and conditions of this section or of this
Agreement, the prevailing party shall be entitled to reimbursement of all
reasonable attorney's fees and costs at both the trial and the appellate court
level. The Employee further agrees that in the event of litigation venue shall
only be proper in Dade County, Florida.
F. The enforceability of this section shall be dependent upon
the continuing existence and operation of the Company or any Medley subsidiary
remaining in the equipment leasing business.
16. Notices: All notices, requests, demands, waivers, consents,
approvals or other communications required or permitted hereunder shall be in
writing and shall be deemed lo have been given when received if delivered
personally or by recognized overnight carrier, or three (3) days after being
sent if sent by certified or registered mail, postage prepaid, return receipt
requested, to the following addresses:
If to the Company: Ameri-Cap Leasing Co.
Attention: Robert D. Press
1100 Ponce de Leon Boulevard
Coral Gables, Florida 33134
If to the Employee: Ron Epstein
____________________
____________________
Any party may by notice change the address to which notice or other
communications to it are to be delivered or mailed.
-6-
<PAGE>
17. Miscellaneous Provisions:
A. Captions and Paragraph Headings: Captions and paragraph
headings contained in this Contract are for convenience and reference only and
in no way define, describe, extend or limit the copy or intent of this Contract
nor the intent of any provision hereof:
B. Counterparts: This Contract may be executed in one or more
counterparts, each of which shall be deemed an original, hut all of which shall
constitute one and the same Contract.
C. Binding Effect: This Contract shall enure to the benefit of
and shall be binding upon the parties hereto and their respective heirs,
personal representatives, successors and assigns. However, under no
circumstances shall this Contract he assignable by Employee.
D. Entire Agreement: This Contract constitutes the entire
understanding agreement between the parties and may not be changed, altered or
modified, except by an instrument in writing signed by all parties against whom
and enforcement of such Contract would be sought. In the event any provision of
this Contract shall be determined by appropriate judicial authority be illegal
or otherwise invalid, such provision, shall be given its nearest legal meaning
or be construed or deleted as such authority determines. The remainder of this
Contract shall be construed to he in full force and effect. This Contract shall
not be modified unless said modification is in writing and signed by the party
to be charged.
E. Governing Law and Venue: This Contract shall be construed and
interpreted according to the laws of the State of Florida. Venue for any
litigation hereunder shall be in Dade County, Florida.
F. Joint Preparation: The preparation of this Contract has been
a joint effort of the parties and the resulting documents shall not, solely as
a matter of judicial construction, be construed more severely against one of
the parties than the other.
G. Attorney's Fees: ln the event of any litigation arising out
of or relating to this Contract, the unsuccessful party in such litigation
shall pay to the successful party all costs and expenses incurred therein by
the successful party, including, without limitation, reasonable attorney's fees
and costs at the trial and appellate court level.
-7-
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set theirs hands and
seals this 30th day of June, 1998.
AMERI -CAP LEASING CORP.
By: __________________________
Robert D. Press, President
-----------------------------
Ron Epstein, Employee
-8-
<PAGE>
EMPLOYMENT AGREEMENT
This Employment Agreement [the "Agreement"] is made and entered
into as of this 30th day of June, 1998 by and between AMERI-CAP LEASING CORP.,
a Florida corporation [the "Company"] and ELLIOT KALUS ["Employee"].
W I T N E S S E T H :
WHEREAS, Employee is experienced in the development, marketing and
operating a medical equipment leasing business, and
WHEREAS, the Company desires to retain, engage and employ Employee
and Employee desires to be so retained, engaged and employed by the Company in
such capacity as may be determined by the Board of Directors of the Employer
upon the terms and conditions set forth in this Agreement, and
WHEREAS, Employee by reason of the nature of Employee's duties and
responsibilities will be provided access to the Company's trade secrets and
other confidential and proprietary information which the Company and its
parent, Medley Credit Acceptance Corp. desires to maintain confidential.
NOW, THEREFORE, in consideration of the mutual promises, covenants
and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties agree
as follows:
1. The above and foregoing recitals are true and correct and are
incorporated herein.
