                                                                                ACCEPTED
                                                                            04-15-00427-CV
                                                                FOURTH COURT OF APPEALS
                                                                     SAN ANTONIO, TEXAS
                                                                       8/17/2015 6:58:46 PM
                                                                             KEITH HOTTLE
                                                                                     CLERK


                   NO. 04-15-00427-CV
                                                           FILED IN
                    IN THE                          4th COURT OF APPEALS
                                                     SAN ANTONIO, TEXAS

           COURT OF APPEALS FOR                THE 08/17/2015 6:58:46 PM
        FOURTH COURT OF APPEALS D
                                                        KEITH E. HOTTLE
                                                ISTRICT Clerk
              SAN ANTONIO, TEXAS
                           ______________

CRAWFORD MEDICAL SUPPLIES, LLC, SAM MADDALI, PREM SWAROOP
           KALIDINDI, AND MADDALI REALTY, LLC
                       APPELLANTS
                             VERSUS

 HUNTLEIGH HOME MEDICAL, LTD. AND JANE ELIZABETH FLORES
                     APPELLEES
                           ______________

 APPEAL FROM THE 57TH JUDICIAL DISTRICT COURT, BEXAR COUNTY, TEXAS
                        NO. 2013-CI-00404


         APPENDIX TO BRIEF OF APPELLANTS

      PULMAN, CAPPUCCIO, PULLEN, BENSON & JONES, LLP
                    Elliott S. Cappuccio
               Texas State Bar No. 24008419
                    Leslie Sara Hyman
               Texas State Bar No. 00798274
                    Etan Z. Tepperman
               Texas State Bar No. 24088515
           2161 NW Military Highway, Suite 400
                 San Antonio, Texas 78213
                (210) 222-9494 (Telephone)
                 (210) 892-1610 (Facsimile)
                    Attorneys for Appellants
             APPELLANTS REQUEST ORAL ARGUMENT
                                            TABLE OF CONTENTS

Document                                                                                                        Tab

June 16, 2015 Order Granting in Part and Denying in Part
Defendants’ Plea in Abatement and Motion to Compel Arbitration ......................... 1

Operating Agreement .................................................................................................2

Plaintiffs’ Third Amended Petition ............................................................................3
Tab 1
                                  DOCUMENT SCANNED AS FILED

                                                                                            2013CI00404 -0057
                                                                                '"~.-   - -·-   ·· - --...---·




                                          CAUSE No. 2013-CI-00404

       HUNTLEIGH HOME MEDICAL, LTD.,                    §                     IN THE DISTRICT COURT
       JANE ELIZABETH FLORES, AND                       §
       MICHAEL FLORES,                                  §
                                                        §
              PLAINTIFFS                                §
                                                        §
       v.                                               §                      57m JUDICIAL DISTRICT
                                                        §
       CRAWFORD MEDICAL SUPPLIES, LLC,                  §
       SAM MADDALI, PREM SWAROOP KALIDINDI,             §
       AND MADDALI REALTY, LLC,                         §
                                                        §
              DEFENDANTS                                §                      BEXAR COUNTY, TEXAS



                          ORDER GRANTING IN PART AND DENYING IN PART
                DEFENDANTS' PLEA IN ABATEMENT AND MOTION TO COMPEL ARBITRATION



              On this date the Court considered Defendants' Plea in Abatement and Motion to Compel

       Arbitration. After careful consideration of the motion and Plaintiffs' response, and having taken

       judicial notice of Plaintiffs' Second and Third Amended Petitions, the Court is of the opinion

       that the motion should be granted in part and denied in part.

              Accordingly, it is hereby ORDERED that Defendants' Plea in Abatement and Motion to

       Compel Arbitration is GRANTED IN PART such that, consistent with the Court's Order dated

       August 30, 2013, any claims by and against Michael Flores that arise out of or relate to his

       employment agreement with Crawford Huntleigh Medical Supplies, LLC nlk/a Crawford

       Medical Supplies, LLC shall be decided in arbitration and this lawsuit is abated and stayed

       pending arbitration only as to such claims.



p
G
lr."
7
6      570
                                DOCUMENT SCANNED AS FILED




            It is further ORDERED that Defendants' Plea in Abatement and Motion to Compel

     Arbitration is in all other respects DENIED.

            SIGNED AND ENTERED this ~day of June, 2015.




     APPROVED AS TO FORM:




     ecappuccio@pulmanlaw.com
     Leslie Sara Hyman
     Texas State Bar No. 00798274
     lhyman@pulmanlaw.com
     PULMAN, CAPPUCCIO,
     PULLEN, BENSON & JONES, LLP
     2161 NW Military Highway, Suite 400
     San Antonio, Texas 78213
     www .pulmanlaw.com
     (21 0) 222-9494 Telephone
     (210) 892-1610 Facsimile

8/   ATTORNEYS FOR DEFENDANTS
1
7
/

61    tv\~~.L                                .      '
5
     Mark Murph)TO(j             U~
v    State Bar No. 24002667
0    DAVIS & SANTOS
L    Attorneys & Counselors, P.C.
4    112 E. Pecan Street, Suite 900
4    San Antonio, Texas 78205
~~   Telephone: (210) 853-5882
     Facsimile: (210) 200-8395
g    ATTORNEYS FOR PLAINTIFFS

1
5
7
7    571
                                                        2
Tab 2
                                         OPERATING AGREEME:NT

