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Carla R.

Walworth (CW-5401)
Cynthia A. Curtin
PAUL, HASTINGS, JANOFSKY & WALKER
LLP
75 East 55th Street
New York, New York
Telephone: 212-318-6000
Facsimile: 212-319-4090
carlawalworth@paulhastings.com
cynthiacurtin@paulhastings.com

11 CV 22 33

UNITED STATES DISTRICT COURT


SOUTHERN DISTRICT OF NEW YORK
:
Civil Action No.

Complaint

CAPITAL
ONE,EQUITIES,
NATIONAL
- against
ASSOCIATION,
- and
Plaintiff, FRYDMAN
WHITE
ACRE
LLC
Defendants.
JACOB

COMPLAINT
Capital One, National Association, by its attorneys Paul, Hastings, Janofsky & Walker
LLP, hereby files its Complaint, and states as follows:

INTRODUCTION
1.

Plaintiff Capital One, National Association, ("Capital One" or "Bank")

brings this action to recover approximately $341,558.06 owed to it by White Acre Equities, LLC
("White Acre") and Jacob Frydman (hereinafter referred to collectively as "Defendants"), under
a certain Agreement (defined below), Letters of Credit and Guaranty (the "Agreements"). Under
the Agreements, Defendants borrowed money and received other financial accommodations

from Capital One, and Defendants promised to pay certain amounts, including principal and
interest, totaling $341,558.06, on the conditions set forth therein. In addition, in order to induce
Capital One to extend or continue to extend credit or other financial accommodations to
Defendants, Jacob Frydman executed a guaranty unconditionally guaranteeing Defendants'
obligations under the Agreements. Defendants have defaulted on their obligations under the
Agreements. Although Capital One promptly provided Defendants with a Demand Letter notifying
Defendants of their default, Defendants have not paid Capital One the outstanding

balance owed.

Therefore, Capital One brings this action for breach of contract, among other claims, in order to
recover the debt owed to it by Defendants.
Parties
2.

Plaintiff Capital One is a national bank with its principal place of business

located at 1680 Capital One Drive, McLean, Virginia 22102. Capital One is a successor by
merger to North Fork Bank ("North Fork"), which merged with and into Capital One, N.A. on or
about August 1, 2007.
3.

On information and belief, Defendant White Acre Equities, LLC ("White

Acre") is a New York limited liability company with its principal place of business at 40 Fulton
Street, Floor 6, New York, NY 10038. On information and belief, White Acre is a citizen of
New York.
4.

On information and belief, Defendant Jacob Frydman ("Frydman") is a

New York resident, residing at 40 Fulton Street, Floor 6, New York, NY 10038.

Jurisdiction and Venue


5.

This Court has jurisdiction over the subject matter of this action pursuant

to 28 U.S.C. 1332 because (i) complete diversity of citizenship exists between the parties; and
(ii) the amount in controversy exceeds $75,000.00 exclusive of interest and costs.
6.

Venue in this District is proper under 28 U.S.C. 1391 because

Defendants are subject to personal jurisdiction in this District and the events at issue occurred in
this venue. Thus venue is not inconvenient for the parties.
Count l
{Breach of Contract Under the White Acre Letter of Credit, and White Acre Guarantee
Against Defendants)
A.

The White Acre Letter of Credit


7.

On or about October 3, 2006, pursuant to the Continuing Agreement for

Irrevocable Standby Letters of Credit dated September 27, 2006 (the "Agreement") by and
between North Fork and White Acre, for the benefit of The Interpublic Group of Companies Inc.
("Interpublic"), and under the October 3, 2006 Letter of Credit ("Letter of Credit"), North Fork
agreed to make available to White Acre for the benefit of Interpublic a line of credit (the "Line of
Credit") up the aggregate amount of $330,264.00. The Agreement and the Letter of Credit are
attached hereto as Exhibits 1 and 2 respectively.
8.

Pursuant to Paragraph 3 of the Agreement, entitled "Proper Drawing;

Bank's Honoring", Capital One was authorized to accept and pay a Letter of Credit presented on
or before the expiration date set forth in the Agreement. This Paragraph further provides that the
Bank "may honor, as complying with the terms of the [Letter ofj Credit and of the Application
any Instrument or other document otherwise in order signed or issues by a person purporting to

be an administrator . . . or other legal representative of the party authorized under the [Letter of]
Credit to draw or issue such Instrument or other document".
9.

Pursuant to U.C.C. Section 5-108(a), "an issuer shall honor a presentation

that . . . appears on its face strictly to comply with the terms and conditions of the letter of
credit."
10.

On April 19, 2010, Interpublic presented the Letter of Credit for payment

in the amount of $330,264.00 to Capital One. All necessary documents to draw against the
Letter of Credit were received by Capital One and payment was made on or about April 19, 2010
to Interpublic. The documents presented for payment are attached hereto as Exhibit 3.
11.

Capital One's payment on the Letter of Credit was made in good faith and

as such, pursuant to Paragraph S(f) of the Agreement entitled "U.C.P., Agreements and
Acknowledgements, Indemnification", White Acre has agreed that any such action "shall be
binding on [White Acre] and shall not place the Bank or any of its correspondents under any
liability to [White Acre]." Further, White Acre has agreed to hold the Bank and any of its
correspondents harmless against any and all losses or damage howsoever arising from issuance
of the Letter of Credit.
12.

Pursuant to Paragraph 1 of the Agreement entitled "Reimbursement

Obligation," White Acre was obligated to pay on demand the amount required to pay the Letter
of Credit from the date of payment on the Letter of Credit until the date of reimbursement. Under
the Agreement, this amount must be paid with interest.

13.

Pursuant to U.C.C. Section 5-108(i)(l ), "[a]n issuer that has honored a

presentation as permitted or required by this article: is entitled to be reimbursed by the applicant


in immediately available funds not later than the date of its payment of funds."
14.

Pursuant to Paragraph 5(g) of the Agreement entitled "U.C.P., Agreements

and Acknowledgements, Indemnification," "notice from the Bank's correspondent of payment,


acceptance or other action under the Credit shall be conclusive evidence of Applicant's liability
to reimburse the Bank" as provide in the Agreement. This notice was provided by letter dated
April 20, 2010 (the "Notice Letter"). The Notice Letter is attached hereto as Exhibit 4.
15.

Pursuant to Paragraph 2(a) of the Agreement entitled "Payment of

Commission, Expenses, and Interest," White Acre is obligated to pay on demand the Bank's
commission and all charges, costs and expenses paid or incurred by the Bank and the Bank's
correspondents in connection with the Letter of Credit. The costs and expenses include, but are
not limited to, any charges or allocations by counsel or the Bank's internal legal department "in
connection with the preparation, performance or enforcement of this Agreement or the Credit."
Interest payable on the amounts due under this Paragraph is calculated at "the lesser of (i) the
maximum rate permissible under applicable law, or (ii) the Prime Rate, which shall mean the
highest rate of interest from time to time published in The Wall Street Journal as the prime rate,
plus 4% per annum."
16.

Pursuant to Paragraph 2(b) of the Agreement entitled "Payment of

Commission, Expenses, and Interest," White Acre is obligated to pay to Capital One such
amounts determined by the Bank as "necessary to compensate it for any costs expenses, or

loss

of income attributable to its issuing . . . such Credit . . . or the reimbursement agreement with

respect thereto." Interest payable on the amounts due under this paragraph is calculated at "a
twenty percent per annum rate of return on capital (after federal, state and local taxes)."
17.

In order to induce the Bank from time to time, in its discretion, to extend

or continue credit or other financial accommodations to White Acre, defendant Frydman


executed and delivered to the Bank that certain Personal Guaranty of All Liability dated
September 27, 2006 ("Frydman 2006 White Acre Guaranty"), which unconditionally guaranteed
to plaintiff Bank the payment of obligations of White Acre to Capital One, of whatever nature,
whether then existing or thereafter incurred, including without limitation, the obligations of
White Acre under the Agreement and Letter of Credit. A copy of the Frydman 2006 White Acre
Guaranty is attached hereto as Exhibit 5.
18.

On January 14, 2011 , in accordance with the terms and conditions of the

Agreement, Capital One by letter made a demand for payment in full on White Acre and
Frydman for the amount drawn on the Letter of Credit together with interest and all associated
commissions, fees, attorney's fees, expenses, costs, and interest on them. The January 14, 2011
Demand Letter is attached hereto as Exhibit 6.
19.

Pursuant to, and as required under, Paragraphs 1 and 2 of the Agreement

entitled "Reimbursement Obligation" and "Payment of Commissions, Expenses, and Interest,"


White Acre has defaulted in its obligation to pay to Capital One the full amount of the unpaid
principal drawn on the Letter of Credit together with interest and all associated commissions,
fees, expenses, costs, and associated interest, which became due and payable on demand from
Capital One.