2. Relationship of the Parties: The Employer hereby employs, hires
and engages Employee as an employee and the Employee hereby accepts and agrees
to such hiring, engagement and employment subject to the supervision and
pursuant to the orders, advice and discretion of the Employer's Board of
Directors The Employee shall also perform such other duties as are customarily
performed by one holding such position in other, same or similar businesses as
that engaged in by the Employer.
3. Duties: During the term of the Employee's employment, the
Employee shall be responsible for the development, refinement and
implementation of the Company's equipment leasing program and the compliance of
such program with governmental laws, rules and regulations. The Employee shall
work on a full time basis and carry out his employment in a good and
professional manner and to the reasonable satisfaction of the Company's Board
of Directors.
<PAGE>
4. Term: The term of the Employee's employment shall be tor a tem,
of three years commencing upon the execution of this Agreement and subject to
the termination provisions set forth in this Agreement, provided however, that
the term of this Agreement shall be automatically extended for additional one
year terms unless the Company or Employee gives written notice to the other no
later than thirty (30) days prior to the expiration of any term electing to
decline such extension.
5. Compensation:
A. The Company covenants and agrees that in consideration of
the services performed and to be performed hereunder, it will pay to Employee,
during the term of Employee's employment under this Agreement, at the Company's
regular and customary intervals for payment of compensation to employees but
not less than twice per month, an annual base salary in the sum of $100,000.00.
6. Benefits: The Employee shall be entitled to the following
benefits during the period of his employment hereunder;
A. Employee shall be entitled in accordance with the Company's
general policies for executives to participate in paid vacation leave, health,
casually, disability and life insurance programs and any other benefits as are
made available from time to time by the Company to other employees or
executives.
B. During the term of his employment the Employee shall be
entitled to reimbursement of all reasonable expenses actually paid or incurred
by Employee in the course of and pursuant to the performance of his duties
hereunder. Any single expense in excess of Five Hundred and 00/100 ($500.00)
Dollars shall be verbally approved in advance by the Board Chairman or other
person designated by the Company to approve such expenditure.
C. Employee shall be entitled to two (2) weeks paid vacation in
the first twelve (12) month period during the term of this Agreement and three
(3) weeks in each twelve (12) month term thereafter. Paid vacation shall be
prorated in any calendar year during which the Employee is employed under this
Agreement for less than an entire year. The Employee shall also he entitled to
all paid holidays given by the Company to its executives or employees. In the
event any annual accrued vacation time is unused at the conclusion of a
calendar year the unused time may be carried over into the next calendar year
or years until utilized.
7. Incentive Stock Option Program: Employee shall be entitled to
participate in the incentive Stock Option Program of the Company's parent,
Medley Credit Acceptance Corp. The number of incentive stock options
distributable by the Company will be based upon the Company's annual net income
as follows:
-2-
<PAGE>
If the Net Income of the Company is in excess of:
$500,000 75,000 ISO's
$1 million 100,000 ISO's
$1.5 million 125,000 ISO's
$2.0+ million 150,000 ISO's
The Incentive Stock Option Program shall be funded with common shares of the
C:ompany's parent Medley Credit Acceptance Corp., pursuant to the terms of that
certain stock option plan for Medley Credit Acceptance Corp. dated December 31,
1996, as amended from time to time. The distribution of the ISO's to individual
employees of the Company shall be determined by the Company's Leasing, Division
Operating Committee composed of Ron Epstein, Elliot Kalus and Hank Koche
8. Cash Bonus Fund: As an additional incentive to compensate the
Employee for performance, the Company shall establish annually a discretionary
cash bonus fund for its leasing division employee executives in an amount of up
to ten percent (10%) of the pre-tax net income earned by the Company's Leasing
division during the previous calendar year. The entitlement amount and to who
the distribution of the cash bonus funds shall be made shall be determined at
the discretion of the leasing division's operating committee.