                                                                   OF
                   CRAWFORU BUNTLEIGHMEDICAL -SUFPLlES, LLC

                           A TEXAS LIMITEDLIABI':LITY-COMl>ANY
                               '         . '.-     - ·-   .   -



              THIS QP'BRATJNO, AGREeMENt c·Agreement'~) is m?de a.s of t}lis                            L' 2~
                                                                                                        day of
      Dc;:cember, 401 1 by ~pd -a!}.19J1& P-REM: SWAROOP KALlDINDI {"Kalidim:U)))? an .indlvidttal
      having an address at 171 :Foiesf Drive, Piscataway:~ New Jersey .(}88.5.4, ANNAPURNA
      MADOALI ("Mi<td&li'')"' mi ihdivi'dual hav1ng an, address at 1 Cathet CO.t(tt, Ledgewood, New
      Je(s¢y '0785i,, .Md QB.iiULIA, LLC, a Te){as H!niteq Hab~Hty company, paving a11 address at
                 a M~tta, .SM Anton1o1 Te~as 78232 anq .<;RAWFO'RD l{IJ.l'flJ;~IGH MEDICAL
      3ot 'Rtt~ q_
      SUPPLIES~, .LLP,-, a- Te~as limite4 liability <;omp~ny having an addt;e~s· at 5626 Randolph
      Boulevard, .S:te. 2~ San Ailto!tio~" Texas 7823.3 '(the ''CompanY''). Kali'iliridi, Maddali, and.Obd\.11ia,
      LLC shall c.oll¢ctive1y be.refened'to as th~ "M~mbers".


                                                          WITNESSETH!

              VlHEREAS:.. th'e Metttbei:s .desire· to ·enter ji1to th1s Operatjng Agreeo1ent' 10petating t
      Agr~emeiit" .b t "Agre·em.enn· fo:r .the pth"pose_s of g9v¢i)lillg CRAWFORD HlJWTLEIGH
      ME:01CA,t; SI]PPLIES, t;~O, a Tex~s lirrnted liabijity cotnlJailY '{~QIJ1parly'')'.Qerein formed, to
      and' for t4_e purpose of o"'rn.ing, and oper<iting a. me~i~~l -sppply and duraf;)le medical equipmetlt
      business (the '~Business"). The Cmhpruiy -shaH :not coridMt >any other hus)ness tii1Jess related .to
      the ~usi:nesS', unless appl:oved as provid~· beto~v.

             NOW THER,EFQR,E, it1 cons1Q.~ra:tiO~t>:ft4e ¢utual'pKeq1ise~.:helow,:,anc\ othe(goo_d and
      valuable Gonsidetariou receipt and :suffici'ency of whicl). l_s' h~teby -a9.knowledg~d, th~ Membe.rs
      hereby ag~:ee as follows:

                                           ARTICLEl.                      DEFINITIONS
      Sectior'l l.Oi Definitions, Tf}e· felloWitig. t'~tn'is used in thi$ Agt:eemtmt have the~ n1eaniugs
      specifi~d in tliis_Art·id~ -orelsec\Yhet~in f~ Agt1eei.nehf.                          ·

                                                    (~) "Act" m.eans, the Title .3 ot; th~ T~X:as BusitJesS
                                   Qrga!lf;za.tfons Act~ ·whi¢h pettains;}q the fotl}J~frqg .a.!Jd-ope1·ation 9f
                                   limited: liability .cofupan1es, includhl.g ai.ilendmeitts thereto .frOJil time
                                   to .,ti.ffie~

                                                              (b) ''Agceement" means tl1iS: opei·ating agreement~ -as:
                                   origlnally execiifed and a~ am~ndGd fr\im tfrne to lime.

                                                                     1



505
                    (c) "Assignee11 means a person who has acquired a
      Member's Economic lnterest in the Company, by way of a Transfer in
      accordance witb the tenns of tbjs Agreement, but who has not become
      a Member.

                    (d) "Assigning Member11 means a Member who by
      means of a Transfer has transferred an Economic h1terest in the
      Companiy to an Assiguee.

                     (e) "Business" means the sale of home medical
      supplies and durable medical equipment.

                    (f) "Capital Account" means, as to any Member, a
      separate account maintajned and adjusted in accordance with Section
      3.02.

                       (g) "Capital Contribution" means, vr.rith respect to any
      MembeJ:, the amot!nt of the money, the forgiveness of any debt, and
      the Fair Market Value of any services or property (other than money)
      contributed to the Company (net of liabilities secured by such
      contributed property that the Company is considered to assume or take
      "subject to 11 under IRC section 752) in consideration of a Percentage
      Intefest held by such Member. A Capital Contribution shall not be
      deemed a loan.

                    Q1) "Capital Event'' means a sale or disposition of any
      of the Company's capital assets, the receipt of insurance and other
      pmceed:s derived from the voluntary or involuntary conversion of
      Company property~ the receipt of proceeds from a refinancing of
      Compar!y property, or a similar event with respect to Company
      pmperty or assets.

                       (i) "Cet1ificate of Formation" means the document
      required! t.o be filed with the applicable office of the state of Texas to
      establish a limited liability company in Texas.

                    G) "Code" m "IRC" means the Internal Revenue Code
      of l986, as amended, and any successor provision.

                    (k) "Company'' and/or "LLC" means the company
      named in Section 2.02.


                     (1) ''Contributing Member" is defined m Section
      3.03(a).

