Affidavit of L Michael Cantor 2

Exhibits 38 - 49

EFiled: Feb 10 2013 07:25PM EST Transaction ID 49424102 Case No. 8270VCG

EXHIBIT 38

1

On 7/20/12 1:22 PM, "Gary Silversmith" <[email protected]> wrote:

>As you know, a while ago Sergio and I submitted to you drafts of the

>requested plans.

>These were, as you expected, "barebones".

>

>I look forward to receiving your edits.

>

>At closing i indicated that the one insurance policy that we would not

>get expeditiously to satsify the Tranche B distribution was Fine Arts,

>because that requires appraisals of the furniture. Anyway, that remains

>the issue, since i am waiting for the valuations so we can finalize the

>Fine Arts policy. But, the Fine Arts policy will be issued as soon as

>we have the valuations, and, as you have seen in the previous email

>traffic, we finally bound the rest of the required insurance.

>

>(I still have Willis and Meltzer getting (i) more affordable P&I at

>the higher limits of $42 MM and $50 MM--although that isn't in the loan

>docs; and (ii) increasing the hull coverage from $5 MM to $6.5

>MM--although that is not required until November).

>

>I have made good faith efforts to satisfy the conditions for the

>Tranche B distribution. Even if you made such distribution immediately

>(including the remainder of Tranche A), my focus will remain the

>aforesaid insurance, finalization of the restoration, maintenance and

>management plans, new accounting systems, new marketing and web

>presence, and better controls and systems.

>

>

>Thanks.

>Gary

2

MANAGEMENT AGREEMENT U.S.S. SEQUOIA PRESIDENTIAL YACHT This Management Agreement (“Agreement”) is hereby entered into between The Sequoia Presidential Yacht Group, LLC, a Delaware LLC (“Owner”), the owner of the U.S.S. Sequoia Presidential Yacht, Coast Guard Number 225115 (“Sequoia”), and P&L Investments, LLC, an LLC, headquartered at 1001 Connecticut Avenue, N.W., Suite 405, Washington, D.C. (“Manager”), as of the date hereof, July 1, 2012. 1. Delegation of Duties. Owner hereby agrees to delegate management, maintenance and rental responsibilities to Manager for the term of this Agreement. Manager agrees to perform these duties with professionalism, integrity and expertise. 2. Manager’s Responsibility. Manager is responsible for maintaining the Sequoia in a “Fit for Purpose” condition at all times. Manager shall ensure that the vessel is maintained in a fit for purpose condition at all times and is compliant with all applicable maritime and marine protection rules, applicable sections of the any maritime transport law, any Ship registration law, and any health or safety laws. Manager shall always ensure that the Sequoia is Coast Guard certified. When the Coast Guard issues an “835” order for repair, the Manager shall ensure that any such repair shall be performed within the guidelines and timetable requested by the Coast Guard. Manager shall ensure that the Sequoia is in possession of a valid Coast Guard inspection certificate, or its equivalent and it shall be displayed in accordance with rules and regulations. Manager shall prepare yearly budgets, Maintenance Plans and Restoration Plans, which shall be presented to the Owner for their advice and consent. Manager shall endeavor to comply with those budgets and plans, and the Manager shall advise the Owner if and when it determines that there will be a variance. When the Sequoia undergoes any modifications or major repairs, the Owner’s consent to such work shall be required. Manager shall ensure that the Sequoia is always staffed by competent and professional staff, including a licensed Captain and an experienced First Mate. The Sequoia staff shall be of the standards and caliber expected by guests to the vessel. 3. Owner’s Responsibility. Owner shall work closely with the Manager to ensure that the vessel is maintained in a fit for purpose condition at all times and is compliant with all applicable maritime and marine protection rules.

Owner shall ensure that the Manager has sufficient and adequate working capital and reserves to pay for needed and necessary repairs and maintenance, as delineated in writing by the Manager. Owner shall pay the Manager promptly, as set forth below. 4. Designated Person The Owner and Manager each hereby designate Gary Silversmith as the Designated Person for complying with their responsibilities under this Agreement. The contact information for Gary Silversmith is: [email protected]; 202 487 8777; 1001 Connecticut Avenue, N.W., #405, Washington, D.C. 20036. The Designated Person can be changed at any time, for any reason, by either the Owner or the Manager. The Designated Person is responsible for providing management over the entity, and ensuring that its duties and responsibilities are reasonably performed. In particular, the Designated Person shall ensure that the Sequoia is fit for its intended service and intended operating limits, and that it complies with all applicable maritime safety rules. 5. Compensation. The Owner and Manager have agreed that, as of the date hereof, July 1, 2012, the Manager shall not receive any compensation for its work pursuant to this Agreement. However, the parties hereto may in the future mutually decide pay the Manager a fair and reasonable compensation. 6. Term This Agreement shall be for a term of five years, from July 1, 2012 to July 1, 2017. Thereafter, this Agreement shall be automatically renewed for annual one year terms, unless either party elects to terminate this agreement upon thirty (30) days notice. The Owner may terminate this Agreement at any time, upon thirty (30) days notice, in the event the Manager is not performing its duties as required herein. If and when any third party purchases one hundred percent (100%) of the Sequoia from the Owner, then the Owner has the right to terminate this Agreement upon thirty days (30) days notice.

IN WITNESS HEREOF, the parties hereto hereby agree to the aforementioned terms. OWNER WITNESS The Sequoia Presidential Yacht Group, LLC ___________________________ _______________________ Gary Silversmith MANAGER WITNESS P&L Investments, LLC ___________________________ _______________________ Gary Silversmith

EXHIBIT 39

FE PARTNERS, LLC1250 24th Street, NW

Suite 300Washington, DC 20037

August 14, 2012

VIA MAIL AND EMAIL

The Sequoia Presidential Yacht Group, LLC1001 Connecticut Ave., NW, #405,Washington, DC 20036Attention: Mr. Gary SilversmithE-mail: [email protected]

Gary Silversmith6610 Radnor RoadBethesda MD 20817E-mail: [email protected]

Re: NOTICES OF DEFAULT

Dear Gary:

This is a notice that an additional default has occurred under the Amended and Restated Term LoanAgreement, dated as of July 3, 2012, by and between The Sequoia Presidential Yacht Group, LLC(“TSPYG”) and FE Partners, LLC (the “Loan Agreement”), and the related First Preferred Ship Mortgage,dated as of July 3, 2012, by and between TSPYG and FE Partners (the “Mortgage”). In particular, byfailing to pay amounts due and owing to Brown & Brown Insurance in respect of the various policies ofinsurance covering the U.S.S. Sequoia (the “Vessel”), with the result that (i) the primary Hull/P&I, VesselPollution excess P&I coverage expired without renewal effective August 11, 2012 (though weunderstand that Brown & Brown was able to maintain coverage through today) and (ii) the balance ofthe required coverage was threatened with cancellation effective as of today. This constitutes a breachof the provisions of Section 2.8 of the Mortgage and Sections 5.2 and 5.5 of the Loan Agreement, amongother provisions. Additionally, we understand that Gangplank Marina had directed that the Vessel bemoved from their marina today unless a certificate of insurance was provided no later than today, whichcertificate Brown & Brown was unable to provide because of the insurance lapse and pendingcancellations. Your failure to notify us of the impending removal of the Vessel constitutes a breach ofthe provisions of Section 2.14 of the Mortgage, and your failure to comply with the provisions of theGangplank lease constitutes a breach of the provisions of Section 5.5 of the Loan Agreement.