9. Disability: In the event that Employee shall become
incapacitated by reason of mental or physical disability during the term of his
employment such that he is prevented from performing his principal duties and
services hereunder for a period of sixty (60) consecutive days or for shorter
periods aggregating ninety (90) days during any twelve (12) month period, the
Company thereafter shall have the right to terminate Employee's employment
under this Agreement by sending written notice of such termination to Employee
or his legal representative and thereupon his employment shall hereunder
immediately terminate. Upon such termination Employee shall be entitled to
receive and shall be paid by the Company his salary in effect on the date of
termination paid at the Company's regular and customary intervals for the
payment of salaries for the lesser of three (3) months or the remaining terms
of' this Agreement. ln addition, during, such period, Employee shall continue
to receive his benefits described in this Agreement as in effect at the date of
termination.. Immediately following the expiration of such applicable period
the Employee shall no longer be entitled to further Company benefits. The
Employee agrees to accept the payments described herein in full discharge and
release of the Company of and from any further obligations under this
Agreement. Such discharge and release shall not affect any rights or remedies
which may be available to Employee or the Company otherwise than under this
Agreement.
10. Termination For Cause:
A. The Company shall have the right to terminate the employment
Employee hereunder at any time for cause [as used herein, "cause"] if:
-3-
<PAGE>
1. Employee shall be convicted by a court of competent and
final jurisdiction of any crime [whether or not involving the Company] which
constitutes a felony in the jurisdiction involved or shall be habitually drunk
or intoxicated in public or otherwise commit acts of moral turpitude in such a
manner as to adversely reflect upon the reputation of the Company; or
2. Employee shall commit any act of embezzlement or similar
material dishonest and injurious conduct against the Company; or
3. Employee shall demonstrate willful and injurious
misconduct in connection with the performance of his duties and
responsibilities under, or assigned pursuant to this Agreement; or
4. Employee shall demonstrate reckless or grossly negligent
and injurious conduct in connection with the performance of, or a gross
disregard for, his duties and responsibilities under, or assigned pursuant to
this Agreement; or
5. In the event, alter the first six (6) months following the
Commencement Date of this Agreement, the net monthly sales volume [total amount
of all leases written in any calendar month of the Company is less than
$500,000.00 per month in any consecutive month period or in a three (3) month
aggregate in any twelve (12) month period.
B. In the event that the employment of Employee shall be
terminated by the Company for cause pursuant to Paragraph 10A hereof, Employee
shall be entitled to receive his salary then in effect through the dale of such
termination. Employee shall accept the payments pursuant to this paragraph in
full discharge and release of the Company of and from any further obligations
under this Agreement. Nothing contained in this paragraph shall constitute a
waiver or release by the Company of any rights or claims it may have against
the Employee, including, but not limited to, any claims or rights pursuant to
the provisions set forth in this Agreement.
11. Best Efforts of Employee: The Employee agrees that Employee
will at all times, faithfully, industriously and to the best of his ability,
experience and talents, perform all of the express and implicit teens hereof,
to the reasonable satisfaction of the Company. The duties to be rendered by the
Employee shall be rendered at the principal address of the Company or at such
other place or places as the Company shall require. lt is understood that the
Employee must devote his full time and effort to the business of the Company.
12. Employee's Limitations on Ability to Make Company Commitments:
The Employee shall have the legal authority to enter into contracts and
commitments for and on behalf of the Company. However, the Employee shall not
cater into any contract or commitment on behalf of the Company which would
violate the parameters of the Company's lease underwriting guidelines or be in
derogation of the express requirements of the Company's credit committee with
respect to the leasing of equipment or an expenses in excess of One Thousand
-4-
<PAGE>
Dollars ($1,000.00) for non business related expenditures excluding authorized
Employee reimbursements pursuant to paragraph 6B without the express written
consent of the Company's Board of Directors or the Company's Credit Committee.
13. Trust Funds: All money belonging to the Company which comes
into the possession of Employee shall be received by Employee in trust for the
Company and Employee shall immediately deliver said funds to the Company for
deposit. All of such funds shall be considered "'Trust Funds".
14. Covenants. Representations and Warranties of Employee: The
Employee represents and warrants to the Company as follows:
A. Employee has the power and authority to enter into this
Agreement and perform its duties hereunder.
B. Employee shall use his best efforts to comply with all laws,
regulations. rules and ordinances pertaining to the Company's business.