                     (m) "Economic Interest" means a Persall's right to share
      in the income, gains, losses, deductions, credit or similar items o4 and

                            2



506
                        to req~iv'~ distributio!l~ from, the, Co~:np_~y, but dbes not inqhtde any
                        other tights of.a Met).!ber) including tlre right to vote·or to participate in
                        management.

                                        (u} •rE1i1ployment Agi·eeihent'' means the employment
                        agreement clated Decembe1· __, 20li benveen the Company~ as
                        employer, an:d.lvticb(!el D_avid Flores, as ·en1.ployee.

                                          (o} 1 ~Eneumber" means .the a~l of creating or pmpOJting
                        to -creare! an· Enc~m~rance, wheilier ot not p~rfected under applicable
                        law.

                                       (p) "Encumbrance" means, with T.espect te any
                        Membership liitetest,_ or any element thereof, .a n1ortgage, pledge~
                        security interest, lien, proxy coupled w.i1h ·an interest (other than as
                        GOOiemplated in thl~: ·f..gr~emt:;nt); optio;n, o.r preferentiaf tight to
                        pUfC:hase:.
                                                                        1
                                        (q), "F.ai_~ 1yfa~ket Val:\11~ ' means, witb. respect to any
                        itetn. of propetty ef.the Company. the--i{eni's adjusted. basis for federal
                        income tax purposes', exc.ept as-follows;

                                        The EC!.it Mru·]:(¢t Vah1~ of ~llY prope1ty cont1iliuted
                                       (i)
      by a Member to the-Company shalf be the--valtle of such ptopeJ.ty~ as ~ittqally agt'eed by
      the contributing Member and the Company;                                         ·       -

                                   (ii)     The Fair Market Vatu~ of any- itern of C<?.mp,~ny
      property distribtJ~ed to any Member,shall be the v-alue.of such jtem of prope1ty on the
      date of distribution~ as mutually'. agreed by the distribu'tee Member and Hie C.ompa~y;
      ai1d

                                      (ill)       Faii Market Value for purposes of Section 8.06
      shall o~. detennined under ·section ·8.08...
                                      (i) "Initial Member'; or "Initial Members" ·nieans thQSe
                        Persons \-Vhose .q,~m,.es are set forth , in t~e fir~t sente11ce of this
                        Agreement. A reference to an 11 Initial Member11 means an.y of the
                        InitHtl Members.

                                              (s) "lilVoluntary· Trailsfer'; means,_with respect to any
                        Memb~rship Intel-est, or any ~le¢~nt thereat any Transfer or
                        Encmuhrancef. whether by op,eratio1l ·of law, pul'suant 1o coutt orde1·,
                        foreoJQS.!llre of a s~C\Jri~y iqterest, exeqution of a Judgment {)r other
                        legal pr.ocess, or otheJ..wl.se;.including a pmp.ot1ed h:ansfe1; to or fi-om a
                        trustee in bankruptcy~ i'eeeiver_, or assigtiee f-or the benefit of creditors.
                                              (t) ''Losses". See. "Pr.ofits a1~d Losses".


                                                     3



507
                     (u) ''Majority of Members" means a MenJber or
      Members whose Percentage Interest represent more than 50 percent of
      the Percentage Interests of all the Members.

                  (v) "Managing Member(s)" means such Member· or
      Members who constitute a Majority of Members.

                    (w) "Meeting" is defined in Section 5.03.

                   (x) "Member'' means an Initial Member or a Pe~·son
      who otherwise acquires a Membership Interest, as permitted under this
      Agreement, and who remains a Member.

                    (y) 11 Non-Contributing MembeJ" is defmed in Section
      3.02.

                     (z) "Notice11 means a written notice required or
      permitted under this Agreement. A notice shall be deemed given or
      sent when deposited, by certified mail or for overnight delivery,
      postage and fees prepaid, in the United States mail; when delivered to
      Federal Express, United States Postal Service Express Mail or United
      Parcel Service, for overnight delivery, charges prepaid or charged to
      the sender's account; when personally delivered to the recipient; when
      transmitted by electronic means, and such transmission is
      electronically confir.tned as having been successfully n·ansmitted; or
      when delivered to the home or office of a recipient in the care of a
      person whom the sender has reason to believe will promptly
      communicate the notice to the recipient.

                    (aa)"Percentage Interest" of each Member in the
      Company is the same percentage -as each such Member's allocation of
      Profits and Losses is to all Pmfits and Losses. as set fot1h in Section
      4.01.

                     (bb)        "Person" means an individual, partnership,
      limited patinership, trust, estate, association, corporation, limited
      liability company, or other entity~ whether domestic or foreign.

                    (cc)"Profits and Losses" means, for each fiscal year or
      other period specified in this Agreement, an amount equal to the
      Company's taxable income or loss for such year or period, determined
      in accordance with IRC section 703 (a).

                     (dd)      ''Regulations" ("Reg'') means the income tax
      regulations promulgated by the United States Department of the
      Treasmy and published in the Federal Register for the purpose of
      interp1·eting and applying the provisions of the Code, as such


                           4


508
                              Regulations may be amended from time to time, including
                              corresponding provisions of applicable successor regulations.

                                             (ceY'Substituted Member'' is defined in Section 8.09.

                                             (ff) ''Successor in Interest'' means an Assignee, a
                              successor of a Person by merger or otherwise by operation of law, or a
                              transferee of all or substantiaBy all of the business or assets of a
                              Person.

