CASE NO.: 10-""Jt{t--6"J 9 0 2CA

IN THE CIRCUIT COURT OF THE ELEVENTH JUDICIAL CIRCUIT IN AND FOR MIAMI-DADE COUNTY, FLORIDA JSSI CAPITAL ENTERPRISES, LLC, a Delaware Limited Liability Company, and THE FRANKLIN MINT, LLC, a Delaware Limited Liability Company, vs. Plaintiffs, GENERAL JURISDICTION DIVISION CASE NO.: 10-""Jt{t--6"J 9 0 2CA lfv THE FRANKLIN MINT, J;N"C.,, a New York Corporation,~HE MORGAN MINT, INC., a New York Corporation,." INTER-GOVERNMENTAL PHILATELIC r; CORPORATION, a New York Corporation, / IDEAL STAf\jP CO., a New York Corporation,1AOSHE MALAMUD, individually( and SAMUEL MALAMUD, individually, / Defendants. ---------------_-.:/ --- ~ e:t :'{ = ""T1 r.""' C:1 N ". COMPLAINT Plaintiffs, JSSI Capital Enterprises, LLC and The Franklin Mint, LLC, sue Defendants, The Franklin Mint, Inc., The Morgan Mint, Inc., Inter-Goverinnental Philatelic Corporation, Ideal Stamp Co., Moshe Malamud, and Samuel Malamud, and state as fouows: NATURE OF CLAIM This is an action for fraud in the inducement, negligent misrepresenta,ion, rescission, breach of contract, and unjust enrichment arising from an investment scheme orchestrated by Defendants that defrauded Plaintiffs out of over $16,000,000. {M2902769;3} AKERMAN SENTERFITI, ONe SOUTHEAST THIRD AVENUE, SUITE 2500, MIAMI, FL 33131-1714

THE PARTIES 1. Plaintiff, JSSI Capital Enterprises, LLC ("JSSI Capital"), is a Delaware Limited Liability Company. 2. Plaintiff, The Franklin Mint, LLC ("Newco"), is a Delaware Limited Liability Company fonned by JSSI Capital to acquire the assets of The Franklin Mint, Inc. and The Morgan Mint, Inc. 3. Defendant, The Franklin Mint, Inc. ("The Franklin Mint"), is a New York Corporation. 4. Defendant, The Morgan Mint, Inc. ("The Morgan Mint"), is a New York Corporation. S. Defendant, Inter-Governmental Philatelic Corporation ("IGPC"), is a New York Corporation. 6. Defendant, Ideal Stamp Co. ("Ideal Stamp"), is a New York Corporation. 7. Defendant, Moshe Malamud ("M. Malamud"), is an individual sui juris and a resident ofthe State ofnew York. M. Malamud is Samuel Malamud's son. 8. Defendant, Samuel Malamud ("S. Malamud"), is an individual sui juris and a resident ofthe State ofnew York. S. Malamud is M. Malamud's father. 9. Upon information and belief, at all relevant times, M. Malamud controlled and was the decision-maker for The Franklin Mint and The Morgan Mint, and S. Malamud controlled and was the decision-maker for IGPC and Ideal Stamp. 10. M. Malamud was Plaintiffs' direct contact during negotiations for Plaintiffs to acquire the assets and assume the debt of The Franklin Mint and The Morgan Mint. {M2902769;3 } - 2 AKERMAN SEN~RFITT. ONE SOUTHEAST THIRD AVENUE, SUITE 2500, MIAMI, FL 33131-1714

JURISDICTION AND VENUE 11. This Court has subject matter jurisdiction over this action inasmuch as the amount in controversy exceeds the sum of$15,000, exclusive of interest and costs. 12. The Franklin Mint has committed a tort in the State of Florida and is, therefore, subject to personal jurisdiction in this State. 13. The Morgan Mint has committed a tort in the State of Florida and is, therefore, subject to personal jurisdiction in this State. 14. IOPC has committed a tort in the State of Florida and is, therefore, subject to personal jurisdiction in this State. 15. Ideal Stamp has committed a tort in the State of Florida and is, therefore, subject to personal jurisdiction in this State. 16. M. Malamud has committed a tort in the State of Florida and is, therefore, subject to personal jurhldiction in this State. 17. S. Malamud has committed a tort in the State of Florida and is, therefore, subject to personal jurisdiction in this State. 18. Venue is proper in this Court because a substantial part ofthe events or omissions giving rise to the Plaintiffs' claims occurred in Miami-Dade County, Florida. GENERAL ALLEGATIONS A. The Asset Purchase Agreement 19. In or about April, 2009, M. Malamud began soliciting JSSI Capital to invest in The Franklin Mint. 20. Relying on certain misrepresentations made by M. Malamud, and certain knowingly wrongful omissions by S. Malamud, JSSI Capital agreed to invest in The Franklin (M2902769;3 ) - 3 AKERMAN SENTERFITT, ONE SOUTHEAST THIRD AVENUE, SUITE 2500, MIAMI, FL 33131-1714

