Simran Services Llc et al v. Everest Foods Inc. et al

BRIEF in Opposition

D.N.J.July 10, 2017

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY ___________________________________ SIMRAN SERVICES, LLC, MANDEEP : OBEROI, MD, NARINDARPAL NARULA : and VIKRAM GUPTA, : : Civil Action No. 17- Plaintiffs, : cv-03808-JMV-JBC : v. : : EVEREST FOODS, INC., RAJA JHANJEE, : and VICKY VIJ, : : Defendants. : ___________________________________: DEFENDANTS’ MEMORANDUM IN OPPOSITION TO PLAINTIFFS’ APPLICATION SEEKING A TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTIVE RELIEF Law Offices of Sanjay Chaubey 18 East 41st Street Suite 1704 New York, NY 10017 Phone: 212-563-3223 Fax: 212-563-4534 Case 2:17-cv-03808-JMV-JBC Document 26 Filed 07/10/17 Page 1 of 19 PageID: 463 i TABLE OF CONTENTS Page TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . .iii Statement of Relevant Facts . . . . . . . . . . . . . . . 1 Argument . . . . . . . . . . . . . . . . . . . . . . . . .1 Standard of Review . . . . . . . . . . . . . . . . . . . 2 I. The Plaintiffs’ Application is Fatally Flawed Where There Are No Affidavits From the Plaintiffs (or Anyone With Personal Knowledge) in Support Thereof; and Their Papers Do Attach Their (Verified) Complaint. . . . . 3 II. The Plaintiffs’ Order to Show Cause for a Temporary Restraining Order and Preliminary Injunction Fails to Meet With the Requisites of the Federal Rules. . . . 4 III. The Plaintiffs’ Application Must Be Denied Where They Fail to Address, Much Less Meet, Two of the Four Requisite Factors Applicable to Such Motions. . . . .4 IV. The Plaintiffs’ Application Fails In Light of the Defendants’ Affidavits. . . . . . . . . . . . . . . .7 V. The Plaintiffs Cannot Establish Irreparable Harm. . .7 VI. The Plaintiffs Have Not Shown a Likelihood of Success On the Merits Where (a) They Lack Standing to Assert Individual Claims; and (b) the Defendants Have Disputed the Bases for the Causes of Action. . . . . 9 (a) The Plaintiffs Lack Standing to Assert Individual Claims. . . . . . . . . . . . . . . . . . . . . . . 10 (i) The Plaintiffs Cannot Bring a Derivative Claim Absent . . . . . . . . . . . . . . . . . . . . . . . . . . 10 (ii) The Plaintiffs Lack Standing to Assert Individual Claims . . . . . . . . . . . . . . . . . . . . . . .10 (b) Assuming, Arguendo, They Have Standing, the Plaintiffs’ Claims Are Not Likely to Succeed on the Merits. . . . . . . . . . . . . . . . . . . . . . . 13 Case 2:17-cv-03808-JMV-JBC Document 26 Filed 07/10/17 Page 2 of 19 PageID: 464 ii Page Conclusion . . . . . . . . . . . . . . . . . . . . . . . 15 Case 2:17-cv-03808-JMV-JBC Document 26 Filed 07/10/17 Page 3 of 19 PageID: 465 iii TABLE OF AUTHORITIES Page Rules Federal Rule of Civil Procedure 65(d)(1) . . . . . . . . .4 Local Rule 65.1(a) . . . . . . . . . . . . . . . . . . . .3 Cases Abrams v. Donati, 66 N.Y.2d 951, 953, 489 N.E.2d 751, 783 (1985). . . . . . . . . . . . . . . . . . . . . . . . . .11 Allegheny Energy, Inc. v. DQE, Inc., 171 F.3d 153 (3d Cir. 1999) . . . . . . . . . . . . . . . . . . . 4 American Tel. and Tel. Co. v. Winback and Conserve Program, Inc., 42 F.3d 1421 (3d Cir. 1994) . . . . . . . . 5; 9 Circus Fruits Wholesale Corp. v. Farmer Joen Produce Corp., 2017 WL 1397950 (D.N.J.). . . . . . . . . . . . . . .8 Crowe v. De Gloia, 90 N.J. 126, 447 A.2d 173 (1982) passim Niles v. New York Cent. & Hudson Riv. R.R. Co., 176 N.Y. 119, 68 N.E. 142. . . . . . . . . . . . . . . . . . . . .11 Opticians Assn. of Am. v. Indep. Opticians of Am., 920 F.2d 187 (3d Cir. 1990) . . . . . . . . . . . . .5 Pacifict Intl. Marketing, Inc. v. A & B Produce, Inc., 462 F.3d 279 (3d Cir. 2006). . . . . . . . . . . . . 8 S. Katzman Produce, Inc. v. Depiero’s Farm, Inc., 2012 WL 764235 (D.N.J.) . . . . . . . . . . . . . . .8 Strasenburgh v. Straubmuller, 146 N.J. 527 (1996) . . . .11 Tanimura & Antle, Inc. v. Packed Fresh Produce, Inc., 222 F.3d 132 (2000). . . . . . . . . . . . . . . . . . . . . .7 Case 2:17-cv-03808-JMV-JBC Document 26 Filed 07/10/17 Page 4 of 19 PageID: 466 1 The Defendants, Raja Jhanjee (“Jhanjee”) and Vicky Vij (“Vij”)(“the Defendants”), submit this Memorandum of Law in Opposition to the Application of the Plaintiffs, Simran Services, LLC (“Simran”), Mandeep Oberoi, MD. (“Oberoi”), Narindarpal Narula (“Narula”), and Vikram Gupta (“Gupta”)(“the Plaintiffs”), for a Temporary Restraining Order and Preliminary Injunctive Relief (“TRO”). For the reasons that follow, the Plaintiffs’ application should be denied. Statement of Relevant Facts For the sake of brevity, the Court is referred to the accompanying Affidavits of Vicky Vij (“Vij”) and Raja Jhanjee (“RJ”). Argument This Court should deny the plaintiffs' order to show cause because plaintiffs move for temporary restraining order and a permanent injunction regarding the operation of Everest Foods, Inc., the defendant in this case. Everest is a New York Corporation organized pursuant to the laws of the State of New York. In this regard, the shareholder agreement annexed as Exhibit A to Plaintiffs motion papers clearly reflects that Defendant Everest Foods, Inc., is a New York Corporation. Plaintiffs seek remedies under the New Jersey business corporation law based on principles of corporate oppression. Plaintiffs also seek appointment of a receiver under New Jersey Case 2:17-cv-03808-JMV-JBC Document 26 Filed 07/10/17 Page 5 of 19 PageID: 467 2 business corporation law. The New Jersey business corporation law applies to New Jersey companies, not New York companies. Therefore, this Court should deny the plaintiffs' application. Furthermore, plaintiffs do not set forth the dates on which alleged irreparable harm was suffered. The plaintiffs complaint and their memorandum of law in support of the order to show cause refers to events that occurred several years ago. Such harm, even if established, would not be immediate irreparable harm since the failure of the plaintiffs' to seek timely relief serves as a waiver of the right to seek immediate emergency injunctive relief. As the plaintiffs fail to establish an emergency, this Court should deny their order to show cause. Standard of Review A preliminary injunction should not issue except when necessary to prevent irreparable harm. Crowe v. De Gloia, 90 N.J. 126, 132, 447 A.2d 173, 177 (1982). In certain circumstances, severe personal inconvenience can constitute irreparable injury justifying issuance of injunctive relief. Id. at 133. A second principle is that temporary relief should be withheld when the legal right underlying the plaintiff’s claim is unsettled. Id. Case 2:17-cv-03808-JMV-JBC Document 26 Filed 07/10/17 Page 6 of 19 PageID: 468 3 A third rule is that a preliminary injunction should not issue where all material facts are controverted. Id. Thus, to prevail on an application for temporary relief, a plaintiff must make a preliminary showing of a reasonable probability of ultimate success on the merits. Id. However, mere doubt as to the validity of a claim is not adequate for refusal to maintain the status quo. Id. The final test in considering a preliminary injunction is the relative hardship to the parties in granting or denying relief. Id. at 134, 177. I. The Plaintiffs’ Application is Fatally Flawed Where There Are No Affidavits From the Plaintiffs (or Anyone With Personal Knowledge) in Support Thereof; and Their Papers Do Attach Their (Verified) Complaint. Local Court Rule Section 65.1(a) provides, inter alia, that . . . . No order to show cause to bring on a matter for hearing will be granted except on a clear and specific showing by affidavit, other document complying with 28 U.S.C. 1746, or verified pleading of good and sufficient reasons for a procedure other than by notice of motion is necessary . . . Here, neither of the Plaintiffs offered Affidavits in support of their application; and, significantly, their application fails to even attach the Verified Complaint (see, Document 23-3). Instead, their Brief appears to be a narration based on reference to certain documents (see, Document 23-2, pp. 1-13) without any reference to allegations of irreparable harm, Case 2:17-cv-03808-JMV-JBC Document 26 Filed 07/10/17 Page 7 of 19 PageID: 469 4 lack of harm to the Defendants, or public interest factors (Id.). In light of the fact that the Plaintiffs neither submitted Affidavits nor their Verified Complaint, they have failed to meet with the requisites of the Local Rule and, on that basis, fail to establish entitlement to relief. II. The Plaintiffs’ Order to Show Cause for a Temporary Restraining Order and Preliminary Injunction Fails to Meet With the Requisites of the Federal Rules. Federal Rule of Civil Procedure 65(d)(1) provides that every order granting an injunction and every restraining order must state the reasons why it issued. Here, the Plaintiffs have submitted an Order to Show Cause for a Temporary Restraining Order and Preliminary Injunction (Document 23-1) that is devoid of any reasoning for its issuance. III. The Plaintiffs’ Application Must Be Denied Where They Fail to Address, Much Less Meet, Two of the Four Requisite Factors Applicable to Such Motions. Law A party seeking a preliminary injunction must show that, inter alia, granting preliminary relief will not result in even greater harm to the nonmoving party and that the public interest favors such relief. Allegheny Energy, Inc. v. DQE, Inc., 171 F.3d 153, 158 (3d Cir. 1999). Case 2:17-cv-03808-JMV-JBC Document 26 Filed 07/10/17 Page 8 of 19 PageID: 470 5 One of the goals of the preliminary injunction analysis is to maintain the status quo, defined as the last, peaceable, noncontested status of the parties. Opticians Assn. of Am. v. Indep. Opticians of Am., 920 F.2d 187, 197 (3d Cir. 1990). Application Here, the Plaintiffs make no effort whatever to brief or even argue that granting preliminary relief will not result in greater harm to the Defendants than the Plaintiffs in not granting such relief; or that the public interest factors favor such relief. District courts should award preliminary injunctive relief only upon weighing all four factors. American Tel. and Tel. Co. v. Winback and Conserve Program, Inc., 42 F.3d 1421, 1444 n. 8 (3d Cir. 1994). Hence, the Plaintiffs’ failure to brief, much less meet, these factors renders their application incomplete and demands its rejection. Furthermore, the Defendants have affirmed that they will suffer substantial harm if the Plaintiffs’ application is granted: Due to location of the Castle, restrictions on the kitchen equipment - including operation of Indian Clay Oven (Tandoor) - and the high cost of operating and maintenance resulted in reoccurring losses to the company (Vij Aff. at ¶10). In order to keep the business running, the Parties decided to supply the Case 2:17-cv-03808-JMV-JBC Document 26 Filed 07/10/17 Page 9 of 19 PageID: 471 6 food and catering from Everest to Gourmet (Id.). In this process, Gourmet owed more than $400,000.00 to Everest towards the actual food and catering cost (Id.). This further deteriorated the financial conditions and Everest’s ability to pay any profits or dividends to the shareholders (Id.). Gupta and Oberoi are physician by profession, and engaged in practice of medicine (Id. at ¶12). Narula owns several franchise businesses and is independently self- sustainable (Id.). On the other hand, Vij and Rawat are engaged in fulltime work at the restaurant business, being compensated for their work, along with forty (40) other employees (Id.). The Plaintiffs’ demands to not pay wages will result into immediate seize of operation of the business (Id.). Everest's financial situation is a direct result of Castle & Gourmet withholding $400.000.00 toward the supply of food and catering (Id. at ¶14). Appointment of a receiver will be extremely detrimental to the operation of the business (Id.). It will not have sufficient money to meet payroll, cover monthly rent of $30,000.00, and pay the receiver (Id.). Grant injunctive relief will seriously prejudice Defendants and their business (Id. at ¶18; Jhanjee Aff., ¶18). Case 2:17-cv-03808-JMV-JBC Document 26 Filed 07/10/17 Page 10 of 19 PageID: 472 7 IV. The Plaintiffs’ Application Fails In Light of the Defendants’ Affidavits. It is the general rule that a preliminary injunction will not issue where the material facts are met by a full, explicit, and circumstantial denial under oath. Crowe, supra, 90 N.J. at 139, 447 A.2d at 180. Here, the Defendants have offered their sworn Affidavits in Opposition to the Plaintiffs’ Motion, contesting the facts set forth therein and creating, at minimum, a ripe dispute between the Parties sufficient to defeat injunctive relief. V. The Plaintiffs Cannot Establish Irreparable Harm. The Plaintiffs argue that the Third Circuit “explicitly determined that irreparable harm has existed where” “a defendant’s actions have dissipated an entity’s assets, and any expected payment would not be readily forthcoming or available.” Tanimura & Antle, Inc. v. Packed Fresh Produce, Inc., 222 F.3d 132 (2000)(Document 23-2, p. 14). There, however, a Perishable Agriculture Commodities Act (PACA) “trust dissipation in this case constitutes irreparable harm.” 222 F.3d 140-41. There, “the trust was depleted and payment was not readily forthcoming or available.” Id. at 141. Under those specific circumstances, the harm was considered irreparable. Specifically, if . . . . PACA’s trust is to have any meaning, and Congress’ intent is to be effectuated in Case 2:17-cv-03808-JMV-JBC Document 26 Filed 07/10/17 Page 11 of 19 PageID: 473 8 any way, trust assets must be preserved and not dissipated, . . . , and PACA trust beneficiaries are entitled to full payment before trustees may lawfully use trust funds to pay other creditors . . . Pacifict Intl. Marketing, Inc. v. A & B Produce, Inc., 462 F.3d 279, 285 (3d Cir. 2006). To that end, the issuance of “a preliminary injunction [ ] is in the public interest, as the statutory purpose of [PACA] explicitly encapsulates this.” Circus Fruits Wholesale Corp. v. Farmer Joen Produce Corp., 2017 WL 1397950, 2 (D.N.J.). Indeed, in S. Katzman Produce, Inc. v. Depiero’s Farm, Inc., 2012 WL 764235 (D.N.J.), furthermore, the plaintiffs failed to demonstrate any “risk that the Defendants would be irreparably injured if th[e] emergent relief is granted.” Id. at 1. The defendants had “no right to use the PACA Trust funds for any purpose other than to pay Plaintiff for the produce it received.” Id. The temporary restraints served such purpose without harm to any cognizable interest of the defendants; and the court found “that the public interest will be strongly served by granting the emergent relief requested.” Id. Here, glaringly, the Plaintiffs admit that “money damages would provide temporary relief, . . . .” (Document 23-2, p. 16). While they contend that it is only equitable relief that would prevent “grave irreparable harm” (Id.), it makes little sense Case 2:17-cv-03808-JMV-JBC Document 26 Filed 07/10/17 Page 12 of 19 PageID: 474 9 how requiring the Defendants “to release all requested financial information” (Id.) would act to provide such relief. They also admit that appointing a receiver, their second request, would only “alleviate a large portion [but not all] of the problems currently facing Everest” (Document 23-2, p. 16). The Plaintiffs make vague and murky claims of irreparable harm, claiming that “damages alone would not alleviate the issue of” the Defendants “making decisions not in the best interest of the entire company” (Id. at p. 15). And yet there is no allegation that such decisions - which affect the company that pays the Defendants’ bills and employees will irreparably harm anyone or anything. As affirmed by the Defendants, the relief sought by the Plaintiffs in their application would actually serve to greatly harm Everest’s business - presumably, what the Plaintiffs want to avoid. VI. The Plaintiffs Have Not Shown a Likelihood of Success On the Merits Where (a) They Lack Standing to Assert Individual Claims; and (b) the Defendants Have Disputed the Bases for the Causes of Action. Preliminary injunctive relief is an “extraordinary remedy” and “should be granted only in limited circumstances.” American Tel. & Tel. Co. v. Winback & Conservative Program, Inc., supra, 42 F.3d at 1427. As set forth below, it is respectfully submitted that this is not one of those circumstances. Case 2:17-cv-03808-JMV-JBC Document 26 Filed 07/10/17 Page 13 of 19 PageID: 475 10 (a) The Plaintiffs Lack Standing to Assert Individual Claims. (i) The Plaintiffs Cannot Bring a Derivative Claim Absent Demand Upon Other Members of Everest. First, the Plaintiffs have failed to prove that they took the steps necessary to maintain a derivative action on behalf of the corporation. N.Y. B.S.C. §626, which applies to Everest as a New York Corporation, provides that a member may maintain a derivative action to enforce a right of a limited liability company if (c) the complaint sets in detail the efforts of the plaintiff to secure the initiation of such action by the board or the reasons for not making such effort. Here, the Plaintiffs’ Complaint contains no allegations whatever that the Plaintiffs sought a derivative action to be brought on behalf of Everest, which is named as a Defendant, to protect its interests. Nevertheless, it goes into detail, below, that evinces the basis for the Complaint is harm to Everest and its shareholders. Because the Complaint fails to allege either that demand was made for Everest to bring suit or that such demand was futile, it cannot succeed. (ii) The Plaintiffs Lack Standing to Assert Individual Claims. For a wrong against a corporation, a shareholder has no individual cause of action, though he loses the value of his investment or incurs personal liability in an effort to maintain Case 2:17-cv-03808-JMV-JBC Document 26 Filed 07/10/17 Page 14 of 19 PageID: 476 11 the solvency of the corporation. Abrams v. Donati, 66 N.Y.2d 951, 953, 489 N.E.2d 751, 783 (1985). Allegations of mismanagement or diversion of assets by officers or directors to their own enrichment, without more, plead a wrong to the corporation only, for which a shareholder may sue derivatively but not individually. Niles v. New York Cent. & Hudson Riv. R.R. Co., 176 N.Y. 119, 68 N.E. 142. Here, the allegations of the Complaint make clear that the complaints pertain to harm to Everest, not the individual Plaintiffs. For example, the Plaintiffs allege that the Defendants’ “negligent and fraudulent acts have caused substantial harm to Everest and its remaining shareholders” (Plaintiffs' Complaint, ¶39). They further allege that their “investment in Everest continues to diminish in value and will do so as long as” the Defendants are permitted to run the company (Id. at ¶42). The Plaintiffs’ causes of action further emphasize that the instant is a derivative claim belonging to the corporation: Count One specifically alleges that the Defendants’ negligent and fraudulent acts have caused substantial harm to Everest’s “remaining shareholders” (Id. at ¶44); the “irreparably harm” to the Plaintiffs would be the value of their investment in Everest shrinking (Id. at ¶45); and, inter alia, that “the existence of Everest may be threatened without immediate relief . . . .” (Id. Case 2:17-cv-03808-JMV-JBC Document 26 Filed 07/10/17 Page 15 of 19 PageID: 477 12 at ¶51). Hence, Count One alleges no individual claims as to the Plaintiffs that are not identical to the alleged harm to the corporation and its other shareholders. Count Two similarly sets forth claims that belong to Everest and not the Plaintiffs individually: The Complaint alleges that the Defendants’ conduct, “as majority shareholders of Everest, have intentionally engaged in conduct to defraud Plaintiffs, as minority shareholders” (Id. at ¶53). The alleged fraudulent conduct is related entirely to the Defendants’ alleged actions in their role as shareholders of Everest (Id. at ¶54); with decisions allegedly not being “in the best interest of all shareholders, . . . .” (Id. at ¶56). Fatally, the damages the Plaintiffs seek are identical to damages suffered by the corporation and its shareholders: “. . . . the loss of their investment money, profits and interest . . . , and the loss of future profits” (Id. at ¶57). Count Three, based upon Count Two, concerns actions the Plaintiffs allege the Defendants took in furtherance of a conspiracy “to violate the Stockholders Agreement . . . to the detriment of the remaining shareholders of Everest” (Id. at ¶59). Count Four concerns solely the Stockholders Agreement (Id. at ¶66). Case 2:17-cv-03808-JMV-JBC Document 26 Filed 07/10/17 Page 16 of 19 PageID: 478 13 Count Five specifically charges with the Defendants as owing “a fiduciary duty to Everest and the remaining shareholders, . . . .” (Id. at ¶71), hence making the claim entirely derivative. Count Six, by its mere title, concerns “Minority Shareholder Rights” (Id. at ¶79), alleging that the Plaintiffs have been “oppressed minority shareholders” (Id. at ¶80). For these reasons, the Plaintiffs have no individual cause of action apart from Everest, named as a Defendant, and this action is improper. (b) Assuming, Arguendo, They Have Standing, the Plaintiffs’ Claims Are Not Likely to Succeed on the Merits. As a result of the above (point (a)), every single cause of action the Plaintiffs have asserted in their Complaint belong to Everest, which they have not only failed to make a plaintiff but named as a Defendant. As such, their Complaint is unsustainable and highly unlikely to be successful on the merits. Indeed, it is the Defendants’ intention to move to dismiss the Complaint once this application has been briefed. Beyond that, the Plaintiffs allege that they “are ultimately likely to prevail on the merits of their claims” (ECF Document 23-2, p. 16). However, those claims are not only effectively disputed, but met by the defendants’ own Counterclaims (ECF Document 16). The First Counterclaim alleges Case 2:17-cv-03808-JMV-JBC Document 26 Filed 07/10/17 Page 17 of 19 PageID: 479 14 that the Plaintiffs have failed to fulfill their obligations as shareholders of the Defendant Corporation (Id. at ¶93): They have not attended shareholder meetings on all occasions; failed to provide financial information and statements required by lending institutes; failed to fulfill their financial obligations to the Corporation and formed others; and failed to contribute to the additional capital contribution required of shareholders (Id.). The Defendants have expended at least one million dollars in order to save the business and for loans to pay the SBA loan, real estate taxes, and other incidental expenses (Id.). In their Second Counterclaim, the Defendants contend that the Plaintiffs have not disclosed that the main reason for loss and need for further capital contribution results from nonpayment in the sum of approximately $400,000 from the Gourmet Food Merchant LLC (Id. at ¶94). Since the Parties are equity shareholders in that corporation, if Everest is paid $400,000 toward unpaid debt, Everest will emerge out of debt and be able to meet its financial obligations (Id.). Finally, for the sake of brevity, the Defendants will not restate the facts set forth in the accompanying Affidavits. Suffice it to say, such facts bring substantive question to the merits of the Plaintiffs’ action. Case 2:17-cv-03808-JMV-JBC Document 26 Filed 07/10/17 Page 18 of 19 PageID: 480 15 Conclusion For the reasons set forth above, the Plaintiffs’ request for injunctive relief should be denied. Case 2:17-cv-03808-JMV-JBC Document 26 Filed 07/10/17 Page 19 of 19 PageID: 481 UNITED STATE DISTRICT COURT DISTRICT OF NEW JERSEY ................................................................................................................ X : SIMRAN SERVICES LLC, MANDEEP OBEROI, MD. NARINDARPAL NARULA and VIKRAM GUPTA : : Civil Case No. 17-CV-03808 Plaintiffs, : : Defendant Raja Jhanjee’s Affidavit in Opposition to Plaintiff’s Request for TRO - against - : : EVEREST FOODS INC., RAJA JHANJEE, and VICKY VIJ : : Defendants. : : ……………………………………………………………….X Raja Jhanje, being duly sworn, deposes and says: 1. I am the named defendant and principal officer of the defendant Everest foods Inc. (“Everest”) in this action. I am fully familiar with the facts and records of the business and as such, competent to affirm this affidavit in opposition to plaintiff’s Temporary Restraining Order filed by way of Order to Show Cause with request for a Preliminary Injunction. 