                                           (gg)        "Supermajority" shall mean Members
                              owning an aggregate of 76% or more of 1he Percentage Interests of the
                              Company.

                                             (hh)        "Transfern means, with respect to a
                              Percentage Interest, or any element of a Percentage Interest, any sale,
                              assignment, gift, Involuntary Transfer, or other disposition of a
                              Membership Interest or any element of such a Men1bership Interest,
                              djrectly or indirectly, other than an Encumbrance that is expressly
                              pennitted under this Agreement.

                                             (ii) "Triggering Event" is defined in Section 8.05.

                                             Gj) "Vote" means a written consent or approval, a ballot
                              cast at a Meeting, ot a voice vote.

                                            (kk)       "Voting Tnterest'' means, with respect to a
                              Member, the right to Vote or pal1icipate in management and any right
                              to information conceming the business and affairs of the Company
                              provided under the Act, except as limited by the provisions of this
                              Agteement. A Member's Voting Interest shall be dit·ectly propottional
                              to that Member's Percentage Interest.

                                   ARTICLE II.            FORMATION
      Section 2.01 Formation. The Members hereby associate themselves into a limited liability
      company pursuant to the ptov:isions of the Act upon the terms and conditions hereinafter set
      forth.

      Section 2.02 Name. "the narne of the Company shall be CRAWFORD HUNTLEIGH
      MEDICAL SUPPLIES, LLC.

      Section 2.03   Company Registered Agent; Office.

                                            (a) The Company shall have its registered office at
                              5601 Granite Parkway, Suite 400, Plano Texas 75024.



                                                    5



509
                                                 (b) The name of the registered agent of the Company is
                                Jeffrey Yates.

      Section 2.04 PriucjpaJ Office. The principal executive office of the Company shall be 5626
      Randolph Boulevard~ Ste. 2, San Antonio, Texas 78233 or at such location as may be designated
      by the Majority of the Members. The Managing Member shall give Notice to each Member of
      any change in office, agent and principal place of business.

      Section 2.05 Purpose. The purpose for which the Company is organized is for the ownership
      and operation of the Business. The Company shall engage in no other business or venture~
      except upon the unanimous written agreement of all the Members.

      Section 2.06 Existence. The term of existence of th.e Company shall commence on the
      effective date of filing of the Certificate of Formation with the responsible state of Texas office
      which accepts such filings, and shall continue until the winding up and liquidation of the
      Company in accordance to this Agreement m as provided by law.
      Section 2.07 Company's Property. All tangible and intangible, real and personal prope1ty
      owned by the Company shall be owned by the Company as an entity and, insofar as permitted by
      applicable law, no Member shall have any ownership interest in such property in its individual
      name or right) and each Member's interest in the Company shall be pefsonal property for all
      purposes.

                           ARTICLE Ill.            CAPITAL CONTRIBUTIONS
      Section 3.01 Contribution. Each Member shall contribute to the Company the Member's
      Capital Contribution in the amounts respectively set forth in Exhibit A.

      Section 3.02 Failure to Make Capital Contdbution. If a Member fails to make the required
      initial Capital Contdbution as set f01th in Section 3.01 above within 10 days after demand frolil
      the Company or any member that has made its required Capital Contribution, then the unfunded
      Member's entiTe Membership Interest shall tenninate and that Member shall inde11ll1if:Y and hold
      the Company and the other Members harmless from any loss, cost, or expense. including
      reasonable attorney fees incurred> caused by the failme to make such Capital Con11·ibution. The
      remaining Members shall have the right to own the defaulting Members interest in percentage to
      their interest in the Company.

      Section 3.03 Capital Call. Subject to Section 3.04, upon an affirmative vote of by a
      St1pennajority of the Members, the Members shall contribute to the capital ofthe Company fi'om
      time to time and in prop01tion to their respective percentage Membership Interests in the
      Company~ such sums of money as shall have been detetmined by the Members to be necessary in
      order to pay the debts and obligations of the Company as the same become due and payable, to
      make necessary capital improvement, and to prudently operate the Company's business. Each
      Member shall be severalty obligated to the Company for such Member's proporHonate share of
      the contributions to be made by the Members, and a contribution by a Member shall be made
      upon request being made therefore by the Company as described in this Section 3.03. A Member
      shall be in default of such Member's obHgation to make additional Capital Contribution under
      this Section 3.03 (a "Non-Contributing Member") if (i) the Non-Contributing Men1ber fails or

                                                       6



510
      refuses to fund such Member's share of tb.e additional cash required by the Company within ten
      days after delivery of the written capital call notice l'equired under this Section 3.03,and (ii) the
      Non-Contributing Member fruls or refuses to cure such default within five days after written
      notice of the failure is delivered (or deemed to have been delivered) by any Member who has
      satisfied such Member's obligation to make additional Capital Contdbutions with respect to the
      capital called and being funded (a "Contributing Member"). lf a Non-Contributing Member is in
      default on such Member's obligation to make additional Capital Contributions, the exclusjve
      remedy shall be that the Contributing Members may, but shall not be obligated to, exercise, by
      delivery of written notice to that effect to the Non-Contributing Member, the followjng actions
      or remedies from the failure of the Non-Contributing Member to make such Member's requited
      additional Capital Contributions:

                                               (a) any Contributing Member may advance to the
                                 Company the Non-Contributing Member's proportionate share (in
                                 proportion to the relative Membership Intetests of all Contributing
                                 Members, or sncb other proportion as may be agreed by such
                                 Members) of the defaulted amount on the following terms:

                                         (i)   the advance shall constitute a loan by the
               Contributing Member to the Non-Contributing Members, which loan is used by the
               Non-Contributit1g Member to make such Member's additional Capital Contribution to
               the Company.