Mint, and on May 18, 2009, JSSI Capital formed Newco for the purpose of acquiring substantially all the assets of The Franklin Mint and The Morgan Mint. 21. On June 9, 2009, JSSI Capital and Newco entered into an asset purchase agreement (the "Asset Purchase Agreement") with The Franklin Mint and The Morgan Mint. A true and correct copy ofthe Asset Purchase Agreement is attached as Exhibit "A." 22. Pursuant to the Asset Purchase Agreement, Newco purchased "substantially all of the assets of The Franklin Mint and The Morgan Mint," including the right to use the name The Franklin Mint and The Morgan Mint. See Asset Purchase Agreement at A. 23. The closing of the transactions contemplated by the Asset Purchase Agreement was held on June 9, 2009 in Miami, Florida. See Asset Purchase Agreement at 2.01. 24. The provisions of the Asset Purchase Agreement and the documents delivered pursuant thereto are "governed by and construed in accordance with the laws of the State of Florida (excluding any conflict of law rule or principle that would refer to the laws of another jurisdiction)." See Asset Purchase Agreement at 8.06 25. Further, each party to the Asset Purchase Agreement irrevocably submitted "to the jurisdiction of the Circuit Court of the State of Florida, Miami-Dade County, in any action or proceeding arising out of or relating to this Agreement or any of the Collateral Agreements, and each party hereby irrevocably agrees that all claims in respect of any such action or proceeding must be brought and/or defended in such court; provided, however, that matters which are under the exclusive jurisdiction of the Federal courts shall be brought in the Federal District Court for the Southern District of-florida." See Asset Purchase Agreement at 8.06 {M2902769;3 } - 4 AKERMAN SENTERFITT. ONE SOUTHEAST THIRD AVENUE. SUITE 2500, MIAMI, FL 33131 1714

B. JSSI Capital's and Newco's Investment 26. As described herein, the misrepresentations and wrongful omissions of M. Malamud and S. Malamud, individually and on behalf of The Franklin Mint and The Morgan Mint, induced JSSI Capital and Newco into investing over $16,000,000 in The Franklin Mint venture. 27. In reliance on the misrepresentations and intentionally wrongful omissions, JSSI Capital invested in excess of $12,600,000 in The Franklin Mint, as stated in a letter agreement (the "Letter Agreement") executed by the parties on June 9, 2009 (the "Letter Agreement"). A true and correct copy of the Letter Agreement is attached as Exhibit "B." 28. From the $12,600,000, JSSI Capital invested $3,225,000 in Newco as its capital contribution. 29. JSSI Capital infused an additional $9,375,000 into Newco (the "JSSI Capital Loan"), which is evidenced by a Promissory Note dated June 9, 2009 from Newco to JSSI Capital (the "JSSI Capital Note"). A true and correct copy of the JSSI Capital Note is attached as Exhibit "C." 30. Proceeds from the JSSI Capital Loan were used to pay $1,975,000 that The Morgan Mint purportedly owed to S. Malamud ($1,856,649.28) and Steve Sisskind ($118,350.72). 31. Seizing the opportunity to further profit from the misrepresentations and omissions described herein, M. Malamud and S. Malamud, individually and on behalf of the corporate Defendants, wrongfully induced Newco to issue almost $4,000,000 more in promissory notes to assume a debt purportedly owed by The Morgan Mint to S. Malamud, individually, IGPC, and Ideal Stamp, as follows: {M2902769;3 } - 5 AKERMANSENTERFITT, ONE SOUTHEAsr THIRD AVENUE, SUITE 2500, MIAMI, FL 33131-1714