2. Plaintiff has filed the underlying complaint and requested Order to Show Cause with mala fide intentions and concealing vital facts of this case. In this regard following is the factual background of the matter. Case 2:17-cv-03808-JMV-JBC Document 26-1 Filed 07/10/17 Page 1 of 7 PageID: 482 2 Factual Background 1. I state that I am trained and involved in operation of Restaurant and Hospitality business for more than three decades and have been operating our own business in Manhattan for more than 20 years approximately. Initially, we were three shareholders namely Raja Jhanjee (“Raja”), Vicky Vij (“Vicky”) and Bachan Rawat (‘Rawat”), the Chef. 2. I further state that I was introduced to the plaintiffs by a common friend. Plaintiffs also wanted to start Restaurant and Hospitality business but had no prior training or experience in operation of a restaurant business. 3. On or about beginning of year 2013 plaintiff Mandeep Oberoi (“Oberoi”) contacted me and induced and offered an opportunity to purchase a Banquet Hall in Roselle Park, NJ (“The Castle”) which was in a foreclosure sale. Not understanding the ulterior motives of Oberoi to take a share in our existing robust business of d/b/a Bukhara Restaurant, I got allured for the purchase of Banquet Hall in New Roselle Park, NJ. 4. In order to purchase the Castle, a group of investors were collected besides Oberoi plaintiff Narinderpal Narula (“Narula”) , Tirun Gopal (“Gopal”) and Vikram Gupta (‘Gupta”) 5. Plaintiff and I agreed that we can purchase and operate Castle with equal contribution to set up the business operation. Accordingly, I and Vicky were required to contribute at least $ 325,000.00 approx. each towards the initial investment including payment of key money, rent, groceries, and salaries for the staff. 6. In order to meet my financial obligation towards the total contribution I sold my 20 shares in Everest d/b/a Bukhara. Case 2:17-cv-03808-JMV-JBC Document 26-1 Filed 07/10/17 Page 2 of 7 PageID: 483 3 7. I further state that Plaintiff has concealed that at the time of initial purchase of share of Everest, two more corporations were incorporated, and namely Westfield Realty Holding LLC., (“Westfield”) which owns the real estate of the CASTLE and Gourmet Food Merchant LLC ("Gourmet”) is the corporation which operates the business of the CASTLE. Copies of the Operating Agreement of both the corporations are attached as 'Exhibit ‘A’ to this affidavit. However, the lending bank refused financing as none of the plaintiffs had any industry or business experience in operation of restaurant business or Banquet Hall. Accordingly, we pledged Everest as security and also provided our Personal Guarantees. 8. I further state that due to location of the CASTLE, restrictions on the kitchen equipment, parking limitations as well as high cost of operating and maintenance, which were well known to plaintiffs, Castle resulted into reoccurring losses. In order to somehow keep the business running, we decided to supply the food and catering from the Everest to the Gourmet Food Merchant LLC. In this process Gourmet owes more than $400,000.00 approx. to Everest towards the actual food and catering cost. This further deteriorated the financial conditions and ability of Everest to pay any profits or dividends to the share holders. 9. Despite financial constraints, Everest is still paid dividends to plaintiffs particularly to Simran in the sum of approximately $25,000.00. Copy of the payment statement is attached is 'Exhibit ‘C’. Case 2:17-cv-03808-JMV-JBC Document 26-1 Filed 07/10/17 Page 3 of 7 PageID: 484 4 DEFENDANTS ARE ENTITLED TO COMPENSATION FOR THE WORK & SERVICES RENDERED 10. I state that one of the reliefs requested by Plaintiffs in its Order to Show Cause is “paying distribution to themselves without seeking or obtaining the consent of the Plaintiffs and without equally compensating Plaintiffs”. In this regard I respectfully submit that, Plaintiffs Gupta and Oberoi are physician by profession and training, and are engaged in practice of medicine. Narula owns several franchise businesses and also independently self sustainable. On the other hand I, Vicky, and Rawat are engaged in full time work and employment of the restaurant business, we are compensated for our work in the restaurant business along with 25 full time and other part time employees. I further state that we have not made any distribution in form of dividends or profits from Everest. In fact any distribution of dividends and profits will be made to all shareholders in their pro rata share holding. The Plaintiffs demands to not pay the wages to me, and other employees will result into immediate seize of operation, of the restaurant business. Hence, the Plaintiffs demand is neither legal nor just and fair against the majority shareholders as well as the employees of the corporation. FINANCIAL DOCUMENTS RELATING TO EVEREST 11. I also submit that Plaintiffs demand in the motion for Preliminary Injunction relates to withholding of financial documents relating to Everest. In view of our providing all available documents including but not limited to tax returns, individual tax returns, pay roll records, to the Plaintiff; plaintiff’s demand is moot. Case 2:17-cv-03808-JMV-JBC Document 26-1 Filed 07/10/17 Page 4 of 7 PageID: 485 5 PLAINTIFFS DEMAND FOR APPOINTMENT OF RECEIVER IS NOT ESTABLISHED OR JUSTIFIED 12. Plaintiff in its' Motion for Preliminary Injunction also requests an appointment of receiver. In this regard I state that Plaintiff has not laid their case showing any need or urgency for an appointment of receiver. As stated above Everest's financial situation is direct result of CASTLE & Gourmet withholding $400.000.00 towards the supply of food and catering. Plaintiffs are trying to demonstrate to the court that because Everest is in loss receiver should be appointed. I state that an appointment of a receiver will be extremely detrimental to the operation of the business. As the business will not have sufficient money to execute the payroll besides the monthly rent of $30,000.00approx. in addition to pay the receiver for his services rendered, resulting into a total collapse of the restaurant business at the pretext of minority shareholders’ request for an appointment of receiver for no valid reason. PLAINTIFFS FAILED TO PARTICIPATE IN SHAREHOLDERS MEETINGS AND MAKE CONTRIBUTIONS 13. I also state that, due to failing conditions of Castle and Gourmet, urgent shareholders meeting was organized and all shareholders were notified and confirmed by email too. Plaintiffs undisputedly refused to participate in the shareholders meeting even of Everest’s shareholders meeting. The purpose of meeting was to seek additional contributions to pay the mortgage on the CASTLE which is approximately $25,000.00 per month, and payment of real estate taxes approximately in the sum of approximately $200,000.00 is due and payable, see attached as 'Exhibit B' Minutes of the Meeting dated March 22, 2017. On one hand Plaintiffs are seeking Injunctive Relief, on the other hand Plaintiffs are neither attending the meetings nor making additional contributions as Case 2:17-cv-03808-JMV-JBC Document 26-1 Filed 07/10/17 Page 5 of 7 PageID: 486 6 required by the share holders in a duly notified shareholders meeting. In order to fulfill the pressing demands of payment of mortgage, payroll, utility bills, and real estate taxes, I and Vicky have availed further loans from lending institutions approximately in the sum of $110,000. PLAINTIFFS FAILED TO DISCLOSE PROFITS RECEIVED FROM EVERST 14. Plaintiff Simran has failed to disclose or state that it has received approximately $25,000.00 approx. from Everest from the time period of 2013- 2016, copy of the statement of account is attached as 'Exhibit C' to this affidavit. 15. I also state that the disbursement of $25,000.00 to Plaintiff Simran and nonpayment of $400,000.00 from CASTLE to Everest and subsequent loan of $100,000.00 accounts for approximately half a million dollars. If these amounts are made available to Everest, it will result into financial ability to run its own operation and distribute profits to the shareholders without any need for appointment of receiver. 16. Since all the Plaintiffs are also shareholders in the CASTLE which owes $400,000.00 to Everest, it is unfair on part of the plaintiff to not to fulfill their obligation of payment to Everest, but in addition demand a receiver to further financially burden Everest. 17. I further state that this case can't be resolved by litigation or Injunctive Motions but by meaningful Mediation. 18. I also state that Grant of requested Injunctive Relief will seriously prejudice Defendants and defendants business of operating the restaurant. However, not granting Case 2:17-cv-03808-JMV-JBC Document 26-1 Filed 07/10/17 Page 6 of 7 PageID: 487 7 the Injunctive Relief will not prejudice the plaintiffs as the loss of alleged profits or distribution maybe fully compensated in the terms of money. 19. The balance of equity and likelihood of success on merit is in favor of the defendants. 20. I have not filed any motion or affidavit in opposition seeking similar relief in this court or any other court. WHEREFORE, I request the honorable court to reject plaintiff’s Order to Show Cause for a preliminary injunction in all respects. I also request to pass any other relief or any other order in favor of defendant, which this Court may deem fit and proper. I also request that court may award me cost and disbursement of this action. New York, NY July 7, 2017 /s/ Raja Jhanjee Sworn to before me on July 7, 2017 ______________/s/______________ Notary Public 3. Case 2:17-cv-03808-JMV-JBC Document 26-1 Filed 07/10/17 Page 7 of 7 PageID: 488 UNITED STATE DISTRICT COURT DISTRICT OF NEW JERSEY ................................................................................................................ X : SIMRAN SERVICES LLC, MANDEEP OBEROI, MD. NARINDARPAL NARULA and VIKRAM GUPTA : : Civil Case No. 17-CV-03808 Plaintiffs, : : Defendant Vicky Vij’s Affidavit in Opposition to Plaintiff’s Request for TRO - against - : : EVEREST FOODS INC., RAJA JHANJEE, and VICKY VIJ : : Defendants. : : ……………………………………………………………….X Vicky Vij, being duly sworn, deposes and says: 1. I am the named defendant and principal officer of the defendant Everest foods Inc. (“Everest”) in this action. I am fully familiar with the facts and records of the business and as such, competent to affirm this affidavit in opposition to plaintiff’s Temporary Restraining Order filed by way of Order to Show Cause with request for a Preliminary Injunction. 2. Plaintiff has filed the underlying complaint and requested Order to Show Cause with mala fide intentions and concealing vital facts of this case. In this regard following is the factual background of the matter. Case 2:17-cv-03808-JMV-JBC Document 26-2 Filed 07/10/17 Page 1 of 7 PageID: 489 2 Factual Background 1. I state that I am trained and involved in operation of Restaurant and Hospitality business for more than three decades and have been operating our own business in Manhattan for more than 20 years approximately. Initially, we were three shareholders namely Raja Jhanjee (“Raja”), Vicky Vij (“Vicky”) and Bachan Rawat (‘Rawat”), the Chef. 2. I further state that I was introduced to the plaintiffs by a common friend. Plaintiffs also wanted to start Restaurant and Hospitality business but had no prior training or experience in operation of a restaurant business. 3. On or about beginning of year 2013 plaintiff Mandeep Oberoi (“Oberoi”) contacted me and induced and offered an opportunity to purchase a Banquet Hall in Roselle Park, NJ (“The Castle”) which was in a foreclosure sale. Not understanding the ulterior motives of Oberoi to take a share in our existing robust business of d/b/a Bukhara Restaurant, I got allured for the purchase of Banquet Hall in New Roselle Park , NJ. 4. In order to purchase the Castle, a group of investors were collected besides Oberoi plaintiff Narinderpal Narula (“Narula”) , Tirun Gopal (“Gopal”) and Vikram Gupta (‘Gupta”) 5. Plaintiff and I agreed that we can purchase and operate Castle with equal contribution to set up the business operation. Accordingly, I and Raja were required to contribute at least $ 325,000.00 approx. each towards the initial investment including payment of key money, rent, groceries, and salaries for the staff. 6. In order to meet my financial obligation towards the total contribution I sold my 20 shares in Everest d/b/a Bukhara . Case 2:17-cv-03808-JMV-JBC Document 26-2 Filed 07/10/17 Page 2 of 7 PageID: 490 3 7. I further state that Plaintiff has concealed that at the time of initial purchase of share of Everest, two more corporations were incorporated, namely Westfield Realty Holding LLC., (“Westfield”) which owns the real estate of the CASTLE and Gourmet Food Merchant LLC ("Gourmet”) is the corporation which operates the business of the CASTLE. Copies of the Operating Agreement of both the corporations are attached as 'Exhibit ‘A’ to this affidavit. However, the lending bank refused financing as none of the plaintiffs had any industry or business experience in operation of restaurant business or Banquet Hall. Accordingly, we pledged Everest as security and also provided our Personal Guarantees. 8. I further state that due to location of the CASTLE, restrictions on the kitchen equipment, parking limitations as well as high cost of operating and maintenance, which were well known to plaintiffs, Castle resulted into reoccurring losses. In order to somehow keep the business running, we decided to supply the food and catering from the Everest to the Gourmet Food Merchant LLC. In this process Gourmet owes more than $400,000.00 approx. to Everest towards the actual food and catering cost. This further deteriorated the financial conditions and ability of Everest to pay any profits or dividends to the share holders. 9. Despite financial constraints, Everest is still paid dividends to plaintiffs particularly to Simran in the sum of approximately $25,000.00. Copy of the payment statement is attached is 'Exhibit ‘C’. Case 2:17-cv-03808-JMV-JBC Document 26-2 Filed 07/10/17 Page 3 of 7 PageID: 491 4 DEFENDANTS ARE ENTITLED TO COMPENSATION FOR THE WORK & SERVICES RENDERED 10. I state that one of the reliefs requested by Plaintiffs in its Order to Show Cause is “paying distribution to themselves without seeking or obtaining the consent of the Plaintiffs and without equally compensating Plaintiffs”. In this regard I respectfully submit that, Plaintiffs Gupta and Oberoi are physician by profession and training, and are engaged in practice of medicine. Narula owns several franchise businesses and also independently self sustainable. On the other hand I, Vicky, and Rawat are engaged in full time work and employment of the restaurant business, we are compensated for our work in the restaurant business along with 25 full time and other part time employees. I further state that we have not made any distribution in form of dividends or profits from Everest. In fact any distribution of dividends and profits will be made to all shareholders in their pro rata share holding. The Plaintiffs demands to not pay the wages to me, and other employees will result into immediate seize of operation, of the restaurant business. Hence, the Plaintiffs demand is neither legal nor just and fair against the majority shareholders as well as the employees of the corporation. FINANCIAL DOCUMENTS RELATING TO EVEREST 11. I also submit that Plaintiffs demand in the motion for Preliminary Injunction relates to withholding of financial documents relating to Everest. In view of our providing all available documents including but not limited to tax returns, individual tax returns, pay roll records, to the Plaintiff; plaintiff’s demand is moot. Case 2:17-cv-03808-JMV-JBC Document 26-2 Filed 07/10/17 Page 4 of 7 PageID: 492 5 PLAINTIFFS DEMAND FOR APPOINTMENT OF RECEIVER IS NOT ESTABLISHED OR JUSTIFIED 12. Plaintiff in its' Motion for Preliminary Injunction also requests an appointment of receiver. In this regard I state that Plaintiff has not laid their case showing any need or urgency for an appointment of receiver. As stated above Everest's financial situation is direct result of CASTLE & Gourmet withholding $400.000.00 towards the supply of food and catering. Plaintiffs are trying to demonstrate to the court that because Everest is in loss receiver should be appointed. I state that an appointment of a receiver will be extremely detrimental to the operation of the business. As the business will not have sufficient money to execute the payroll besides the monthly rent of $30,000.00approx. in addition to pay the receiver for his services rendered, resulting into a total collapse of the restaurant business at the pretext of minority shareholders’ request for an appointment of receiver for no valid reason. PLAINTIFFS FAILED TO PARTICIPATE IN SHAREHOLDERS MEETINGS AND MAKE CONTRIBUTIONS 13. I also state that, due to failing conditions of Castle and Gourmet, urgent shareholders meeting was organized and all shareholders were notified and confirmed by email too. Plaintiffs undisputedly refused to participate in the shareholders meeting even of Everest’s shareholders meeting. The purpose of meeting was to seek additional contributions to pay the mortgage on the CASTLE which is approximately $25,000.00 per month, and payment of real estate taxes approximately in the sum of approximately $200,000.00 is due and payable, see attached as 'Exhibit B' Minutes of the Meeting dated March 22, 2017. On one hand Plaintiffs are seeking Injunctive Relief, on the other hand Plaintiffs are neither attending the meetings nor making additional contributions as Case 2:17-cv-03808-JMV-JBC Document 26-2 Filed 07/10/17 Page 5 of 7 PageID: 493 6 required by the share holders in a duly notified shareholders meeting. In order to fulfill the pressing demands of payment of mortgage, payroll, utility bills, and real estate taxes, I and Raja have availed further loans from lending institutions approximately in the sum of $110,000. PLAINTIFFS FAILED TO DISCLOSE PROFITS RECEIVED FROM EVERST 14. Plaintiff Simran has failed to disclose or state that it has received approximately $25,000.00 approx. from Everest from the time period of 2013- 2016, copy of the statement of account is attached as 'Exhibit C' to this affidavit. 15. I also state that the disbursement of $25,000.00 to Plaintiff Simran and nonpayment of $400,000.00 from CASTLE to Everest and subsequent loan of $100,000.00 accounts for approximately half a million dollars. If these amounts are made available to Everest, it will result into financial ability to run its own operation and distribute profits to the shareholders without any need for appointment of receiver. 16. Since all the Plaintiffs are also shareholders in the CASTLE which owes $400,000.00 to Everest, it is unfair on part of the plaintiff to not to fulfill their obligation of payment to Everest, but in addition demand a receiver to further financially burden Everest. 17. I further state that this case can't be resolved by litigation or Injunctive Motions but by meaningful Mediation. 18. I also state that Grant of requested Injunctive Relief will seriously prejudice Defendants and defendants business of operating the restaurant. However, not granting Case 2:17-cv-03808-JMV-JBC Document 26-2 Filed 07/10/17 Page 6 of 7 PageID: 494 7 the Injunctive Relief will not prejudice the plaintiffs as the loss of alleged profits or distribution maybe fully compensated in the terms of money. 19. The balance of equity and likelihood of success on merit is in favor of the defendants. 20. I have not filed any motion or affidavit in opposition seeking similar relief in this court or any other court. WHEREFORE, I request the honorable court to reject plaintiff’s Order to Show Cause for a preliminary injunction in all respects. I also request to pass any other relief or any other order in favor of defendant, which this Court may deem fit and proper. I also request that court may award me cost and disbursement of this action. New York, NY July 7, 2017 /s/ Vicky Vij Sworn to before me on July 7, 2017 _____________/s/______________ Notary Public Case 2:17-cv-03808-JMV-JBC Document 26-2 Filed 07/10/17 Page 7 of 7 PageID: 495 GOURMET FOOD MERCHANT LLC OPERATING AGREEMENT This LIMITED LIABILITY COMPANY OPERATING AGREEMENT, dated as of May 7, 2013 (the “Agreement”), by and among GOURMET FOOD MERCHANT LLC, a New Jersey limited liability company (the “Company”), SIMRAN SERVICES LLC, a New Jersey limited liability company, VICKY VIJ, RAJA JHANJEE, TIRUN GOPAL, VIKRAM GUPTA and BACHAN RAWAT (each a “Member,” and collectively, the “Members”). WHEREAS, the Members and the Company hereto deem it in their best interests and in the best interests of the Company to set forth their respective rights and obligations in connection with their ownership of the Company; and NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein, the parties agree as follows: 1. Terms and Conditions (a) Organization. The Company has been formed as a limited liability company for the purposes and scope set forth in this Agreement. This Agreement shall govern the relationship between the Members and the Company as set forth herein. Each of the Members’ respective ownership interests in the Company shall be set forth on Schedule A, which is annexed hereto and incorporated by reference herein. The Company has been organized under the New Jersey Limited Liability Company Act, N.J.S.A. § 42:2C-1 et. seq., as amended or superseded, from time to time (the “LLC Act”). Except to the extent set forth in this Agreement, the rights, powers, duties, and obligations of the Company and of each Member shall be governed by the LLC Act and the Company shall be a partnership for income tax purposes. Each Member’s respective interest in the Company shall be personal property for all purposes. All real and personal property owned by the Company is deemed to be owned by the Company, and no Member individually will have any ownership rights with respect to such property. No new member may be admitted to the Company unless that action is expressly approved in accordance with this Agreement. (b) Name. The name of the Company shall be “GOURMET FOOD MERCHANT LLC”. The Members hereby acknowledge that the company has registered the name “THE CASTLE” an alternate name with the State of New Jersey, Division of Revenue. The business of the Company shall be under the Company name or the said alternate name and all assets of the Company shall be held under the Company name or the said alternate name. In addition to the foregoing, upon the affirmative vote of all the Members, the Company may file and operate under a new alternative name. The principal place of business of the Company shall be located at 147 West Westfield Avenue, Roselle Park, New Jersey 07204, or at such other location as may be approved by the Members from time to time. (c) Certificate of Formation. On April 12, 2012, the Company caused to be filed with the Department of Treasury, Division of Revenue, of the State of New Jersey, on behalf of the Company, a Certificate of Formation in accordance with the LLC Act, and the Members shall Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 1 of 53 PageID: 496 2 execute such other documents and instruments and take such other actions as they deem necessary or appropriate to effectuate and permit the continued formation of the Company under the LLC Act or to conduct business in any jurisdiction. The Members shall from time to time, take appropriate action, including preparing and filing such amendments to the Certificate of Formation as may be required by the LLC Act. (d) Registered Agent and Office. The registered agent for the Company shall be the Company. The registered office of the Company shall be at such location as the Members may determine from time to time. 2. Term. The term of the Company shall commence on the date the Certificate of Formation was filed in the Division of Revenue of State of New Jersey and shall continue until the first of the following shall occur: (a) all or substantially all of the assets of the Company have been sold or transferred; (b) the Company is dissolved; or (c) this Agreement is terminated pursuant to Section 10, below. Except as permitted in this Agreement, each Member hereby agrees not to withdraw from the Company, assign its interest in the Company or take any voluntary action that would have such effect prior to the dissolution and winding up of the Company. 