                                             (ii)   the amount loaned shall bear interest at a rate of
               interest equal to the prime rate of interest as published in The Wall Street Journal from
               time to time (the "Prime Rate") plus two percent (2%) per annum (or the maximum rate
               pel'mitted by applicable law, if less) from the day the advance is made utltil the Joan,
               together with all interest accmed thereon, is repaid to the Contributing Member;

                                        (iii)   aU distributions from the Company that otherwise
               would be made to the Non-Contributing Member shall instead be paid to the
               Contributing Member until the loan ~nd all interest accrued shall have been repaid in
               full; and

                                           (iv)    upon making the advance to the Company, the
               Contributjng Member shall have a co1Hinuing security interest, which is hereby granted
               by each Member to the extent such Member becomes a Non-Contributing Membet·, in
               the Non-Contributing Member's Membersrup Interest, now owned and hereafter
               acquired, and the Contributing Member shall be entitled to all the rights and remedies of
               a secln·ed pa11y tmderthe Te:xas Uniform Commercial Code; or

                                              (b) Any Contributing Member may tnake an additional
                                 Capital Contribution to the Company in an am01mt up to such
                                 Member's prop01tionate share (in proportion to the relative
                                 Membership Interests of all Lending Members and Coniributing
                                 Members, or such other proportion as may be agreed by such
                                 Members) of the defaulted amount, ill which event (i) the Membership

                                                        7


511
                               Interest of the Contributing Member shall be increased to that
                               percentage which equals such Member's total Capital Contribution
                               divided by the total Capital Contributions made by all Members to
                               date, and (ii) the Membership interest of the Non-Contributing
                               Member shall be correspondingly decreased.

                                               (c) In connection with any advances made by
                               Contributing Members under Section 3.03, this Agreement shall
                               constitnte a security agreement fol' purposes of the Unifonn
                               Conuncrcial Code. Each Member, to the extent he becomes a Non-
                               Contributing Membet, hereby agrees to execute !U1d deliver to each
                               Contributing Member such Uniform Commercial code financing
                               statements as the Contributing MembcJ: may l'equest from time to time
                               coverin~: the security interest created hereunder. The Contributing
                               Membet shall be entiHed to record such financing statements (or
                               photocoJpies thereof) for the purposes of perfecting the security
                               interests created hereunder and pt'oviding public notice thereof.

      Section 3.04 Capital Call Option. Notwithstanding the provisions of Section 3.03, any
      Member shall have the right to dedare a Capital Call to the Company upon the occurrence of any
      of the following:

                                                (a) default of a Joan, contract or agreement, where the
                               liquidahld amount to satisfY the debt is in excess of $15,000 provided
                               there ate~ insufficient funds in the working capital fund;

                                                (b) the filing or imminent threat of a filing of mortgage
                               or lien foreclostu·e, tax lien, litigation, judgment, summary
                               disposse:ssion or eviction proceeding affecting the business premises of
                               the Company, replevin proceeding, involuntary Chapter 7 Bankruptcy
                               petitio.n, against the Company or any of the Company's assets; or

                                             (c) default of any loan, contract or agreement that has
                               been personally guaranteed by any Member or its principals.

      Section 3.05 Capital Accounts. An individual Capital Account shall be maintained for each
      Member consisting of that Membl~r·s Capital Contl'ibution, (1) in.creased by that Member's share
      of Profits, (2) decreased by that Member's share of Losses, and (3) adjusted as reqt1ired in
      accordance with applicable provis.ions ofthe Code and Regulations.

      Section 3.06 No Withdrawals of Capital Contribution. A Member shall not be entitled to
      withdraw any part of th.e Member's Capital Contribution or to receive any distributions, whether
      of money or property fi·om the Company, except as provided in this Agreement.

      Section 3.07 No Interest. No interest shall be paid on funds or property contribllted to the
      capital of the Company or on the balance of a Member's Capital Account.

      Section3.08   No Personal LiabiJity. A Member shall not be bound by, nor be personally Hable

                                                      8



512
      for, the expenses, liabilities, or obligations of the Company, except as otherwise pJ'ovided in the
      Act, in this Agreement, or in a separate written agreement executed by such Member.

      Section 3.09 No Priority. Except as set forth otherwise, no Member shaH have priority over
      any other Member with respect to the return of a Capital Contribution, or distributions or
      allocations of income, gain, losses, deductions, credits, or items thereof

                     ARTICLE IV.           ALLOCATIONS AND DISTRIBUTIONS
      Section 4.01 Rese1·ves. Subject to maintaining the Company in a sound financial and cash
      position (which. without limiting the generality of the foregoing, shall include the provision for
      losses affecting the cash position of the Company and the payment or provision for payment,
      when due, of obligations of the Company) and establishing such Reserves as aro dete1mined by a
      Majority of the Members, in their reasonable discretion, the Company shall distribute funds to
      the Members as provided herein.