a. Newco issued a subordinated promissory note in the amount of $1,071,477.30 in favor of S. Malamud (the "S. Malamud Subordinated Note") to assume a purportedly pre-existing loan in this amount from S. Malamud to The Morgan Mint. A true and correct copy of the S. Malamud Subordinated Note is attached hereto as Exhibit "D." When Plaintiffs requested the original note, S. Malamud advised that he purportedly lost the original note signed by The Morgan Mint and, instead, provided a lost note affidavit; b. Newco issued a subordinated promissory note in the amount of $2,307,536.91 in favor of IGPC (the "IGPC Subordinated Note") to assume a purportedly pre-existing loan in this amount from IGPC to The Morgan Mint. A true and correct copy of the IGPC Subordinated Note is attached hereto as Exhibit "E." S. Malamud is the president of IGPC and again purportedly lost the original note signed by The Morgan Mint; and c. Finally, Newco issued a subordinated promissory note in the amount of $589,258.66 in favor of Ideal Stamp (the "Ideal Stamp Subordinated Note") to assume a purportedly pre-existing loan in this amount from Ideal Stamp to The Morgan Mint. A true and correct copy of the Ideal Stamp Subordinated Note is attached hereto as Exhibit "F." S. Malamud, the president of Ideal Stamp, again purportedly lost the original note signed by The Morgan Mint. 32. The Morgan Mint, which upon information and belief is controlled by M. Malamud, further benefited from Defendants' fraudulent scheme in that The Morgan Mint received a 28.2% equity interest in Newco. C. JSSI Capital and Newco Learn of the Fraud 33. As alleged above, JSSI Capital and Newco agreed to purchase substantially all of the assets of The Franklin Mint and The Morgan Mint and to satisfy with cash and promissory notes the debt of The Morgan Mint, relying on a series of false representations and knowingly wrongful omissions by M. Malamud. and S. Malamud, individually and on behalf of The Franklin Mint and The Morgan Mint. 34. The fraud was premised on a wholly fabricated business plan that contained, among other things, false financial statements about existing and projected revenue. {M2902769;3} AKERMAN SENTERFITI, ONE SOUTHEAST THIRD AVENUE, SUITE 2500, MIAMI, Fl 33131 1714

35. The fraudulent business plan was predicated on historical successes of The Franklin Mint that M. "Malamud and S. Malamud knew were no longer accurate given the company's then-current financial situation. 36. Indeed, within six months after closing the transactions, The Franklin Mint's actual financial results reveal that Defendants, through M. Malamud and S. Malamud, grossly inflated projected company revenue by over fifty percent (50%) to wrongfully induce Plaintiffs to complete the transactions. 37. From about April to June, 2009, M. Malamud represented to Robert H. Book, an executive of ~SI Capital and Newco, that The Franklin Mint had strong established business relationships with a number of significant clients that were willing and able to expand their business with The Franklin Mint. M. Malamud referred to these relationships as "low-hanging fruit" ready to be exponentially developed with the infusion of more capital. 38. For example, M. Malamud misrepresented to Mr. Book that: a. The Publisher's Clearing House "loved" The Franklin Mint and would order in excess of $12,000,000 in The Franklin Mint products. M. Malamud, however, knew that this representation was false when made since the Publisher's Clearing House had previously terminated its relationship with The Franklin Mint; b. The Franklin Mint had a great business relationship with QVC and, based on past performance, the QVC account would generate from $35,000,000 to $60,000,000 per year. M. Malamud knew this representation was false when made because, at that time, QVC was dissatisfied with The Franklin Mint's purported inability to deliver products timely and that QVC had ordered only $250,000 in products; c. That the a~counts with Harley-Davidson, and ShopNBC.com were expected to generate millions of dollars in revenue. Indeed, M. Malamud falsely represented that The Franklin Mint has exclusive distribution rights to Harley-Davidson's die-cast and jewelry products. M. Malamud knew these representations were false when made, as he was fully aware that The Franklin Mint did not have exclusive distribution rights to any of Harley-Davidson's products, and that such revenue projections were unrealistic under any scenario. {M2902769;3 } - 7 AKERMAN SENTERFIIT, ONE SOUTHEAST THIRD AVENUE, SUITE 2500, MIAMI, FL 33131-1714