3. Scope and Purposes. The Company was formed: (i) to own and operate a restaurant, bar and catering hall to be named “The Castle,” located at 147 West Westfield Avenue, Roselle Park, New Jersey 07204, and currently operating as “Solar Manor” (the “Business”); or (ii) to engage in any other lawful acts or activities as are permitted for limited liability companies under the laws of the State of New Jersey and that are necessary or desirable for conducting the Business of the Company as may be approved by all the Members. 4. Ownership, Capital, Financing, Distributions, Allocations, Member Services, and Competition. (a) Ownership. A Member’s ownership interest in the Company shall be represented by units of membership interest (“Units”). Each Member hereby agrees that its interest in the Company and in their Units shall for all purposes be personal property. A Unit holder shall have no interest in specific Company property. The total number of authorized Units shall be one hundred (100). Each Unit issued shall represent that percentage of ownership in the Company calculated by dividing the Unit by the total number of Units issued and outstanding. (b) Capital Accounts. A capital account shall be established and maintained for each Member. No interest shall be payable on a Member’s capital account. (i) Each Member’s capital account shall be credited with the dollar amount of: Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 2 of 53 PageID: 497 3 (1) the value of any cash or services contributed as capital by that Member to the Company from time to time; (2) the share of profits of the Company allocated to that Member; (3) any items in the nature of income or gain that are specially allocated to that Member pursuant to this Section; and (4) the fair market value of property contributed by such Member (net of any liabilities secured by such property that the Company assumed or takes subject to). (ii) Each Member’s capital account shall be debited by the dollar amount of: (1) the share of losses of the Company allocated to such Member or for which that Member is responsible pursuant to this Agreement; (2) cash distributed to that Member pursuant to any provision of this Agreement; (3) any items in the nature of expenses or losses that are specially allocated to that Member pursuant to this Section; and (4) the fair market value of any property distributed to such Member (net of liabilities secured by such property that the Member assumed or takes subject to). To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Internal Revenue Code of 1986, as amended, (the “Code”), is required, pursuant to Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining capital accounts, the amount of such adjustment to the capital accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Members in a manner consistent with that in which their capital accounts are required to be adjusted pursuant to the treasury regulations promulgated under the Code (the “Regulations”). In cases where Code Section 704(c) would apply to the contribution of property to the Company, the Members’ capital accounts shall be adjusted as set forth in Regulation Section 1.704- 1(b)(2)(iv)(g). In determining the amount of any liability for purposes of this Section, there shall be taken into account Code Section 752 and any other applicable provisions of the Code and Regulations thereunder. These provisions relating to the maintenance of capital accounts are intended to comply with Regulation Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with that Regulation. If the Members determine that it is prudent to modify the manner in which the capital Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 3 of 53 PageID: 498 4 accounts, or any debits or credits thereto (including, without limitation, debits or credits relating to liabilities which are secured by contributed or distributed property or which are assumed by the Company or the Members) are computed to comply with that Regulations the Members may make such modification; provided that it is not likely to have a material effect on the amounts distributable to any Member pursuant to Section 12 hereof upon the dissolution of the Company. The Members also shall (i) make any adjustments that are necessary or appropriate to maintain equality between the capital accounts of the Members and the amount of Company capital reflected on the Company’s balance sheet, as computed for book purposes in accordance with Regulation Section 1.704-1(b)(2)(iv)(q), and (ii) make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Regulation Section 1.704-1(b). (c) Capital Contributions. (i) Generally. Members’ contributions to the Company may be cash, other property, and/or services rendered to the Company. If other than cash, the Members shall agree on the value, if any, to be attributed to the property or services contributed and how such contributions shall be treated by the Company. (ii) Capital Contributions. Each Member has contributed or shall contribute the capital contributions as set forth on Schedule A hereto. (iii) Additional Capital Contributions. Except for contributions made to the Company as of the date of this Agreement and except as otherwise required by the LLC Act or provided in a written subscription, contribution, purchase or other agreement between the Company and the relevant Member, no Member shall be required to make any additional capital contributions to the Company. Notwithstanding anything to the contrary contained herein, in the event that a majority of the Members determine in good faith that the Company requires additional capital to meet its financial or operational needs, or in furtherance of conducting the Business, and that additional needed funds cannot readily be obtained through borrowings by the Company from third- parties, the Management Committee shall make a written demand upon the other Members, who each shall be required within four (4) weeks of the receipt thereof to contribute, on a pro-rata basis, its share of the capital contribution demanded of them. In the event a Member fails or refuses to make the capital contribution when required, the other Members shall be entitled to contribute (the “Contributing Members”) the amount of the capital that the non-contributing Member (the “Defaulting Member”) failed to contribute, receiving in consideration Units proportionally equal to the amount contributed, thereby diluting the Defaulting Member's Units. (d) Allocation of Profits and Losses. All Company items of Profits and Losses shall be allocated in accordance with the applicable percentage as set forth next to the Member’s name on Schedule A and in accordance with this Section. In the event Members are admitted to the Company pursuant to this Agreement on different dates, the Profits or Losses allocated to the Members for each Fiscal Year during which Members are so admitted shall be allocated among the Members in accordance with the applicable percentage as set forth next to the Member’s name on Schedule A for the relevant period during Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 4 of 53 PageID: 499 5 such Fiscal Year in accordance with Code Section 706, using any convention permitted by law and selected by the Tax Matters Member (as defined below). Except as otherwise provided in this Agreement, all items of Company income, gain, loss, deduction and any other allocations not otherwise provided for shall be divided among the Members Units in the same proportions as they share Profits and Losses for the Fiscal Year in question. In accordance with Code Section 704(c) and the Regulations thereunder, income, gain, loss, and deduction (including depreciation) with respect to any property contributed to the capital of the Company by a Member shall, solely for tax purposes, be allocated among the Member(s) so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its Gross Asset Value at the time it was contributed to the Company. In the event the Gross Asset Value of any Company asset is adjusted pursuant to subsection (2) of the definition of “Gross Asset Value” in Section 4(d) below, subsequent allocations of income, gain, loss and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in the same manner as under Code Section 704(c) and the Regulations thereunder. To the extent that any allocation of income or gain made pursuant to this Agreement includes the allocation of an item of income or gain that is recaptured as ordinary income under Code Sections 1245 or 1250, such ordinary income shall be allocated to the Member(s) who received the allocation of the depreciation or cost recovery deductions that generated the ordinary income recapture in proportion to their shares of such deductions, provided that such allocation of ordinary income shall be limited to the amount of income or gain allocated to such Member for the period to which such allocation relates. No Member shall be allocated any item of Losses or deduction to the extent said allocation will cause or increase any deficit in said Member’s capital account as of the end of the tax year to which such allocation relates. In determining the above, a Member’s capital account shall be reduced for the items described in Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6). If any Member with a deficit in their capital account unexpectedly receives any adjustment, allocation or distribution described in Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6), then items of income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate the deficit in said Member’s capital account created by such adjustment, allocation, or distribution as quickly as possible. In the event any Member has a deficit in their capital account at the end of any tax year that is in excess of the sum of (i) the amount such Member is obligated to restore and (ii) the amount such Member is deemed to be obligated to restore pursuant to the penultimate sentence of Regulation Section 1.704(b)(4)(iv)(f), each such Member shall be specially allocated items of income and gain in the amount of such excess as quickly as possible. For purposes of this Section 4(d), the following definitions shall apply: (i) “Gross Asset Value” means, with respect to any asset, such asset’s adjusted basis for federal income tax purposes, except as follows: Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 5 of 53 PageID: 500 6 (1) the initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset, as agreed to by the contributing Member and the other Members; (2) the Gross Asset Value of all Company assets shall be adjusted to equal their respective gross fair market values, as determined by the Company, as of the following times: (i) the acquisition of any additional Units in the Company by any existing Member or additional Member in exchange for more than a de minimis capital contribution; or (ii) the distribution by the Company to a Member of more than a de minimis amount of Company assets as consideration for an interest in the Company; and (3) the Gross Asset Value of any Company asset distributed to any Member shall be the gross fair market value of such asset on the date of distribution, as determined by the Members. If the Gross Asset Value of an asset has been determined or adjusted pursuant to subsection (1) or subsection (2) immediately above, such Gross Asset Value shall thereafter be adjusted by the depreciation taken into account with respect to such asset for purposes of computing Profits and Losses. (ii) “Profits” and “Losses” means, for each Fiscal Year, an amount equal to the Company’s net taxable income or loss for such Fiscal Year, determined in accordance with Code Section 703(a) (but including in taxable income or loss, for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1), with the following adjustments: (1) any income of the Company exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition shall be added to such taxable income or loss; (2) any expenditures of the Company described in Code Section 705(a)(2)(B) (or treated as expenditures described in Code Section 705(a)(2)(B) pursuant to Regulation Section 1.704-1(b)(2)(iv)(i)) and not otherwise taken into account in computing Profits or Losses pursuant to this definition shall be subtracted from such taxable income or loss; (3) in the event the Gross Asset Value of any Company asset is adjusted in accordance with subsection (2) or subsection (3) of the definition of “Gross Asset Value” above, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Profits or Losses; (4) gain or loss resulting from any disposition of any asset of the Company with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the asset disposed of, notwithstanding that the adjusted tax basis of such asset differs from its Gross Asset Value; (5) in lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account depreciation for such Fiscal Year or other period, computed in accordance with the definition of “Depreciation” above; and (6) notwithstanding any other provision of this definition, any items which are specially allocated pursuant to this Section shall not be taken into account in computing Profit or Loss. Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 6 of 53 PageID: 501 7 (e) Member Expenses. A Member shall be reimbursed for all ordinary and reasonable expenses incurred in the performance of its services on behalf of the Company, however, any expenses shall be pre-approved by the Members. The Members shall submit an expense report to the Company on a monthly basis, on or before the end of each month. Any expenses which are not documented or which were not pre-approved shall not be reimbursable. (f) Member Compensation. The compensation of each Member, if any, shall be as set forth next to such Member’s name on Schedule A. Member compensation may be increased or decreased by the vote of all the Members. Except as agreed to by the Members, no Member shall be entitled to receive a salary or other compensation for the services each such Member is to provide to the Company hereunder, excepting the distributions permitted by this Agreement, (g) Distributions. Except as provided in this Agreement, distributions of Net Cash Flow (as defined below) or other assets of the Company shall be made on an annual basis for the first two (2) years in which the Company begins its Business operations and then every six (6) months thereafter in such amounts as shall be determined by the Management Committee, as defined in Section 5 below, and shall be distributed to the Members in proportion to the number of Units held by each Member. For purposes of this Section 4(g), the term “Net Cash Flow” means, for each Fiscal Year or other period of the Company, the gross cash receipts of the Company from all sources, but excluding any amounts such as gross receipts taxes that are held by the Company as a collection agent or in trust for others or that are otherwise not unconditionally available to the Company, less all amounts paid by or for the account of the Company during the same Fiscal Year or other period (“Payments on Account”) and less any amounts determined by the Members to be necessary to provide a reasonable reserve for working capital needs or any other contingencies of the Company. Net Cash Flow shall be determined in accordance with the cash receipts and disbursements method of accounting and otherwise in accordance with generally accepted accounting principles, consistently applied. Net Cash Flow shall not be reduced by depreciation, amortization, cost recovery deductions, depletion, similar allowances or other non-cash items, but shall be increased by any reduction of reserves previously established. Payments on Account shall be made according to the following priority: (i) First, (a) Operating Expenses incurred in the ordinary course of business. The term “Operating Expenses” as used herein shall be limited to the following expenses, incurred in the ordinary course of business, and determined in accordance with generally accepted accounting principles: cost of goods sold, overhead (which may include, but not necessarily be limited to (as applicable): rent, utilities (including telecommunication charges, website hosting expenses, electricity, etc.), storage costs, shipping costs, salaries of employees, marketing and promotional expenses, taxes, employee salaries, and any other expenses incurred by the Company which were pre-approved by the Management Committee in accordance with this Agreement; and (b) any current installment due for any debt payment to any institution, private lender or third party in accordance with such debt’s terms. In addition to the foregoing, not more than once in any calendar year, the Management Committee shall vote, subject to sixty-five (65%) percent approval, on whether any additional debt or mortgage payments shall be made. In the event of an affirmative vote by the Management Committee, an additional payment Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 7 of 53 PageID: 502 8 shall be made, but such payment shall not exceed twenty-five (25%) percent of Net Cash Flow. (ii) Second, after payment of the preceding amounts, to establish or increase a cash reserve of one hundred thousand ($100,000.00) dollars, to meet anticipated and/or contingent Company obligations and/or accrued expenses; (iii) Third, after payment of the preceding amounts, in the event the Company has not made the payment of any installment due to any institution, private lender, vendor or third party for which a Member has provided a personal guarantee, and said institution, etc., has required the Member providing such personal guarantee to pay the outstanding installment, the Company shall make payment to such Member in the amount paid by said Member, plus simple interest at the per annum rate of ten percent (10%), from the date the installment was paid by the Member until the date the Member is repaid in full. Notwithstanding anything to the contrary, no distributions of cash or assets shall be made to any Members, for any purpose whatsoever, until all Members to which this Section is applicable are repaid in full. In the event this Section is applicable to multiple Members at the same time, then the distributions shall be made to such Members in proportion to the number of Units held by each. (iv) Fourth, after payment of the preceding amounts, the Members shall make distributions from Net Cash Flow for the Company to make annual cash distributions to the Members on or before April 15 of each year following a year (the “Prior Year”) with respect to which the Company had Taxable Income (as defined below) and such Taxable Income was allocated to the Members in any year, in an amount at least equal to each Member’s Interest in the Company multiplied by the product of (x) the sum of the highest marginal federal income tax rate and the highest effective State Tax Rate (as defined below) applicable to individuals with respect to income earned during the Prior Year multiplied by (y) the amount of the Company’s Taxable Income for the Prior Year. For purposes of this Agreement, the Company’s “Taxable Income” shall mean, with respect to any year, its gross income for that year minus all deductions allowed for that year and the “Highest Effective State Tax Rate” shall mean, with respect to any year, the highest marginal State income tax rate applicable to individuals for that year multiplied by the excess of 100% over the highest marginal federal income tax rate applicable to individuals for that year. (v) Fifth, after payment of the preceding amounts, the Company shall return any remaining capital contributions of cash and loans made by the Members to the Company, pro rata to their respective loans. (vi) Sixth, after payment of the preceding amounts, the Company shall make distributions to the Members’ in accordance with their pro-rata share of Units. 5. Management; Members. (a) Management of Company. The management of the Company shall be vested in the committee of Managers (the “Management Committee”). Each member of the Management Committee shall be a Member (or an Affiliate (as hereinafter defined) thereof) of the Company. The number of Managers on the Management Committee shall be no less than two (2), unless the Members provide otherwise. The initial Managers of the Company shall VICKY VIJ, RAJA JHANJEE, MANDEEP OBEROI and NARINDERPAL NARULA. Each Manager shall serve in such capacity until he resigns, is removed for “Cause,” as set forth below, or by an Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 8 of 53 PageID: 503 9 affirmative vote of sixty-five (65%) percent of the Units entitled to vote. The Management Committee shall meet and confer as required to conduct the business and affairs of the Company. Each Manager shall devote such time to the Company affairs as he shall determine is reasonably necessary for the conduct of such affairs. (b) Manner of Acting by Managers. Each Manager shall have one (1) vote. Except as otherwise provided in this Agreement, the Management Committee shall act by the affirmative vote of a majority of all of the members of the Management Committee. Once an action is approved by the Management Committee, then any Manager, acting alone, may execute any documents necessary or desirable to effectuate such action and any person conducting business with the Company shall be entitled to rely on the authority and signature of any Manager. Approval of seventy-five (75%) percent of the Management Committee shall be required to borrow money and to issue evidence of indebtedness in a singular or aggregate amount in excess of seventy-five thousand ($75,000) dollars or to secure any indebtedness of the Company by pledge or other lien of Company property. (c) Meetings of Managers. A meeting of the Management Committee may be called at any time by any Manager. Meetings of the Management Committee shall be held at the Company's principal place of business or at any other place approved by the Management Committee. Not less than two (2) nor more than thirty (30) days before each meeting, the person calling the meeting shall give written notice of the meeting to each Manager entitled to vote at the meeting. The notice shall state the time, place, and purpose of the meeting. Notwithstanding the foregoing provisions, each Manager who is entitled to notice waives notice if before or after the meeting the Manager signs a waiver of the notice which is filed with the records of Management Committee meetings, or is present at the meeting in person or by proxy. A Manager may vote either in person or by written proxy signed by the Member or by its duly authorized attorney in fact. (d) Action by Management Committee without a Meeting. Any action required or permitted to be taken at a meeting of the Management Committee may be taken without a meeting if the number of Managers sufficient to approve such action at a meeting where all the Managers were present shall consent in writing to such action and notice of such consent shall be given promptly to all Managers not consenting to such action. Action taken under this Section is effective when the number of Managers necessary to approve such action have signed the consent, unless the consent specifies a different effective date. The record date for determining Managers entitled to take action without a meeting shall be the date the first Managers signs a written consent. Such written consent or consents shall be filed in the Company’s minute book. (e) Meetings of Members. A meeting of the Members may be called at any time by the Management Committee or any Member. Meetings of Members shall be held at the Company's principal place of business or at any other place approved by the Members. Not less than two (2) nor more than thirty (30) days before each meeting, the person calling the meeting shall give written notice of the meeting to each Member entitled to vote at the meeting. The notice shall state the time, place, and purpose of the meeting. Notwithstanding the foregoing provisions, each Member who is entitled to notice waives notice if before or after the meeting the Member signs a waiver of the notice which is filed with the records of Members' meetings, or is present at the meeting in person or by proxy. A Member may vote either in person or by written proxy signed by the Member or by its duly authorized attorney in fact. Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 9 of 53 PageID: 504 10 (f) Manner of Acting by Members. The affirmative vote of a majority of the Units entitled to vote shall be the act of the Members, unless the vote of a greater or lesser proportion or number is otherwise required by the LLC Act, by the Certificate of Formation or by this Agreement. Each Member shall vote based on the number of Units owned. Unless otherwise expressly provided in this Agreement or required under applicable law, Members who have an interest (economic or otherwise) in the outcome of any particular matter upon which the Members vote or consent, may vote or consent upon any such matter and their Units, by vote or consent, as the case may be, shall be counted in the determination of whether the requisite matter was approved by the Members. (g) Action by Members without a Meeting. Any action required or permitted to be taken at a meeting of Members may be taken without a meeting if the number of Units sufficient to approve such action at a meeting where all the Members were present shall consent in writing to such action and notice of such consent shall be given promptly to all Members not consenting to such action. Action taken under this Section is effective when the number of Units necessary to approve such action have signed the consent, unless the consent specifies a different effective date. The record date for determining Members entitled to take action without a meeting shall be the date the first Member signs a written consent. Such written consent or consents shall be filed in the Company’s minute book. (h) Officers. The Members may, from time to time, designate and appoint one or more individuals as an officer of the Company (“Officer”). Any Officers so designated shall have such authority and perform such duties as the Members may, from time to time, delegate to them. The Members may assign titles to particular Officers. Unless the Members otherwise decide, if the title is one commonly used for officers of a business corporation, the assignment of such title shall constitute the delegation to such Officer of the authority and duties that are normally associated with that office. (i) President. The president shall be the chief executive officer of the Company. Subject to the provisions of this Agreement and to the direction of the Management Committee, he shall have the responsibility for the general management and control of the affairs and Business of the Company and shall perform all the duties and have all the powers which are delegated to him by the Management Committee. He shall have power to sign all contracts and other instruments of the Company which are authorized. He shall have general supervision and direction of all of the other officers and agents of the Corporation. RAJA JHANJEE shall serve as the initial president of the Company remain in such capacity until either (i) he resigns, (ii) is removed for “Cause,” as set forth below, (iii) is removed by an affirmative vote of sixty-five (65%) percent of the Units entitled to vote, or (iv) is removed by an affirmative vote of the Management Committee. (j) Employees. VICKY VIJ and RAJA JHANJEE shall have sole discretion to hire and terminate employees. They shall notify the Management Committee of all new hires and terminations within five (5) business days of each such event. The rights provided pursuant to this Paragraph can be terminated by the Management Committee. Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 10 of 53 PageID: 505 11 (k) Decisions requiring the Majority Consent of Members. A majority of Members must approve the following actions: (i) following the required approval of the Management Committee, to borrow money and to issue evidence of indebtedness in a singular or aggregate amount in excess of seventy-five thousand ($75,000.00) or to secure any indebtedness of the Company by pledge or other lien of Company property; (ii) the institution of any legal proceedings in the Company’s name or defense of any action instituted against it; (iii)the addition of any new Member, except in the case of the sale of a Member’s Units in accordance with Section 7 below; (iv) any merger in which the Members will own less than fifty (50%) percent of the voting equity of the surviving company; (v) to sell all or substantially all or any material assets of the Company; (vii) the dissolution of the Company; (viii) make capital expenditures or enter into, perform and carry out contracts, which impose an obligation upon the Company in an amount in excess of fifty thousand ($50,000) dollars, in the aggregate; (ix) issue or authorized any additional Units or classes of Units, whether or not authorized hereto or hereunder; (x) carry on any other business; and (xi) such other decisions as are so specified in this Agreement. Except as set forth above, the Management Committee shall make all decisions regarding the operations, business and affairs of the Company. (l) Exculpation of Members, Managers or Officers. In carrying out their duties hereunder, the Members, Managers and Officers, shall not be liable to the Company or to any other Member for their good faith actions, or failure to act, or for any errors of judgment, or for any act or omission believed in good faith to be within the scope of authority conferred by this Agreement. Actions or omissions taken in reliance upon the advice of legal counsel as being within the scope of authority conferred by this Agreement shall be conclusive evidence of such good faith; however, good faith may be determined without obtaining such advice. The Company does hereby indemnify and hold harmless the Members, Managers, Officers and their respective Affiliates and agents, trustees, officers, employees, partners, members and directors against and from any and all losses, claims, damages, liabilities, expenses (including legal Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 11 of 53 PageID: 506 12 fees and expenses), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative (together, “Claims”), in which the indemnified person may be involved, or threatened to be involved, as a party or otherwise by reason of their status as a Member, Manager, Officer or an Affiliate thereof, an agent, trustee, officer, employee, partner, member or director of such Member, Manager, Officer or an Affiliate thereof, or a person serving at the request of the Company in another entity in a similar capacity, which relates to or arises out of the Company, its property, business or affairs, regardless of whether the indemnified person continues to be a Member, Manager, Officer or an Affiliate thereof or its agent, trustee officer, employee, partner, member or director at the time any such liability or expense is paid or incurred, if (i) the indemnified person acted in good faith and in a manner it believed to be in or not opposed to the best interests of the Company, (ii) the indemnified person’s conduct did not constitute gross negligence or willful misconduct, (iii) in connection with any criminal action or proceeding, the indemnified person had no reasonable cause to believe their conduct was unlawful, and (iv) with respect to Claims by or in the right of the Company, the indemnified person is not adjudged to be negligent or liable for misconduct, unless a court determines that indemnification is nonetheless appropriate. Notwithstanding clauses (iii) and (iv) above, an indemnified person shall be eligible for indemnification hereunder to the extent it has been successful on the merits with respect to any Claim. In no event shall any Member be required to make an additional capital contribution to carry out this indemnification provision. For purposes of this Agreement, an “Affiliate” of any person means (i) any person directly or indirectly owning, controlling or holding the power to vote ten percent (10%) or more of the outstanding voting securities of the specified person; (ii) any person ten percent (10%) or more of whose outstanding voting securities is directly or indirectly owned, controlled or held with power to vote by the specified person; (iii) any person directly or indirectly controlling, controlled by, or under control with a specified person; (iv) any trustee, officer, partner, member or director of the specified person; or (v) any person of which the specified person is a trustee, officer, director or partner. (m) Removal of a Manager or Officer for Cause. A Manager or Officer may be removed by a majority vote of the remaining Members for “Cause.” For purposes of this Section, “Cause” shall be defined as the following conduct: (i) Misconduct as a Manager of the Company relating to the finances of the Company, including but not necessarily limited to, fraud, willful misappropriation or theft of funds or property of the Company, or embezzlement; (ii) Intentional or willful acts that subjects the Company to serious public disrespect, scandal, or ridicule, or that causes the Company to be in violation of governmental regulations that subjects the Company either to sanctions by governmental authority or to civil liability; (iii) Intentional disclosure or use of confidential information of the Company, other than as specifically authorized and required in the performance of a Manager’s Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 12 of 53 PageID: 507 13 duties; (iv) Breach of any provision of this Agreement which, if capable of cure, is not cured within thirty (30) days after written notice; or (v) Conviction of a felony or plea of guilty to a felony which subjects the Company to public disrespect, scandal, or ridicule, or the penalty for which will otherwise prohibit the Manager from exercising substantially all of his duties as a Manager for a period of greater than one (1) year. (n) Vacancies. Whenever there are not enough Managers serving on the Management Committee or there is no Officer in office, then the Members may elect a Manager(s) or Officer, as necessary. (o) Conflicts of Interest, Other Business. Subject to the other express provisions of this Agreement, each Member of the Company at any time and from time to time may engage in and possess interests in other business ventures of any and every type and description, independently or with others, except for business ventures in direct competition with the Company participated directly or indirectly by such Member. The foregoing restriction on competition shall survive for a period of two (2) years following any Member’s release of any Units in the company for any reason whatsoever. (p) Confidentiality. Each Member expressly acknowledges that such Member may receive confidential and proprietary information relating to the Company, including information relating to the Company’s financial condition and business plans, and that the disclosure of such confidential information to a third party would cause irreparable injury to the Company. Except with the prior written consent of the Company, no Member shall disclose any such information to a third party (other than on a “need to know” basis to any Affiliate or any employee, agent, representative or contractor of such Member or its Affiliates (each of whom shall agree to maintain the confidentiality of such information)), and each Member shall use reasonable efforts to preserve the confidentiality of such information. The obligations of a Member under this Section 5(p) shall survive the termination of this Agreement or cessation of a Member’s status as a Member and for a period of five (5) years thereafter. Information exchanged between Members shall be non-confidential unless exchanged pursuant to a separate confidentiality agreement executed between such Members. Notwithstanding the foregoing, a Member shall not be bound by the confidentiality obligations in this Section 5(p) with respect to any information that is currently or becomes: (a) required to be disclosed by such Member pursuant to applicable law, including federal or state securities laws, or court order (but in each case only to the extent of such requirement); (b) required to be disclosed in order to protect such Member’s interest in the Company or enforce such Member’s rights under this Agreement (but in each case only to the extent of such requirement and only after consultation with the Company); (c) publicly known or available in the absence of any improper or unlawful action on the part of such Member; or (d) known or available to such Member via legitimate means other than through or on behalf of the Company or the other Members. (q) No Conflicts. No Member shall disclose or use, during the course of its relationship with the Company, any confidential information which it may have acquired because of Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 13 of 53 PageID: 508 14 its engagement or relationship with any Person other than the Company, or otherwise, which confidential information is subject to restrictions on disclosure or use. Each of the Members represent and warrant that the acceptance of confidential information, the entering into a relationship with the Company and the other Members and the execution of and compliance with the terms of this Agreement does not and will not conflict with, violate the terms of, or constitute a breach of any agreement or understanding to which such Member is a party or to which it may otherwise be bound. (r) Remedies. The Members recognize that irreparable injury will result to the Company or the other Members, as the case may be, and, their respective business and property, in the event of a breach by a Member of any of the provisions of this Agreement and that the issuance of Units by the Company to the Members is undertaken in reliance, among other matters, upon the covenants by the Members as herein set forth. Accordingly, in the event of a breach or threatened breach by a Member of any of the provisions of this Agreement, the Company or the other Members, as the case may be, shall be authorized and entitled to seek from any court of competent jurisdiction, preliminary and/or final injunctive relief as well as any equitable accounting of all profits, compensation or benefits arising out of such violation and any damages for the breach of this Agreement which may be applicable. In addition, the Company or the other Members, as the case may be, shall be entitled to recover all court costs, reasonable attorneys’ fees and other expenses from the breaching Member. The aforesaid remedies shall be independent, severable and cumulative and shall be in addition to any other rights and remedies to which the Company or the other Members, as the case may be, may be entitled. All of the covenants of the Members set forth in such Section shall be construed as agreements independent of any other provision of this Agreement and shall survive the termination of this Agreement; and the existence of any claim or cause of action against the Company or the other Members, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company or the other Members, as the case may be, of such covenants. (s) Deadlock. (i) For purposes of this Section, the term “Major Decision” shall mean any action (or election not to act) by or on behalf of the Company which, pursuant to the provisions of this Agreement, requires the approval of all or a majority of the Members, and which may have, or which may be anticipated to have, a material effect on the business and operation of the Company. (ii) In the event the voting rights of the Members are evenly divided with respect to a Major Decision and the Members are unable to reach an agreement, then a legal or financial advisor of the Company, as agreed upon by all the Members, shall try to mediate the situation, however, if no agreement can be reached within fifteen (15) days after the commencement of mediation between the parties or the parties cannot mutually agree upon a legal or financial advisor to mediate the situation, then in such an event, a deadlock (the “Deadlock”) shall be deemed to exist. (iii) At any time after the occurrence of a Deadlock and prior to a resolution thereof among the Members, either Member (the “Proposing Member”) may, give written notice to the other Member (the “Offering Notice”), based upon an offering price, determined by the Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 14 of 53 PageID: 509 15 Stipulation of Value (as defined in Section 8(c) herein), (“Deadlock Price”) at which the Proposing Member is willing to either (i) sell to the other Member all of the Proposing Member’s Units or (ii) purchase from the other Member all of the other Member’s Units. The other Member shall have a period of fifteen (15) days after delivery of the Offering Notice in which to elect, by written notice to the Proposing Member (the “Response Notice”) to either (i) counteroffer for the purchase of all of the Units of the Proposing Member at the applicable Deadlock Price, or such other purchase price, (“Counteroffer Member”) or (ii) sell all of its Units to the Proposing Member at the applicable Deadlock Price. The Counteroffer Member and Proposing Member shall be collectively referred to as the Offering Member. The failure of the other Member to respond within 15 days to a Response Notice or the Counteroffer Member’s counteroffer, as applicable, shall constitute such Member’s election to sell all of its Units to the Offering Member at the applicable Deadlock Price. (iv) The parties agree to use commercially reasonable efforts to consummate such transaction within 120 days following: (i) acceptance by the other Member of the Proposing Member’s offer, (ii) the end of the 15 day period for the other Member to respond to the Offering Party’s offer or counteroffer or (iii) acceptance of the counteroffer by the Proposing Member of the Counteroffer Member’s offer to purchase the Proposing Member’s Units. At closing, at least fifty percent (50%) of the purchase price for the Units being sold shall be payable in cash. The balance of the purchase price shall be paid pursuant to a promissory note in equal quarterly payments of principal and interest over a five (5) year period at a rate of five percent (5%) per annum (the “Promissory Note”). 6. Financial and Tax Matters. (a) Fiscal Year & Yearly Budget. The fiscal year of the Company shall begin on January 1st and end on December 31st. The Members shall vote on and approve the annual budget for the Company prior to each Fiscal Year. (b) Books and Records. SIMRAN SERVICES LLC, or any of its members, shall cause the Company to keep complete and accurate books of account and other necessary financial, accounting and tax records on a cash basis and otherwise in accordance with generally accepted accounting principles (GAAP), consistently applied and applicable law. (c) Financial Reports. SIMRAN SERVICES LLC, or any of its members, shall maintain current and accurate records of the Company’s financial condition and reports shall be made available on no less than a monthly basis to the Members. (d) Interim Financial Reports. SIMRAN SERVICES LLC, or any of its members, shall furnish balance sheets and income statements showing the financial condition and results of operations of the Company within ninety (90) days following the end of each fiscal year. (e) Bank Accounts. Funds of the Company shall be deposited in the Company’s name in one or more bank accounts approved by the Management Committee. Each of the Managers is authorized to sign checks on behalf of the Company, provided, however, that any check in the amount of seven thousand five hundred ($7,500.00) dollars or more will require signatures of two (2) of the Managers. The Managers shall maintain possession of Company Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 15 of 53 PageID: 510 16 checkbooks and credit cards and shall be responsible for the day-to-day handling of financial matters for the Company. (f) Tax Matters. (i) Federal, state and local income tax returns of the Company and its Members shall be prepared, at the Company’s expense, by an accounting firm or accountant selected by the Members, and furnished to each Member on or prior to the statutory date for filing, subject to extensions permitted by law. The proportionate part of each item of income, gain, loss, deduction or credit earned, realized or available by or to the Company shall be allocated to the Members in accordance with Section 4(d); (ii) Organization expenses shall be amortized over the first sixty (60) months of the term of the Company as permitted under Code Section 709. Tax decisions and elections for the Company not specified in this Agreement must be approved by a majority of the Members; (iii) Prompt notice shall be given to each Member upon receipt of advice that the Internal Revenue Service (“IRS”) intends to examine the Company’s income tax returns for any year; and (iv) Tax Matters Member. (1) the Management Committee is hereby designated as the “Tax Matters Member” of the Company for purposes of Code Section 6231(a)(7) and shall have the power to manage and control, on behalf of the Company, any administrative proceeding at the Company level with the IRS relating to the determination of any item of Company income, gain, loss, deduction or credit for federal income tax purposes. (2) The Tax Matters Member shall, within ten (10) days of the receipt of any notice from the IRS in any administrative proceeding at the Company level relating to the determination of any Company item of income, gain, loss, deduction or credit, mail a copy of such notice to each Member. (3) The Members, by the vote of a majority-in-interest, may at any time hereafter designate a new Tax Matters Member; provided, however, that only a Member may be designated as the Tax Matters Member of the Company. 