      Section 4.02 Allocations. The Profits and Losses of the Company and all items of Company
      income, gain, loss, deduction, or credit shall be allocated, for Company book purposes and tot·
      tax purposes, to each Member in accordance with their MembershijJ Interests. If any Member
      unexpectedly receives any adjustment, allocation, or distribution described in Reg. sections
      l.704-l (b)(2)(ii)(d)(4), 1.704-l (b)(2)(ii)(d)(S)) or 1.704-1 (b)(2)(ii)(d)(6), as same may be
      amended from time to time, or tlnder any successor statutes thereof, items of Company gross
      income and gain shall be specially allocated to that Member in au amow1t and manner sufficient
      to eliminate any deficit balance in the Member's Capital Account cteated by such adjustment,
      allocation, or distribution as quickly as possible. Any special allocation under this Section 4.02
      shall be taken into account in computing subsequent· allocations of Profits and Losses so that the
      net amount of allocations of income and loss and all other items shall, to the extent possible, be
      equal to the net amount that would have been allocated if the unexpected adjustment, allocation,
      or distribution had not occurred. The provisions of this Section 4.02 and the other provisions of
      this Agreement relating to the maintenance of Capital Accounts are intended to comply with Reg
      sections 1.704-1(b) and 1.704-2, as same may be amended from time to time, or under any
      successor regulations thereof, and shall be interpreted and applied in a manner consistent with
      such Regulations.

      Section 4.03 Um·ealizcd Appteciation!Depa•eciation.             Any umealized appreciation or
      um·ealized depreciation in the values of Company property distributed in kind to all the Members
      shall be deemed to be Profits or Losses realized by the Company immediately prior to the
      distribution of the property, and such Profits or Losses shall be allocated to the Members' Capital
      Accotmts in the same proportions as Profits are allocated under Section 4.01. Any property so
      distributed shall be treated as a distribution to the Members to the extent of the Fair Market
      Value of tbe property Jess the amount of any liability secured by and related to the prope1ty.
      Nothing contained in this Agreement is intended to treat or cause such distributions to be treated
      as sales for value. For the purposes of this Section 4.03, "unrealized appreciation" or "unrealized
      depreciation" shall mean the difference between the Fair Market Value of such property and the
      Company's basis for such property.

      Section 4.04   Transfer of Interest. 1n the case of a Trattsfer of an Economic Interest during

                                                       9



513
      any fiscal year1 the Assigning Member and Assignee shall each be allocated a share of Pt·ofits or
      Losses based on the number of days each held r.he Economic Interest dming that fiscal year.

      Section 4.05 Operating Profits. Except as set forth otherwise~ cash resulting from the normal
      business operations of the Company and from a Capital Event shall be distributed among the
      Members at least each fiscal quarter, after accounting for reasonable reserves under Section 4.01 ,
      in prop01tion to each Member's Percentage Interest. Without limiting the foregoing, provided
      there are sufficient proceeds, each Member shall receive distributions necessary to satisfy their
      respective tax obligations for any income realized from the Company.

      Section 4.06 Non-cash Proceeds. If the proceeds from a sale or other disposition of an item of
      the Company consists of propetty other than cash, the value of such property shall be as
      determined by the Members. Such non-cash proceeds shall then be allocated among all the
      Members in proportion to their Percentage Interests. If such non-cash proceeds are subsequently
      reduced to cash, such cash shall be distributed to each Member in accordance with Section 4.0 1.

      Section 4.07 Liquidation Distributions. Notwithstanding any other provisions of this
      Agreement to the contraty, when there is a distribution in liquidation of the Company, or when
      any Member's interest is liquidated, all items of income and loss flrst shall be allocated to the
      Members' Capital Accounts under this ARTiCLE IV, and other credits and deductions to tl1c
      Members' Capital Accounts, shall be made before the final distribution is made. The fmal
      disttibution to the Membel'S shall be made to the Members to the extent of and in proportion to
      their positive Capital AccOtmt balances.

      Section 4.08 Guaranteed Payments to Obdulia, LLC. Notwithstanding anything to the
      contrary, the Company shall make the following guaranteed payments to Obdulia~ LLC:

                                              (a) No later than January 31, 2013, the Company shall
                                make a guaranteed payment to Obdulia, LLC in the sum of$130,000 if
                                the Gross Receipts for the calendar year 2012, equals or exceed
                                $2,000,000.

                                              (b) No later than January 31, 2014, the Company shall
                                make a guaranteed payment to Obdulia, LLC in the sum of $130,000 if
                                the Gross Receipts for the calendar year 2013 equals or exceeds
                                $3,000,000.

                                               (c) "Gross Receipts'~ as used in this Section 4.08 means
                                actual funds received by the Company fi·om jts operations and ol'dinal'y
                                course of business dming the pertinent time period. calculated on a
                                cash basis. Gross Receipts shall not include receipt of funds from non-
                                operating activities such as loans and investment income.

                      ARTICLE V.             MANAGEMENT AND OPERATIONS
      Section 5.01 Managing Member. For so long as it constittttes a Majority of the Members, the
      following shall serve as the Managing Member:


                                                      10



514
                                        ANNAPURNA MADDALI

      Section 5.02 Company's Management. Except as otherwise set forth in this Agreement,
      including, without limitation Section 7.03 below, all decisions concerning the operation and
      management of the Company's business shall be made by the Managing Member. A declaration
      by the Managing Member, staling that it has approved any specific action concerning the
      management of the Company's business as set fo1th in this Section 5.02, shall be conclusive to
      any tbi1·d party that a Majority ofMembers have approved such stated specific action and that the
      Managing Member is authorized to perform such action on behalf of the Company. The
      Managing Member may take any action set fm1h above by a written consent executed with or
      without a meeting. The Managing Member shall be authorized to obtain financing for the
      Business and sign and deliver any credit documents on behalf of the Company; provided
      however no Member shall cause the Company to inctu· a debt in excess of $20,000 without the
      unanimous consent of the Members.