39. M. Malamud further represented that The Franklin Mint would generate revenues in excess of $20 million dollars from June, 2009 to December, 2009, and that such revenues would skyrocket with Plaintiffs' infusion of additional capital. Indeed, M. Malamud represented that he could get the Franklin Mint to generate in excess of $300,000,000 in annual sales by 2013. As confirmed by actual financial results, M. Malamud knew this representation was false when made, but made it to induce Plaintiffs to enter into the subject transactions and to invest over $16,000,000 in capital. 40. M. Malamud further misrepresented to Mr. Book that The Franklin Mint's inventory was worth in excess of $5,000,000 when at the time of the statement, the value of the inventory was no more than $2,500,000. 41. M. Malamud further misrepresented that The Franklin Mint had spent approximately $570 million in advertising. This misrepresentation grossly overstated the advertising expense during M. Malamud's involvement with The Franklin Mint. 42. During negotiations, Plaintiffs inquired as to whether the Defendants had the infrastructure in terms of information technology systems, operational processes, and financial reporting systems to support the production required to generate the revenue stated and projected by M. Malamud. In response, and to further conceal the deceptive scheme, M. Malamud represented that The Franklin Mint had existing efficient information technology systems, operational processes, and financial reporting systems in place to increase its production and respond to increased customer demand. This statement was false when made as M. Malamud knew that the Franklin Mint did not have adequate systems in place for the management of the company's (i) information technology, (ii) supply chain, (iii) inventory control, and (iv) financial reports. {M2902769;3} - 8 AKERMAN SENTERFITT, ONE SOUTHEAST THIRD AVENUE, SUITE 2500, MIAMI, FL 33131 1714

43. M. Malamud also falsely represented to Mr. Book that he had the experience and preparation to successfully manage and operate The Franklin Mint. 44. These representations were made through various phone calls and meetings that took place from April to May, 2009, including a number of phone calls directed to JSSI Capital in Miami. 45. To conceal the fraud, M. Malamud directed employees of The Franklin Mint and The Morgan Mint not to speak with Plaintiffs without M. Malamud's express approval and not to provide any information to Plaintiffs during Plaintiffs' evaluation of the transactions, without M. Malamud's express approval. 46. In fact, as part of the fraudulent scheme, M. Malamud asked internal staff members to develop an improper scheme to provide payoffs to certain customers in exchange for increased revenue. 47. S. Malamud was present at the time M. Malamud made the knowingly false representations described in paragraphs 34 to 46 above, but deliberately omitted to disclose the truth as part of Defendants' execution of the fraudulent scheme and in order to reap the fruits of Defendants' deception. 48. After the transactions closed, JSSI Capital and Newco learned that the representations and omissions by M. Malamud and S. Malamud, individually and on behalf of The Franklin Mint, The Morgan Mint, IGPC, and the Ideal Stamp, were false at the time that they were made. 49. All conditions precedent to the commencement of this action have either occurred, been satisfied and/or have been waived. {M2902769;3} - 9 AKERMAN SENTERFITT, ONE SOUTHEAST THIRD AVENUE, SUITE 2500, MIAMI, FL 33131-1714

50. As a result of Defendants' wrongful conduct described herein, Plaintiffs have been required to retain the undersigned counsel to represent them in this action and are obligated to pay them a reasonable fee for their services, for which Defendants may be liable. COUNT I - FRAUD IN THE INDUCEMENT (By JSSI Capital) (The Franklin Mint, The Morgan Mint, M. Malamud, and S. Malamud) 51. JSSI Capital re-alleges paragraphs 1 through 50 and incorporates them by reference as if fully set forth herein. 52. M. Malamud, individually and on behalf of The Franklin Mint and The Morgan Mint, made the representations identified in paragraphs 34 to 46 above. 53. M. Malamud knowingly and willfully made the representations with the intent to fraudulently induce JSSI Capital to purchase substantially all of the assets of The Franklin Mint and The Morgan Mint and invest and lend money to Newco as described above. 54. S. Malamud was present at the time M. Malamud made the knowingly false representations described in paragraphs 34 to 46 above, but deliberately omitted to disclose the truth as part of Defendants' execution of the fraudulent scheme and in order to reap the fruits of Defendants' deception. 55. M. Malamud, S. Malamud, The Franklin Mint and The Morgan Mint had actual knowledge that the representations described in paragraphs 34 to 46 above were false and misleading when made. 56. JSSI Capital justifiably relied on the misrepresentations and omissions. 57. Relying on the misrepresentations and omissions, JSSI Capital invested in excess of$12,600,000 in The Franklin Mint. 58. The above misrepresentations and omissions proximately caused JSSI Capital damages in an amount to be established at trial. ( M2902769;31-10 AKERMAN SENTERFITI, ONE SOUTHEAST THIRD AVENUE, SUITE 2500, MIAMI, FL 33131-1714