7. Sale or Transfer of Member Interest. (a) Except as otherwise set forth in this Agreement, no Member may in any other way, directly or indirectly, sell, transfer, pledge, hypothecate, encumber, assign, exchange, donate, make a gift of or otherwise dispose of (“Transfer”) its Units without the consent of all the Members. (b) Third persons. Subject to the following rights of the other Members, a Member shall be permitted to sell all or a portion of its Units to an unaffiliated third person Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 16 of 53 PageID: 511 17 (“Proposed Transferee”), provided that said third person agrees to be bound by and become a signatory to this Agreement: (i) Right of First Refusal. If a Member (“Seller”) proposes to Transfer all or any portion of its Units (the “Offered Units”) to a Proposed Transferee, it shall first provide the Members, on a pro rata basis, and, second, to the Company, with a right of first refusal, by providing first to the Members, then to the Company written notice (“Offer Notice”), to acquire the Seller’s Units at a price equal to the consideration that Seller would receive in exchange for the Offered Units (the “First Refusal Price”), provided, that payment of the First Refusal Price by the Members(s) or the Company shall be made, at the option of the Member(s) or the Company, either by: (A) payment consistent with the terms and conditions made by the Proposed Transferee, or (B) pursuant to the terms of the Promissory Note. Interest on the Promissory Note shall accrue at the simple rate of five percent (5%) per annum. The Members, on a pro rata basis, shall have thirty (30) days after receipt of the Offer Notice to elect to purchase the Seller’s Units and, in the event none of the Members so elect, the Company shall have thirty (30) days upon the expiration thereof to elect to purchase the Seller’s Units. In the event any payment due pursuant to the Promissory Note would cause the Company to become insolvent or otherwise unable to pay its obligations when due, then the Company can defer such payment until such time as the Company can make the payment, which shall extend the payment period thereunder by the number of deferred payments; and (ii) Right of Co-Sale. (1) If neither the Company nor the remaining Members elect(s) to exercise their rights set forth in Section 7(b)(i) above, then the remaining Members shall have the right to sell to the Proposed Transferee (a “Co-Sale”), at the same price and on the same terms and conditions as involved in such sale, such Units (“Co-Sale Units”) shall equal (i) the number of Offered Units multiplied by (ii) a fraction, the numerator of which is the number of Units held by the remaining Members, and the denominator of which is the sum of the total number of Units at the time owned by the Seller and the remaining Members; (2) The Seller and the remaining Members, if they desire to sell their Units (the “Co-Sale Members”) to the Proposed Transferee, may sell to the Proposed Transferee (allocated in accordance with Section 7(b)(ii)(1)) an aggregate amount of Units not less than the total number of Offered Units, at a price not less than the Offer Price and upon other terms and conditions, if any, not more favorable to the Proposed Transferee than those provided in the Offer Notice; provided, however, that any purchase of less than all of the Offered Units by the Proposed Transferee shall be made from the Selling Member and the Co-Sale Members pro rata based upon the relative amount of the Units that the Seller and the Co-Sale Members are otherwise entitled to sell pursuant to Section 7(b)(i); (3) If a Co-Sale Member decides to exercise its Co-Sale rights under Section 7(b)(ii) to sell all or any part of the Units permitted to be sold in connection with such Co-Sale, it shall notify the Seller in writing within thirty (30) days of the Offer Notice (a “Co-Sale Notification”) of its election to exercise such Co-Sale rights, which notice shall state the number of Units it desires to sell. The Co-Sale Notification shall, when taken in conjunction with the Offer, be deemed to constitute a valid, legally binding and enforceable agreement for the sale by the Seller and each Co-Sale Members to the Proposed Transferee. The Co-Sale of the Units to be sold Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 17 of 53 PageID: 512 18 pursuant to this Section shall be made at the offices of the Company, or at such other place mutually acceptable to the Seller and the Co-Sale Member on the forty-fifth (45th) day following the date of the Offer Notice (or if such forty-fifth (45th) day is not a business day, then on the next succeeding business day); (4) The fees, costs and expenses incurred in connection with the sale of any Units sold pursuant to Section 7(b)(ii) above shall be borne ratably by the Co-Sale Members (including the Seller) participating in such sale, provided, that each such Member shall be responsible for the fees and disbursements of its own legal counsel in connection with such sale; and (5) Any Offered Units not sold pursuant to the provisions of Section 7(b)(ii) above shall again be subject to the restrictions contained in this Agreement and shall not thereafter be sold, pledged or transferred, except in compliance with the applicable provisions of this Agreement. (c) Transfers to Family Members. Notwithstanding the foregoing terms and restrictions set forth in this Section, any Member shall be permitted to transfer all or part of its Units to an immediate family member or a related entity without approval of the non-transferring Member. For purposes of this Agreement, the term “immediate family member” shall mean spouse, sibling or child. In such case, the immediate family member transferee shall have no voting rights in the Company, unless agreed to by unanimous vote of the remaining Members. 8. Dissociation of a Member. (a) Dissociation. A Member shall cease to be a Member upon the earliest to occur of any of the following events (a “Dissociation”): (i) the bankruptcy, insolvency, or assignment for the benefit of creditors, of a Member; or (ii) the death, disability (as defined herein) or termination of services of a Member as set forth in Section 10. (b) Rights of Dissociating Member. In the event any Member dissociates prior to the expiration of the term of the Company, then: (i) if the Dissociation causes a dissolution and winding up of the Company under Section 12, the dissociating Member shall be entitled to participate in the winding up of the Company to the same extent as any other Member, except that any distributions to which the Member would have been entitled shall be reduced by the direct expenses sustained (including reasonable attorneys’ fees, accounting costs, and etc.) by the Company; or (ii) if the Dissociation does not cause a dissolution and winding up of the Company under Section 12, the dissociating Member shall, in exchange for such Member’s Units, be entitled to receive the Stipulation of Value (as defined below) paid pursuant to the Promissory Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 18 of 53 PageID: 513 19 Note. The dissociating Member shall be required to tender such Member’s Units within fifteen (15) days of the disassociating event. (c) Stipulation of Value. Each affected Member and the Management Committee shall choose three (3) independent third party appraisers, unless agreed to otherwise, to determine the “fair value” of the Units (“Stipulation of Value”). The Stipulation of Value shall be determined by averaging the fair value determined by each appraiser. The Company shall bear the cost of hiring the appraisers to determine the Stipulation of Value. The Stipulation of Value per Unit shall be determined by taking the total number of Units issued to all of the Members and dividing it by the Stipulation of Value (“Per Unit Stipulation of Value”). Each Member’s Stipulation of Value shall be determined by multiplying the total number of Units held by such Member by the Per Unit Stipulation of Value. 9. Death, Disability of a Member. (a) Purchase of Insurance Policies. The Company may purchase life insurance policies on the Members for the purchase by the Company of a Member’s Units as set forth below. In addition, upon the Members becoming eligible for disability insurance, the Company may purchase disability insurance policies on the Members. The proceeds of such insurance policies shall be used to fund the purchase of a Member’s Units upon death or disability of a Member by the Company. (b) Buy-out of Deceased Member’s Units. (i) Member Purchase. In the event of the death of a Member, the other Members shall have the first right, but not the obligation, to purchase, on a pro rata basis, such Member’s Units for an amount equal to the Member’s portion of the Stipulation of Value. In the event the other Members do not purchase the Units hereunder within 60 days of the death of such Member, then the Company shall have the right to purchase the Units in accordance with Section 9(b)(ii). The balance due for the purchase of such Units by the Members shall be paid pursuant to a Promissory Note. (ii) Company Purchase. In the event of the death of a Member and the Members do not purchase such Member’s Units, the Company shall have the right, but not the obligation, to purchase such Member’s Units. Upon the purchase of the Units, the amount due to such Member or such deceased Member’s estate or legal representative shall be its portion of the Stipulation of Value. The proceeds from the life insurance policies referenced in Section 9(a) above shall be used by the Company to purchase such Member’s Units. In the event the proceeds from such life insurance policies, if any, exceed the repurchase price of such Member’s Units, the excess proceeds shall be paid over to the Company. In the event the proceeds from the life insurance policies, if any, are insufficient to fully fund the purchase of such Member’s Units in the Company, then the balance remaining due for the purchase of such Member’s Units shall be paid by the Company pursuant to the Promissory Note. In the event any payment due pursuant to the Promissory Note would cause the Company to become insolvent or otherwise cannot pay its obligations when due, then the Company can defer such payment until such time as the Company Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 19 of 53 PageID: 514 20 can make the payment, which shall extend the payment period thereunder by the number of deferred payments. (c) Buy-Out of Member’s Interest on Disability. (i) Member Purchase. In the event of the Disability (as defined below) of a Member, the disabled Member shall have the right to offer the remaining Members the right to purchase, on a pro rata basis, such disabled Member’s Units for an amount equal to the Member’s portion of the Stipulation of Value. Payment for such Units by the Members shall be paid pursuant to a Promissory Note. In the event the other Members do not purchase the Units hereunder within 60 days of the disabled Member’s offer to purchase, then the Company shall have the right to purchase the Units in accordance with Section 9(c)(ii). (ii) Company Purchase. In the event of the Disability of a Member, and the remaining Members do not elect to purchase the disabled Member’s Units pursuant to Section 9(c)(ii) above, the Company shall purchase the vested Units held by such Member for an amount equal to its portion of the Stipulation of Value. In the event the proceeds from such disability insurance policies referenced in Section 9(a), if any, exceed the repurchase price of such Member’s Units, the excess proceeds shall be paid over to the Company. In the event the proceeds from the disability insurance policies, if any, are insufficient to fully fund the purchase of such Member’s Units in the Company, then the balance remaining due for the purchase of such Member’s Units shall be paid by the Company pursuant to the Promissory Note. In the event any payment due pursuant to the Promissory Note would cause the Company to become insolvent or otherwise cannot pay its obligations when due, then the Company can defer such payment until such time as the Company can make the payment, which shall extend the payment period thereunder by the number of deferred payments. “Disability” shall mean (i) a disability as a result of illness, accident or other physical or mental incapacity or disability, such that the Member shall be unable to perform its duties hereunder, with or without reasonable accommodation, for a period of one hundred eighty (180) consecutive calendar days or, (ii) in the event disability insurance has been purchased by the Company, in accordance with the determination made by the physician selected by the provider of the disability insurance, or (iii) if a legal guardian is appointed by a court for a Member due to mental or physical disability. 10. Termination. This Agreement shall be deemed terminated and of no further force and effect in the event if any of the following events shall occur: (a) the sale, exchange or other disposition by the Company of all or substantially all of the Company’s assets; or (b) the agreement of all the Members to terminate this Agreement and dissolve the Company. In the event any one of the foregoing events shall occur, the assets owned by the Company shall be dealt with as set forth in Section 12, below. Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 20 of 53 PageID: 515 21 11. Members’ Liability and other Activities. Neither the Company nor any Member shall be responsible or liable for any indebtedness or other obligation or liability of the other Members incurred or arising either before or after the execution of this Agreement except as otherwise indicated herein. This Agreement shall not be deemed to create a relationship between the Members with respect to any activities whatsoever other than activities within the scope and business purposes and activities of the Company and the Members described in this Agreement. Any Member that takes any action not authorized by or under this Agreement shall be responsible to, and shall indemnify and hold harmless, the other Members for and against liabilities or expenses of any nature arising out of, or resulting from, such unauthorized action. 12. Dissolution. (a) Authority Following Dissolution. When the term of the Company has ended pursuant to this Agreement, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its remaining assets and satisfying the claims of its creditors and the Members. No Member shall take any action that is inconsistent with winding up the Company’s business and affairs. The Members shall be responsible for overseeing the winding up and liquidation of the Company. (b) Capital Accounts on Liquidation. If the Company is “liquidated” within the meaning of Regulation Section 1.704-1(b)(2)(ii)(g), distributions shall be made pursuant to this Section to the Members who have positive capital accounts in compliance with Regulation Section 1.704-1(b)(2)(ii)(b)(2). (c) Application and Distribution Upon Liquidation. After the Company shall have been liquidated, the cash proceeds therefrom, to the extent sufficient, shall be applied and distributed in the following order: (i) First, to the payment and discharge of all of the Company’s debts and liabilities to third parties which are guaranteed by the Members; (ii) Second, to the Members that guaranteed the Company’s debts and liabilities to third parties and upon which any Member was required to make payment to said third party, plus interest at the simple rate of five (5%) percent per annum, from the date the payment was made by the Member until the date the Member is repaid in full. No other distributions of cash or assets shall be made to any other Members, for any purpose whatsoever, until all Members subject to this Section are repaid in full. In the event this Section is applicable to multiple Members at the same time, then the distributions shall be made to such Members in accordance with their Units; (iii) Third, to the payment and discharge of all of the Company’s debts and liabilities to the Members, including Default Loans; (iv) Fourth, to the Members, to the extent of their respective capital accounts; and Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 21 of 53 PageID: 516 22 (v) Fifth, the balance, if any, to the Members in accordance with their Units. (d) Completion of Liquidation. Upon request, each Member shall sign and, if necessary, file or publish any document necessary to terminate the Company or to complete the winding up of its business activities. 13. Indemnification. The following indemnification provisions shall apply: (a) Indemnification by Breaching Member. Each Member shall indemnify, defend and hold harmless the other Members and the Company from and against any and all claims, demands, losses, damages, liabilities, lawsuits and other proceedings, judgments and awards, and costs and expenses (including but not limited to reasonable attorneys’ fees and disbursements) relating to or arising out of, directly or indirectly and in whole or in part, the indemnifying Member’s breach of this Agreement or any activity or liability of such Member (i) not within the scope or purpose of the Company or this Agreement; (ii) for acts of fraud, gross negligence, dishonesty or intentional breach of this Agreement by a Member; or (iii) prior to the beginning of the term of the Company. (b) Indemnification as to Personally Guaranteed Debts. In the event that any debt incurred on behalf of the Company and which was personally guaranteed by a Member (“Guaranteeing Member”) is called into default or is otherwise sought to be collected or enforced against the Guaranteeing Member, then in such event each of the other Members agree that they shall personally indemnify and hold harmless the Guaranteeing Member to the extent of their respective Units as applied against the aggregate amount sought to be collected or enforced against the Guaranteeing Member. This Section and each Member’s personal obligation hereunder shall survive the termination or dissolution of the Company. 14. Notices. All notices, demands and communications required or provided for in this Agreement shall be in writing and shall be delivered personally or sent by facsimile or overnight mail to each Member at its address set forth on Schedule A of this Agreement. Each Member may designate in writing another address for purposes of this Section. Notice shall be effective when delivered or sent as aforesaid. 15. General Provisions. (a) This Agreement constitutes the entire agreement and understanding of the Members with respect to the matters covered hereby and shall supersede all previous written, oral or implied agreements, representations, statements, promises and understandings between them with respect to such matters. (b) This Agreement may not be amended or changed except by an agreement in writing executed by all the Members. Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 22 of 53 PageID: 517 23 (c) This Agreement shall be binding upon, and inure to the benefit of, the parties to this Agreement and their permitted successors and assigns. (d) The validity, interpretation and enforcement of this Agreement shall be governed by the laws of the State of New Jersey, without regard to its conflicts of law principles. (e) If any provision in this Agreement shall be determined by a court of competent jurisdiction to be invalid or unenforceable, such provision shall be enforced to the extent it can be so enforced and such determination shall not affect the remaining provisions of this Agreement, all of which shall remain in full force and effect. (f) The failure of any Member to enforce at any time any of the provisions of this Agreement shall not be construed to be a waiver of any such provision or of any other provision, nor in any way affect the validity of this Agreement or the right of any Member to enforce each and every such provision in the future. No waiver of any breach of this Agreement shall be held to be a waiver of any other or subsequent breach. Any party may, at its option, waive any provision of this Agreement provided such waiver is in writing. (g) The rights and remedies of the Members set forth in this Agreement are not exclusive and each Member shall be entitled to all rights and remedies available to such Member under applicable legal or equitable principles. (h) The headings of the Sections in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. (i) Any written consent or written notice contemplated by this Agreement may be provided by email to the recipient’s email account with the Company or such other email account as the recipient shall designate. (j) When used herein, the masculine gender includes the feminine and neuter genders, and the singular includes the plural, as the context requires. (k) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original against any party who signed such counterpart, but all of which together shall constitute one and the same instrument. In the event that any signature is delivered by facsimile transmission or via pdf, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile or pdf signature were the original thereof. 16. Representation; Waiver and Indemnification. All the parties hereto acknowledge their knowledge of, understanding of, and agreement to, the fact that the Company has been represented by the law firm of Paris Ackerman & Schmierer LLP with respect to this Agreement. All of the parties further acknowledge that Paris Ackerman & Schmierer LLP has in the past and continues to represent some of the Members of the Company. The parties understand and accept responsibility for the fact that they have substantial conflicting interests. They have been advised by Paris Ackerman & Schmierer LLP of their right to and need for independent counsel and with Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 23 of 53 PageID: 518 Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 24 of 53 PageID: 519 Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 25 of 53 PageID: 520 26 GOURMET FOOD MERCHANT LLC SCHEDULE A to OPERATING AGREEMENT Member’s Name and Address Membership Units Percentage Interest Capital Contributions Compensation Raja Jhanjee 34 Ramkey Drive Fairfield, NJ 07004 25 25% $25,000 Subject to Section 4 (f) of this Agreement Vicky Vij 5, Ramkey Drive Fairfield, NJ 07004 25 25% $25,000 Subject to Section 4 (f) of this Agreement Bachan Rawat 9001 86th Street Hollis, NY 11423 5 5% $5,000 Subject to Section 4 (f) of this Agreement Vikram Gupta 46, Terrace Avenue Nutley, NJ 07110 10 10% $10,000 Subject to Section 4 (f) of this Agreement Tirun Gopal 1742, Central Park Orefield, PA 18069 10 10% $10,000 Subject to Section 4 (f) of this Agreement SIMRAN SERVICES, LLC 16 Cornwall Road Glen Rock, NJ 07452 25 25% $25,000 Subject to Section 4 (f) of this Agreement Total 100 100% $100,000.00 Subject to Section 4 (f) of this Agreement Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 26 of 53 PageID: 521 1 WESTFIELD REALTY HOLDING, LIMITED LIABILITY COMPANY OPERATING AGREEMENT This LIMITED LIABILITY COMPANY OPERATING AGREEMENT, dated as of May 7, 2013 (the “Agreement”), by and among WESTFIELD REALTY HOLDING, LIMITED LIABILITY COMPANY, a New Jersey limited liability company (the “Company”), SIMRAN SERVICES LLC, a New Jersey limited liability company, VICKY VIJ, RAJA JHANJEE, TIRUN GOPAL, VIKRAM GUPTA and BACHAN RAWAT (each a “Member,” and collectively, the “Members”). WHEREAS, the Members and the Company hereto deem it in their best interests and in the best interests of the Company to set forth their respective rights and obligations in connection with their ownership of the Company; and NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein, the parties agree as follows: 1. Terms and Conditions (a) Organization. The Company has been formed as a limited liability company for the purposes and scope set forth in this Agreement. This Agreement shall govern the relationship between the Members and the Company as set forth herein. Each of the Members’ respective ownership interests in the Company shall be set forth on Schedule A, which is annexed hereto and incorporated by reference herein. The Company has been organized under the New Jersey Limited Liability Company Act, N.J.S.A. § 42:2C-1 et. seq., as amended or superseded, from time to time (the “LLC Act”). Except to the extent set forth in this Agreement, the rights, powers, duties, and obligations of the Company and of each Member shall be governed by the LLC Act and the Company shall be a partnership for income tax purposes. Each Member’s respective interest in the Company shall be personal property for all purposes. All real and personal property owned by the Company is deemed to be owned by the Company, and no Member individually will have any ownership rights with respect to such property. No new member may be admitted to the Company unless that action is expressly approved in accordance with this Agreement. (b) Name. The name of the Company shall be “WESTFIELD REALTY HOLDING, LIMITED LIABILITY COMPANY”. The business of the Company shall be under the Company name and all assets of the Company shall be held under the Company name. In addition to the foregoing, upon the affirmative vote of all the Members, the Company may file and operate under an alternative name. The principal place of business of the Company shall be located at 147 West Westfield Avenue, Roselle Park, New Jersey 07204, or at such other location as may be approved by the Members from time to time. (c) Certificate of Formation. On June 20, 2012, the Company caused to be filed with the Department of Treasury, Division of Revenue, of the State of New Jersey, on behalf of the Company, a Certificate of Formation in accordance with the LLC Act, and the Members shall execute such other documents and instruments and take such other actions as they deem necessary Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 27 of 53 PageID: 522 2 or appropriate to effectuate and permit the continued formation of the Company under the LLC Act or to conduct business in any jurisdiction. The Members shall from time to time, take appropriate action, including preparing and filing such amendments to the Certificate of Formation as may be required by the LLC Act. (d) Registered Agent and Office. The registered agent for the Company shall be the Company. The registered office of the Company shall be at such location as the Members may determine from time to time. 2. Term. The term of the Company shall commence on the date the Certificate of Formation was filed in the Division of Revenue of State of New Jersey and shall continue until the first of the following shall occur: (a) all or substantially all of the assets of the Company have been sold or transferred; (b) the Company is dissolved; or (c) this Agreement is terminated pursuant to Section 10, below. Except as permitted in this Agreement, each Member hereby agrees not to withdraw from the Company, assign its interest in the Company or take any voluntary action that would have such effect prior to the dissolution and winding up of the Company. 