We understand from your email to Brown & Brown of this morning, on which you copied us, that thatsent Brown & Brown a P&L Investments check in the amount of $10,730.98 in payment of the downpayment and initial premiums due for such insurance under a premium finance agreement withPremium Assignment Corporation, in an attempt to continue the coverage in force. We note, however,that such check was dated 8/18/12, so even if it was written for good funds, payment using it would

The Sequoia Presidential Yacht Group, LLCMr. Gary SilversmithAugust 14, 2012Page 2

leave the Vessel without insurance for at least one-week. Consequently, because of the non-renewaland contemplated cancellation, and the resultant potentially catastrophic consequences of your failureto obtain and maintain the required coverages, we have today arranged with Brown & Brown to wiretransfer them the amount of $107,492.74, which they told us was the amount required to pay thepremiums for all required insurance for the next year.

Moreover, not only did you not notify us of the non-renewal and threatened cancellations, it is ourunderstanding that you instructed members of Brown & Brown Insurance to intentionally withhold fromus information concerning the extant and threatened cancellations. Your failure to notify us of the non-renewal and threatened cancellations constitutes a breach of the provisions of Section 5.4 of the LoanAgreement. And, we are greatly disturbed to find that not only do you continue to engage in a patternof intentionally withholding information from us, but also that you again have and attempted to enlistothers with knowledge of such information in a scheme to deceive us. Finally, we note that youapparently contemplated financing payment of the insurance under a premium finance agreement withPremium Assignment Corporation. While our payment of the required premiums has obviated the needfor such arrangement, we note that this is the first we heard of the arrangement and further note that,had you consummated the premium finance agreement it would be a breach of the provisions of Section5.9 of the Loan Agreement.

This letter confirms that FE Partners has not waived any of the Defaults noticed in any prior Notices ofDefault or in this Notice, and FE Partners expressly reserves all of its rights, powers, privileges andremedies under the Loan Agreement, the Mortgage and the other loan documents, applicable law orotherwise with respect to any Default now existing or hereafter arising under any thereof, includingwithout limitation (i) the right to demand immediate payment in full of all obligations owing under theLoan Agreement, the Mortgage and the other loan documents, and (ii) the right to repossess and takeother action with respect to any or all collateral, including the liquidation thereof pursuant to thesecurity interest granted under the Mortgage and the other loan documents. The failure of FE Partnersto exercise any such rights, powers, privileges and remedies is not intended, and shall not be construed,to be a waiver of any such Default. FE Partners may elect to exercise any or all of its rights, at its soleoption, at any time hereafter, without the necessity of any further notice, demand or other action on itspart.

Nothing contained in this letter nor any delay by FE Partners in exercising any rights, powers, privilegesand remedies under the Loan Agreement, any other loan document or applicable law with respect to theany Default now existing or hereafter arising shall be construed as a waiver or modification of any ofsuch rights, powers, privileges and remedies. This letter is not, and shall not be deemed to be, a waiverof, or a consent to, any default, noncompliance or Default now existing or hereafter arising under theMortgage, the Loan Agreement or any other loan document. This letter shall not entitle TSPYG to anyother or further notice or demand.

The Sequoia Presidential Yacht Group, LLCMr. Gary SilversmithAugust 14, 2012Page 2

Sincerely yours,

FE Partners, LLC

By: ___________________________Richard M. Graf, General Counsel

cc: Anuj TimbloL. Michael Cantor

EXHIBIT 40

1

-----Original Message-----

From: gary silversmith [mailto:[email protected]]

Sent: Thursday, July 26, 2012 11:21 AM

To: Michael Cantor

Cc: Richard Graf

Subject: Re: Sequoia - Ownership and Operating Agreement

i made the statement to the Court with the intention of simultaneously transferring the interest.

when i did not transfer the interest, in order to rectify the mistake, i notified the plaintiff in the case, EnviroFinance.

perhaps i should have filed a supplemental brief in the case rectifying the issue

gary

On 7/26/12, Michael Cantor <[email protected]> wrote:

> Gary - So you committed a fraud on the court?

>

> Mike

> From: [email protected] [mailto:[email protected]]

> Sent: Thursday, July 26, 2012 10:29 AM

> To: Michael Cantor

> Cc: Richard Graf

> Subject: Re: Sequoia - Ownership and Operating Agreement

>

> As I indicated previously, I contemplated transferring 75 percent of

> Sequoia to my family members, and had told EnviroFinance that I was to

> have only 25 percent. I prepared papers I do this, and then decided I

> should not involve the family . I then notified EnviroFinance that I

> was keeping 100 percent

>

> So My representation regarding my ownership remains accurate and

> truthful

>

> Gary

>

2

> Sent from my iPhone

>

> On Jul 26, 2012, at 10:15 AM, Michael Cantor

> <[email protected]<mailto:[email protected]>> wrote:

> Gary - It would appear that you are either intentionally misleading

> my company (FE Partners LLC) or the DC Circuit Court with respect to

> the ownership of the Sequoia. Neither is acceptable.

>

>

> In the below e-mail you make the representations that "...I am now,

> and have always been, the 100% owner of The Sequoia Presidential Yacht

> Group, LLC... "I have never transferred, sold or assigned any interest

> in TSPYC to any third party, including family members (except for the

> de minimus interest transferred to FE Partners at our July 3, 2012

> loan closing.)" However, in the attached motion which you filed in DC

> Superior Court you state that "... Defendant has only a 25% membership

> interest in the Sequoia Presidential Yacht, LLC, ("Sequoia"), a

> limited liability company organized and operating in the District of

> Columbia [] Pursuant to the terms of a $2 Million bank mortgage loan

> on the Sequoia, if a charging order is filed against Defendant's

> interest in the Sequoia, then the Sequoia's $2 Million mortgage loan

> with Industrial Bank will be declared in default, thereby affecting

> both the equity interest of the 75% innocent owners and the financial viability of the collateral, a national historic

landmark."