59. JSSI Capital reserves the right to seek punitive damages pursuant to Section 768.72, Florida Statute. WHEREFORE, JSSI Capital Enterprises, LLC demands judgment against The Franklin Mint, Inc., The Morgan Mint, Inc., Moshe Malamud, and Samuel Malamud for damages, prejudgment and post-judgment interest and costs, and any other relief the Court deems appropriate. COUNT II - NEGLIGENT MISREPRESENTATION (By JSSI Capital) (The Franklin Mint, The Morgan Mint, M. Malamud, and S. Malamud) 60. JSSI Capital re-alleges paragraphs I through 50 and incorporates them by reference as if fully set forth herein. 61. M. Malamud, individually and on behalf of The Franklin Mint and The Morgan Mint, made the representations identified in paragraphs 34 to 46 above. 62. M. Malamud negligently made the representations with the intent to induce JSSI Capital to purchase substantially all ofthe assets ofthe Franklin Mint and The Morgan Mint and invest and lend money to Newco as described above. 63. S. Malamud was present at the time M. Malamud made the representations described in paragraphs 34 to 46 above, but negligently omitted to disclose the truth. 64. M. Malamud, S. Malamud, The Franklin Mint and The Morgan Mint knew or should have known that the representations described in paragraphs 34 to 46 above were false and misleading when made. 65. JSSI Capital justifiably relied on the misrepresentations and omissions. 66. Relying on the negligent misrepresentations and omissions, JSSI Capital invested in excess of $12,600,000 in The Franklin Mint. 67. The above negligent misrepresentations and omissions proximately caused JSSI Capital damages in an amount to be established at trial. {M2902769;3 } - 11 AKERMAN SENTERFITI, ONE SOUTHEAST THIRD AVENUE, SUITE 2500, MIAMI, FL 33131 1714

68. JSSI Capital reserves the right to seek punitive damages pursuant to Section 768.72, Florida Statute. WHEREFORE, JSSI Capital Enterprises, LLC demands judgment against The Franklin Mint, Inc., The Morgan Mint, Inc., Moshe Malamud, and Samuel Malamud for damages, prejudgment and post-judgment interest and costs, and any other'relief the Court deems appropriate. COUNT III - FRAUD IN THE INDUCEMENT (By Newco) (The Franklin Mint, The Morgan Mint, M. Malamud, and S. Malamud) 69. Newco re-alleges paragraphs 1 through 50 and incorporates them by reference as if fully set forth herein. 70. M. Malamud, individually and on behalf of The Franklin Mint and The Morgan Mint, made the representations identified in paragraphs 34 to 46 above. 71. M. Malamud knowingly and willfully made the representations with the intent to fraudulently induce Newco to purchase substantially all of the assets of The Franklin Mint and The Morgan Mint, and to pay and/or agree to pay the purported debt of Morgan Mint. 72. S. Malamud was present at the time M. Malamud made the knowingly false representations described in paragraphs 34 to 46 above, but deliberately omitted to disclose the truth as part of Defendants' execution of the fraudulent scheme and in order to reap the fruits of Defendants' deception. 73. M. Malamud, S. Malamud, The Franklin Mint and The Morgan Mint had actual knowledge that the representations described in paragraphs 34 to 46 above were false and misleading when made. 74. Newco justifiably relied on the misrepresentations and omissions. 75. Relying on the misrepresentations and omissions, Newco (1) purchased substantially all of the assets of The Franklin Mint and The Morgan Mint, (2) paid and/or agreed {M2902769;3} - 12 AKERMAN SENTERFITT, ONE SOUTHEAST THIRD AVENUE, SUITE 2500, MIAMI, FL 33131-1714