3. Scope and Purposes. The Company was formed: (i) to own and operate real property located at 147 West Westfield Avenue, Roselle Park, New Jersey 07204; or (ii) to engage in any other lawful acts or activities as are permitted for limited liability companies under the laws of the State of New Jersey and that are necessary or desirable for conducting the Business of the Company as may be approved by all the Members. 4. Ownership, Capital, Financing, Distributions, Allocations, Member Services, and Competition. (a) Ownership. A Member’s ownership interest in the Company shall be represented by units of membership interest (“Units”). Each Member hereby agrees that its interest in the Company and in their Units shall for all purposes be personal property. A Unit holder shall have no interest in specific Company property. The total number of authorized Units shall be one hundred (100). Each Unit issued shall represent that percentage of ownership in the Company calculated by dividing the Unit by the total number of Units issued and outstanding. (b) Capital Accounts. A capital account shall be established and maintained for each Member. No interest shall be payable on a Member’s capital account. (i) Each Member’s capital account shall be credited with the dollar amount of: (1) the value of any cash or services contributed as capital by that Member to the Company from time to time; Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 28 of 53 PageID: 523 3 (2) the share of profits of the Company allocated to that Member; (3) any items in the nature of income or gain that are specially allocated to that Member pursuant to this Section; and (4) the fair market value of property contributed by such Member (net of any liabilities secured by such property that the Company assumed or takes subject to). (ii) Each Member’s capital account shall be debited by the dollar amount of: (1) the share of losses of the Company allocated to such Member or for which that Member is responsible pursuant to this Agreement; (2) cash distributed to that Member pursuant to any provision of this Agreement; (3) any items in the nature of expenses or losses that are specially allocated to that Member pursuant to this Section; and (4) the fair market value of any property distributed to such Member (net of liabilities secured by such property that the Member assumed or takes subject to). To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Section 734(b) or 743(b) of the Internal Revenue Code of 1986, as amended, (the “Code”), is required, pursuant to Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining capital accounts, the amount of such adjustment to the capital accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Members in a manner consistent with that in which their capital accounts are required to be adjusted pursuant to the treasury regulations promulgated under the Code (the “Regulations”). In cases where Code Section 704(c) would apply to the contribution of property to the Company, the Members’ capital accounts shall be adjusted as set forth in Regulation Section 1.704-1(b)(2)(iv)(g). In determining the amount of any liability for purposes of this Section, there shall be taken into account Code Section 752 and any other applicable provisions of the Code and Regulations thereunder. These provisions relating to the maintenance of capital accounts are intended to comply with Regulation Section 1.704-1(b), and shall be interpreted and applied in a manner consistent with that Regulation. If the Members determine that it is prudent to modify the manner in which the capital accounts, or any debits or credits thereto (including, without limitation, debits or credits relating to liabilities which are secured by contributed or distributed property or which are assumed by the Company or the Members) are computed to comply with that Regulations the Members may make Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 29 of 53 PageID: 524 4 such modification; provided that it is not likely to have a material effect on the amounts distributable to any Member pursuant to Section 12 hereof upon the dissolution of the Company. The Members also shall (i) make any adjustments that are necessary or appropriate to maintain equality between the capital accounts of the Members and the amount of Company capital reflected on the Company’s balance sheet, as computed for book purposes in accordance with Regulation Section 1.704-1(b)(2)(iv)(q), and (ii) make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Regulation Section 1.704-1(b). (c) Capital Contributions. (i) Generally. Members’ contributions to the Company may be cash, other property, and/or services rendered to the Company. If other than cash, the Members shall agree on the value, if any, to be attributed to the property or services contributed and how such contributions shall be treated by the Company. (ii) Capital Contributions. Each Member has contributed or shall contribute the capital contributions as set forth on Schedule A hereto. (iii) Additional Capital Contributions. Except for contributions made to the Company as of the date of this Agreement and except as otherwise required by the LLC Act or provided in a written subscription, contribution, purchase or other agreement between the Company and the relevant Member, no Member shall be required to make any additional capital contributions to the Company. Notwithstanding anything to the contrary contained herein, in the event that a majority of the Members determine in good faith that the Company requires additional capital to meet its financial or operational needs, or in furtherance of conducting the Business, and that additional needed funds cannot readily be obtained through borrowings by the Company from third- parties, the Management Committee shall make a written demand upon the other Members, who each shall be required within four (4) weeks of the receipt thereof to contribute, on a pro-rata basis, its share of the capital contribution demanded of them. In the event a Member fails or refuses to make the capital contribution when required, the other Members shall be entitled to contribute (the “Contributing Members”) the amount of the capital that the non-contributing Member (the “Defaulting Member”) failed to contribute, receiving in consideration Units proportionally equal to the amount contributed, thereby diluting the Defaulting Member's Units. (d) Allocation of Profits and Losses. All Company items of Profits and Losses shall be allocated in accordance with the applicable percentage as set forth next to the Member’s name on Schedule A and in accordance with this Section. In the event Members are admitted to the Company pursuant to this Agreement on different dates, the Profits or Losses allocated to the Members for each Fiscal Year during which Members are so admitted shall be allocated among the Members in accordance with the applicable percentage as set forth next to the Member’s name on Schedule A for the relevant period during such Fiscal Year in accordance with Code Section 706, using any convention permitted by law and selected by the Tax Matters Member (as defined below). Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 30 of 53 PageID: 525 5 Except as otherwise provided in this Agreement, all items of Company income, gain, loss, deduction and any other allocations not otherwise provided for shall be divided among the Members Units in the same proportions as they share Profits and Losses for the Fiscal Year in question. In accordance with Code Section 704(c) and the Regulations thereunder, income, gain, loss, and deduction (including depreciation) with respect to any property contributed to the capital of the Company by a Member shall, solely for tax purposes, be allocated among the Member(s) so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its Gross Asset Value at the time it was contributed to the Company. In the event the Gross Asset Value of any Company asset is adjusted pursuant to subsection (2) of the definition of “Gross Asset Value” in Section 4(d) below, subsequent allocations of income, gain, loss and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Gross Asset Value in the same manner as under Code Section 704(c) and the Regulations thereunder. To the extent that any allocation of income or gain made pursuant to this Agreement includes the allocation of an item of income or gain that is recaptured as ordinary income under Code Sections 1245 or 1250, such ordinary income shall be allocated to the Member(s) who received the allocation of the depreciation or cost recovery deductions that generated the ordinary income recapture in proportion to their shares of such deductions, provided that such allocation of ordinary income shall be limited to the amount of income or gain allocated to such Member for the period to which such allocation relates. No Member shall be allocated any item of Losses or deduction to the extent said allocation will cause or increase any deficit in said Member’s capital account as of the end of the tax year to which such allocation relates. In determining the above, a Member’s capital account shall be reduced for the items described in Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6). If any Member with a deficit in their capital account unexpectedly receives any adjustment, allocation or distribution described in Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6), then items of income and gain shall be specially allocated to such Member in an amount and manner sufficient to eliminate the deficit in said Member’s capital account created by such adjustment, allocation, or distribution as quickly as possible. In the event any Member has a deficit in their capital account at the end of any tax year that is in excess of the sum of (i) the amount such Member is obligated to restore and (ii) the amount such Member is deemed to be obligated to restore pursuant to the penultimate sentence of Regulation Section 1.704(b)(4)(iv)(f), each such Member shall be specially allocated items of income and gain in the amount of such excess as quickly as possible. For purposes of this Section 4(d), the following definitions shall apply: (i) “Gross Asset Value” means, with respect to any asset, such asset’s adjusted basis for federal income tax purposes, except as follows: (1) the initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset, as agreed to by the contributing Member and the other Members; Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 31 of 53 PageID: 526 6 (2) the Gross Asset Value of all Company assets shall be adjusted to equal their respective gross fair market values, as determined by the Company, as of the following times: (i) the acquisition of any additional Units in the Company by any existing Member or additional Member in exchange for more than a de minimis capital contribution; or (ii) the distribution by the Company to a Member of more than a de minimis amount of Company assets as consideration for an interest in the Company; and (3) the Gross Asset Value of any Company asset distributed to any Member shall be the gross fair market value of such asset on the date of distribution, as determined by the Members. If the Gross Asset Value of an asset has been determined or adjusted pursuant to subsection (1) or subsection (2) immediately above, such Gross Asset Value shall thereafter be adjusted by the depreciation taken into account with respect to such asset for purposes of computing Profits and Losses. (ii) “Profits” and “Losses” means, for each Fiscal Year, an amount equal to the Company’s net taxable income or loss for such Fiscal Year, determined in accordance with Code Section 703(a) (but including in taxable income or loss, for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1), with the following adjustments: (1) any income of the Company exempt from federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this definition shall be added to such taxable income or loss; (2) any expenditures of the Company described in Code Section 705(a)(2)(B) (or treated as expenditures described in Code Section 705(a)(2)(B) pursuant to Regulation Section 1.704-1(b)(2)(iv)(i)) and not otherwise taken into account in computing Profits or Losses pursuant to this definition shall be subtracted from such taxable income or loss; (3) in the event the Gross Asset Value of any Company asset is adjusted in accordance with subsection (2) or subsection (3) of the definition of “Gross Asset Value” above, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Profits or Losses; (4) gain or loss resulting from any disposition of any asset of the Company with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the asset disposed of, notwithstanding that the adjusted tax basis of such asset differs from its Gross Asset Value; (5) in lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account depreciation for such Fiscal Year or other period, computed in accordance with the definition of “Depreciation” above; and (6) notwithstanding any other provision of this definition, any items which are specially allocated pursuant to this Section shall not be taken into account in computing Profit or Loss. (e) Member Expenses. A Member shall be reimbursed for all ordinary and reasonable expenses incurred in the performance of its services on behalf of the Company, however, any expenses shall be pre-approved by the Members. The Members shall submit an Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 32 of 53 PageID: 527 7 expense report to the Company on a monthly basis, on or before the end of each month. Any expenses which are not documented or which were not pre-approved shall not be reimbursable. (f) Member Compensation. The compensation of each Member, if any, shall be as set forth next to such Member’s name on Schedule A. Member compensation may be increased or decreased by the vote of all the Members. Except as agreed to by the Members, no Member shall be entitled to receive a salary or other compensation for the services each such Member is to provide to the Company hereunder, excepting the distributions permitted by this Agreement, (g) Distributions. Except as provided in this Agreement, distributions of Net Cash Flow (as defined below) or other assets of the Company shall be made on an annual basis for the first two (2) years in which the Company begins its Business operations and then every six (6) months thereafter in such amounts as shall be determined by the Management Committee, as defined in Section 5 below, and shall be distributed to the Members in proportion to the number of Units held by each Member. For purposes of this Section 4(g), the term “Net Cash Flow” means, for each Fiscal Year or other period of the Company, the gross cash receipts of the Company from all sources, but excluding any amounts such as gross receipts taxes that are held by the Company as a collection agent or in trust for others or that are otherwise not unconditionally available to the Company, less all amounts paid by or for the account of the Company during the same Fiscal Year or other period (“Payments on Account”) and less any amounts determined by the Members to be necessary to provide a reasonable reserve for working capital needs or any other contingencies of the Company. Net Cash Flow shall be determined in accordance with the cash receipts and disbursements method of accounting and otherwise in accordance with generally accepted accounting principles, consistently applied. Net Cash Flow shall not be reduced by depreciation, amortization, cost recovery deductions, depletion, similar allowances or other non-cash items, but shall be increased by any reduction of reserves previously established. Payments on Account shall be made according to the following priority: (i) First, (a) Operating Expenses incurred in the ordinary course of business. The term “Operating Expenses” as used herein shall be limited to the following expenses, incurred in the ordinary course of business, and determined in accordance with generally accepted accounting principles: cost of goods sold, overhead (which may include, but not necessarily be limited to (as applicable): rent, utilities (including telecommunication charges, website hosting expenses, electricity, etc.), storage costs, shipping costs, salaries of employees, marketing and promotional expenses, taxes, employee salaries, and any other expenses incurred by the Company which were pre-approved by the Management Committee in accordance with this Agreement; and (b) any current installment due for any debt payment to any institution, private lender or third party in accordance with such debt’s terms. In addition to the foregoing, not more than once in any calendar year, the Management Committee shall vote, subject to sixty-five (65%) percent approval, on whether any additional debt or mortgage payments shall be made. In the event of an affirmative vote by the Management Committee, an additional payment shall be made, but such payment shall not exceed twenty-five (25%) percent of Net Cash Flow. (ii) Second, after payment of the preceding amounts, to establish or increase a cash reserve of one hundred thousand ($100,000.00) dollars, to meet anticipated and/or Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 33 of 53 PageID: 528 8 contingent Company obligations and/or accrued expenses; (iii) Third, after payment of the preceding amounts, in the event the Company has not made the payment of any installment due to any institution, private lender, vendor or third party for which a Member has provided a personal guarantee, and said institution, etc., has required the Member providing such personal guarantee to pay the outstanding installment, the Company shall make payment to such Member in the amount paid by said Member, plus simple interest at the per annum rate of ten percent (10%), from the date the installment was paid by the Member until the date the Member is repaid in full. Notwithstanding anything to the contrary, no distributions of cash or assets shall be made to any Members, for any purpose whatsoever, until all Members to which this Section is applicable are repaid in full. In the event this Section is applicable to multiple Members at the same time, then the distributions shall be made to such Members in proportion to the number of Units held by each. (iv) Fourth, after payment of the preceding amounts, the Members shall make distributions from Net Cash Flow for the Company to make annual cash distributions to the Members on or before April 15 of each year following a year (the “Prior Year”) with respect to which the Company had Taxable Income (as defined below) and such Taxable Income was allocated to the Members in any year, in an amount at least equal to each Member’s Interest in the Company multiplied by the product of (x) the sum of the highest marginal federal income tax rate and the highest effective State Tax Rate (as defined below) applicable to individuals with respect to income earned during the Prior Year multiplied by (y) the amount of the Company’s Taxable Income for the Prior Year. For purposes of this Agreement, the Company’s “Taxable Income” shall mean, with respect to any year, its gross income for that year minus all deductions allowed for that year and the “Highest Effective State Tax Rate” shall mean, with respect to any year, the highest marginal State income tax rate applicable to individuals for that year multiplied by the excess of 100% over the highest marginal federal income tax rate applicable to individuals for that year. (v) Fifth, after payment of the preceding amounts, the Company shall return any remaining capital contributions of cash and loans made by the Members to the Company, pro rata to their respective loans. (vi) Sixth, after payment of the preceding amounts, the Company shall make distributions to the Members’ in accordance with their pro-rata share of Units. 5. Management; Members. (a) Management of Company. The management of the Company shall be vested in the committee of Managers (the “Management Committee”). Each member of the Management Committee shall be a Member (or an Affiliate (as hereinafter defined) thereof) of the Company. The number of Managers on the Management Committee shall be no less than two (2), unless the Members provide otherwise. The initial Managers of the Company shall VICKY VIJ, RAJA JHANJEE, MANDEEP OBEROI and NARINDERPAL NARULA. Each Manager shall serve in such capacity until he resigns, is removed for “Cause,” as set forth below, or by an affirmative vote of sixty-five (65%) percent of the Units entitled to vote. The Management Committee shall meet and confer as required to conduct the business and affairs of the Company. Each Manager shall devote such time to the Company affairs as he shall determine is reasonably necessary for the conduct of such affairs. Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 34 of 53 PageID: 529 9 (b) Manner of Acting by Managers. Each Manager shall have one (1) vote. Except as otherwise provided in this Agreement, the Management Committee shall act by the affirmative vote of a majority of all of the members of the Management Committee. Once an action is approved by the Management Committee, then any Manager, acting alone, may execute any documents necessary or desirable to effectuate such action and any person conducting business with the Company shall be entitled to rely on the authority and signature of any Manager. Approval of seventy-five (75%) percent of the Management Committee shall be required to borrow money and to issue evidence of indebtedness in a singular or aggregate amount in excess of seventy-five thousand ($75,000.00) dollars or to secure any indebtedness of the Company by pledge or other lien of Company property. (c) Meetings of Managers. A meeting of the Management Committee may be called at any time by any Manager. Meetings of the Management Committee shall be held at the Company's principal place of business or at any other place approved by the Management Committee. Not less than two (2) nor more than thirty (30) days before each meeting, the person calling the meeting shall give written notice of the meeting to each Manager entitled to vote at the meeting. The notice shall state the time, place, and purpose of the meeting. Notwithstanding the foregoing provisions, each Manager who is entitled to notice waives notice if before or after the meeting the Manager signs a waiver of the notice which is filed with the records of Management Committee meetings, or is present at the meeting in person or by proxy. A Manager may vote either in person or by written proxy signed by the Member or by its duly authorized attorney in fact. (d) Action by Management Committee without a Meeting. Any action required or permitted to be taken at a meeting of the Management Committee may be taken without a meeting if the number of Managers sufficient to approve such action at a meeting where all the Managers were present shall consent in writing to such action and notice of such consent shall be given promptly to all Managers not consenting to such action. Action taken under this Section is effective when the number of Managers necessary to approve such action have signed the consent, unless the consent specifies a different effective date. The record date for determining Managers entitled to take action without a meeting shall be the date the first Managers signs a written consent. Such written consent or consents shall be filed in the Company’s minute book. (e) Meetings of Members. A meeting of the Members may be called at any time by the Management Committee or any Member. Meetings of Members shall be held at the Company's principal place of business or at any other place approved by the Members. Not less than two (2) nor more than thirty (30) days before each meeting, the person calling the meeting shall give written notice of the meeting to each Member entitled to vote at the meeting. The notice shall state the time, place, and purpose of the meeting. Notwithstanding the foregoing provisions, each Member who is entitled to notice waives notice if before or after the meeting the Member signs a waiver of the notice which is filed with the records of Members' meetings, or is present at the meeting in person or by proxy. A Member may vote either in person or by written proxy signed by the Member or by its duly authorized attorney in fact. (f) Manner of Acting by Members. The affirmative vote of a majority of the Units entitled to vote shall be the act of the Members, unless the vote of a greater or lesser proportion or number is otherwise required by the LLC Act, by the Certificate of Formation or by this Agreement. Each Member shall vote based on the number of Units owned. Unless otherwise Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 35 of 53 PageID: 530 10 expressly provided in this Agreement or required under applicable law, Members who have an interest (economic or otherwise) in the outcome of any particular matter upon which the Members vote or consent, may vote or consent upon any such matter and their Units, by vote or consent, as the case may be, shall be counted in the determination of whether the requisite matter was approved by the Members. (g) Action by Members without a Meeting. Any action required or permitted to be taken at a meeting of Members may be taken without a meeting if the number of Units sufficient to approve such action at a meeting where all the Members were present shall consent in writing to such action and notice of such consent shall be given promptly to all Members not consenting to such action. Action taken under this Section is effective when the number of Units necessary to approve such action have signed the consent, unless the consent specifies a different effective date. The record date for determining Members entitled to take action without a meeting shall be the date the first Member signs a written consent. Such written consent or consents shall be filed in the Company’s minute book. (h) Officers. The Members may, from time to time, designate and appoint one or more individuals as an officer of the Company (“Officer”). Any Officers so designated shall have such authority and perform such duties as the Members may, from time to time, delegate to them. The Members may assign titles to particular Officers. Unless the Members otherwise decide, if the title is one commonly used for officers of a business corporation, the assignment of such title shall constitute the delegation to such Officer of the authority and duties that are normally associated with that office. (i) President. The president shall be the chief executive officer of the Company. Subject to the provisions of this Agreement and to the direction of the Management Committee, he shall have the responsibility for the general management and control of the affairs and Business of the Company and shall perform all the duties and have all the powers which are delegated to him by the Management Committee. He shall have power to sign all contracts and other instruments of the Company which are authorized. He shall have general supervision and direction of all of the other officers and agents of the Corporation. VICKY VIJ shall serve as the initial president of the Company remain in such capacity until either (i) he resigns, (ii) is removed for “Cause,” as set forth below, (iii) is removed by an affirmative vote of sixty-five (65%) percent of the Units entitled to vote, or (iv) is removed by an affirmative vote of the Management Committee. (j) Employees. VICKY VIJ and RAJA JHANJEE shall have sole discretion to hire and terminate employees. They shall notify the Management Committee of all new hires and terminations within five (5) business days of each such event. The rights provided pursuant to this Paragraph can be terminated by the Management Committee. (k) Decisions requiring the Majority Consent of Members. A majority of Members must approve the following actions: (i) following the required approval of the Management Committee, to borrow money and to issue evidence of indebtedness in a singular or aggregate amount in excess of Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 36 of 53 PageID: 531 11 seventy-five thousand ($75,000.00) or to secure any indebtedness of the Company by pledge or other lien of Company property; (ii) the institution of any legal proceedings in the Company’s name or defense of any action instituted against it; the addition of any new Member, except in the case of the sale of a Member’s Units in accordance with Section 7 below; (iv) any merger in which the Members will own less than fifty (50%) percent of the voting equity of the surviving company; (v) to sell all or substantially all or any material assets of the Company; (vii) the dissolution of the Company; (viii) make capital expenditures or enter into, perform and carry out contracts, which impose an obligation upon the Company in an amount in excess of fifty thousand ($50,000) dollars, in the aggregate; (ix) issue or authorized any additional Units or classes of Units, whether or not authorized hereto or hereunder; (x) carry on any other business; and (xi) such other decisions as are so specified in this Agreement. Except as set forth above, the Management Committee shall make all decisions regarding the operations, business and affairs of the Company. (l) Exculpation of Members, Managers or Officers. In carrying out their duties hereunder, the Members, Managers and Officers, shall not be liable to the Company or to any other Member for their good faith actions, or failure to act, or for any errors of judgment, or for any act or omission believed in good faith to be within the scope of authority conferred by this Agreement. Actions or omissions taken in reliance upon the advice of legal counsel as being within the scope of authority conferred by this Agreement shall be conclusive evidence of such good faith; however, good faith may be determined without obtaining such advice. The Company does hereby indemnify and hold harmless the Members, Managers, Officers and their respective Affiliates and agents, trustees, officers, employees, partners, members and directors against and from any and all losses, claims, damages, liabilities, expenses (including legal fees and expenses), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative (together, “Claims”), in which the indemnified person may be involved, or threatened to be involved, as a party or otherwise by reason of their status as a Member, Manager, Officer or an Affiliate thereof, an agent, trustee, officer, employee, partner, member or director of such Member, Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 37 of 53 PageID: 532 12 Manager, Officer or an Affiliate thereof, or a person serving at the request of the Company in another entity in a similar capacity, which relates to or arises out of the Company, its property, business or affairs, regardless of whether the indemnified person continues to be a Member, Manager, Officer or an Affiliate thereof or its agent, trustee officer, employee, partner, member or director at the time any such liability or expense is paid or incurred, if (i) the indemnified person acted in good faith and in a manner it believed to be in or not opposed to the best interests of the Company, (ii) the indemnified person’s conduct did not constitute gross negligence or willful misconduct, (iii) in connection with any criminal action or proceeding, the indemnified person had no reasonable cause to believe their conduct was unlawful, and (iv) with respect to Claims by or in the right of the Company, the indemnified person is not adjudged to be negligent or liable for misconduct, unless a court determines that indemnification is nonetheless appropriate. Notwithstanding clauses (iii) and (iv) above, an indemnified person shall be eligible for indemnification hereunder to the extent it has been successful on the merits with respect to any Claim. In no event shall any Member be required to make an additional capital contribution to carry out this indemnification provision. For purposes of this Agreement, an “Affiliate” of any person means (i) any person directly or indirectly owning, controlling or holding the power to vote ten percent (10%) or more of the outstanding voting securities of the specified person; (ii) any person ten percent (10%) or more of whose outstanding voting securities is directly or indirectly owned, controlled or held with power to vote by the specified person; (iii) any person directly or indirectly controlling, controlled by, or under control with a specified person; (iv) any trustee, officer, partner, member or director of the specified person; or (v) any person of which the specified person is a trustee, officer, director or partner. (m) Removal of a Manager or Officer for Cause. A Manager or Officer may be removed by a majority vote of the remaining Members for “Cause.” For purposes of this Section, “Cause” shall be defined as the following conduct: (i) Misconduct as a Manager of the Company relating to the finances of the Company, including but not necessarily limited to, fraud, willful misappropriation or theft of funds or property of the Company, or embezzlement; (ii) Intentional or willful acts that subjects the Company to serious public disrespect, scandal, or ridicule, or that causes the Company to be in violation of governmental regulations that subjects the Company either to sanctions by governmental authority or to civil liability; (iii) Intentional disclosure or use of confidential information of the Company, other than as specifically authorized and required in the performance of a Manager’s duties; (iv) Breach of any provision of this Agreement which, if capable of cure, is not cured within thirty (30) days after written notice; or Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 38 of 53 PageID: 533 13 (v) Conviction of a felony or plea of guilty to a felony which subjects the Company to public disrespect, scandal, or ridicule, or the penalty for which will otherwise prohibit the Manager from exercising substantially all of his duties as a Manager for a period of greater than one (1) year. (n) Vacancies. Whenever there are not enough Managers serving on the Management Committee or there is no Officer in office, then the Members may elect a Manager(s) or Officer, as necessary. (o) Conflicts of Interest, Other Business. Subject to the other express provisions of this Agreement, each Member of the Company at any time and from time to time may engage in and possess interests in other business ventures of any and every type and description, independently or with others, except for business ventures in direct competition with the Company participated directly or indirectly by such Member. The foregoing restriction on competition shall survive for a period of two (2) years following any Member’s release of any Units in the company for any reason whatsoever. (p) Confidentiality. Each Member expressly acknowledges that such Member may receive confidential and proprietary information relating to the Company, including information relating to the Company’s financial condition and business plans, and that the disclosure of such confidential information to a third party would cause irreparable injury to the Company. Except with the prior written consent of the Company, no Member shall disclose any such information to a third party (other than on a “need to know” basis to any Affiliate or any employee, agent, representative or contractor of such Member or its Affiliates (each of whom shall agree to maintain the confidentiality of such information)), and each Member shall use reasonable efforts to preserve the confidentiality of such information. The obligations of a Member under this Section 5(p) shall survive the termination of this Agreement or cessation of a Member’s status as a Member and for a period of five (5) years thereafter. Information exchanged between Members shall be non-confidential unless exchanged pursuant to a separate confidentiality agreement executed between such Members. Notwithstanding the foregoing, a Member shall not be bound by the confidentiality obligations in this Section 5(p) with respect to any information that is currently or becomes: (a) required to be disclosed by such Member pursuant to applicable law, including federal or state securities laws, or court order (but in each case only to the extent of such requirement); (b) required to be disclosed in order to protect such Member’s interest in the Company or enforce such Member’s rights under this Agreement (but in each case only to the extent of such requirement and only after consultation with the Company); (c) publicly known or available in the absence of any improper or unlawful action on the part of such Member; or (d) known or available to such Member via legitimate means other than through or on behalf of the Company or the other Members. (q) No Conflicts. No Member shall disclose or use, during the course of its relationship with the Company, any confidential information which it may have acquired because of its engagement or relationship with any Person other than the Company, or otherwise, which confidential information is subject to restrictions on disclosure or use. Each of the Members represent and warrant that the acceptance of confidential information, the entering into a relationship with the Company and the other Members and the execution of and compliance with the terms of this Agreement does not and will not conflict with, violate the terms of, or constitute a Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 39 of 53 PageID: 534 14 breach of any agreement or understanding to which such Member is a party or to which it may otherwise be bound. (r) Remedies. The Members recognize that irreparable injury will result to the Company or the other Members, as the case may be, and, their respective business and property, in the event of a breach by a Member of any of the provisions of this Agreement and that the issuance of Units by the Company to the Members is undertaken in reliance, among other matters, upon the covenants by the Members as herein set forth. Accordingly, in the event of a breach or threatened breach by a Member of any of the provisions of this Agreement, the Company or the other Members, as the case may be, shall be authorized and entitled to seek from any court of competent jurisdiction, preliminary and/or final injunctive relief as well as any equitable accounting of all profits, compensation or benefits arising out of such violation and any damages for the breach of this Agreement which may be applicable. In addition, the Company or the other Members, as the case may be, shall be entitled to recover all court costs, reasonable attorneys’ fees and other expenses from the breaching Member. The aforesaid remedies shall be independent, severable and cumulative and shall be in addition to any other rights and remedies to which the Company or the other Members, as the case may be, may be entitled. All of the covenants of the Members set forth in such Section shall be construed as agreements independent of any other provision of this Agreement and shall survive the termination of this Agreement; and the existence of any claim or cause of action against the Company or the other Members, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company or the other Members, as the case may be, of such covenants. (s) Deadlock. (i) For purposes of this Section, the term “Major Decision” shall mean any action (or election not to act) by or on behalf of the Company which, pursuant to the provisions of this Agreement, requires the approval of all or a majority of the Members, and which may have, or which may be anticipated to have, a material effect on the business and operation of the Company. (ii) In the event the voting rights of the Members are evenly divided with respect to a Major Decision and the Members are unable to reach an agreement, then a legal or financial advisor of the Company, as agreed upon by all the Members, shall try to mediate the situation, however, if no agreement can be reached within fifteen (15) days after the commencement of mediation between the parties or the parties cannot mutually agree upon a legal or financial advisor to mediate the situation, then in such an event, a deadlock (the “Deadlock”) shall be deemed to exist. (iii) At any time after the occurrence of a Deadlock and prior to a resolution thereof among the Members, either Member (the “Proposing Member”) may, give written notice to the other Member (the “Offering Notice”), based upon an offering price, determined by the Stipulation of Value (as defined in Section 8(c) herein), (“Deadlock Price”) at which the Proposing Member is willing to either (i) sell to the other Member all of the Proposing Member’s Units or (ii) purchase from the other Member all of the other Member’s Units. The other Member shall have a period of fifteen (15) days after delivery of the Offering Notice in which to elect, by written notice to the Proposing Member (the “Response Notice”) to either (i) counteroffer for the purchase of all Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 40 of 53 PageID: 535 15 of the Units of the Proposing Member at the applicable Deadlock Price, or such other purchase price, (“Counteroffer Member”) or (ii) sell all of its Units to the Proposing Member at the applicable Deadlock Price. The Counteroffer Member and Proposing Member shall be collectively referred to as the Offering Member. The failure of the other Member to respond within 15 days to a Response Notice or the Counteroffer Member’s counteroffer, as applicable, shall constitute such Member’s election to sell all of its Units to the Offering Member at the applicable Deadlock Price. (iv) The parties agree to use commercially reasonable efforts to consummate such transaction within 120 days following: (i) acceptance by the other Member of the Proposing Member’s offer, (ii) the end of the 15 day period for the other Member to respond to the Offering Party’s offer or counteroffer or (iii) acceptance of the counteroffer by the Proposing Member of the Counteroffer Member’s offer to purchase the Proposing Member’s Units. At closing, at least fifty percent (50%) of the purchase price for the Units being sold shall be payable in cash. The balance of the purchase price shall be paid pursuant to a promissory note in equal quarterly payments of principal and interest over a five (5) year period at a rate of five percent (5%) per annum (the “Promissory Note”). 6. Financial and Tax Matters. (a) Fiscal Year & Yearly Budget. The fiscal year of the Company shall begin on January 1st and end on December 31st. The Members shall vote on and approve the annual budget for the Company prior to each Fiscal Year. (b) Books and Records. SIMRAN SERVICES LLC, or any of its members, shall cause the Company to keep complete and accurate books of account and other necessary financial, accounting and tax records on a cash basis and otherwise in accordance with generally accepted accounting principles (GAAP), consistently applied and applicable law. (c) Financial Reports. SIMRAN SERVICES LLC, or any of its members, shall maintain current and accurate records of the Company’s financial condition and reports shall be made available on no less than a monthly basis to the Members. (d) Interim Financial Reports. SIMRAN SERVICES LLC, or any of its members, shall furnish balance sheets and income statements showing the financial condition and results of operations of the Company within ninety (90) days following the end of each fiscal year. (e) Bank Accounts. Funds of the Company shall be deposited in the Company’s name in one or more bank accounts approved by the Management Committee. Each of the Managers is authorized to sign checks on behalf of the Company, provided, however, that any check in the amount of seven thousand five hundred ($7,500.00) dollars or more will require signatures of two (2) of the Managers. The Managers shall maintain possession of Company checkbooks and credit cards and shall be responsible for the day-to-day handling of financial matters for the Company. Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 41 of 53 PageID: 536 16 (f) Tax Matters. (i) Federal, state and local income tax returns of the Company and its Members shall be prepared, at the Company’s expense, by an accounting firm or accountant selected by the Members, and furnished to each Member on or prior to the statutory date for filing, subject to extensions permitted by law. The proportionate part of each item of income, gain, loss, deduction or credit earned, realized or available by or to the Company shall be allocated to the Members in accordance with Section 4(d); (ii) Organization expenses shall be amortized over the first sixty (60) months of the term of the Company as permitted under Code Section 709. Tax decisions and elections for the Company not specified in this Agreement must be approved by a majority of the Members; (iii) Prompt notice shall be given to each Member upon receipt of advice that the Internal Revenue Service (“IRS”) intends to examine the Company’s income tax returns for any year; and (iv) Tax Matters Member. (1) the Management Committee is hereby designated as the “Tax Matters Member” of the Company for purposes of Code Section 6231(a)(7) and shall have the power to manage and control, on behalf of the Company, any administrative proceeding at the Company level with the IRS relating to the determination of any item of Company income, gain, loss, deduction or credit for federal income tax purposes. (2) The Tax Matters Member shall, within ten (10) days of the receipt of any notice from the IRS in any administrative proceeding at the Company level relating to the determination of any Company item of income, gain, loss, deduction or credit, mail a copy of such notice to each Member. (3) The Members, by the vote of a majority-in-interest, may at any time hereafter designate a new Tax Matters Member; provided, however, that only a Member may be designated as the Tax Matters Member of the Company. 