>

>

> Mike

>

> ________________________________

>

> -----Original Message-----

> From: gary silversmith

> [mailto:[email protected]]<mailto:[mailto:gary.silversmith@gm

> ail.com]>

> Sent: Monday, July 23, 2012 7:05 PM


> Cc: Richard Graf

> Subject: Re: FW: Sequoia - Ownership and Operating Agreement

>

>

>

> I hereby certify and warrant, both individually and as the President

> of The Sequoia Presidential Yacht Group, LLC ("TSPYC"), the owner of

> the USS Sequoia Presidential Yacht (#225115) "(Sequoia"), the four

> paragraphs specified below, that:

>

> The Sequoia Presidential Yacht Group, LLC

>

> 1. TSPYC is a Del LLC in good standing, and is the owner of the Sequoia.

>

> 2. The attached Operating Agreement, dated August 11, 2000, is the

> ONLY Operating Agreement ever adopted by TSPYC.

3

>

> 3. I am now, and have always been, the 100% owner of TSPYC.

>

> 4. I have never transferred, sold or assigned any interest in TSPYC to

> any third party, including family members (except for the de minimus

> interest transferred to FE Partners at our July 3, 2012 loan closing.)

>

>

>

> I apologize for the confusion.

>

>

>

> Best regards,

>

>

>

> Gary Silversmith

>

> ________________________________

> From: Michael Cantor

> Sent: Monday, July 23, 2012 6:32 PM

> To: [email protected]<mailto:[email protected]>

> Cc: Richard Graf

> Subject: FW: Sequoia - Ownership and Operating Agreement

>

> Gary - Unbelievably at this stage of the transaction, there still

> seems to be some uncertainty regarding the identity of the Limited

> Liability Company that Owns the Sequoia, the ownership of such Limited

> Liability Company and the relevant Operating Agreement.

>

> We closed the transaction and made certain disbursements based upon

> the understanding, and you had certified in the officer's certificate

> at closing, that the form of the operating agreement dated August 11,

> 2000, which contains your signature in a number of places, is the

> agreement under which TSPYG is operating and has always operated.

> Yet, in your below e-mail to me of 7/19/12, you attached a different

> and an unsigned form of Operating Agreement and indicated that this

> was TSPYG's form of Operating Agreement and that you had a signed copy

> in your files. Furthermore, your office manager, Wanda, last Thursday

> sent me a version of the latter agreement, also unsigned, that shows

> you with a 20% interest, Perri (your wife) with a 60% interest and a Beth Silversmith with a 20% interest.

>

> In order to clarify and resolve these issues once and for all, I need

> you to certify - with the understanding that this certification is

> going to be deemed by you and us to be an additional representation

> and warranty under the Amended Loan Agreement - that:

>

> 1. TSPYG is a Delaware Limited Liability Company and the owner

> of the Sequoia (Hull No. 225115);

>

> 2. The Operating Agreement dated August 11, 2000, a copy of which

4

> is attached to this email, is the only operating agreement that has

> ever been adopted by TSPYG;

>

> 3. You are now, and have always been, the holder of 100% of the

> membership interests in TSPYG; and,

>

> 4. You have never transferred, sold or assigned any of the

> membership interest in TSPYG to any members of your family or any 3rd

> party and/or represented to any member of your family and/or any other

> 3rd party that anyone else other than you holds or has ever held any

> membership interest at all in TSPYG.

>

> With kind regards,

>

> Mike

> ________________________________

>




> ail.com]>

> Sent: Monday, July 23, 2012 9:48 AM


> Cc: Richard Graf

> Subject: Re: sequoia ownership

>

>

>

> Just as a point of clarification.

>

> During our last lunch, i mentioned that the three times i took a high

> interest rate loan, i later regretted it---John Foster, Gina, and

> EnviroFinance. I mentioned that EnviroFinance was a bad experience

> because of their high interest rate and resulting litigation

> (EnviroFinance President told me that they were owned by real estate

> speculators, and they were lending only with the intent of getting control of the collateral).

> Anyway, when they sued me to get control of the collateral (since it

> was worth twice the loan amount), at that time i talked to my wife

> about transfering 75% Sequoia ownership to the family, so that i would

> own only 25%. During the litigation, I even had papers drawn up to

> that effect, and i think i told EnviroFinance so--but i never signed them.

>

>

>

> In the end, i kept the 100%. Anyway, thats probably more than you want

> to know, but I know you like all of the details.

>

> ________________________________

>


> From: Michael Cantor

> Sent: Friday, July 20, 2012 5:48 PM

5

> To: 'gary silversmith'

> Cc: Richard Graf

> Subject: RE: sequoia ownership

>

>

>

> Ok. Thanks for explanation

>

> ________________________________

>




> ail.com]>

> Sent: Friday, July 20, 2012 3:49 PM


> Subject: Re: sequoia ownership

>

>

>

> Prior to organizing the entity, I considered giving some of the equity

> to my family members. But, before closing, i elected to keep everything myself.

>

>

>

> i have always owned 100%---until our recent loan closing, when i

> transferred the de minimus equity to FE.

>

>

>

> The binder that Richard has, contains a copy of the original corporate

> docs===which contain just my name.

>

>

>

> Gary

>

> ________________________________

>

> On 7/20/12,

> [email protected]<mailto:[email protected]>

> <[email protected]<mailto:[email protected]>> wrote:

>

>

>

> Yes

>

>

>

> Sent from my iPhone

>

> ________________________________

6

>

> On Jul 20, 2012, at 10:41 AM, Michael Cantor

> [email protected]<mailto:[email protected]> wrote:

>

>

>

> Gary - So just to confirm once again, you are and have always been

> the only member?

>

> ________________________________

>




> ail.com]>

> Sent: Thursday, July 19, 2012 7:25 PM


> Cc: Wanda- Reed

> Subject: Sequoia Operating Agreement

>

>

>

> Attached is a draft on my computer (for which i have a signed copy in

> my files), where I am the only officer and shareholder.

>

>

>

> The previous version that you, Wanda, have----was a draft that i later

> changed before I signed it.

>

>

>

> Thanks,

>

> Gary

>

> ________________________________

> From: Wanda Reed

> [mailto:[email protected]]<mailto:[mailto:[email protected]]>

> Sent: Thursday, July 19, 2012 6:19 PM


> Subject: Sequoia Operating Agreement

>

> Hi Mr. Cantor,

>

> As I was searching my computer, I did run across an operating

> agreement with Delaware as the governing state that had Perri's name

> listed. I have attached the agreement for your perusal although it is not signed.