15. Restrictive Covenants:
A. Employee recognizes and acknowledges that as a consequence of
his duties hereunder, Employee will be provided access to or will come in
contact with confidential information of or regard the Company and its parent,
Medley Credit Acceptance Corp., from time to time. Accordingly, Employee agrees
that he will not, during or after the term of his engagement except with prior
written consent of the Company, disclose any confidential information relating
to the Company or its Parent. The provisions of this section shall not apply to
information which Employee is required to disclose by law or by order a court
of competent jurisdiction but only to the extent required by law or by order
and when reasonably possible, only if Employee shall give the Company prior
notice of such intended disclosure so that the Company has the opportunity to
seek a protective order if it deems such appropriate
B. As used in this Agreement, "confidential information" shall
mean and include studies, plans, reports, records, promotional materials,
agreements, memoranda, documents, information related to Company activities,
systems, finances, client lists, research data personnel data, financing
sources. and such other related information not of a public knowledge.
C. For so long as the Employee is employed hereunder, Employee
shall not engage either as principal, agent or consultant or through any
corporation, firm or organization in which he is or may be an officer,
director, employee, shareholder, partner, member or with which he is otherwise
affiliated in any business for profit which is engaged in any activity or
business similar to that of the Employer. Notwithstanding the foregoing, Ron
Epstein may continue to run off the existing leases in Clearlake Financial
Corp. which exist as of the date hereof.
-5-
<PAGE>
D. The Employee covenants and agrees that for a period of two
(2) years from the date of his termination of employment with the Company,
either voluntary or involuntary that he will not directly or indirectly solicit
or aid in the solicitation of any Company client who dealt with the Company
during the period of time that the Employee was in the employ of the Company
for the purpose of attempting to arrange the refinance of any unexpired lease
procured by the Company. In addition, the Company has the right for a period of
up to six months to prohibit the Employee from soliciting any type of leasing
business so long, as the Company continues to pay Employee his compensation
during the period of restriction.
E. It is agreed by the Employee that should he violate the
provisions of this section, the Company shall have the right to obtain an order
from a court of competent jurisdiction enjoining him from violating any and all
of the provisions of this section or of this Agreement and the Company's
application for such a writ of injunction shall be deemed without prejudice to
any all other rights, remedies or actions which may accrue in favor of the
Company as a result of the Employee's breach of this provision or of the terms
of this Agreement. In the event the Company is required to institute any
litigation commencing the terms and conditions of this section or of this
Agreement, the prevailing party shall be entitled to reimbursement of all
reasonable attorney's fees and costs at both the trial and the appellate court
level. The Employee further agrees that in the event of litigation venue shall
only be proper in Dade County, Florida.
F. The enforceability of this section shall be dependent upon
the continuing existence and operation of the Company or any Medley subsidiary
remaining in the equipment leasing business.
16. Notices: All notices, requests, demands, waivers, consents,
approvals or other communications required or permitted hereunder shall be in
writing and shall be deemed lo have been given when received if delivered
personally or by recognized overnight carrier, or three (3) days after being
sent if sent by certified or registered mail, postage prepaid, return receipt
requested, to the following addresses:
If to the Company: Ameri-Cap Leasing Co.
Attention: Robert D. Press
1100 Ponce de Leon Boulevard
Coral Gables, Florida 33134
If to the Employee: Elliot Kalus
_____________________
_____________________
Any party may by notice change the address to which notice or other
communications to it are to be delivered or mailed.
-6-
<PAGE>
17. Miscellaneous Provisions:
A. Captions and Paragraph Headings: Captions and paragraph
headings contained in this Contract are for convenience and reference only and
in no way define, describe, extend or limit the copy or intent of this Contract
nor the intent of any provision hereof:
B. Counterparts: This Contract may be executed in one or more
counterparts, each of which shall be deemed an original, hut all of which shall
constitute one and the same Contract.
C. Binding Effect: This Contract shall enure to the benefit of
and shall be binding upon the parties hereto and their respective heirs,
personal representatives, successors and assigns. However, under no
circumstances shall this Contract he assignable by Employee.