to pay $5,943,272.87 purportedly owed by The Morgan Mint to S. Malamud, Steve Sisskind, IGPC, and Ideal Stamp. 76. The above misrepresentations and omissions proximately caused Newco damages in an amount to be established at trial. Florida Statute. 77. Newco reserves the right to seek punitive damages pursuant to Section 768.72, WHEREFORE, The Franklin Mint, LLC demands judgment against The Franklin Mint, Inc., The Morgan Mint, Inc., Moshe Malamud, and Samuel Malamud for damages, pre-judgment and post-judgment interest and costs, and any other relief the Court deems appropriate. COUNT IV - NEGLIGENT MISREPRESENTATION (By Newco) (The Franklin Mint, The Morgan Mint, M. Malamud, and S. Malamud) 78. Newco re-alleges paragraphs 1 through 50 and incorporates them by reference as if fully set forth herein. 79. M. Malamud, individually and on behalf of The Franklin Mint and The Morgan Mint, made the representations identified in paragraphs 34 to 46 above. 80. M. Malamud negligently made the representations with the intent to induce Newco to purchase substantially all of the assets of The Franklin Mint and The Morgan Mint, and to pay and/or agree to pay the purported debt of Morgan Mint. 81. S. Malamud was present at the time M. Malamud made the negligent representations described in paragraphs 34 to 46 above, but negligently omitted to disclose the truth as part of Defendants' execution of the fraudulent scheme and in order to reap the fruits of Defendants' deception. {M2902769;31-13 AKERMAN SENTERFITT, ONE SOUTHEAST THIRD AVENUE, SUITE 2500, MIAMI, FL 33131-1714

82. M. Malamud, S. Malamud, The Franklin Mint and The Morgan Mint knew or should have known that the representations described in paragraphs 34 to 46 above were false and misleading when made. 83. Newco justifiably relied on these negligent misrepresentations and omissions. 84. Relying on the negligent misrepresentations and omissions, Newco (l) purchased substantially all of the assets of The Franklin Mint and The Morgan Mint, (2) paid and/or agreed to pay $5,943,272.87 purportedly owed by The Morgan Mint to S. Malamud, Steve Sisskind, IGPC, and Ideal Stamp. 85. The above negligent misrepresentations and omissions proximately caused Newco damages in an amount to be established at trial. Florida Statute. 86. Newco reserves the right'to seek punitive damages pursuant to Section 768.72, WHEREFORE, The Franklin Mint, LLC demands judgment against The Franklin Mint, Inc., The Morgan Mint, Inc., Moshe Malamud, and Samuel Malamud for damages, pre-judgment and post-judgment interest and costs, and any other relief the Court deems appropriate. COUNT V - RESCISSION OF PROMISSORY NOTES (IGPC, Ideal Stamp, S. Malamud). 87. Newco re-alleges paragraphs I through SO and incorporates them by reference as if fully set forth herein. 88. On June 9, 2009, Newco executed the S. Malamud Subordinated Note in the amount of$i,071,477.30 in favor of S. Malamud. 89. On June 9, 2009, Newco executed the IGPC Subordinated Note in the amount of $2,307,536.91 in favor ofigpc {M2902769;3 } - 14 AKERMAN SENTERFITT, ONE SOUTHEAST THIRD AVENUE, SUITE 2500, MIAMI, FL 33131-1714

90. On June 9, 2009, Newco executed the Ideal Stamp Subordinated Note in the amount of$589,258.66 in favor ofideal Stamp. 91. Newco executed the above referenced subordinated notes (collectively the "Subordinated Notes") in conjunction with the Asset Purchase Agreement and the Letter Agreement. 92. Newco was induced to execute the Subordinated Notes by a series of, misrepresentations and omissions by M. Malamud and S. Malamud, on behalf of The Franklin Mint, The Morgan Mint, lope, and Ideal. 93. M. Malamud, individually and on behalf of The Franklin Mint and The Morgan Mint, made the representations identified in paragraphs 34 to 46 above. 94. M. Malamud knowingly and willfully made the representations with the intent to fraudulently induce Newco to purchase substantially all of the assets of The Franklin Mint and The Morgan Mint, and to pay and/or agree to pay the purported debt of Morgan Mint. 95. S. Malamud was present at the time M. Malamud made the knowingly false representations described in paragraphs 34 to 46 above, but deliberately omitted to disclose the truth as part of Defendants' execution of the fraudulent scheme and in order to reap the fruits of Defendants' deception. 96. M. Malamud, S. Malamud, The Franklin Mint and The Morgan Mint had actual knowledge that the representations described in paragraphs 34 to 46 above were false and misleading when made. 97. Newco would not have entered into the Subordinated Notes if it had known that the above representations were false and/or concealed material facts. (M2902769;3 } - 15 AKERMAN SENTERFITT, ONE SOUTHEAST THIRD AVENUE. SUITE 2500. MIAMI. FL 33131.1714