>

> All the best,

> Wanda M. Reed

> P&L Investments, LLC

7

> 1001 Connecticut Avenue, N.W., Suite 405 Washington, D.C. 20036

> (202) 337-7300

> (202) 429-5290-fax

>

> Life's not about having the best of everything; it's about doing the

> best with everything you have.

>

>

> <ENVIROFINANCE Opposition motion.doc.pdf>

>

EXHIBIT 41

EXHIBIT 42

FE PARTNERS, LLC 1250 24th Street, NW

Suite 300 Washington, D C 20037

November 24,2012

VIA MAIL AND EMAIL

The Sequoia Presidential Yacht Group, LLC 1001 Connecticut Ave., NW, #405 Washington, DC 20036 Attention: Mr. Gary Silversmith E-mail: [email protected]

Gary Silversmith 6610 Radnor Road Rethesda MD 20817 E-mail: [email protected]

Dear Gary:

In accordance with the provisions of Sections 1 of the Amended and Restated Option Agreement (the "Agreement"), dated as of July 3, 2012 by and between The Sequoia Presidential Yacht Group, LLC, ("Sequoia"), Gary Silversmith ("Silversmith"), and FE Partners, LLC ("FE Partners"), this will serve as notice that FE Partners is exercising the option granted pursuant to said Agreement to purchase all of Sequoia's interest in the Vessel (as such term is defined in the Agreement). Because TSPYG currently is in default and has been in default for over 30 days under various provisions of the Amended and Restated Term Loan Agreement, dated as of July 3,2012, by and between The Sequoia Presidential Yacht Group, LLC ('TSPYW and FE Partners, LLC (the "Loan Agreement"), and the related First Preferred Ship Mortgage, dated as of July 3, 2012, by and between TSPYG and FE Partners (the "Mortgage") as noted in our prior Notices of Default, this notice constitutes notice of a Default Exercise (as such term is defined in the Agreement) and the Purchase Price for the Vessel will be $7,800,000. This notice constitutes the Exercise Notice referenced in Section 4 of the Agreement. In accordance with the provisions of said Section 4, the closing for the purchase of the Vessel shall be held on December 1, 2013, unless FE Partners subsequently shall specify another date. We will prepare the form of purchase agreement referenced in Section 5 of the Agreement and forward the same to you for pour review. Please contact me if you have any questions.

Sincerely yours,

cc: Anuj Timblo Richard Graf

EXHIBIT 43

Hamilton Square600 Fourteenth Street, N.W.Washington, D.C. [email protected]

INTERNAL REVENUE SERVICE RULES REQUIRE THAT WE ADVISE YOU THATTHE TAX ADVICE, IF ANY, CONTAINED IN THIS MEMORANDUM WAS NOTINTENDED OR WRITTEN TO BE USED BY YOU, AND CANNOT BE USED BY YOU,FOR THE PURPOSES OF (I) AVOIDING PENALTIES UNDER THE INTERNALREVENUE CODE OR (II) PROMOTING, MARKETING OR RECOMMENDING TOANOTHER PARTY ANY TRANSACTION OR MATTER ADDRESSED HEREIN.

M E M O R A N D U M

TO: Mike Cantor, FE Partners, LLC

FROM: Lance Jacobs

DATE: February 8, 2013

RE: Sequoia Sales Tax

ISSUES:

1. Is the renting of a yacht for charter potentially subject to sales taxes in the District ofColumbia?

2. Is the provision of food and beverage on a yacht for charter for an additional, separatelystated fee, subject to sales taxes in the District of Columbia?

CONCLUSIONS:1. The renting of a yacht for charter is potentially subject to sales taxes in the District of

Columbia.2. The provision of food and beverage on a yacht for charter for an additional separately

stated fee is potentially subject to sales taxes in the District of Columbia.

It is our understanding that the Sequoia Presidential Yacht Group, LLC (the“Company”), a Delaware limited liability company, owns the Sequoia, a finely-appointed,wooden, 1925 Trumpy-designed yacht with a large collection of presidential photographs and

February 8, 2013Page 2 of 6

-2-

original memorabilia. The Sequoia is the former presidential yacht that served more than ninepresidents until it was sold by the U.S. government during the late 1970s. According to itswebsite (www.sequoiayacht.com), the Sequoia is available, on a limited basis, for privatecharters of up to 50 guests. The website lists several different cruise options on its website, someof which may leave District waters; on the other hand, it also lists the possibility that an entireevent can occur dockside in the District, an option chosen by President Clinton, according to thewebsite. Catering is offered in the yacht’s dining room, with sit-down and buffet options, andthe website notes that, “[t]he Sequoia also provides, for an additional fee, a bar with premiumliquors.”

Sales Tax Overview

D.C. Code Ann. § 47-2001(n)(1) defines the terms “retail sale” or “sale at retail”as the sale in any quantity or quantities of any tangible personal property. D.C. Code Ann. § 47-2002(a) imposes a sales tax on vendors for the privilege of selling at retail certain tangiblepersonal property and for the privilege of selling certain selected services (defined as a “retailsale” and “sale at retail”).

Taxability of Food and Beverage

The definition of “retail sale” or “sale at retail” is explicitly defined to includesales of food or drink prepared for immediate consumption, per D.C. Code Ann. § 47-2001(n)(1)(A). “Food or drink prepared for immediate consumption includes food or drink in aheated state (except heated baked goods whose heated state is solely a result of baking);sandwiches suitable for immediate consumption; prepared salads; salad bars; party platters; colddrinks dispensed in or with a cup or glass either by a retailer or on a self-service basis by theconsumer; frozen yogurt, ice cream, or ice milk sold in quantities of less than one pint; and allfood or drink, served by, or sold in or by, restaurants, lunch counters, cafeterias, hotels,caterers, boarding houses, carryout shops or like places of business. D.C. Code § 47-2001(g-1) (emphasis added). The definition of “food or drink” excludes alcoholic beverages, perD.C. Code § 47-2001(g), but alcoholic beverages served for consumption on premises arenonetheless taxable. See D.C. Code Ann. 47-2002(a)(3)(B).