D. Entire Agreement: This Contract constitutes the entire
understanding agreement between the parties and may not be changed, altered or
modified, except by an instrument in writing signed by all parties against whom
and enforcement of such Contract would be sought. In the event any provision of
this Contract shall be determined by appropriate judicial authority be illegal
or otherwise invalid, such provision, shall be given its nearest legal meaning
or be construed or deleted as such authority determines. The remainder of this
Contract shall be construed to he in full force and effect. This Contract shall
not be modified unless said modification is in writing and signed by the party
to be charged.
E. Governing Law and Venue: This Contract shall be construed and
interpreted according to the laws of the State of Florida. Venue for any
litigation hereunder shall be in Dade County, Florida.
F. Joint Preparation: The preparation of this Contract has been
a joint effort of the parties and the resulting documents shall not, solely as
a matter of judicial construction, be construed more severely against one of
the parties than the other.
G. Attorney's Fees: ln the event of any litigation arising out
of or relating to this Contract, the unsuccessful party in such litigation
shall pay to the successful party all costs and expenses incurred therein by
the successful party, including, without limitation, reasonable attorney's fees
and costs at the trial and appellate court level.
-7-
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their hands and
seals this 30th day of June, 1998.
AMERI -CAP LEASING CORP.
By: __________________________
Robert D. Press, President
-----------------------------
Elliot Kalus, Employee
-8-
<PAGE>
EMPLOYMENT AGREEMENT
This Employment Agreement [the "Agreement"] is made and entered
into as of this 30th day of June, 1998 by and between AMERI-CAP LEASING CORP., a
Florida corporation [the "Company"] and HENRY KOCHE [Employee"].
W I T N E S SE T H :
WHEREAS, Employee is experienced in the development, marketing and
operating a medical equipment leasing business, and
WHEREAS, the Company desires to retain, engage and employ Employee
and Employee desires to be so retained, engaged and employed by the Company in
such capacity as may be determined by the Board of Directors of the Employer
upon the terms and conditions set forth in this Agreement, and
WHEREAS, Employee by reason of the nature of Employee's duties and
responsibilities will be provided access to the Company's trade secrets and
other confidential and proprietary information which the Company and its
parent, Medley Credit Acceptance Corp. desires to maintain confidential.
NOW, THEREFORE, in consideration of the mutual promises, covenants
and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties agree
as follows:
1. The above and foregoing recitals are true and correct and are
incorporated herein.
2. Relationship of the Parties: The Employer hereby employs, hires
and engages Employee as an employee and the Employee hereby accepts and agrees
to such hiring, engagement and employment subject to the supervision and
pursuant to the orders, advice and discretion of the Employer's Board of
Directors The Employee shall also perform such other duties as are customarily
performed by one holding such position in other, same or similar businesses as
that engaged in by the Employer.
3. Duties: During the term of the Employee's employment, the
Employee shall be responsible for the development, refinement and
implementation of the Company's equipment leasing program and the compliance of
such program with governmental laws, rules and regulations. The Employee shall
work on a full time basis and carry out his employment in a good and
professional manner and to the reasonable satisfaction of the Company's Board
of Directors.
<PAGE>
4. Term: The term of the Employee's employment shall be tor a tem,
of three years commencing upon the execution of this Agreement and subject to
the termination provisions set forth in this Agreement, provided however, that
the term of this Agreement shall be automatically extended for additional one
year terms unless the Company or Employee gives written notice to the other no
later than thirty (30) days prior to the expiration of any term electing to
decline such extension.
5. Compensation:
A. The Company covenants and agrees that in consideration of
the services performed and to be performed hereunder, it will pay to Employee,
during the term of Employee's employment under this Agreement, at the Company's
regular and customary intervals for payment of compensation to employees? but
not less than twice per month, an annual base salary in the sum of $100,000.00.
6. Benefits: The Employee shall be entitled to the following
benefits during the period of his employment hereunder;
A. Employee shall be entitled in accordance with the Company's
general policies for executives to participate in paid vacation leave, health,
casually, disability and life insurance programs and any other benefits as are
made available from time to time by the Company to other employees or
executives.