20.

Pursuant to Paragraph 7 of the Agreement entitled "Obligations Due and

Payable," White Acre's failure to comply with the provisions of the Agreement constitutes an
"Event of Default."
21.

In accordance with Paragraph 7 of the Agreement entitled "Obligations

Due and Payable," in the event of default any and all obligations and liabilities of White Acre
also "shall become and be due and payable forthwith without notice or demand."
22.

As of April 20, 2010, White Acre has defaulted and remains in default of

its obligation to pay to Capital One all amounts drawn on the Letter of Credit and all interest and
associated commissions, fees, expenses, and costs, which became due and payable upon demand
from the Capital One, and remains in default of any claims related to the breach. See Exhibit 6.
B.
Breach of the Agreement, Letter of Credit, and Frydman 2006 White Acre
Guaranty
23.

To date, neither White Acre nor Frydman have paid the outstanding

principal balance of the Agreement and Letter of Credit.


24.

Defendants have breached the Agreement, Letter of Credit, and Frydman

2006 White Acre Guaranty for those reasons stated above, including but not limited to the failure
to comply with the obligations under the Agreement to pay Capital One the full amount of the
unpaid principal, interest and late fees in the amount of $341,558.06 together with interest and all
associated commissions, fees, expenses, and costs, which became due and payable on demand
from Capital One. A schedule showing the calculation of the amounts of principal, interest and
late charges due as of March 29, 2011 under the Agreement and Letter of Credit is attached
hereto as Exhibit 7.

25.

Defendants' breach of contract has resulted in damages to Capital One in

an amount to be determined at trial, which is far in excess of the jurisdictional amount of this
Court.
26.

Pursuant to Paragraph 14 of the Agreement entitled "Jurisdiction and

Venue; Service of Process; Appointment of Agent; Waiver," White Acre is obligated to pay
Capital One's reasonable attorney's fees whether at trial or appellate court or bankruptcy
court for any such action between Capital One and White Acre or any claim by Capital One
against White Acre.
27.

Capital One has incurred and continues to incur costs and expenses,

including fees and disbursements of in-house and outside counsel, in regards to enforcing the
obligations under the Agreement.
Count 2
(Estoppel Against Defendants)
28.

Capital One repeats and realleges each and every allegation as set forth

29.

In entering into the transactions at issue, Capital One relied directly upon

above.

the express representations of Defendants with regard to the above noted Agreement, Letter of
Credit, Frydman 2006 White Acre Guaranty and related documents (the "Agreements").
30.

Defendants entered into the Agreements with full knowledge of Capital

One's reliance upon their representations therein and, indeed, made such representations to
induce Capital One to rely thereon.

31.

Capital One has been injured as a direct and proximate result of

Defendants' failure to honor the express representations in the Agreements .


32.

Based upon the foregoing, Defendants are now estopped from disputing

the representations and promises in the Agreements.


Count 3
(Uniust Enrichment and Quantum Meruit Against Defendants)
33.

Capital One repeats and realleges each and every allegation as set forth

34.

As a result of Defendants' conduct as set forth above, the Defendants have

above.

been unjustly enriched.


35.

Capital One is entitled to recovery under the doctrines of quasi-contract,

quantum meruit and unjust enrichment.

WHEREFORE, Plaintiff Capital One respectfully requests that this Court enter
judgment in its favor and against the Defendants as follows:
(a)

On the First Count, a judgment against Defendants in the amount

to be determined at trial, including all damages sustained, rights and remedies available as
provided under the Agreement, Letter of Credit, Frydman 2006 White Acre Guaranty, and
related documents, reasonable costs and expenses incurred in this action, including counsel fees,
and any other expenses, and all interest on the damages sustained as a result of the breach, on all
commissions, costs, and expenses applicable under the Agreement, Letter of Credit, Frydman
2006 White Acre Guaranty, and related documents and on all counsel fees incurred in enforcing
its rights as set forth therein;
(b)

On the Second Count, a judgment against Defendants in the

amount to be determined at trial, including all damages sustained, rights and remedies,
reasonable costs and expenses incurred in this action, including counsel fees, and any other
expenses;
(c)

On the Third Count, a judgment against Defendants in the amount

to be determined at trial, including all damages sustained, rights and remedies, reasonable costs
and expenses incurred in this action, including counsel fees, and any other expenses;
(d)

The costs and disbursements as taxed by the Clerk of the Court;

and

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(e)

Awarding Capital One such other and further relief as the Court

may deem just and proper under the circumstances.

Dated: New York, New York


March 31, 2011

75 East 55th Street New York, New York


Telephone: 212-318-6000
Facsimile: 212-319-4090 carlawalworth@paulhastings.com cynthiacurtin@paulhastings.com
ATTORNEYS FOR PLAINTIFF CAPITAL ONE, N.A.

LEGAL_US_E # 9228951 5.3

0890530149

CONTINUING AGREEMENT
FOR IRREVOCABLE
. STANDBY LETTERS OF CREDIT

Member FDIC/Equal Housing Lender

NORTH FORK BANK


CONTINUING AGREEMENT FOR IRREVOCABLE STANDBY LETTERS OF CREDIT

Definitions:
(l)
The "Applicant" means any party and all parties signing the Application, whether as applicant or account party.
(2)

The "Application means any and all applications submitted to the Bank by the Applicant for issuance of Credit as such applications
may be amended or modified from time to time with the written or oral consent of the Applicant.

(3)

The ''Bank" means North Fork Bank.

(4)

"C1cdit" means any and all letterti of credit issued by Bank by order of Applicant pursuant to the Application.

(5)

An "lnserument" means any draft, receipt, acceptance, teletran111nission (illcluding, but not limited to, telex) or cable or other written
demand for payment.

(6)

''Property mean:i goods and merchandise and any and all docwnent, relativo thereto, six:uritics, funds, choices in action, and aay
and all other forms of property, whether real, porsona or mixed and any right or intarelll therein.

(7)

"Uniform Cus10ms and. Practice" mns the Uniform Customi and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500, or any subsequent revision thereof adhered to by the Bank on the date the Credit is issued.

In consideration of the issuance by the Bank of the Credit substantially as requested in the Application, the Applicant hereby agrees wilh the
Bank as follows with rci1pect to the Credit:
I.
Reimbunement Obligation. The Applicant will pay the Bank, on demand, at the Bank's principal office, or such other office as is
designated by the Bank, in immediately available funds, the amount required to pay each Instrument. SU<:h payment shall be made with
interest from the date of the Bank's payment of such lll$tnunent to the date of reimbursement. If the lnstrumont is in a foreign currency, such
payment shall be in United States currency at the higher of the Bank's or Bank's correspondent's selling rate of exchange for cable transfem to
the place of payment of the Instrument current on tbe date payment or Bank's sottlement of its obligation -Or the dale of demand as the Dank
may require. If, for any cause, on the date of payment or settlement, as the case may be, there is no selling rate or other rate of exchange
gftl1erally current in New York for effecting such trand'eni, the Applicant will pay the Banlc on demand 1111 amount in United States currency
equivalent lo the Bank's aclul cost of settlement of its obligation however or whenever the shall make such settlement, with itUerest from the
date of setUem6nt to the date of payment. The /\pplieant will comply with all governmental exchange regula.timu now or herell.fter applicable
to the Credit or Instrument or payments related thereto and will pay the Bank, on demand, in United Sta currency, such amount as the Bank
may be or may have been l\lqUired to expend on accounl of such regul11tion1. Tue Banlc may debit the Applicant's demand deposit account
referred to in the Application, and any other account or acc:ounts maintained by tho Applicant with any office of the Bank, or any subsidiary
or affiliate thereof (now or in the future) and apply the proceeds to the payment of any and all amounts owed by the Applicant to the Bank
hereunder. Applicant shall during die life of all Credit
maitain the account referred lo in the Application.

2.