Taxability of Charter

The definition of “retail sale” includes lease transactions: “[t]he sale or chargesfor possession or use of any article of tangible personal property granted under a lease orcontract, regardless of the length of time of such lease or contract or whether such lease orcontract is oral or written; in such event... such lease or contract shall be considered the sale ofsuch article and the tax shall be computed and paid by the vendor upon the rental paid...” D.C.Mun. Regs. tit., 9, § 461.8 further provides, “[w]hen tangible personal property, including suchmobile equipment as motor vehicles, trailers, and contractor's equipment, is rented, the tax shallbe payable for such rental period during which the property is within the boundaries of theDistrict.” “Motor vehicles” are defined as any vehicle propelled by an internal-combustionengine or by electricity or steam. While we do not have first-hand knowledge of how theSequoia is powered, we note that an article published in Newsweek and reproduced on theCompany’s website references President Nixon’s habit of shutting the engines down at Mount


-3-

Vernon (the article can be found at http://www.sequoiayacht.com/newsweek_2012.pdf). Itseems, then, that the Sequoia ought to be considered a motor vehicle for purposes of the statute.

The rental of limousines, chartered buses, and other motor vehicles with drivers issubject to the tax when the control of the vehicle is exercised by the person to whom the vehicleis furnished, regardless of the method of charging for that use. D.C. Mun. Regs. tit. 9, § 462.1.The regulations consider a person to have control of the vehicle when the person has theexclusive use of the vehicle for a given period of time; and the person has the right to direct themanner of the use of the vehicle, whether exercised or not, for that period. D.C. Mun. Regs. tit.9, § 462.2. There is no further guidance as to what constitutes the “right to direct the manner ofthe use of the vehicle”; we note that this right does not have to be an exclusive right, and it doesnot have to be full control of the vehicle; rather it has to be the ability to direct the vehicle’smanner of use, and this right does not have to be exercised. Based upon the language in theregulation, something as simple as asking the yacht’s captain to pull a little closer to shore so thatthe passengers can get a better view would suffice. It is conceivable that a carefully craftedcontract could be structured so that the person chartering the boat has no right to direct themanner of the use of the vehicle; we would need to review the individual charter contracts todetermine whether this applies.

D.C. Mun. Regs. tit. 9, § 462.3 notes that the rental of a limousine for sightseeing purposes is ataxable transaction; although passengers in a limousine might have more flexibility than thepassengers on the Sequoia in choosing destinations and might have more ability to direct themanner of use of the limousine, it is somewhat analogous. D.C. Mun. Regs. tit. 9, § 462.4(b)provides that regularly scheduled sightseeing trips over a fixed route are exempt from the salestax. It is likely that the Sequoia does not qualify for this exemption; by the terms on its websiteit is only available on a limited basis rather than regularly scheduled trips. Additionally, theroutes that the boat takes vary. In this sense, it is very different than the duck boat tours or otherbus tours that operate regularly in the District and offer a variety of different routes for each bus.It seems unlikely that this exemption would apply. Of course, trains and planes departing fromthe District are almost definitionally destined outside the District. On the other hand, theSequoia’s cruise originates and terminates in the District, which is an argument against theexemption applying in any case.

Tax Rates

The general sales tax rate is 6% per D.C. Code Ann. § 47-2002(a), though there isa special 10% rate for food and drink served on the premises for immediate consumption(imposed in two parts by D.C. Code Ann. § 47-2002(a)(3)(A) and D.C. Code Ann. § 47-2002.02(3)(A)). Likewise, there is a special 11% rate for alcoholic beverages served onpremises for immediate consumption (10% found in D.C. Code Ann. § 47-2002(a)(3)(B) and 1%found in D.C. Code Ann. § 47-2002.02(a)(3)(B)). The charter of the boat would presumptivelybe subject to the 6% sales tax rate.

The calculation of the tax owed may vary depending on how the Sequoia operatesand invoices its customers. Arguably, if the cost of the food, beverages and alcohol is includedin a lump sum rate to charter the boat, the Sequoia could be deemed the consumer of these items


-4-

and would not have to collect tax on its ultimate resale as a part of the charter. In this case, theCompany would pay the tax due to its vendors on its purchase of these items. The Companywould still have to collect and remit the 6% sales tax for taxable charters, as the gross charge forthe charter would still be a taxable activity.

In the alternative, if the Company is separately invoicing customers, either on aline item basis or on a separate invoice basis, for food and beverage, it would likely be able toprovide resale certificates to its vendors so it could purchase the food and beverage tax-free. Itwould then have to apply the higher food and beverage rates to these line items, while stillcollecting the 6% sales tax on the charter.

Potential Exemption

D.C. Code Ann. § 47-2005(9) does contain an exemption for “[s]ales of food ordrink or beverages of any nature if made in any car composing a part of any train or in anyaircraft or boat operating within the District in the course of commerce between the District anda state”, which would certainly apply to, for example, a train leaving Union Station bound forNew York. It may also apply to those cruises whereby the Sequoia leaves District of Columbiawaters, though it appears that many of the cruises available do not leave the District’s waters;further, there is a dockside charter option. At best, this would exempt some, but certainly not all,of the Sequoia’s voyages.

Statute of Limitations

D.C. Code Ann. § 47-4301(a) provides for a three year statute of limitations forthe Office of Tax and Revenue to assess tax, which runs from the date that a return was filed.However, when no return is filed, the statute does not apply, and D.C. Code Ann. § 47-4301(d)(1)(C) allows the Office of Tax and Revenue to assess at any time when no return isfiled.

Responsible Person Liability

An officer or director of a corporation, general partner of a partnership, or similarprincipal of a business shall, in addition to other penalties provided by law, be liable for apenalty equal to the tax, including interest and penalties thereon, not collected or paid to theDistrict, per D.C. Code Ann. § 47-4491(a).

Interest

Interest accrues on underpaid tax at the rate of 10%, compounded daily, per D.C.Code Ann. § 47-4201(d)(2).

Civil Penalties

There are a whole host of civil penalties that can apply to sales tax delinquencies.D.C. Code Ann. § 47-2026(d) imposes a maximum civil fine of $50 per day for each day that avendor who is required to be registered under the sales tax laws makes retail sales without beingregistered. A certification of the Mayor (through the Office of Tax and Revenue) is presumptive


-5-

evidence (in the context of civil fines and penalties) of noncompliance as to tax payment, filing areturn, getting a registration certificate, or supplying information, per D.C. Code Ann. § 47-2027.