B. During the term of his employment the Employee shall be
entitled to reimbursement of all reasonable expenses actually paid or incurred
by Employee in the course of and pursuant to the performance of his duties
hereunder. Any single expense in excess of Five Hundred and 00/100 ($500.00)
Dollars shall be verbally approved in advance by the Board Chairman or other
person designated by the Company to approve such expenditure.
C. Employee shall be entitled to two (2) weeks paid vacation in
the first twelve (12) month period during the term of this Agreement and three
(3) weeks in each twelve (12) month term thereafter. Paid vacation shall be
prorated in any calendar year during which the Employee is employed under this
Agreement for less than an entire year. The Employee shall also he entitled to
all paid holidays given by the Company to its executives or employees. In the
event any annual accrued vacation time is unused at the conclusion of a
calendar year the unused time may be carried over into the next calendar year
or years until utilized.
7. Incentive Stock Option Program: Employee shall be entitled to
participate in the incentive Stock Option Program of the Company's parent,
Medley Credit Acceptance Corp. The number of incentive stock options
distributable by the Company will be based upon the Company's annual net income
as follows:
-2-
<PAGE>
If the Net Income of the Company is in excess of:
$500,000 75,000 ISO's
$1 million 100,000 ISO's
$1.5 million 125,000 ISO's
$2.0+ million 150,000 ISO's
The Incentive Stock Option Program shall be funded with common shares of the
Company's parent Medley Credit Acceptance Corp., pursuant to the terms of that
certain stock option plan for Medley Credit Acceptance Corp. dated December 31,
1996, as amended from time to time. The distribution of the ISO's to individual
employees of the Company shall be determined by the Company's Leasing, Division
Operating Committee composed of Ron Epstein, Elliot Kalus and Hank Koche
8. Cash Bonus Fund: As an additional incentive to compensate the
Employee for performance, the Company shall establish annually a discretionary
cash bonus fund for its leasing division employee executives in an amount of up
to ten percent (10%) of the pre-tax net income earned by the Company's Leasing
division during the previous calendar year. The entitlement amount and to who
the distribution of the cash bonus funds shall be made shall be determined at
the discretion of the leasing division's operating committee.
9. Disability: In the event that Employee shall become
incapacitated by reason of mental or physical disability during the term of his
employment such that he is prevented from performing his principal duties and
services hereunder for a period of sixty (60) consecutive days or for shorter
periods aggregating ninety (90) days during any twelve (12) month period, the
Company thereafter shall have the right to terminate Employee's employment
under this Agreement by sending written notice of such termination to Employee
or his legal representative and thereupon his employment shall hereunder
immediately terminate. Upon such termination Employee shall be entitled to
receive and shall be paid by the Company his salary in effect on the date of
termination paid at the Company's regular and customary intervals for the
payment of salaries for the lesser of three (3) months or the remaining terms
of' this Agreement. ln addition, during, such period, Employee shall continue
to receive his benefits described in this Agreement as in effect at the date of
termination.. Immediately following the expiration of such applicable period
the Employee shall no longer be entitled to further Company benefits. The
Employee agrees to accept the payments described herein in full discharge and
release of the Company of and from any further obligations under this
Agreement. Such discharge and release shall not affect any rights or remedies
which may be available to Employee or the Company otherwise than under this
Agreement.
-3-
<PAGE>
10. Termination For Cause:
A. The Company shall have the right to terminate the employment
Employee hereunder at any time for cause [as used herein, "cause"] if:
1. Employee shall be convicted by a court of competent and
final jurisdiction of any crime [whether or not involving the Company] which
constitutes a felony in the jurisdiction involved or shall be habitually drunk
or intoxicated in public or otherwise commit acts of moral turpitude in such a
manner as to adversely reflect upon the reputation of the Company; or
2. Employee shall commit any act of embezzlement or similar
material dishonest and injurious conduct against the Company; or
3. Employee shall demonstrate willful and injurious
misconduct in connection with the performance of his duties and
responsibilities under, or assigned pursuant to this Agreement; or
4. Employee shall demonstrate reckless or grossly negligent
and injurious conduct in connection with the performance of, or a gross
disregard for, his duties and responsibilities under, or assigned pursuant to
this Agreement; or
5. In the event, alter the first six (6) months following the
Commencement Date of this Agreement, the net monthly sales volume [total amount
of all leases written in any calendar month of the Company is less than
$500,000.00 per month in any consecutive month period or in a three (3) month
aggregate in any twelve (12) month period.