Payment of Commlasions, Expenses and Interat


(a) Tho Applicant will pay the Bank, on demand, tho Bank's commission and all charge, costs and expensea paid or incurred
by the Bank and the Bank's correspondents in connection with the Credit, and interest where chargeable, including, but no< lirnited to,
fees and
cbarges of cou11sel Of allocated by the Bank's internal legal department in connection with the preparation, performance or enforcement of
this Agreement or the Credit. Unless otherwise agreed:
(1) commissions payable hereunder on amounts not paid when due shall be at the rate customarily charged by the Bank at the
time in like circumstances; and
(2) interest payable hereunder on amounts not paid when due shall be at the lesser of (i) the maximum rato permissible under
applicable law, or (ii) the Prime Rate, which shall mean the highest rate of interost from time to time published in The Wall Street
Journal u the prime rate, plus 4% per annum.
(b) In addition to commissions, fees and amount$ otherwise payable with respect to the issuance of the Credit, the Applicant shall
pay to Uie Bank on demai1d such amounts as the Bank in its sole discretion determine& arc necessazy to compensate it for any costs
expenses, or loss of iucome attributable to its issuing or having outstanding such Credit resulting from the application of any law or regulation
applicable to the Bank regarding any reserve, assessment, capital adequacy or similar requirement relating to letters of credit or the
reimbursement agreement with
respect thereto or other similar liabilities or users of the Bank whether existing st the time of issuance of the Credit or adopted
tl1creafter, provided, however, that in the case of a sale of a participation permitted by paragraph 5 hereof all amounts payable by Applicant
under paragraph 2
(b) hereof shall be determined 85 if the B!tllk has not sold such participation. The applicant acknowledges that there may be various
methods of allocating coslli (including, but not limited to, the coat of maintaining capital sufficient to pennit issuance of the Crodit) to the
Credit and agrees that the Bank's allocation for purposes of dctennining the costs referred to above shall be conclusive and binding upon the
Applicant provided such allocation is made in good faith. The Bank shall be deemed to be entitled t.o a twenty percent per annum rate of
return on capital (after federal, state and local taxes) in calculating any cost, expense, or loss of income punuant to this paragraph.

3.
Proper Drawing; Bnnk'1 Honoring. The Bank may accept or p&y and Instrument presented on or before the expiration date set forth
in the App!ic!lion. Except insofar ai; wriUen instructions bay be given by a person pu111orling to be an authorized representative of the
Applicant expressly lo the contrary, and prior to the Bank's issuance of Credit the Bank may honor, as complying with the tenns of the
Credit and of the Application any ln5trument or other document otherwise in order signed or issued by II person purporting to be an
administrator, executor; trustee
in bankruptcy, debtor in possession, assignee for the benefit of creditor, liquidator, receiver or other legal representative of tho party authoriied
under tho Credit to draw or issue such lnstnunent or other documents.
Amendment, Change, Modification, No Waiver. In the event of any amendment, change: or modification, with the consent of the
Applicant, relative to the Credit, or any lnstrument or documents called for thereunder, including waiver of noncompliance of any such Instruments
or documents with the terms of the Credit, this Agreement shall be binding upon the Applicant with regard lo the CrediI SB so amended, chmgcd or
tnodified, and to any action taken by the Bank or any of itll correspondents relative thereto. No amendment, change, waiver or modification to
which the Bank hu consented shall be deemed to mean that the Bank will conumt or has consented to any other or subsequent request to amend,
change, modify or waivo a term of the Credit. The Bank shall not be deemed to have: waived any of its rights hereundcc-, unless the Bank or its
authorized agent shall have signed such waiver in writing. No such waiver, unless exprc:.,sly as stated therein, shall be effective as to any transac
tion which occurs subsequont to the date of such waiver, nor u to any continuance of a breach aftr such waiver. All rights and remedies provided
heroin shall be cumulative aod not exclusive of any rights or remedies provided by law.
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5.
U.C.P., Agreement, and Acknowledgments, Indemnification. The Uniform Customs and Practice shall be binding on the Applicant
and the Bank eiccept to the extent ii is otherwise expressly agreed. It is al8o agreed that:
(a) user (s} of the Credit shall not be deemed agents of the Bank;
(b) none of the Bank, its affiliated, subsidiaries, or its correspondents shall be responsible for:
(i) failure or any Instrument to bear any reference: to tho Cit or inaclequate refercoce In any lnstruineut to the Credit, or failure of
documents (other than documents expressly required to be presented under the Credit) to accompany any Instrument at negotiation, or failure of
any person to note the amount of any Instrument on the reverse of the Credit, or to surrender or take up the Credit or to forward documents apart
from Instruments III required by the terms of the Credit, each of which provisions, if contained in the Credit itself, it is agreed may be waived by
the Bank; or
(ii) etro111, omissions, interruption, or delay, in tranamission, or delivery of any messages, by mail, telex, cable, telegraph,
facsimile, wireless or olhei: teletransmission or by onil instructions, whether or not they may be in cipher;
(iii)any acts or omissiona of any beneficiary of the Cn:dit or assignee of the Cn,dit, Irassignable;
(iv) the existence, nature, amount, condition, or delivery of the property purporting to be represented by documents or any
variance from description, therein;
(v) the nature, validity, form, sufficiency, genuineness or collcctibility of any documents (including insurance), or Instruments,
or of any endorsement thereon, or the relationship of any issuer thereof of the property;
(vi) any irregularity in connection with shipment, including any default, oversight, or fraud by the shipper and or any other
in co1111cction with the properly or documents or the shipment, non,shipment or trlnsmiltal thereof, or delay in arrival thereof, failure to
arrive, or failure to give notice of shipment or arrival thereof;
(vii)any act or omission or insolvency or failure in busincss of any other person;
(viii)
any act or omission, whether rightful or wro11gful, of any present or future dejure or de facto government or
govemmcntal authority, "Govemmentiu Acts";
(ix) failure to pay under Credit as a result of Governmental Acts or any other cause beyond the control of the Bank, Its
correspon dents, and age11ts.
(c) the Bank shall not be responsible for any act, error, neglect or default, omission, insolvency or failure in business of any of
its correspondents;
(d) the occunencc of any one or more of the contingencies or events referred to in the Uniform Customs and Practice or in the
preceding clauses of subparagraph (b) and (c) shall not &!feet, impair, or prevtlllt the vesting of any of the Bank's rights or powers hereunder
or the applicant's obligation to make payment;
(e) the Applicant will promptly examine::
(i) the copy of the Credit (and of any amendments thereof) sent to it by the Bank; and
(ii) all ln1trume11ts and documents delivered to it from time to time and, in thc event of any claim of noncompliance with
Applicant's instructions or other irregularity, the Applicant will immediately notify the Bank lherc:of in writing, the Applicant being
conclusively dc=tcd to have waived any such claim against the Bank and its correspondents unless such notice is given as aforesaid;
(f) without in any way limiting the foregoing, any action, inaction omission on the part of the Bank or any of its correspondents,
under or in connection wilh the Credit or relative Instromenta, documents or property, if in good failh, shall be binding upon the Applicant tnd
shall not place the Bank or any of its correspondents under any liability to the Applicant and in no event shall the Bank or any
correspondent be lible for any special, incidental, consequential, or punitive damages. .The Applicant agreca to hold the Bank, each affiliMe
and subsidiary of tho Bank, and the correspondents of any of them indemnified and hannlcss against any and all claims, loss, liability or
damage, including, but not limited to, reasonable counsel fees, howsoever arising from ii.suance of the Credit or any act or omission
pursuant to instructions or otherwise in connection with the Credit including, without limitation, any such claim, loss liability or damage
ari&ing oul of any transfer, sale, delivery, surrender or endorsement of any document at any time held by the Banlc or any of its affiliates or
subsidiaries, or held for the account of them by any correspon dent of any of them or arising out of any action for injunctive or other judicial or
administrative relief 1U1d affecting, directly or indirectly, the Bank or such affiliate of subsidiary. The occurrence of any event set forth above
shall not affect or impair the rights or powers of the Bank or Applicant's obligation to reimburse the Bank;
(g) notice from the Bank's correspondent of payment, acceptance or other action undr the Credit shall be conclusive evidence
of Applicant's liability to reimburse the Bauk as provided herein;
(h) Applicant has not relied on the Bank in any manner in connection with the wording of the Credit, including, but uot limited to
the drawing conditions or the structuring of the underlying transactioa, the same being Applicant's responsibility undertaken with
opportunity to consult counsel.

6.

Administrative Agreement,
(a) Applicant agrcc1 not to initiate or acquiesce in any judicial, administrative, or other proceeding for any injunctive or
declaratory relief to block the Bank from paying the Credit. This provision shall apply notwithstanding any fraud covered by Section 5-114
of the Uniform Commercial Code (or successor seclion). Applicant acknowledges that remcdios for all such fraud related rixks have been
adequately considered in the agreements between the beneficiaries of the Credit and the Applicant.
(b) Any claim against the Bank she.11 be limited to actual damages with no liability for consequcntial , incidental, special or
punitive damages. Any action for da,nages by Applicant against the Bank must be commenced within one year after the claim
arises.
(c) Applicant requests the Bllllk to accept and act upon instructions, to issue Credit and to amend existing Credit upon the Bank's
receipt of written instructions by telex, cable, facsimile, and/or telecopier transmission. In the event the Ba1lk honors such instructions (and
the Bank need not so honor) Applicant indemnifies and holds harmless the Bank from and against any claims, actions, suits, liability, costs,
expenses, 11Dd damages including, but not limited to, attorney fees, arising out of the Bank's honoring such request, so long as the
inslructions are given by llllyone purporting to be authorized to give such instructions for the Applicant. All such instructions must contain
such information as determined by the Bank in its sole discretion and shall be governed by this Agreement, including, but not limited to,
Section 9 hereof.
7.