D.C. Code § 47-4211(b)(1)(A) imposes a 20% penalty on an underpaymentattributable to negligence. “Negligence” is defined in the statute as a failure to make areasonable attempt to comply with the provisions of the tax laws. D.C. Code § 47-4212(a)imposes a penalty of 75% on underpayments where instances of fraud are involved. Fraud isindicated when a taxpayer willfully fails to pay the sales tax, or attempts to evade or defeat thesales tax or its payment, per D.C. Code § 47-4212(d). Either the negligence penalty or the fraudpenalty applies, but not both. D.C. Code Ann. § 47-4211(c). The law also imposes a penalty of5% per month (or part of a month), not to exceed 25% in the aggregate, for a failure to file areturn. D.C. Code Ann. § 47-4213(a). Finally, D.C. Mun. Regs. tit. 9, § 105.13 imposes a 10%penalty on taxpayers who are supposed to file electronically but fail to do so.

Criminal Penalties

D.C. Code Ann. § 47-4101(a) makes a person who willfully attempts in anymanner to evade or defeat the sales tax guilty of a felony if the tax evaded or attempted to beevaded exceeds $10,000, and subject to a fine of not more than $10,000 or 3 times the amount ofthe tax evaded or attempted to be evaded, whichever is greater, or imprisoned not more than 10years, or both, together with the costs of prosecution. D.C. Code Ann. § 47-4102(a) imposes anidentical criminal penalty in situations where a person required to collect, account for, or payover sales tax who willfully fails to collect or truthfully account for and pay over the tax.

D.C. Code Ann. § 47-4103(a) imposes a fine of $5,000 and a potentialimprisonment of 180 days for a person who willfully fails to pay a tax, pay estimated tax, make areturn, keep a records, or supply the information, at the time required by law or regulations. Thiscrime is considered a misdemeanor.

The statute of limitations on such crimes is six years, which runs from the latest ofthe following dates: the commission of the offense, the last action in furtherance of the offense,or the last action to conceal the offense. D.C. Code Ann. § 47-4108.

The construction provisions of the criminal portion of the tax statutes providesthat a person shall be deemed to include an officer or employee of a corporation or a member oremployee of a partnership or association, who as an officer, employee, or member, is under aduty to perform the act in respect to which the violation occurs, per D.C. Code Ann. § 47-4109.

The

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%*

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

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0,00

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0,00

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5,00

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9,41

147

1,20

545

7,74

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6,19

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7,86

611

7,25

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0,03

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8,09

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487,

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t rat

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10%

. D.

C. C

ode

47-4

201.

EXHIBIT 44

Hamilton Square600 Fourteenth Street, N.W.Washington, D.C. [email protected]

INTERNAL REVENUE SERVICE RULES REQUIRE THAT WE ADVISE YOU THATTHE TAX ADVICE, IF ANY, CONTAINED IN THIS MEMORANDUM WAS NOT

INTENDED OR WRITTEN TO BE USED BY YOU, AND CANNOT BE USED BY YOU,FOR THE PURPOSES OF (I) AVOIDING PENALTIES UNDER THE INTERNAL

REVENUE CODE OR (II) PROMOTING, MARKETING OR RECOMMENDING TOANOTHER PARTY ANY TRANSACTION OR MATTER ADDRESSED HEREIN.

M E M O R A N D U M

TO: Mike Cantor, FE Partners, LLC

FROM: Lance S. Jacobs

DATE: February 8, 2013

SUBJECT: Property Tax

ISSUES:

1. Is a yacht subject to the District of Columbia’s personal property taxes?

CONCLUSIONS:1. A yacht, absent an applicable exemption, is subject to the District of Columbia’s personal

property taxes.

FACTS:It is our understanding that the Sequoia Presidential Yacht Group, LLC (the

“Company”), a Delaware limited liability company, owns the Sequoia, a finely-appointed,wooden, 1925 Trumpy-designed yacht with a large collection of presidential photographs andoriginal memorabilia. The Sequoia is the former presidential yacht that served more than ninepresidents until it was sold by the U.S. government during the late 1970s. According to itswebsite (www.sequoiayacht.com), the Sequoia is available, on a limited basis, for privatecharters of up to 50 guests. The website lists several different cruise options on its website, someof which may leave District waters; on the other hand, it also lists the possibility that an entire


-2-

event can occur dockside in the District, an option chosen by President Clinton, according to thewebsite. Catering is offered in the yacht’s dining room, with sit-down and buffet options, andthe website notes that, “[t]he Sequoia also provides, for an additional fee, a bar with premiumliquors.”

DISCUSSION:

D.C. Code Ann. § 47-1522(a) imposes a personal property tax on tangiblepersonal property used in a trade or business. The rate of tax is $3.40 per $100 of value. D.C.Code Ann. § 47-1522(e) requires such persons owning tangible personal property having ataxable situs in the District on July 1st of such tax year to file a property tax return and remit thetax to the District. The Sequoia, assuming it is docked on July 1st in the District, would acquiresuch a tax situs, per D.C. Mun. Regs. tit. 9, § 700.3(i), and the Company would therefore beresponsible for filing personal property tax returns and remitting the tax to the District.

D.C. Code Ann. § 47-1523(a) requires the full and true value and the currentvalue of tangible personal property, including taxable leasehold improvements, to be reported onthe property tax return. The full and true value shall be the original costs of the tangible personalproperty in an arms-length transaction. Id. The tax return is due by August 1st each year, andthe tax computed on the return is required to be paid by that time, though extensions may berequested in writing before this deadline. D.C. Code Ann. § 47-1524(b).

D.C. Mun. Regs. tit. 9, § 708 provides the depreciation guidelines for tangiblepersonal property for purposes of reporting it on the personal property tax return. Two particularcategories of property are of interest for the Sequoia. According to the regulation, watercraftsand floating equipment, including boats, are considered Category B property and are given a 15year useful life, or a depreciation allowance of 6.67% per annum. On the other hand, antiques,since they are considered to appreciate in value, are subject to classification under Category Fand no depreciation is allowed.

There is no detailed explanation of what qualifies as an antique in the District. Itis worth noting that under Louisiana’s property tax laws, antique airplanes are those consideredto be manufactured 25 years or more ago. La. Admin. Code tit. 61, § V:1501(2). Likewise,Mississippi uses the 25 year threshold as well in classifying slot machines as antique. Miss.Code Ann. § 27-27-12(2). Va. Code Ann. § 46.2-100 considers automobiles and trailers to beantiques if they were manufactured more than 25 years ago. This concept is consistent with thedictionary definition of antique, which reads, in pertinent part, “…a manufacturedproduct…from an earlier period.” Merriam-Webster’s Collegiate Dictionary 52 (10th ed.) Inlight of this, it is likely that the Sequoia would be considered an antique under the District’s lawand assessed at 100% of its original cost without a depreciation allowance.

There are limited exemptions for personal property taxes in the District, none ofwhich appear to apply to the Sequoia or the Company.


