16.

COMMITMENTS:

The Company elected not to renew the employment agreement of its former chief executive officer effectively terminating his employment as of December 31, 2010. The Company recorded an expense during the year ended December 31, 2010 of $2,000,000 representing its estimated contractual obligation, along with associated costs, relating to the contract non-renewal. Included in the recorded expense is $312,000 of stock compensation expense relating to the accelerated vesting of restricted stock. In March 2011, the former chief executive officer filed for an arbitration hearing in the City of New York to settle a dispute regarding certain contractual obligations owed in connection with the contract non-renewal. In January 2012, the arbitrator granted a partial award on this matter subject to the final determination of legal fees. The partial award granted by the arbitrator, which is binding, did not result in any significant change to the Company's original $2,000,000 charge. As of December 31, 2011, the liability associated with the former chief executive officer was approximately $623,000. A majority of the obligation was paid by January 31, 2012.

From time to time, the Company may become a party to litigation or other legal proceedings that it considers to be a part of the ordinary course of business. The Company is not currently involved in any other legal proceedings that could reasonably be expected to have a material adverse effect on its business, prospects, financial condition or results of operations.

The Company also has employment agreements with three executive officers and five other principal officers. At December 31, 2011, the total contractual obligations under these agreements over the next three years is approximately $3,157,000. In addition, three executive officers are entitled to bonuses based on certain performance criteria, as defined, and six officers and four key employees are entitled to bonuses based on a percentage of earnings before taxes, as defined. Total bonus compensation expense was approximately $419,000 and $89,000 for years ended December 31, 2011 and 2010, respectively.