7. Sale or Transfer of Member Interest. (a) Except as otherwise set forth in this Agreement, no Member may in any other way, directly or indirectly, sell, transfer, pledge, hypothecate, encumber, assign, exchange, donate, make a gift of or otherwise dispose of (“Transfer”) its Units without the consent of all the Members. (b) Third persons. Subject to the following rights of the other Members, a Member shall be permitted to sell all or a portion of its Units to an unaffiliated third person (“Proposed Transferee”), provided that said third person agrees to be bound by and become a signatory to this Agreement: Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 42 of 53 PageID: 537 17 (i) Right of First Refusal. If a Member (“Seller”) proposes to Transfer all or any portion of its Units (the “Offered Units”) to a Proposed Transferee, it shall first provide the Members, on a pro rata basis, and, second, to the Company, with a right of first refusal, by providing first to the Members, then to the Company written notice (“Offer Notice”), to acquire the Seller’s Units at a price equal to the consideration that Seller would receive in exchange for the Offered Units (the “First Refusal Price”), provided, that payment of the First Refusal Price by the Members(s) or the Company shall be made, at the option of the Member(s) or the Company, either by: (A) payment consistent with the terms and conditions made by the Proposed Transferee, or (B) pursuant to the terms of the Promissory Note. Interest on the Promissory Note shall accrue at the simple rate of five percent (5%) per annum. The Members, on a pro rata basis, shall have thirty (30) days after receipt of the Offer Notice to elect to purchase the Seller’s Units and, in the event none of the Members so elect, the Company shall have thirty (30) days upon the expiration thereof to elect to purchase the Seller’s Units. In the event any payment due pursuant to the Promissory Note would cause the Company to become insolvent or otherwise unable to pay its obligations when due, then the Company can defer such payment until such time as the Company can make the payment, which shall extend the payment period thereunder by the number of deferred payments; and (ii) Right of Co-Sale. (1) If neither the Company nor the remaining Members elect(s) to exercise their rights set forth in Section 7(b)(i) above, then the remaining Members shall have the right to sell to the Proposed Transferee (a “Co-Sale”), at the same price and on the same terms and conditions as involved in such sale, such Units (“Co-Sale Units”) shall equal (i) the number of Offered Units multiplied by (ii) a fraction, the numerator of which is the number of Units held by the remaining Members, and the denominator of which is the sum of the total number of Units at the time owned by the Seller and the remaining Members; (2) The Seller and the remaining Members, if they desire to sell their Units (the “Co-Sale Members”) to the Proposed Transferee, may sell to the Proposed Transferee (allocated in accordance with Section 7(b)(ii)(1)) an aggregate amount of Units not less than the total number of Offered Units, at a price not less than the Offer Price and upon other terms and conditions, if any, not more favorable to the Proposed Transferee than those provided in the Offer Notice; provided, however, that any purchase of less than all of the Offered Units by the Proposed Transferee shall be made from the Selling Member and the Co-Sale Members pro rata based upon the relative amount of the Units that the Seller and the Co-Sale Members are otherwise entitled to sell pursuant to Section 7(b)(i); (3) If a Co-Sale Member decides to exercise its Co-Sale rights under Section 7(b)(ii) to sell all or any part of the Units permitted to be sold in connection with such Co-Sale, it shall notify the Seller in writing within thirty (30) days of the Offer Notice (a “Co-Sale Notification”) of its election to exercise such Co-Sale rights, which notice shall state the number of Units it desires to sell. The Co-Sale Notification shall, when taken in conjunction with the Offer, be deemed to constitute a valid, legally binding and enforceable agreement for the sale by the Seller and each Co-Sale Members to the Proposed Transferee. The Co-Sale of the Units to be sold pursuant to this Section shall be made at the offices of the Company, or at such other place mutually acceptable to the Seller and the Co-Sale Member on the forty-fifth (45th) day following the date of Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 43 of 53 PageID: 538 18 the Offer Notice (or if such forty-fifth (45th) day is not a business day, then on the next succeeding business day); (4) The fees, costs and expenses incurred in connection with the sale of any Units sold pursuant to Section 7(b)(ii) above shall be borne ratably by the Co-Sale Members (including the Seller) participating in such sale, provided, that each such Member shall be responsible for the fees and disbursements of its own legal counsel in connection with such sale; and (5) Any Offered Units not sold pursuant to the provisions of Section 7(b)(ii) above shall again be subject to the restrictions contained in this Agreement and shall not thereafter be sold, pledged or transferred, except in compliance with the applicable provisions of this Agreement. (c) Transfers to Family Members. Notwithstanding the foregoing terms and restrictions set forth in this Section, any Member shall be permitted to transfer all or part of its Units to an immediate family member or a related entity without approval of the non-transferring Member. For purposes of this Agreement, the term “immediate family member” shall mean spouse, sibling or child. In such case, the immediate family member transferee shall have no voting rights in the Company, unless agreed to by unanimous vote of the remaining Members. 8. Dissociation of a Member. (a) Dissociation. A Member shall cease to be a Member upon the earliest to occur of any of the following events (a “Dissociation”): (i) the bankruptcy, insolvency, or assignment for the benefit of creditors, of a Member; or (ii) the death, disability (as defined herein) or termination of services of a Member as set forth in Section 10. (b) Rights of Dissociating Member. In the event any Member dissociates prior to the expiration of the term of the Company, then: (i) if the Dissociation causes a dissolution and winding up of the Company under Section 12, the dissociating Member shall be entitled to participate in the winding up of the Company to the same extent as any other Member, except that any distributions to which the Member would have been entitled shall be reduced by the direct expenses sustained (including reasonable attorneys’ fees, accounting costs, and etc.) by the Company; or (ii) if the Dissociation does not cause a dissolution and winding up of the Company under Section 12, the dissociating Member shall, in exchange for such Member’s Units, be entitled to receive the Stipulation of Value (as defined below) paid pursuant to the Promissory Note. The dissociating Member shall be required to tender such Member’s Units within fifteen (15) days of the disassociating event. Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 44 of 53 PageID: 539 19 (c) Stipulation of Value. Each affected Member and the Management Committee shall choose three (3) independent third party appraisers, unless agreed to otherwise, to determine the “fair value” of the Units (“Stipulation of Value”). The Stipulation of Value shall be determined by averaging the fair value determined by each appraiser. The Company shall bear the cost of hiring the appraisers to determine the Stipulation of Value. The Stipulation of Value per Unit shall be determined by taking the total number of Units issued to all of the Members and dividing it by the Stipulation of Value (“Per Unit Stipulation of Value”). Each Member’s Stipulation of Value shall be determined by multiplying the total number of Units held by such Member by the Per Unit Stipulation of Value. 9. Death, Disability of a Member. (a) Purchase of Insurance Policies. The Company may purchase life insurance policies on the Members for the purchase by the Company of a Member’s Units as set forth below. In addition, upon the Members becoming eligible for disability insurance, the Company may purchase disability insurance policies on the Members. The proceeds of such insurance policies shall be used to fund the purchase of a Member’s Units upon death or disability of a Member by the Company. (b) Buy-out of Deceased Member’s Units. (i) Member Purchase. In the event of the death of a Member, the other Members shall have the first right, but not the obligation, to purchase, on a pro rata basis, such Member’s Units for an amount equal to the Member’s portion of the Stipulation of Value. In the event the other Members do not purchase the Units hereunder within 60 days of the death of such Member, then the Company shall have the right to purchase the Units in accordance with Section 9(b)(ii). The balance due for the purchase of such Units by the Members shall be paid pursuant to a Promissory Note. (ii) Company Purchase. In the event of the death of a Member and the Members do not purchase such Member’s Units, the Company shall have the right, but not the obligation, to purchase such Member’s Units. Upon the purchase of the Units, the amount due to such Member or such deceased Member’s estate or legal representative shall be its portion of the Stipulation of Value. The proceeds from the life insurance policies referenced in Section 9(a) above shall be used by the Company to purchase such Member’s Units. In the event the proceeds from such life insurance policies, if any, exceed the repurchase price of such Member’s Units, the excess proceeds shall be paid over to the Company. In the event the proceeds from the life insurance policies, if any, are insufficient to fully fund the purchase of such Member’s Units in the Company, then the balance remaining due for the purchase of such Member’s Units shall be paid by the Company pursuant to the Promissory Note. In the event any payment due pursuant to the Promissory Note would cause the Company to become insolvent or otherwise cannot pay its obligations when due, then the Company can defer such payment until such time as the Company can make the payment, which shall extend the payment period thereunder by the number of deferred payments. Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 45 of 53 PageID: 540 20 (c) Buy-Out of Member’s Interest on Disability. (i) Member Purchase. In the event of the Disability (as defined below) of a Member, the disabled Member shall have the right to offer the remaining Members the right to purchase, on a pro rata basis, such disabled Member’s Units for an amount equal to the Member’s portion of the Stipulation of Value. Payment for such Units by the Members shall be paid pursuant to a Promissory Note. In the event the other Members do not purchase the Units hereunder within 60 days of the disabled Member’s offer to purchase, then the Company shall have the right to purchase the Units in accordance with Section 9(c)(ii). (ii) Company Purchase. In the event of the Disability of a Member, and the remaining Members do not elect to purchase the disabled Member’s Units pursuant to Section 9(c)(ii) above, the Company shall purchase the vested Units held by such Member for an amount equal to its portion of the Stipulation of Value. In the event the proceeds from such disability insurance policies referenced in Section 9(a), if any, exceed the repurchase price of such Member’s Units, the excess proceeds shall be paid over to the Company. In the event the proceeds from the disability insurance policies, if any, are insufficient to fully fund the purchase of such Member’s Units in the Company, then the balance remaining due for the purchase of such Member’s Units shall be paid by the Company pursuant to the Promissory Note. In the event any payment due pursuant to the Promissory Note would cause the Company to become insolvent or otherwise cannot pay its obligations when due, then the Company can defer such payment until such time as the Company can make the payment, which shall extend the payment period thereunder by the number of deferred payments. “Disability” shall mean (i) a disability as a result of illness, accident or other physical or mental incapacity or disability, such that the Member shall be unable to perform its duties hereunder, with or without reasonable accommodation, for a period of one hundred eighty (180) consecutive calendar days or, (ii) in the event disability insurance has been purchased by the Company, in accordance with the determination made by the physician selected by the provider of the disability insurance, or (iii) if a legal guardian is appointed by a court for a Member due to mental or physical disability. 10. Termination. This Agreement shall be deemed terminated and of no further force and effect in the event if any of the following events shall occur: (a) the sale, exchange or other disposition by the Company of all or substantially all of the Company’s assets; or (b) the agreement of all the Members to terminate this Agreement and dissolve the Company. In the event any one of the foregoing events shall occur, the assets owned by the Company shall be dealt with as set forth in Section 12, below. 11. Members’ Liability and other Activities. Neither the Company nor any Member shall be responsible or liable for any indebtedness or other obligation or liability of the other Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 46 of 53 PageID: 541 21 Members incurred or arising either before or after the execution of this Agreement except as otherwise indicated herein. This Agreement shall not be deemed to create a relationship between the Members with respect to any activities whatsoever other than activities within the scope and business purposes and activities of the Company and the Members described in this Agreement. Any Member that takes any action not authorized by or under this Agreement shall be responsible to, and shall indemnify and hold harmless, the other Members for and against liabilities or expenses of any nature arising out of, or resulting from, such unauthorized action. 12. Dissolution. (a) Authority Following Dissolution. When the term of the Company has ended pursuant to this Agreement, the Company shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its remaining assets and satisfying the claims of its creditors and the Members. No Member shall take any action that is inconsistent with winding up the Company’s business and affairs. The Members shall be responsible for overseeing the winding up and liquidation of the Company. (b) Capital Accounts on Liquidation. If the Company is “liquidated” within the meaning of Regulation Section 1.704-1(b)(2)(ii)(g), distributions shall be made pursuant to this Section to the Members who have positive capital accounts in compliance with Regulation Section 1.704-1(b)(2)(ii)(b)(2). (c) Application and Distribution Upon Liquidation. After the Company shall have been liquidated, the cash proceeds therefrom, to the extent sufficient, shall be applied and distributed in the following order: (i) First, to the payment and discharge of all of the Company’s debts and liabilities to third parties which are guaranteed by the Members; (ii) Second, to the Members that guaranteed the Company’s debts and liabilities to third parties and upon which any Member was required to make payment to said third party, plus interest at the simple rate of five (5%) percent per annum, from the date the payment was made by the Member until the date the Member is repaid in full. No other distributions of cash or assets shall be made to any other Members, for any purpose whatsoever, until all Members subject to this Section are repaid in full. In the event this Section is applicable to multiple Members at the same time, then the distributions shall be made to such Members in accordance with their Units; (iii) Third, to the payment and discharge of all of the Company’s debts and liabilities to the Members, including Default Loans; (iv) Fourth, to the Members, to the extent of their respective capital accounts; and (v) Fifth, the balance, if any, to the Members in accordance with their Units. Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 47 of 53 PageID: 542 22 (d) Completion of Liquidation. Upon request, each Member shall sign and, if necessary, file or publish any document necessary to terminate the Company or to complete the winding up of its business activities. 13. Indemnification. The following indemnification provisions shall apply: (a) Indemnification by Breaching Member. Each Member shall indemnify, defend and hold harmless the other Members and the Company from and against any and all claims, demands, losses, damages, liabilities, lawsuits and other proceedings, judgments and awards, and costs and expenses (including but not limited to reasonable attorneys’ fees and disbursements) relating to or arising out of, directly or indirectly and in whole or in part, the indemnifying Member’s breach of this Agreement or any activity or liability of such Member (i) not within the scope or purpose of the Company or this Agreement; (ii) for acts of fraud, gross negligence, dishonesty or intentional breach of this Agreement by a Member; or (iii) prior to the beginning of the term of the Company. (b) Indemnification as to Personally Guaranteed Debts. In the event that any debt incurred on behalf of the Company and which was personally guaranteed by a Member (“Guaranteeing Member”) is called into default or is otherwise sought to be collected or enforced against the Guaranteeing Member, then in such event each of the other Members agree that they shall personally indemnify and hold harmless the Guaranteeing Member to the extent of their respective Units as applied against the aggregate amount sought to be collected or enforced against the Guaranteeing Member. This Section and each Member’s personal obligation hereunder shall survive the termination or dissolution of the Company. 14. Notices. All notices, demands and communications required or provided for in this Agreement shall be in writing and shall be delivered personally or sent by facsimile or overnight mail to each Member at its address set forth on Schedule A of this Agreement. Each Member may designate in writing another address for purposes of this Section. Notice shall be effective when delivered or sent as aforesaid. 15. General Provisions. (a) This Agreement constitutes the entire agreement and understanding of the Members with respect to the matters covered hereby and shall supersede all previous written, oral or implied agreements, representations, statements, promises and understandings between them with respect to such matters. (b) This Agreement may not be amended or changed except by an agreement in writing executed by all the Members. (c) This Agreement shall be binding upon, and inure to the benefit of, the parties to this Agreement and their permitted successors and assigns. Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 48 of 53 PageID: 543 23 (d) The validity, interpretation and enforcement of this Agreement shall be governed by the laws of the State of New Jersey, without regard to its conflicts of law principles. (e) If any provision in this Agreement shall be determined by a court of competent jurisdiction to be invalid or unenforceable, such provision shall be enforced to the extent it can be so enforced and such determination shall not affect the remaining provisions of this Agreement, all of which shall remain in full force and effect. (f) The failure of any Member to enforce at any time any of the provisions of this Agreement shall not be construed to be a waiver of any such provision or of any other provision, nor in any way affect the validity of this Agreement or the right of any Member to enforce each and every such provision in the future. No waiver of any breach of this Agreement shall be held to be a waiver of any other or subsequent breach. Any party may, at its option, waive any provision of this Agreement provided such waiver is in writing. (g) The rights and remedies of the Members set forth in this Agreement are not exclusive and each Member shall be entitled to all rights and remedies available to such Member under applicable legal or equitable principles. (h) The headings of the Sections in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. (i) Any written consent or written notice contemplated by this Agreement may be provided by email to the recipient’s email account with the Company or such other email account as the recipient shall designate. (j) When used herein, the masculine gender includes the feminine and neuter genders, and the singular includes the plural, as the context requires. (k) This Agreement may be executed in two or more counterparts, each of which shall be deemed an original against any party who signed such counterpart, but all of which together shall constitute one and the same instrument. In the event that any signature is delivered by facsimile transmission or via pdf, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile or pdf signature were the original thereof. 16. Representation; Waiver and Indemnification. All the parties hereto acknowledge their knowledge of, understanding of, and agreement to, the fact that the Company has been represented by the law firm of Paris Ackerman & Schmierer LLP with respect to this Agreement. All of the parties further acknowledge that Paris Ackerman & Schmierer LLP has in the past and continues to represent some of the Members of the Company. The parties understand and accept responsibility for the fact that they have substantial conflicting interests. They have been advised by Paris Ackerman & Schmierer LLP of their right to and need for independent counsel and with full knowledge and understanding, some have declined to retain independent counsel. The parties have read and fully understand the terms, conditions and provisions of this Agreement. They acknowledge that all the terms, conditions and provisions of this Agreement have been negotiated Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 49 of 53 PageID: 544 24 by them without any influence whatsoever by any attorney associated with Paris Ackerman & Schmierer LLP. The parties acknowledge and understand that this Agreement is necessary to preserve harmony and continuity with respect to the management of the Company. As part of the consideration for the Company’s representation by Paris Ackerman & Schmierer LLP in this matter, and for performing the legal work necessary to implement the Agreement, the parties hereby waive any conflicts of interest of Paris Ackerman & Schmierer LLP, and all its partners, counsel and employees who are such on the date of the Agreement, or any time thereafter and release, hold harmless and indemnify such firm, its partners, counsel and employees from, any claims of or relating to a conflict of interest made by any of the parties or any of their heirs, assignees, administrators, legal or personal representatives, executors or successors based upon such firm’s representation of the Company and involvement in the transactions which are the subject of this Agreement. This waiver, release and indemnification shall be binding upon the parties and their heirs, executors, administrators, successors and assignees, and shall inure to the benefit of all partners, counsel and employees of Paris Ackerman & Schmierer LLP who are such on the date of this Agreement, or any time there-after, and all such partners’, counsels’ and employees’ heirs, executors, administrators, successors and assignees. [SIGNATURE PAGE IMMEDIATELY FOLLOWS] Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 50 of 53 PageID: 545 Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 51 of 53 PageID: 546 Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 52 of 53 PageID: 547 WESTFIELD REALTY HOLDING, LIMITED LIABILITY COMPANY SCHEDULE A to OPERATING AGREEMENT Member’s Name and Address Membership Units Percentage Interest Capital Contributions Compensation Raja Jhanjee 34 Ramkey Drive Fairfield, NJ 07004 25 25% $6,250 Subject to Section 4 (f) of this Agreement Vicky Vij 5, Ramkey Drive Fairfield, NJ 07004 25 25% $6,250 Subject to Section 4 (f) of this Agreement Bachan Rawat 9001 86th Street Hollis, NY 11423 5 5% $1,250 Subject to Section 4 (f) of this Agreement Vikram Gupta 46, Terrace Avenue Nutley, NJ 07110 10 10% $2,500 Subject to Section 4 (f) of this Agreement Tirun Gopal 1742, Central Park Orefield, PA 18069 10 10% $2,500 Subject to Section 4 (f) of this Agreement SIMRAN SERVICES, LLC 16 Cornwall Road Glen Rock, NJ 07452 25 25% $6,250 Subject to Section 4 (f) of this Agreement Total 100 100% $25,000.00 Subject to Section 4 (f) of this Agreement Case 2:17-cv-03808-JMV-JBC Document 26-3 Filed 07/10/17 Page 53 of 53 PageID: 548 Case 2:17-cv-03808-JMV-JBC Document 26-4 Filed 07/10/17 Page 1 of 7 PageID: 549 Case 2:17-cv-03808-JMV-JBC Document 26-4 Filed 07/10/17 Page 2 of 7 PageID: 550 Case 2:17-cv-03808-JMV-JBC Document 26-4 Filed 07/10/17 Page 3 of 7 PageID: 551 Case 2:17-cv-03808-JMV-JBC Document 26-4 Filed 07/10/17 Page 4 of 7 PageID: 552 Case 2:17-cv-03808-JMV-JBC Document 26-4 Filed 07/10/17 Page 5 of 7 PageID: 553 Case 2:17-cv-03808-JMV-JBC Document 26-4 Filed 07/10/17 Page 6 of 7 PageID: 554 Case 2:17-cv-03808-JMV-JBC Document 26-4 Filed 07/10/17 Page 7 of 7 PageID: 555 Case 2:17-cv-03808-JMV-JBC Document 26-5 Filed 07/10/17 Page 1 of 4 PageID: 556 Case 2:17-cv-03808-JMV-JBC Document 26-5 Filed 07/10/17 Page 2 of 4 PageID: 557 Case 2:17-cv-03808-JMV-JBC Document 26-5 Filed 07/10/17 Page 3 of 4 PageID: 558 Case 2:17-cv-03808-JMV-JBC Document 26-5 Filed 07/10/17 Page 4 of 4 PageID: 559