-3-

Interest

Interest accrues on underpaid tax at the rate of 10%, compounded daily, per D.C. Code Ann. §47-4201(d)(2).

Civil Penalties

There are a whole host of civil penalties that can apply to personal property taxdelinquencies. D.C. Code § 47-4211(b)(1)(A) imposes a 20% penalty on an underpaymentattributable to negligence or a substantial valuation misstatement. “Negligence” is defined in thestatute as a failure to make a reasonable attempt to comply with the provisions of the tax laws.D.C. Code § 47-4212(a) imposes a penalty of 75% on underpayments where instances of fraudare involved. Fraud is indicated when a taxpayer willfully fails to pay the property tax, orattempts to evade or defeat the property tax or its payment, per D.C. Code § 47-4212(d). Eitherthe negligence penalty or the fraud penalty applies, but not both. D.C. Code Ann. § 47-4211(c).The law also imposes a penalty of 5% per month (or part of a month), not to exceed 25% in theaggregate, for a failure to file a return. D.C. Code Ann. § 47-4213(a).

Criminal Penalties

D.C. Code Ann. § 47-4101(a) makes a person who willfully attempts in anymanner to evade or defeat the personal property tax guilty of a felony if the tax evaded orattempted to be evaded exceeds $10,000, and subject to a fine of not more than $10,000 or 3times the amount of the tax evaded or attempted to be evaded, whichever is greater, orimprisoned not more than 10 years, or both, together with the costs of prosecution. D.C. CodeAnn. § 47-4102(a) imposes an identical criminal penalty in situations where a person required tocollect, account for, or pay over the personal property tax who willfully fails to collect ortruthfully account for and pay over the tax.

D.C. Code Ann. § 47-4103(a) imposes a fine of $5,000 and a potentialimprisonment of 180 days for a person who willfully fails to pay a tax, pay estimated tax, make areturn, keep a records, or supply the information, at the time required by law or regulations. Thiscrime is considered a misdemeanor.

The statute of limitations on such crimes is six years, which runs from the latest ofthe following dates: the commission of the offense, the last action in furtherance of the offense,or the last action to conceal the offense. D.C. Code Ann. § 47-4108.

The construction provisions of the criminal portion of the tax statutes providesthat a person shall be deemed to include an officer or employee of a corporation or a member oremployee of a partnership or association, who as an officer, employee, or member, is under aduty to perform the act in respect to which the violation occurs, per D.C. Code Ann. § 47-4109.

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EXHIBIT 45

Official Web Site

Home | About | Rental | Photos | Recent Events | History | Rental Request| Contact | Merchandise

Availability

This Coast Guard-certified, fully restored, national historic landmark is available, for a limited time, for exclusive charters in the Washington, D.C. area. Information is available at this web site. In order to ascertain availability, call 202-333.0011, or fax 202.429.5290 or e-mail us. (Charters are coordinated with any Presidential usage).

Rental Request

Location

The Sequoia is docked at the Gangplank Marina, at 6th & Maine Avenue, S.W., Washington, D.C., approximately one mile south of the Capitol building. It is located at the end of the commercial dock, next to the Odyssey cruise boat dock, and one block from both Phillips restaurant and Arena Stage Theater.

Directions >>>

Rental Pricing

Contact us for an event of up to four hours. Additional time entails an extra charge. (Crew gratuities are left to your discretion).

Rental Request

Dining

The original mahogany dining room table can accommodate up to 22 (as it did for JFK’s last birthday) for an elegant sit-down meal. An extra table can be placed in the aft salon to accommodate another six diners (as it did for a Vice President Cheney dinner cruise). The yacht accommodates 49 easily for a buffet (as it did for Soviet Premier Gorbachev's brunch cruise).

Rooms

Luxurious main salon/dining room (where 10 Presidents dined, and where FDR and Churchill planned D-day), comfortable aft salon (where Presidents relaxed after dining), rear deck (where FDR and Hoover fished, and where Nixon decided to resign), spacious top deck (where most guests congregate during pleasant weather, and where Nixon and Brezhnev negotiated the first arms control treaty), and four renovated staterooms (including the luxurious Presidential suite) which sleep a total of six.

Food & Drinks

For food, the Sequoia works with all reputable catering companies and restaurants, and the Sequoia staff is pleased to make recommendations. The yacht has a full kitchen below deck, plus a portal kitchen. The Sequoia also provides, for an additional fee, a bar with premium liquors. For questions, call Lynn Klein at 301.237.4003.

Rental Information

◦ Additional information >>◦ Pictures of Sequoia's facilities >>

◦ Additional information >>◦ Photos of Sequoia's facilities >>

Sample of Rental Options

◦ Dockside greeting for 30-60 minutes. Cruise for a 2-hour brunch on the Potomac River. (Trip chosen by Mikhail Gorbachev.)

◦ Dockside cocktails for 30-60 minutes. Cruise for 1-3 hours on the Potomac River. (Trip chosen by Board of Directors of Museum of American History).

◦ Cruise to Mt. Vernon, and arrive at sundown. Take a 1½ hour private candlelight tour of George Washington’s house ($30/p), and cruise back. (Trip chosen by Boy Scouts of America Board.) NOTE: This option may be subject to additional charges, because it may require use of the yacht beyond four hours

◦ Cruise 30 minutes to Old Town Alexandria, and guests leave. New guests board for remaining cruise. (Trip chosen by Mayor of Washington, D.C. and Secretary of the Treasury)

◦ Dockside for entire event, thereby allowing guests to arrive or depart at will. (Trip chosen by President Clinton)

◦ Cruise for 2 hours on the Anacostia and Potomac Rivers, with a formal sit-down dinner. (Trip taken by Vice President Cheney and Alan Greenspan)

Additional information >>

Page 1 of 2U.S.S. Sequoia Rental Information

2/8/2013http://sequoiayacht.com/rentalinformation.htm

Photos of Sequoia's facilities >>

Sequoia Presidential Yacht Group © 2013 All rights reserved

Home | About us | Distinguished Visitors | Policy | Video | Directions | Contact | Merchandise

Page 2 of 2U.S.S. Sequoia Rental Information

2/8/2013http://sequoiayacht.com/rentalinformation.htm

EXHIBIT 46

Online Deal

Over 1000 bought

USS "Sequoia" Presidential Yacht – Gangplank Marina

Two-Hour Presidential Yacht Cruise. 15 Options Available.

from$99No Longer Available

Tue Aug 16 03:59:59 UTC 2011

Value

$250

Discount60%

You Save$151

Buy it for a friend!