Obligations Dae and Payable


(a) Any and all obligations and liabilities of the Applicant to the Bank, whether now existing or hereafter incurred (including the
future obligation to pay hereunder), shall becomo and be due and payable forthwith without notice or demand, whiclt Applicant hereby
waives, as follows, and "Event of Default";
(i) if tho Bank shall in good faith docm itself insecure et any time;
(ii) upon the death or dinolution of the Applicant;
(iii) if any obligation and/or liability of the Applicant to the Bank or any of its affiliates or subsidiaries shall not be paid
or per formed when due, or any event of default as such is !lefined under any material Agreement to which tho Applicnnt is IIparty remains
tmcured after any appropriate cure period thereunder.
(iv) if the Applicant shall became uuolveot (however such insolvency may be evidenced or defined) or file or have filed
against it any petition in bankruptcy or insolvency or make a generlli assignment for the benefit of creditors, or if the Applicant shall suspend
the transaction of its usual business or be eitpclled or sugpended from any exchange, or if an application is made by any judgment creditor of
the Applicant for an order directing the Bank to pay over money or to deliver other property or if any document provided in Artjcle 52 of the
New York Civil Practice Law and Rules is servt.d upon Applicant, the Bank or any third party by a judgment creditor , or if a petition shall
be filed by or against the Applicant or any proceeding shall be instituted by or agai1111t the Applicant for any relief under any ba11kruptcy
or insolvency laws or any law relating to the relief of debtors, rcadjwrlmcnt of indcbtednOlls, reorganization, comp0&ition or extensions, or if
ony governmental authority, or any court at the instance of any governmental authority, shall take poueuion of any substantial part of the
property of the Applicant or shall assume control over the affairs or operations of the Applicant, or if a receiver or custodian shall be
appoinu:d of, or a writ or order of attachment or garnishment shall be lscucd or made against any of the property or assetll of the Applicant;
(v) if the Applicant fails to coinply with any provision of this Agreement;
(vi) or if any representation or warranty made lo obtain credit or extem,ion thereof is or appears to Bank to be false.
(b) It is further agreed that;
(i) in the event of any of the foregoing. the Applicant shall, an demand of the Bank, deliver, convey, transfer or assign to the
Bank collateral of a alue and character salisfactory lo the Bank, or make such payment as the Bank may require, and
(ii) if a temporary order, an injunction (preliminary or permanent) or any similar order ia issued ii,connection with the Credit or auy
instrument or documents rela.ting thereto, which order, injunction or similar order may apply, directly or indirectly, to the Bank, the. Applicant
shall, on demand of the Bank, deliver, convey, transfer or aasign to the Bank collateral of a value an!I character satisfactory to the Bank, or
make such payment as lhe Bank may require.
(c) Upon tho occurrence of an Event of Default, in addition to the foregoing, the Bank shall have all of the rights 81\d
remedies provided for herein and at law and including, but not limited to, thollC under the Unifonn Commercial Code.
8.
ContluuJng Righta and Obligations. The Bank's right hereunder shall contilllle unimpaired, and the applicant shall be and
remain obligated in accordance with the terms and provisions hereof. Na delay, c,ttcnsion of time, renewal , compromise or other indulgence
which may occur or be granted by the Bank, shall impair the Bank's right& or powers. here1D1der. If 1he Applicant is a parmership, its
obligations hereunder shall continue in force and o.pply, notwithstanding any change in the membership of such partnership, whether arising
from the ath or retirement of one or more partners or the accession of one or more new partnlll'3. lf the Applicant ia a banking institution, the
Applicant hereby appoint3 the Bank its agent to issue the Credit in o.ccardance with, and subject to thi! Agreement and the Application.
lf more th1m one entity ad /or persons sign this Agreement, each of them shall be jointly and soverally liable hereunder and all the tenna
and provisions regarding liabilities, obligations and Property of such entities and/or persons shall apply to any liabilitic . obligations and
Property of and all of them.
9.
Custructions, No Liability. Instruclions (whether by oral, telephone, facsimile, tcleprocees or other means) may be honored by the
Bank when recoived from anyone pu1porting lo be authorized to give such instructions for the Applicant. Applicant agrees to furnish the Bank
with written confirmation of each such instruction signed by tho person giving such instruction, or other authoriud officer, but the Bank's
responsibility with respect to any instruction shall not be affected by its failure to receive or the co1\tent of such confirroe.tion, and in the
event of any such disc.epancy the originlll instructions shall govern. The Bank shall havo no responsibility to notify Applicant of any
discrepancies between Applicant's in&tructi<ins &ad its written confirmation. The Bank shall be fully protected in, and shall incur no liability
to the Applicant for, acting upon 1111y oral, telephone, telcprocess or other instructions which the Bank in good faith believe& to have been
given by any authorized person, and in no event shall the Bank be liable for special, consequential or punitive damages. The may, but need not
at its option, use any meaits of verifying any inslructions n:ceivcd. by it. The Bank also may , at its option, but need not, refuse to act on any
oral, telephone, telcprocess or other instruction or any part thereof, without incurring any responsibility for any loss, liability or expense
arising out of such refusal.

( '
1,.

Amended Agreement; Conseut to Dilclosurc.


(a) In the event that the Bank shall amend its standard roimburscmcnt Agreement executed by c:ach applicant for Credit, the
Applicant shall execute and deliver to the Bank 1111 amendment to this Agreement incorporating such changes, promptly upon reoeipt thereof
from the Bank.
(b) Applicant hereby consents to the dissemination to subsidiaries and affiliates of the Bank of credit information relating to
the Applicant in connection with any proposed participations by the Dank of any rights and obligations hereunder.
I 0.

11.