B. In the event that the employment of Employee shall be
terminated by the Company for cause pursuant to Paragraph 10A hereof, Employee
shall be entitled to receive his salary then in effect through the dale of such
termination. Employee shall accept the payments pursuant to this paragraph in
full discharge and release of the Company of and from any further obligations
under this Agreement. Nothing contained in this paragraph shall constitute a
waiver or release by the Company of any rights or claims it may have against
the Employee, including, but not limited to, any claims or rights pursuant to
the provisions set forth in this Agreement.
11. Best Efforts of Employee: The Employee agrees that Employee
will at all times, faithfully, industriously and to the best of his ability,
experience and talents, perform all of the express and implicit teens hereof,
to the reasonable satisfaction of the Company. The duties to be rendered by the
Employee shall be rendered at the principal address of the Company or at such
other place or places as the Company shall require. lt is understood that the
Employee must devote his full time and effort to the business of the Company.
-4-
<PAGE>
12. Employee's Limitations on Ability to Make Company Commitments:
The Employee shall have the legal authority to enter into contracts and
commitments for and on behalf of the Company. However, the Employee shall not
cater into any contract or commitment on behalf of the Company which would
violate the parameters of the Company's lease underwriting guidelines or be in
derogation of the express requirements of the Company's credit committee with
respect to the leasing of equipment or an expenses in excess of One Thousand
Dollars ($1,000.00) for non business related expenditures excluding authorized
Employee reimbursements pursuant to paragraph 6B without the express written
consent of the Company's Board of Directors or the Company's Credit Committee.
13. Trust Funds: All money belonging to the Company which comes
into the possession of Employee shall be received by Employee in trust for the
Company and Employee shall immediately deliver said funds to the Company for
deposit. All of such funds shall be considered "'Trust Funds".
14. Covenants. Representations and Warranties of Employee: The
Employee represents and warrants to the Company as follows:
A. Employee has the power and authority to enter into this
Agreement and perform its duties hereunder.
B. Employee shall use his best efforts to comply with all laws,
regulations. rules and ordinances pertaining to the Company's business.
15. Restrictive Covenants:
A. Employee recognizes and acknowledges that as a consequence of
his duties hereunder, Employee will be provided access to or will come in
contact with confidential information of or regard the Company and its parent,
Medley Credit Acceptance Corp., from time to time. Accordingly, Employee agrees
that he will not, during or after the term of his engagement except with prior
written consent of the Company, disclose any confidential information relating
to the Company or its Parent. The provisions of this section shall not apply to
information which Employee is required to disclose by law or by order a court
of competent jurisdiction but only to the extent required by law or by order
and when reasonably possible, only if Employee shall give the Company prior
notice of such intended disclosure so that the Company has the opportunity to
seek a protective order if it deems such appropriate
B. As used in this Agreement, "confidential information" shall
mean and include studies, plans, reports, records, promotional materials,
agreements, memoranda, documents, information related to Company activities,
systems, finances, client lists, research data personnel data, financing
sources. and such other related information not of a public knowledge.
-5-
<PAGE>
C. For so long as the Employee is employed hereunder, Employee
shall not engage either as principal, agent or consultant or through any
corporation, firm or organization in which he is or may be an officer,
director, employee, shareholder, partner, member or with which he is otherwise
affiliated in any business for profit which is engaged in any activity or
business similar to that of the Employer. Notwithstanding the foregoing, Ron
Epstein may continue to run off the existing leases in Clearlake Financial
Corp. which exist as of the date hereof.
D. The Employee covenants and agrees that for a period of two
(2) years from the date of his termination of employment with the Company,
either voluntary or involuntary that he will not directly or indirectly solicit
or aid in the solicitation of any Company client who dealt with the Company
during the period of time that the Employee was in the employ of the Company
for the purpose of attempting to arrange the refinance of any unexpired lease
procured by the Company. In addition, the Company has the right for a period of
up to six months to prohibit the Employee from soliciting any type of leasing
business so long, as the Company continues to pay Employee his compensation
during the period of restriction.