• This deal ended at:

• 11:59PM EDT• 08/15/2011

Page 13 of 19

2/8/2013http://www.groupon.com/deals/the-sequoia-presidential-yacht-group

Over 530 bought

Limited quantity availableThe deal is on!

• Tweet!

• Email!

•

•

•

•

Highlights

• 104 ft. wooden yacht

• National historic landmark• Transported FDR & JFK

• Scenic city views

The Fine Print

• Expiration varies• Limit 6 person, may buy more as gifts. Limit 1 per visit. Valid only for date purchased.

Reservation required 72hr in advance. Subject to availability. Must be 21 years or older.• See the rules that apply to all deals.

Yachts add a touch of luxury to water transport that has yet to be matched by diamond-studded dinghies and caviar-powered jet skis. Sail in style with today's Groupon-exclusive deal: for $99, you get a two-hour yacht cruise plus a glass of wine from the USS Sequoia Presidential Yacht (a $250

value). The Sequoia departs from the Gangplank Marina. Choose from 15 time slots. This is the first time that the Presidential Private Yacht has ever sold individual tickets; normally, passengers must

rent out the entire yacht.

Deemed the "Rolls Royce of Yachts" by the History Channel, the 104-foot USS Sequoia presidential yacht has entertained America's heads of state ever since Herbert Hoover boarded the royally

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Page 14 of 19


appointed vessel. Built in 1925, the Trumpy-designed yacht transports passengers on a two-hour

voyage of the Potomac River that delivers eye-catching views of the Washington Monument and stunning vistas of the city unmarred by the craters from its many mole-man invasions. Voyagers can sip a glass of wine and relax on the top deck in original teak deck chairs that once cozened the keisters

of Franklin Roosevelt and Winston Churchill.

Below decks, explore the National Historic Landmark's collection of presidential photographs and

original memorabilia, or ogle the piano near the aft salon on which Nixon composed his resignation jingle. No presidential footstep-following is complete without reeling in the sights on the rear fish deck where FDR would cast his line, or recapturing the celebratory spirit of JFK's final birthday party,

which he celebrated with close friends aboard the stately wooden vessel.

Ask a Question

Groupon Says

The Groupon Guide to: Police Blotters

Though newspapers are mostly full of articles about blood pressure and lists of important vegetables,

they still contain one gem that makes them worthwhile: the police blotter. Here’s yesterday’s blotter:

7:32 a.m., Crandall Road—Witnesses reported seeing a man with an extremely rude T-shirt attempting to enter a bank where he was not welcome.

10:17 a.m., Petunia Court—A bike theft!

1:58 p.m., Orson Park—A man with an extremely rude T-shirt was heard loudly disparaging

astronauts by an American playground. Officers could not locate the individual.

5:23 p.m., Travolta Memorial Parkway—This car was all like “Flooooaaaaam!” and then another car was just “Brooooooooooooooooooom!” It was crazy.

7:48 p.m., Milton Bradley Library—The rude T-shirt man was seen exploiting a loophole in the town charter to become the new mayor for life. Police are powerless to stop him. This is life now.

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USS "Sequoia" Presidential Yacht

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• A

Gangplank Marina

6th St. and Maine Ave. SW Washington, D.C. 20001

(202) 333-0011 Get Directions

Time Slots

Reviews

• Mr. Silversmith's team has carefully preserved this national treasure

New Jersey Museum of Boating

• Lyndon B. Johnson allegedly liked to sit on the upper deck and watch movies projected on to the ship's white smokestack.

History Channel

In and Around Washington, D. C.

• Washington, D. C.• Beauty & Spas• Restaurants

• Things to Do• Arlington

• Beauty & Spas• Restaurants• Things to Do

• Baileys Crossroads• Beauty & Spas

• Restaurants

Page 16 of 19


EXHIBIT 47

Transaction Date: 03/01/2012 Thu

Transaction Description: ATLANTIC YACHT BASINCHESAPEAKE VA

Cardmember Name: L MICHAEL CANTOR

Amount $: 2,400.93

Doing Business As: ATLANTIC YACHT BASIN

Merchant Address: 2615 BASIN RDCHESAPEAKEVA23322-4012UNITED STATES

Reference Number: 320120620417384526

Category: Transportation - Boat Services

https://online.americanexpress.com/myca/estmt/us/print_doc.html

1 of 1 2/8/2013 5:24 PM

REDACTED

Transaction Date: 03/01/2012 Thu

Transaction Description: ATLANTIC YACHT BASINCHESAPEAKE VA

Cardmember Name: L MICHAEL CANTOR

Amount $: 2,600.00

Doing Business As: ATLANTIC YACHT BASIN

Merchant Address: 2615 BASIN RDCHESAPEAKEVA23322-4012UNITED STATES

Reference Number: 320120620417384521

Category: Transportation - Boat Services

https://online.americanexpress.com/myca/estmt/us/print_doc.html

1 of 1 2/8/2013 5:27 PM

REDACTED

EXHIBIT 48

1

From: [email protected]: Thursday, March 01, 2012 5:53 AMTo: Michael CantorSubject: Gas

I was just told that your card was charged the minimum of $5k I can't imagine we'll use that much gas on friday We can figure it out later Fyi Gary Sent on the Sprint® Now Network from my BlackBerry®

EXHIBIT 49

From: [email protected]: Michael CantorCc: Richard Graf; Wanda- ReedSubject: Sequoia InterestDate: Saturday, November 03, 2012 4:04:31 PM

Can we please revisit your accounting on the interest due, pursuant to your recent email and scheduledated Nov 2

You increase the interest rate from 3.75 percent to 8.75 percent on July 20, 17 days after youoriginated the loan. You impose the default interest rate from July 20-- although I addressed yourrelated Notices of Default and you did not incur a loss of any kind and no payment was due by me. Canyou please revisit your conclusion that an alleged Loan Default, even if rectified promptly, has apermanence that causes the loan's Default provisions to always be in effect.

Regardless of the merits, you know the Sequoia can not afford to pay 8.75 percent interest rate on thedebt. Since you didn't fund approximately half of the loan, we don't have the working capital or reservesto absorb over a 100 percent increase in the interest carry.

You also impose $20,635 for "fees and expenses" paid in September. Can you please identify whatthose are for. I know you once sent an insurance payment, which I then paid back promptly by wire --so I don't know what over $20k would be for. Thanks.

As a side note: you can add to the principal balance the $5000 that you paid previously for gasexpenses in Norfolk.

Of course we can also discuss this at our meeting on Nov 14

Have a good weekendGary

Sent from my iPhone

Documents

Affidavit of L Michael Cantor 2