Security Agreements.
(a) As security for the performance of all Applicant's oblisations of every kind to Bank, r,tesent or future, due or to
become due, absolute or contingcn arising hereunder or otherwise (hereinafter call "Applicant's obligatio11&"), Applicant hereby assigns,
pledges lllld gives Bank a security interest in and a lien upon, and the right of set-off, poAeuion, and dispos&l of:
(i) all documents or Instruments accompanying or relative to drafts under the Credit and all Property shipped, stored or
otherwise disposed of in connection with the Credit or in any way rel&ting thereto and all proceeds of the foregoing;
(ii) all Applicant's rights and causes of action 11g&i11st all partios arising from or in connection with the contract of sale or
p11rchi11ic of the property coven,d by the Credit, or any guarantees, agreements or othor undertakings (including those in effect between
Applicants and 1111y account pany oamcd in the Credit), credits, policies of insurance or other auurances in connection therewith; and
(iii) all property, right,, choices in action, claims and demands of
kind (including, but nol limited to, all deposit balances)
now or hereafter existing and belonging to Applicant and which may now or hereafter be in tht:1 possession, custody or control of, or in transit
lo or set 1part for, Banlc, Bank's agents or correspondenl3 for any purpose, whether or 110! for the express purpose of being used by the
Bank as collateral security or for any other or different purpose. Applicant agrees at any time or from time to time, upon Bank's demand,
lo fumi&h Bllllk with additional security to Bank'a satisfaction.
(b) Bank may at any time or times transfer into Bank's or Bank's nominee's name all or part of such security, before or aft
matur ity of any of Applicant'& obligations and without any notice to Applicant or any other person . Whenever Bank deems it necessary
for Bank's or Applicant's protection, or nfter an Event of Default specified in paragraph 7, or other default, Bank may, without regard to
such maturity, realize upon (by sale, assignment , set-off, application or otherwise) all or any part of such security in each case without
&dvcrtisemcnt, notice to, lener, demand or call of any kind upon Applicant or any other person. Any such sale or imignmenl may be
public, private or upon any broker's board or cxeh&11ge, for cash, on credit or for future delivery, and at such price and upon such temu
and condition; as Bank deems appropriate, Bank may acquire all or any 1)8rt of such security and any purchaser shut hold same free from
any equity of redemption or other claim or right on Applicant's part, which are hereby specifically waived and released. Bank may
discount, Botti. compromise or extend any obligations comtituting such security, and sue thereon In Bank's or Applioant'a namo. Any
dem&nru, tenders, e&II or notices to Applicant shall be deemed duly mad8 or given as of the: time left al Applicant's last known addreu, or
mailed telegniphed, telephoned, or otherwise sent to such address. No advertising, notice, tender, demand or call at any time given or
m.clo shall be a waiver of Bank's right to proceed in the same or other instances without any further action.
(c) Proceeds of any such socurity shall be applied, without nny marshaling of assets, in such manner or order &S Bank may deem
proper, lb any one or more of Applicant's obligations, whether or not due, and Bank may retain any amounts necessary, in Bank's sole
judgment, lo meet any contingent obligations. Applicant shall remain liable for any deficiency.
(d) No receipt. of realization upon, rele111c or substitution, of or other dealing with, any such security shall affect Bank's rights or
liens here.under the Bank need not realize upon &ny security prior to seeking payment form Applicant.
(e) The Bank shall not be liable for failure to collect or demand payment of, or for failure to protest or give notice of
protest or nonpayment of any obligation or relating to auy part of the collateral or for any delay. The Bank shall not be under any
obligation 10 take any action with respect to the collateral.
(f) In addition to and not in limitation of the foregoing, the Banlc shall ha.vo 11ll the rights and remedies of a second party
under the Uniform Cpmmercial O>de.
12.
Repruenh1tlon,. Applicant represents (a) that the eccutlon and delivery of this Agreement and the Application, and the perfonnance
of the obligations they impose, do not violate any law, conflict with any Agreement by which it is botind, or requfre the consent or approval of any
governmental authority or any third p&rty: (b) that this Agreement and the Application arc valid, binding and enforceable according to their terms ;
and (c) that all balance sheets, profit and Ion statements, &nd other fuumcial statements fUT11iahed to the Bank are accurate and fairly reflect the
financial condition of the organizations and persons to which they apply on their effective claws, including contingent liabilitie. of every type,
which financial condition bas not changed materially and advenely since those datc:1. Applicant, if not a natural person, further represents: (a)
that it is duly organized, existing and in good standing under the laws where it is organi.ied ; and (b) that the execution and delivery of this
Agreement and the Application, and the perfonnance of the obligations they imp06e, (i) are within its powers (ii) have been duly authorized
by all necessary action of it, governing body; and (iii) do not contravene the terms of its lllticles of incorporation or organization, or bylaws, or any agreement governing its affairs.
13.
Financing Statement,. The right is expressly granted lo Bank at Bank's discretion, lo file one or more financing statements undi:r
the Unifonn Commercial Code naming Applicant as debtors and Bank a.a aecun,d party and covering any property ta be purchased or shipped
under or by virtue of the Credit, the documents relating thereto and/or any property which is or becomes collateral security under the
terms of lhis Agree ment. Except as disclosed in writing to Bank, Applicant has not signed or filed or authorized or permitted to be filod
in ay jurisdiction any financing statemoot in which Bank is not named a. the, sole secured party. Without Bank's prior written consent,
applicanl will not create, grant or permit to exist any security interest in &ny property to be purch&Sed or shipped under or by virtue of the
Credit or in the documents relating thereto m in auy other property wilich is or becomes collateral security under tho torma of thia Agreement ,
and including security interest in lbe proceeds, products and accessions of and to any thereof.
14.
Jurisdiction and Venue; Service of Proce.ss; Appointment of Aeeot; Wulver. Applicant hereby consent$ Lo the exclusive
jurisdiction of the United States District Court for the Eastom District of New York and the Supreme Court of the State of New York,
Suffolk County over the person of the Applicant , and agrees that such courts shall be proper fora for any action or suit brought by the
Bank . Service of process in any
action or Suit arising out of or in connection with this Agreement or the Credit may be made upon the Applicant by mailing a copy of the
summons

/-,"'

\ .. .

to the Applicant either at the address set forth in the application or at the Applicant's last address appearing in the Bank's records. In any such
action or any other action between the Bank and the Applicant or any claim by the Bank against the Applicant, Applicant agrees to pay the
Bank's reasonable attorneys' fees whether at the trial or appellate court or bankruptcy court.
APPLICANT ALSO WAIVES:
(a) the right to trial by jury in the event of any litigation to which the Bank and Applicant are parties in respect of any manner
arising under the Credit (including, but not limited to,.this Agreement and the Application), whether or not such litigation has been
commenced in respect of the Credit (including, but not limited to, Agreement and the Application) and whether or not other persons arc also
parties thereto;
(b) any immmiity it or its property may now or hereafter have from suit, jurisdiction, attachment (whether prior to judgment or in aid of
execution), execution or other legal process;
{c) any claim against the Bank for consequential, incidental, special or punitive damages. Notice of acceptance of this Agreement
by the Applicant is waived; and
(d) the right to assert that the Eastern District of New York or Suffolk County is an inconvenient forum.
I 5.
No Waiver of Banlt'1Right of Set-00. It is cxprcasly rccogniu.d and acknowledged by the Applicant that notwithstanding
anything to the contrary contained herein, the Bank does not waive its common law or statutory rights of set-off or any other rights
generally available to creditors.
16.
Notices. Notice from Bank to Applicant , or vice-versa, relating to this Agreement shall be deemed effective if made in writing
(includ- ing telecommunications) and delivered to the recipicnts's address, telex number or facsimile number set forth on the Application by
any of the following means; (i) hand delivery, (ii) regutered or certified mail, poatage prepaid, with return receipt requested, (iii) ftrst clllSS or
express mail, postage prepaid, (iv) Federal Express, Purolator Courier or like overnight coinier service, or (v) facsimile, telex, or other wire
transmission with roqucst for assurance or receipt in a manner typical with respect to communications of that type. Notice made in accordance
with this section shall be deemed delivered on receipt if delivered by hand or wire transmission, on the third business day after mailing or
deposit with an overnight courier service if delivered by express mail or overnight courier; provided, however, that notice to the Bank shall be
deemed delivered upon
reci::ipt.
17.
Assl&oment; AppUcablc Law. This Agreement represents the entire 1D1derstanding of the parties and there arc not other
agreements, representations, or understaudings. This Agreement may not be assigned by the Applicant without the prior written consent of the
Bank. The Bank may wign or sell participations in all or any pa.rt of the credit or this Agreement to another entity. This Agreement and all
rights, obliga
tions aud liabilities
arisingassigns
hcrewider
shall be
be binding
and inure to the benefit of the Bank and the Applicant and their respective
successors
and permitted
and shall
govemcdupon
by md coustrued in accordance with the internal laws of the State of New York without
reference to
principles of conflict of laws. Any provision hereof which may prove unenforceable shall not affect the validity of any other provision .
Heading

DATED: 9/27/06
are for convenience only and shall not influence construction or interpretation of this Agreement.

WITNESS:

NORTH FORK BANK


By:-.Sean C. Winchester

Title: Assistant Vice President

Title:

CEO

AN 07-2011

12:43

CAPITAL OE BAI-I<

.. . -North Fork Bank .

1 212 944 5447

P .03

10/0312006

BENEFJCIARY
THE INTERPUBLIC GROUP OF COMPANIES INC

1114 AVEIWE OF THE AMERICAS

NEW YORK, NY 10036

RE: IRREVOCABLE STANDBY L/C NUMBER 3330001490 FOR USD 330.264.00

FOR ACCOUNT OF;

WHITE ACRE EQUITIES, LLC

111 FULTON STREET,.4TH FLOOR

NEW YORK, NY 10038

Gentlemen:
We hereby establish our irrevocable Standby Letter of Credit No. 3330001490 in your favor
for account of White Acre Equities, LLC, l 11 Fulton Street, 4th Floor, New York, NY 10038
in the amount of U.S. Dollars Three Hundred Thirty Thousand Two Hundred Sixty Four and
00/100 ($330,264 .00) available by your drafts at sight drawn on us accompanied by the
original Letter of Credit and any amendment thereto.
Drafts drawn under this Letter of Credit must state, ''Drawn under North Fork Bank Letter of
Credit No.3330001490 dated 0ctober 03, 2006".

Payment will be made within one business day of tender of the draft, original Letter of cr'edit .and
amendments, if any, as set forth herein if presented at our office located at 1001 Avenue of the Americas,
New York. NY 10018, on or before the expiry date indicated herein. "Business day" means a day on which
Commercial Banks are open for business in New York.
Partial drawings are permitted.
This Letter of Credit expires on October
at our counters at 1001 Avenue of the Americas,
New York, NY 10018 unless renewed as stated below.
This Letter of Credit shall be automatically extended, without amendment for additional periods of
One (1) year from the current expiration date, or any future expiration date unless at least Thirty (30)
Days prior to such expiration date we notify you by overnight courier, that this Letter of Credit will
Not be renewed. Upon receipt of such notice, you may draw on us hereunder by means of our sight
Draft for the full available amount of the Letter of Credit at the time of drawing, accompanied by
Your written notice from you of your election not to renew your Letter of Credit
No.3330001490 and we have not received an acceptable .replacement Letter of Credit as of the date.
of our drawing. However, this Letter of Credit JI not be renewed beyond October 2S. 201 I.
. .''