      Section 5.03 Meetings. The Members are not required to hold meetings, and decisions may be
      reached through one or more inforn1al consultations followed by agreement among a 1vfajority of
      Members, provided that aU such Members are consulted (although all Members need not be
      present during a particular consultation), or by a written consent signed by a Majority of
      Members. In the event that Members wish to hold a formal meeting (a "Meeting'') for any
      reason, the following procedures shall apply:

                                               (a) Any two Members may call a Meeting of the
                                Members by giving Notice ofthe time and place ofthe Meeting at least
                                48 holU's prior to the time of the holding of the Meeting. The Notice
                                shall reasonably specify the putpose, location and time of the Meeting.

                                                (b) A Majority of Members shall constitute a quorum
                                for the transaction of business at any Meeting of the Members.

                                               (c) The transactions of the Members at any Meeting,
                                however caUed or noticed, or wherever held, shall be as valid as
                                though transacted at a Meeting duly held after call and notice if a
                                quorum is present and if, either befote or after the Meeting, each
                                Member not present signs a written waiver of Notice, a consent to the
                                holding of the Meeting, or an approval ofthe minutes of the Meeting.

                                               (d) Any action required or pe1mitted to be taken by the
                                Members under tbis Agteement may be taken without a Meeting if a
                                Majority of the Members individually or collectively consent in
                                writing to such action.

                                              (e) Members may participate in the Meeting through
                                Hte use of a conference telephone or similar commun\cations
                                equipment, provided that all Members participating in the Meeting can
                                hear one another.



                                                     11



515
                                                (t) 1l1e Members shall keep or cause to be kept with
                                tbe books and records of the Company full and accurate minutes of all
                                Meetings, Notices, and waivers of :Notices of Meetings, and all written
                                consents in lieu of Meetings.

      Section 5.04 Assets. AU assets of the Company, whether real or personal, may be acquired and
      he!d for the Company's purposes set forth in this Agreement in the Company name.

      Section 5.05 Payment of Taxes, Debts and Obligations. At all times prior to the termination
      or dissolution of the Company, the cash proceeds of the Company, together with any net
      reduction in the reserves of the Company, shall be allied first to 1he payme1tt of all taxes, debts
      and other obligations and liabilities (including the interest on and the principal of any loan owing
      to any Member thereof) of the Company which are then due and owing, and the establishment of
      Ieasonable reserves for contingent and future liabilities and distributions of the Company, as
      detennined by the Managing Member.

      Section 5.06 Delegation. The Managing Member may from time to time cat~se the Company
      to employ Persons, including any Affiliate of the Managing Member, to operate the business of
      the Company, including performing any function that the Managing Membe(" would otherwise
      perform, and to pay such Person any fee that the Managing Member deterJnines to be reasonable;
      provided, however, that no fee shall be paid to an Aft11iate of a Member, except as othenvise
      provided in this Agreement.

      Section 5.07 No Compensation. No Member shall be entitled to any fees, commissions or
      other compensation from the Company for any services rendered to or performed for the
      Company, except as specifically provided .in this Agreement, otller ancillary agreements
      (including Employment Agreements with Members) or as approved by a Supenn!!iority of
      Members in accordance with this Agreement.

      Section 5.08 Member's Indemnification. Each Member (the 11Indemnifying Patty';) shall
      indemnify the Company and each other Member (the "Indemnified Party") for, and shall hold the
      Indemnified ParCy, and for, from and against, any and all liability to any Person incurred by the
      Indemnified Party by reason of any fratldulent, criminal, or grossly negligent act or omission of
      or breach of this Agreement by such Indemnifying Party or any of the shareholders, officers,
      agents, emp!oyees or Affiliates of such Jndelhnifyiug Pruty, and for, from and against all cost,
      expense and loss incutred by the Indenmified Party in connection therewith.

      Section 5.09 Company"'s Indemnification. The Company shall indemnify the Members for,
      and shall hold the Members harmless from and against, any liability of the Members to any
      Person arising or incurred in, COlltlection with the good faith discharge of the l\tfembers•
      obligations w1der this Agreement, except for Jiability imposed on the Members as a result of any
      fraudulent, criminal, 01· grossly negligent act or omission of or breach of this Agreement by the
      Members or any of the shareholders, officers, agents or employees of the Members.

      Section 5.10 Bank Accounts. All funds of the Company shall be deposited in one or more
      accouuts with one or more recognized financial institutions in tbe name of the Company, at such
      locations as shall be determined by the Managing Member. Withdrawal from such accounts


                                                       12



516
      shall require the signature of such person or persons as a Majority of Members may designate.

                                             (a) Any one Membet where there are more d1an one,
                               designated by a Majority of the Members, may fi·om time to time open
                               bank accounts in the name of the Company.

                                              (b) Only persons approved by the Majority of the
                               Members shall have the authority to deposit and withdraw funds from
                               any Company bank account, or sign checks or other instruments on
                               behalf of the Company.

                                            (c) All funds of the Company shall be maintained in a
                               bank accolmt or accounts and no nmds of the Company shall be
                               commingled with funds or accounts of any Member, or person related
                               to any Member.

