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was to advance to Silbernagel "a fully earned draw of $15,000 per
month against annual compensation." Thereafter, the compensation
limits and monthly draw amounts were to be reduced by 50 percent
for the remaining years of the contract.
During the years in issue, Silbernagel contacted between 40
and 50 banks and other mortgage lenders, many of which he had
worked with previously, in an effort to generate loan servicing
business for FAMC. Approximately 95 percent or more of those
contacts involved personal meetings with representatives of the
mortgage lenders. Additionally, Moore and Silbernagel spoke over
the phone approximately 15 times per month. Although Silbernagel
did not submit billing statements to FAMC, through their regular
phone conversations Moore was kept apprised of Silbernagel's
activities, including any leads that Silbernagel had developed and
whether any business was expected to come in.
Despite Silbernagel's efforts, FAMC did not receive the
anticipated increase in loan servicing business, and it became
increasingly difficult to support Silbernagel's consulting fees.
In February 1990, FAMC reduced its payments to Silbernagel to
$10,000 per month; in May 1991, the payments were further reduced
to $5,000 per month. Silbernagel was aware of FAMC's financial
difficulties and agreed to the reductions in his consulting fees.
In March 1992, Leste wrote to Silbernagel to inform him that
his consulting agreement was to be terminated effective April 1,
1992. Silbernagel disagreed with the termination of the consulting
agreement and in a letter to Leste, dated April 30, 1992,
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