This Letter of Credit is transferable in Ml but not in part. Should beneficiary desire to
transfer; such transfer will be subject to the return to us of this original Letter of Credit and any
amendments thereto accompanied by Beneficiary's written instructions on the enclosed form.
Under no
circumstances shall this Letter of Credit be transferred to any person or entity with which
U.S. persons or entities are prohibited from conducting business wider U.S. Foreign Asset
Control Regulations and other applicable U.S. Laws and Regulations. Applicable transfer
charges of
of 1% on
the amount being transferred (or minimum S25O.OO) arc for the account of the Applicant.
We hereby engage with drawers, endorsers and bona fide holder& of draft, that draft drawn and
negotiated in conformity with the terms of this letter of Credit will be duly honored on presentation

of documents as specified above at our above counters.

'.:. ,

Except so far as otherwise expressly stated this standby Letter of Credit is subject to the Uniform: .
.,.-::: Customs and Practice for Documentary Credits (1993 Revision) international Chamber of
Commerce Publication No. 500

GEORGE W. KOCH

Senior Vice Ptnldeat


merlou,

New Y'lric. NY 10011. Tck!phouc; (212) ?64-077S, Fix: (21.2) 1>44-S447

Tclca: 4966S24 NJ'ORJC DK, SWlflT 'NfBKUS33"

JAN-07-2011
12:43

CAPITAL ONE BANK

1 212 944 5447

Interpublic Group '


J

P.01

l 14 Avtnue of the Amancas

New Yori\, NY OD16

www.1ncerpubtic.c4:1m
212 704-1200 ,1
212 704-1201 fax

April 19,2010
Trade Services

. Capital One Bank


1001 Avenue of the Americas
New York,. NY 1oois
Re:
1

North Fork Bank Letter of Credit 3330001490


Draw of S3'064

I
J

I enclose herewith the original Letter of Credit Number


3330001490 drawn on North Fork Bank ("Letter of Credit") along with a sight
draft, dated as of the date hereof, in accordance with the terms of the Letter
of Credit. Would you please deliver a check for the amount of the draw,
payable to the order of The Interpublic Group of Companies, Inc to our counsel,
Golenbock Eiseman Assor Bell & Peskoe LLP, who will arrange to pick up the
check when available.

Please contact our counsel with any questions on this draw: David
M.
Rubin, (212) 907 7 37l drubin@golenbock com . . .
.
.
7
Thank you for your cooperation.
Sincerely yours)
The Interpublic Group of
Companies, Inc.

Title:
cc: Golenbock Eiseman Assor Bell & Peskoe
LLP
.
,

Senior V , P , Gen . Counsel

& Secretary

JAN-07-2011 12:43

CAPITAL (),,IE BANK

1 212 944
5447

P.02

SIGHT DRAFT
Date: April 1 9, 2010

To:

Trade Services
Capital One Bank
1001 Avenue of the Americas
New York, NY 10018

At sight, pay to the order of The lnterpublic Group of Companies, Inc., the sum of
THREE HUNDRED THIRTY THOUSAND TWO HUNDRED AND SIXTY FOUR and
00/IOO's Dollars ($330,264.00).
DRAWN UNDER NORTH FORK BANK LETTER OF CREDIT No. 3330001490 dated
October 03, 2006.
The Interpublic Group of Companies, Inc.

By:

493402./
(

,.

ect&.4

Name: Nicholas l'.camera


Title: Senior v.P , , Gen . counsel
& Secretary

- >

Capital One Bank

'

,r

RICHA?D

" '

- ,. .:.

(\

MONTGOMER Y

WE OUTLINE BELOW DETAILS OF A DRAWING UNDER THE ABOVE REFERENCED LETTER


OF CREDIT
DRAW AMOUNT USD

INCLJDING

OUR

330,264.00

CH ARGES:
331,089.66

CUSTOMER:

WHITE ACRE EQUITIES, LLC


111 FULTON STREET, 4TH FLOOR
NEW YORK, NY 10039

NORTH FORK BANK


275 Broad Hollow Rd
Melville, New York 11747

Date:
Borrower(s):

Guarantor(s):

9/27/06
White Acre Equities, LLC Guarantor(s):

Jacob Frydman

Jacob Frydman

PERSONAL GUARANTY OF ALL LIABIUTY


In this Guaranty the words, I, me, my and mine mean each and all of us who signed it and our successors and assigns. The words you and
yours mean NORTH FORK BANK, and its successors, subsidiaries, endorsees and assigns.

GUARANTY: I hereby guaranty to you the prompt and unconditional p_ayment of claims of every nature you have. against
White Acre Equities, LLC .,

..

letter of credit for tenant security deposit to its landlord

(each and all of whom are called "Borrower") and every obligation and liability of Borrower to you, . which will be called "Obligations."
Obligations means all items described below.

OBLIGATIONS: Obligations means all amounts due to you of any nature, whether they already exist, are incurred at this time, or are
incurred in the future, whether they are direct or indirect, whether they are absolute or contingent, whether they are secured or unsecured,
whether they are matured or umnatured, whether they were incurred by the Borrower alone or jointly and/or severally with others, whether
they were originally contracted with you and /or other(s) and now or later owing to you, whether or not they are represented by purchase or
repurchase agreements"* Obligations include, but are not limited to, all sums just described, late charges, disbursements, legal fees, and
any
amount still due after you take any existing collateral.

* resulting from or in connection with that certain letter of credit issued for borrower security deposit
_

CONSIDERATION: I give this Guaranty to you in return for your doing and having done the following for Borrower : making loans,
advances, extensions, renewal, acquiring notes and security documents and extending and other financial accommodation.

LIEN FOR LIABILITY OF GUARANTOR: I give to you a continuing lien for the amount of all of my obligations and liabilities to you
upon any and all of my property including deposits and credits now or later held by you. My obligations and liabilities to you, which will be
called "Liabilities", mean all amount due to you from me of any nature, including but not limited to amounts due under this Guaranty whether
they already exist, are incurred at this time, or are incurred in the future, whether they are direct or indirect, whether they are absolute or
contingent, whether they are secured or unsecured, whether they are matured or unmatured, whether they were incurred by me alone or
jointly or severally with others or whether they were originally contracted with you and/or others and are now or later owing to you. Property
held by you means all property which is in your possession, whether held now or coming into your possession latter, or whether received by
you for safekeeping, custody, pledge, transmission, collection or otherwise. I authorize you to apply any such property, deposits or credits at
any time without notice to my Liabilities to you, regardless of whether security is held for such Liabilities. All property held by you is called
"Collateral Security''.

BANK'S RIGHTS WITH RESPECT TO COLLATERAL SECURITY: You may do any of the following without notice to me and I will
continue to be fully liable under this Guaranty which will remain infull force and effect:

(a)
Renew, extend, modify, accelerate, compromise or release any of the obligations or liabilities of Borrower or any co-guarantor
or any other party for or on any of the Obligations, Liabilities or Collateral Security in whole or in part at any time or times;
(b)
Exchange, sell, surrender, substitute, liquidate or release any or all collateral or liens for any Obligations;
(c)
Exchange, release, substitute or delay or fail to take action with respect to any Collateral Security, including but not limited to
collect, demand payment of, protest or give notice of non-payment or comply with legal requirements with respect to establishing or
maintaining the validity or priority of liens;
(d}
Register in your name or the name of your nominee any stocks, bonds or securities held by you whether or not any default
exists. You may exercise without limitation all voting and corporate rights with respect to stocks, bonds and securities whether or not you
have registered them in your name and whether or nc:>t default exists. These rights. include, but are not limited to conversion, exchange and
-.
subscription . You may file a proof of claim for the full amount of any collateral security and rate the claim as you deem proper. Your .}i
liability shall be only to account for property actually received by you. You shall have no duty to exercise any of these rights and will not be ,.
responsible for any failure to do so or delay in so doing;
(e)
Sell all or any part of the Collateral Security deposited, pledged or held by you for the Liabilities whether the Liabilities are
absolute or contingent or matured or unmatured whenever in your absolute and unrestricted discretion you consider such sale necessary for
your protection. You may sell in the manner described below without notice or demand to me of any kind, including but not limited to
demands for additional Collateral Security or payment on account and Notice of Sale or intention to sell. If you do give such Notice or
Demand at any time or times, this will not be considered a waiver of your right to sell without Notice or Demand or of your right to accelerate
the maturity of the Liabilities .

DEFAULT AND ACCELERATION: My Liabilities shall become immediately due and payable notwithstanding any inconsistent provision
in any other document upon the happening of any of the followig:

pgal 12/98

..