E. It is agreed by the Employee that should he violate the
provisions of this section, the Company shall have the right to obtain an order
from a court of competent jurisdiction enjoining him from violating any and all
of the provisions of this section or of this Agreement and the Company's
application for such a writ of injunction shall be deemed without prejudice to
any all other rights, remedies or actions which may accrue in favor of the
Company as a result of the Employee's breach of this provision or of the terms
of this Agreement. In the event the Company is required to institute any
litigation commencing the terms and conditions of this section or of this
Agreement, the prevailing party shall be entitled to reimbursement of all
reasonable attorney's fees and costs at both the trial and the appellate court
level. The Employee further agrees that in the event of litigation venue shall
only be proper in Dade County, Florida.
F. The enforceability of this section shall be dependent upon
the continuing existence and operation of the Company or any Medley subsidiary
remaining in the equipment leasing business.
16. Notices: All notices, requests, demands, waivers, consents,
approvals or other communications required or permitted hereunder shall be in
writing and shall be deemed lo have been given when received if delivered
personally or by recognized overnight carrier, or three (3) days after being
sent if sent by certified or registered mail, postage prepaid, return receipt
requested, to the following addresses:
If to the Company: Ameri-Cap Leasing Co.
Attention: Robert D. Press
1100 Ponce de Leon Boulevard
Coral Gables, Florida 33134
-6-
<PAGE>
If to the Employee: Henry Koche
____________________
____________________
Any party may by notice change the address to which notice or other
communications to it are to be delivered or mailed.
17. Miscellaneous Provisions:
A. Captions and Paragraph Headings: Captions and paragraph
headings contained in this Contract are for convenience and reference only and
in no way define, describe, extend or limit the copy or intent of this Contract
nor the intent of any provision hereof:
B. Counterparts: This Contract may be executed in one or more
counterparts, each of which shall be deemed an original, hut all of which shall
constitute one and the same Contract.
C. Binding Effect: This Contract shall enure to the benefit of
and shall be binding upon the parties hereto and their respective heirs,
personal representatives, successors and assigns. However, under no
circumstances shall this Contract he assignable by Employee.
D. Entire Agreement: This Contract constitutes the entire
understanding agreement between the parties and may not be changed, altered or
modified, except by an instrument in writing signed by all parties against whom
and enforcement of such Contract would be sought. In the event any provision of
this Contract shall be determined by appropriate judicial authority be illegal
or otherwise invalid, such provision, shall be given its nearest legal meaning
or be construed or deleted as such authority determines. The remainder of this
Contract shall be construed to he in full force and effect. This Contract shall
not be modified unless said modification is in writing and signed by the party
to be charged.
E. Governing Law and Venue: This Contract shall be construed and
interpreted according to the laws of the State of Florida. Venue for any
litigation hereunder shall be in Dade County, Florida.
F. Joint Preparation: The preparation of this Contract has been
a joint effort of the parties and the resulting documents shall not, solely as
a matter of judicial construction, be construed more severely against one of
the parties than the other.
G. Attorney's Fees: ln the event of any litigation arising out
of or relating to this Contract, the unsuccessful party in such litigation
shall pay to the successful party all costs and expenses incurred therein by
the successful party, including, without limitation, reasonable attorney's fees
and costs at the trial and appellate court level.
-7-
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their hands and
seals this 30th day of June, 1998.
AMERI-CAP LEASING CORP.
By: __________________________
Robert D. Press, President
-----------------------------
Henry Koche, Employee
-8-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 2,458,035
<SECURITIES> 0
<RECEIVABLES> 3,469,188
<ALLOWANCES> 3,000
<INVENTORY> 0
<CURRENT-ASSETS> 6,320,577
<PP&E> 137,113
<DEPRECIATION> 0
<TOTAL-ASSETS> 9,036,050
<CURRENT-LIABILITIES> 1,668,759
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0
29,588
<COMMON> 31,267
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 9,036,050
<SALES> 1,354,961
<TOTAL-REVENUES> 1,354,961
<CGS> 0
<TOTAL-COSTS> 1,216,992
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 30,835
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</TABLE>