98. Newco has rescinded the Subordinated Promissory Notes, and has notified and hereby notifies, S. Malamud, IOPC, and Ideal Stamp that the Subordinated Promissory Notes have been rescinded. 99. Newco has no adequate remedy at law other than the rescission of the Subordinated Promissory Notes. WHEREFORE, The Franklin Mint, LLC demands judgment against Intergovernmental Philatelic Corporation, Ideal Stamp Co. rescinding the Subordinated Notes and granting any other relief the Court deems appropriate. COUNT VI - Breach of Contract (The Franklin Mint, The Morgan Mint) 100. JSSI Capital and Newco re-allege paragraphs 1 through 50 and incorporate them by reference as if fully set forth herein. 101. The Asset Purchase Agreement is a valid and enforceable contract between JSSI Capital and Newco, on one part, and The Franklin Mint and The Morgan Mint, on the other. 102. The Franklin Mint and The Morgan Mint breached Sections 3.08, 3.09, 3.18 and 3.22 of the Asset Purchase Agreement by overstating the financial statements of The Franklin Mint, Inc. 103. The Franklin Mint and The Morgan Mint further breached the Asset Purchase Agreement by failing to disclose that The Morgan Mint was obligated to pay to certain employees in excess of $275,000 pursuant to an annual bonus and profit sharing plan that was never disclosed. 104. As a consequence of this breach, JSSI Capital and Newco have been damaged in an amount to be established at trial. { M2902769;3} - 16 AKERMAN SENTERFITT, ONE SOUTHEAST THIRD AVENUE, SUITE 2500. MIAMI, FL 33131-1714

WHEREFORE, JSSI Capital Enterprises, LLC and The Franklin Mint, LLC dem~d judgment against The Franklin Mint, Inc., The Morgan Mint, Inc., Moshe Malamud, and Samuel Malamud for damages, pre-judgment and post-judgment interest and costs, and any other relief the Court deems appropriate. COUNT VII - Unjust Enrichment (The Morgan Mint, S. Malamud) 105. Newco re-alleges paragraphs 1 through SO and incorporate them by reference as if fully set forth herein. 106. Newco has paid or has executed promissory notes obligating it to pay a total of $3,968,272.87 in purported loans owed by The Morgan Mint pursuant to lost promissory notes. 107. Newco has paid S. Malamud a total of $1,856,649.28 purportedly owed by The Morgan Mint pursuant to a lost promissory note. 108. The Morgan Mint and S. Malamud knowingly and voluntarily accepted Newco's payment of, or promissory notes agreeing to pay for, The Morgan Mint's purported debt in conjunction with Newco's purchase of substantially all ofthe assets of The Morgan Mint. 109. It would be unfair and unjust for The Morgan Mint and/or S. Malamud to retain Newco's payment of, or agreement to pay for, The Morgan Mint's purported debt without due compensation, particularly as Newco was induced by The Morgan Mint's own fraudulent misrepresentations to payor agree to pay The Morgan Mint's purported debt. 110. S. Malamud was present at the time M. Malamud made the knowingly false representations described in paragraphs 34 to 46 above, but deliberately omitted to disclose the truth as part of Defendants' execution of the fraudulent scheme and in order to reap the fruits of Defendants' deception. {M2902769;3} - 17 AKERMAN SENTERFITT, ONE SOUTHEAST THIRD AVENUE, SUITE 2500, MIAMI, FL 33131-1714

111. Newco has no adequate remedy for the fraudulently induced payment of Morgan Mint's purported debt. WHEREFORE, The Franklin Mint, LLC demands judgment against, The Morgan Mint, Inc. and Samuel Malamud for damages, pre-judgment and post-judgment interest and costs, and any other relief the Court deems appropriate. DEMAND FOR JURY TRIAL JSSI Capital Enterprises, LLC and The Franklin Mint, LLC demand a jury trial for all claims so triable. Dated: February 12,2010. Respectfully submitted, ~ft{f;;i(ldo -- By: ---... Michael Marsh, Esq. Florida Bar No. 0072796 E-mail: michael.marsh@akerman.com Francisco A. Rodriguez, Esq. Florida Bar No. 0653446 E-mail: francisco.rodriguez@akerman.com AKERMAN SENTERFITT SunTrust International Center One S.E. Third Avenue - 25th Floor Miami, Florida 33131-1704 Telephone: (305) 374-5600 Facsimile: (305) 374-5095 (M2902769;3} - 18 AKERMAN SENTERFITT, ONE SOUTHEAST THIRD AVENUE, SUITE 2500, MIAMI, FL 33131-1714