(a)
My failure to perform any agreement contained in this Guaranty or any other agreement delivered by me to you. Your
determination of the occurrence of any failure shall be binding on me;
(b)
Default in the prompt payment of any amount due upon any Obligation, Liability, or Collateral Security;
(c)
My death or the death of any co-guarantor or Borrower, if individuals, or my dissolution or a change in my composition, if a
partnership, or a dissolution, merger or consolidation, if a corporation, or my inability to manage my affairs or the appointment of a
representative of any kind for me or my property;
(d)
My seeking relief under any State or Federal Law affording relief to debtors, including, but not limited to, Title 11 of the
United States Code and the New York State Debtor and Creditor Law, or the seeking of any such relief by creditors against me;
(e)
My making a bulk transfer of my property or liquidation my business;
(f)
My failure to supply financial information upon request or to permit examination of my books and records upon request or
to supply any document requested by you in connection with this Guaranty;
(g)
Any representation made by me to you is false in any material respect;
(h)
My failure to pay or withhold any tax(es) when due;
(i)
The entry of any judgment or order of attachment against me or any of my property;
U)
The occurrence of any other event or a material adverse change in my financial affairs or condition which causes you to
deem yourself insecure;
(k)
Granting a security interest in any of my property;
(I)
My failure to comply with Regulation U of the Federal Reserve Board as now existing or as amended;
(m)
The occurrence of any of the above events with respect to any Guarantor, the Borrower or any party to the Obligations,
Liabilities or Collateral Security.

. )j
/

AJI of the above shall be "events of default".

REM EDIES IN EVENT OF DEFAULT: If an event of default occurs, you may do any or all of the following without notice or demand
iq addition to declaring my Liabilities immediately due:
(a)
Collect, receive and realize upon the Collateral Security by any means you deem advisable, including but not limited to,
public or private sales;
(b)
Apply the net proceeds realized from Collateral Security to the payment in whole or in part; of any of my Liabilities you
choose. I will remain liable for any deficiency remaining after the application. "Net proceeds" means the net amount realized after payment
of all costs; disbursements and expenses incurred with respect to the Collateral Security including reasonable attorney's fee due to you ;
(c)
Exercise all rights and remedies of a secured creditor under the Uniform Conunercial Code;

WAIVER OF NOTICE: I waive notice of the following:


(a)
Acceptance of this Guaranty and of the creation, renewal, extension of accrual of any Obligation. All Obligations shall
conclusively be presumed to have been created and all transactions between Borrower and you shall conclusively be presumed to have
occurred in reliance on this Guaranty;
(b)
Protest, demand for payment , notice of default and non-payment to any Guarantor or Borrower or any other party
responsible for the Obligations or Liabilities.
NATURE OF GUARANTY: This Guaranty is an absolute, continuing and unconditioned guaranty of payment. It is not dependent on any
other writing or fact, including but not limited to the validity, regularity or enforceability of any of the Obligations or purported
Obligations, the taking or failure to take a security interest in any property, the bankruptcy of Borrower .Or any other Guarantor, or the
termination of any other guaranty. You do not have to take any action against Borrower or any other guarantor or any security for the
Obligations before seeking payment from me. I will remain liable hereunder despite the occurrence or non-occurrence of any event which
would in the absence of this provision be deemed an equitable or legal discharge of a guarantor. This Guaranty may be terminated by
written notice actually delivered to and received by you at your office at 275 Broadhollow Rd ., Melville, New York 11747, but only as to
new Obligations of Borrower subsequently incurred. Termination shall be effective upon execution and delivery to me of written and other
Liabilities arising out of same and this Guaranty shall continue in full force and effect with respect to same. All payments made on account
of or re acknowledgment of the Obligations of Borrower, or any other party liable therefore, including but not limited to me, shall be
deemed made on my behalf and shall start anew the running of the applicable statue of limitations. The execution and delivery of this
Guaranty shall not terminate any other prior guaranties.

MISCELLANEOUS: All notices to or demands on me which you choose to make shall be deemed effective when forwarded by mail,

telegraph. telephone, cable radio or otherwise to my last address or telephone number appearing on your books, if not otherwise sooner given,
. and shall have the same effect as of notice was actually delivered to and received by me in person. All of your rights and remedies under this
Guaranty are cumulative; you may exercise them singly or at the same time. I waive the benefit of any homestead or other exemption to the
extent permitted by Jaw. This Guaranty shall pass to and may be relied upon and enforced by any of your successors or assignees and anyone
who later holds any of the Obligations. The term" Borrower" shall include (a) the Borrower listed above, (b) all successors and entitles to
which substantially all of the business and assets of Borrower have been transferred, (c) in the case of a partnership, any new partnerships
2
pgal 12196

.
created by admission of a new partner(s) or by dissolution by death, resignation or withdrawal and (d) in the case of a corporation,
any corporation into or with which Borrower has merged, consolidated, reorganized or absorbed. If you employ an_ attorney to enforce
any of
your rights under this Guaranty or to obtain payment under this Guaranty, whether by lawsuit or otherwise, I agree to pay a
reasonable attorney fees. r waive trial by jury and the right to interpose counterclaims of all types in any action by you against me,
although Imay raise
these claims in a separate lawsuit. You shall not be deemed to have waived any right or remedy and delay, act, or omission. All waivers by
you must be in writing and signed by you and shall relate only to the matters set forth therein. No waiver by you or any occasion shall act as
a waiver with respect to any future occasion. This Guaranty contains the understanding between you and me. All changes must be in
a signed writing. No executory agreement shall be effective to change or modify or to discharge this Guaranty. If more than one person
signs this or any other Guaranty, each is jointly and severally liable; if a partnership, each partner is bound jointly and severally. I am
jointly and severally liable with any other guarantor or obligor of the obligation. If any portion of this Guaranty is unenforceable, the
remainder shall continue to be valid. This Guaranty shall be construed in accordance with the laws of the State of New York (without
regard to its conflicts of laws rules) and I agree that service of process of certified mail, return receipt requested, to my last address appearing
on your books will be sufficient to confer personal liability on me.

RETAIL INSTALLMENT CONTRACT: If this Guaranty covers Obligations including a Retail Installment Contract as defined by New
York State Personal Property Law 313, 420, then the following applies:
Identity of Contract:---------------------------------Time Balance: (Total of Payments) $------------------------------

CLAIMS AND REPAYMENT: If a claim is ever made against you and you repay to any person amounts received by you on account of any
Obligation, Liability or Collateral Security, by reason of any judgment, settlement, or other disposition, regardless of whether this Guaranty
has been terminated or whether any Obligation has been cancelled, I will be liable to you for all such amounts as if they had never been paid
to you. Notwithstanding anything to the contrary in this guaranty, Ihereby irrevocably waive all rights Imay have at law or equity
(including without limit, any law subrogating me to your rights) to seek contribution, indemnification, or any other form of
reimbursement from the Borrower, any other guarantor, or any other person now or hereafter primarily or secondarily liable for any
obligations of the Borrower to you, for any payment or disbursement made by me under or in connection with this guaranty or otherwise.

Address:
SS:

111 Fulton St. NY NY 10038


137-46-3214

STATE OF NEW YORK


) SS.:
COUNTY OF

On this 27th day of Sept. 2006, before me, the undersigned, a Notary Public in and for said State,
personally appeared Jacob Frydman, personally known to me or proved to me on the basis of satisfactory evidence to be
the individual whose name is subscribed to the within instrument and acknowledged to me that he executed the same in
his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the
individual acted, executed the instrument.

c:.m..aRt :t

Notary Public

CASWILL J, BRYAN
NOTARY PUSLIC:STATE OF NEW YORK
No. 01 8R5084504

Quallfled In We1tohester County


3

20

My Commlulon Expire, September 02,


pga1 1219a

PERETORE & PERETORE


A PROFESSIONAL CORPOR ATION
COUNSELLORS AT LAW
FRANK PER E:TORt
JANIS MIGLIOR ISE
PERETORE SCOTT 0. CHAIT
FREDDA GOLDSMITH KA TCOFF. or
ANDREW J. SIEGEL. or

REPLY TO NEW .JERSEY

191 WOODPOR T ROAD


SPARTA . NEW JERSEY 07871 2641
19731 729 8991
COUNSEL

COUNSEL

'NE:W JCRSE:Y & NE:W YORK BARS

TELEFAX t973l 7298913


E-MAIL peretore@peretore

NEW YORK OFFICE


110 PARK STREET
STATEN ISLAND . N.Y . 10306
17181 667- 8785

.com

January 14, 201 1


VIA FEDERAL EXPRESS OVERNIGHT
White Acre Equities, LLC
c/o Jacob Frydman
885 Second Avenue- Suite #3400
1 Dag Hammarskjold Plaza
New York, NY 10017-2201
Jacob Frydman
885 Second Avenue- 34th Floor
1 Dag Hammarskjold Plaza
New York, NY 10017-2201

Re: Capital One, National Association with White Acre Equities, LLC:
Continuing Agreement for Irrevocable Standby Letters of Credit, dated
September 27. 2006; loan number 890530149
Dear Mr. Frydman:
. This office represents Capital One, National Association (hereinafter referred to as
the "Bank"). Reference is hereby made to that certain Continuing Agreement for
Irrevocable Standby Letters of Credit, dated as of September 27, 2006, executed by White
Acres Equities, LLC, a New York limited liability company (hereinafter referred to as the
1
"Borrower") in favor North Fork Bank (hereinafter referred to as "North Fork" ) pursuant to
which Borrower agreed to pay to North Fork upon demand any amount North Fork paid
pursuant to a draw in accordance with a letter of credit issued by the Bank upon Borrower's
application (hereinafter, as previously amended and modified, if applicable, referred to as the
"Credit Agreement"). The Borrower's obligations to the Bank in connection with, inter
alia, the Credit Agreement have been guaranteed by Jacob Frydman (hereinafter referred to
as the "Guarantor" and together with the Borrower, the "Loan Parties"), an individual, pursuant
to the terms, conditions, and provisions of that certain Personal Guaranty of All Liability dated
September 27, 2006 (hereinafter referred to as the "Guaranty"), executed by Jacob Frydman in
favor of the Bank. The Credit Agreement, the Guaranty, the Letter of Credit (as defined
below) and all other agreements, instruments and documents, at any time executed and
delivered in connection therewith, each as amended,

Capital One, National Association is the successor by merger to North Fork

White Acre Equities, LLC


Jacob Frydman
January 14, 2011
Page 2 of 4
restated, supplemented, reaffirmed or otherwise modified from time to time, are collectively
referred to as the "Loan Documents".
As you know, pursuant to Letter of Credit No. 3330001490 (the "Letter of Credit"), dated
October 3, 2006, issued by North Fork Bank in accordance with the Credit Agreement, a draw of
$330,264.00 was delivered to The Interpublic Group of Companies, Inc. on or about April 19,
2010 (the "Draw"). Since that time, the Draw remains unpaid as of the date hereof and
constitutes default and an Event of Default under the Credit Agreement (such existing default
and Event of Default, the "Designated Default"). As a result of the Designated Default, as well
as any other defaults or Events of Default that may exist, the Bank is entitled to and intends to
exercise any and all rights and remedies under the Loan Documents, applicable law and/or in
equity against the Borrower, the Guarantor and/or the Collateral (as defined below) in such
manner and at such times as the Bank in its sole and absolute discretion deems appropriate,
including, without limitation, exercising any rights or remedies with respect to any collateral or
security ("Collateral") given in elation to the Loan Documents.
Accordingly, in accordance with the terms and conditions of the Loan Documents, the
Banlc hereby (a) declares the outstanding principal amount of, and all interest on, the Draw, and
all other amounts payable under the other Loan Documents, to b immediately due and payable,
and (b) notifies you that in accordance with the terms and conditions of the Loan Documents, the
unpaid principal balance of the Draw shall accrue interest at the interest rate as provided for in
the Credit Agreement.
DEMAND IS HEREBY MADE for payment in full of the total amount, THREE
HUNDRED THIRTY-SIX THOUSAND FIVE HUNDRED FIFTY-SEVEN DOLLARS AND
TWENTY-TWO CENTS ($336,557.22), plus attorneys' fees in the amount of $250.00, for a
total of THREE HUNDRED THIRTY-SIX THOUSAND EIGHT HUNDRED SEVEN
DOLLARS AND TWENTY-TWO CENTS ($336,807.22), within five (5) days hereof, and
surrender of the Collateral, if any, which is the subject of the Loan Documents.
Please be advised that if this matter is not resolved amicably within five (5) days hereof,
the Bank will immediately thereafter institute suit against the Loan Parties for the balance set
forth above, ongoing interest, costs and attorneys' fees and disbursements, possession of the
Collateral, if any, and punitive damages. (Please note that surrender of the Collateral, if any, will
not satisfy the debt, but will be sold in the ordinary course and applied to the balance owed and
the Bank reserves all rights and claims to any deficiency balance due).
Please be advised that all money expended by the Bank in accordance with the terms
of the Loan Documents as a result the Designated Default and/or as a result of any default or
any other Event of Default now existing or hereafter arising under the Loan Documents, as
the case may be, shall, as and to the extent provided in the Loan Documents, be added to the
outstanding amount of the indebtedness and other obligations of all or any of the Loan Parties
to the Bank under the Loan Documents (the "Obligations"), shall bear interest at the interest
rate referenced above, and be subject to the payment of attorneys' fees, costs and expenses as
set forth in the Loan Documents. Any such ongoing or future discussions or negotiations
between the Bank, on

White Acre Equities, LLC


Jacob Frydman
January 14, 201 1
Page 3 of 4
the one hand, and the Loan Parties, on the other hand, are without prejudice to the Bank or the
Bank's right to collect all sums due and to enforce all rights and remedies now or hereafter
accruing under the Loan Documents and shall not be deemed a waiver of same and may not be
admissible as evidence or otherwise referred to by any Loan Party on any issue that is or may be
before any court or administrative body or in any other proceeding or hearing under Rule 408 of
the Federal Rules of Evidence or any other applicable law, rule or regulation.
We remind you, however, that nothing in this letter or in any ongoing or future
discussions or negotiations between Bank, on the one hand, and the Loan Parties, on the other
hand, nor any delay on the part of the Bank in exercising any of its rights and remedies under the
Loan Documents and/or applicable law, shall directly or indirectly: (i) create any obligation to
forbear from taking any enforcement action or exercising remedies under the Loan Documents or
applicable law, (ii) constitute a consent to, or waiver of, the Designated Default, any past, present
or future default or Event of Default or other violation of any provisions of the Loan Documents,
(iii) amend, modify or operate as a waiver of any provision of any Loan Document or any right,
power, privilege or remedy of the Ban1c thereunder or under applicable law, (iv) constitute an
agreement to forbear, settle, or to restructure the Loan Documents and/or other Obligations in
any respect or otherwise modify the capital structure of any of the Loan Parties, or (v) constitute
a course of dealing or other basis for altering any rights or obligations of the Bank under the
Loan Documents, or any of the Obligations or any obligations of the Loan Parties under any
other contract or instrument. Nothing contained in this letter shall confer on the Loan Parties or
any other person or entity any right to notice or cure periods with respect to any default, the
Designated Default, or any other Event of Default under the Loan Documents.
This letter confirms that the Bank has not waived any defaults, the Designated Default, or
any other Event of Default under the Loan Documents and the Bank expressly reserves -without
prejudice - aH of its rights, powers, privileges and remedies under the Loan Documents
and/or applicable law and equity, including, without limitation, its right at any time, as applicable,
(i) to commence any legal or other action to collect any or all of the Obligations from any or all
of the Loan Parties, and any other person liable therefor, (ii) to exercise any rights or
remedies with respect to any Collateral and/or as appropriate, including but not limited to,
commencing a foreclosure action on all or any portion of the Collateral and/or as appropriate, setoff or apply to the payment of any or all of the Obligations, any or all proceeds realized
from any such foreclosure action, (iii) to take possession of the Collateral, if any, and use,
operate, manage and control the Collateral, and conduct the business thereof, and collect and
receive all earnings, revenues, issues, profits and income of the Collateral or any part thereof,
(iv) to take any other enforcement action or otherwise exercise any or all rights and remedies
provided for by any or all of the Loan Documents or applicable law, (v) to reject any
forbearance, financial restructuring or other proposal made by or on behalf of the Loan Parties,
or any creditor or equity holder and
(vi) to seek the appointment of a receiver for the Collateral, if any, in accordance with the Loan
Documents and/or applicable law. The Bank may exercise its rights, powers, privileges and
remedies, including those set forth in clauses (i) through (vi) above at any time in its sole and
absolute discretion without further notice. No oral representations or course of dealing on the
part of the Ban1c or any of its officers, employees or agents, and no failure or delay by the Ban1c
with respect to the exercise of any right, power, privilege or remedy under any of the Loan


White Acre Equities, LLC
Jacob Frydman
January 14, 201 1
Page 4 of 4
Documents or applicable law shall operate as a waiver thereof, and the single or partial exercise
of any such right, power, privilege or remedy sha1l not preclude any later exercise of any other
right, power, privilege or remedy. Except as specified herein, this letter does not attempt to
summarize all (i) existing misrepresentations, breaches, defaults and Events of Default existing
under the Loan Documents and (ii) rights and remedies of the Bank under the Loan Documents.
Accordingly, this letter is not, and shall not be deemed to be, a waiver of, or consent to, any
misrepresentation, breach, default, potential default or Event of Default now existing or hereafter
arising under the Loan Documents.
Please be guided accordingly.
Very truly yours,
Scott D. Chait
SDC:abm
Cc: client (via
email)