                                               (d) No Member shall have the right to borrow money
                               on behalf of any other party or the Company, or to use the credit of any
                               other party or the Company, for any putpose, except as specificalLy set
                               f01th in this Agree,ment and for the advancement of the Business.

              ARTICLE VI.           ACCOUNTING RECORDS, AND TAX MATTERS
      Section 6.01   Fiscal Year. The fiscal year of the Company shall be the calendar year.

      Section 6.02 Accounting Metho(l. The books and records of the Company shall be
      maintained on the method of accounting chosen by the Members and otherwise in accordance
      with generally accepted accounting principles consistently applied and shall show all items of
      income and expense.

      Section 6.03 Company's Books. Complete books of account of the Company's business, in
      which each Company transac6on shall be fully and accurately entered, shall be kept at the
      Company's principal executive office and shall be open to inspection and copying by each
      Member or the Member's authorized representatives on reasonable Notice dm·ing nonnal
      business hours. The costs of such inspection and copying shall be borne by the Member
      requesting same.

      Sectioo6.04 Financial Statements. Financjal books and records of tile Company shall be kept
      on the cash method of accounting, which shall be the method of accounting followed by the
      Company for federal income tax purposes. A balance sheet, income statement, and tax returns of
      the Company shall be prepared promptly fo!Jowing the close of each fiscat year in a manner
      appropriate to and adequate for the Company's business and for canying out the provisions of
      this Agreement and copies t11ereof shaU be distributed to the Members.

      Section 6.05 Company's Records. At all times dtu·ing the term of existence of the Company,
      and beyond that term if a Majority of Members deem it necessary, the Company sbaU keep or
      cause to be kept the books ofaccow1t referred to in Section 6.03, and the following:


                                                     13



517
                                             (a) A cuiTent list of the full name and 1ast known
                               business or residence address of each Member, together with the
                               Capital Contribution and the share in Profits and Losses of each
                               Member;

                                               (b) A copy of the Certificate ofFormation, as amended;

                                               (c) Copies of the Company's federal, state, and local
                                income tax or information returns and reports, if any, for the six most
                                recent taxable yearsi

                                               (d) Executed   counte~parts   of this Agreement, as
                                amended;

                                              (e) Any powers of attorney under which the Certificate
                                of Formation or any amendments thereto were executed;

                                               (t) Financial statements of the Company for the six
                                most Jecent fiscal yearsi and

                                               (g) The Books and Records of the Company as they
                                relate to the Company's internal affairs for the cutTent and past fom
                                fiscal yeats.

                                              (h) If a Majority of Members deem that any of the
                                foregoing items shall be kept beyond the te1·m of existence of the
                                Company, the repository of said items shaU be as designated by a
                                Majority ofMembers.

      Section 6.06 Partnership Tax Election. Each of the Members hereby recognizes that the
      Company will be recognized as a partnership for Federal and New Jersey tax purposes and will
      be subject to all provisions of Subchaptet' K of Chapter 1 of Subtitle A of tbe Code.

      Section 6.07 Tax Returns. Within 60 days after the end of each taxable year, the Company
      shall send to each Member all infonnation necessary fot the Members to complete their federal
      and state income tax or information returns, and a copy of the Company's federal, state, and local
      income tax or information rehlt'ns for such year. Subject to Section 4.01, the Company shall
      make minimum distributions to cover each Members tax liability arising out of income generated
      by the Company.

      Section 6.08 Tax Matters. The Managing Member shall be the "tax matters pm1ner" for
      purposes of the Code and shall notify the Members of any audit or other matters of which the
      Managing Member is notified or becomes aware.

                       ARTICLE VII.          MEMBERS' RIGHTS AND VOTING
      Section 7.01 No Authority. Except as provided under Section 5.02above, or as provided
      otherwise with respect to the Member's duties or as specifically provided in writing by the all of

                                                      14



518
      the Members, the Members shall not act in the name of or as the representative of the Company
      and shall not deal with the Company's assets in any way. and shall not incur any obligation for
      which the Company or the other Member will or may be Hable, and the Members shall not
      otherwise bind the Compa11y or the other Member, and any violation of this sentence shall be
      deemed to constitute willful misconduct.

      Section 7.02 Voting Proportion. Each Member shall Vote in proportion to the Member's
      Percentage Interest as of the governing record date.

      Section 7.03 Prohibited Acts. Notwithstanding anything to the contrary in this Agreement,
      the following actions shall require the 1.manimous Vote of the Members:

                                             (a) issumg additional ownership interests in the
                                Company to new or existing Members or otherwise taking any actions
                                which would dilute the Percentage Interests ofthe existing Members;

                                               (b) the admissjon of the Assignee as a Substituted
                                Member;

                                              (c) any amendment of the Cettificate of Formation o1·
                                this Agreement; or

                                                (d) entering into any contract with the Managing
                                Member or Annapurna Maddali, or any affiliates, employees or family
                                members of either (collectively, a "Related Party"), or otherwise
                                paying or agreeing to pay any remuneration to any Related Patty other
                                than distributions to the Managing Member in its capacity as Member
                                in accordance with the terms of this Agreement. .

      Section 7.04 Record Date. The record date for determining the Members entitled to Notice of
      any Meeting, to vote, to receive any distribution, or to exercise any right in 1-espect of any other
      lawful action, shall be the date set by a M~ority of Members, provided that such rec01·d date
      s11atl not be more than 60, nor less than 10 days prior to the date of the Meeting, nor more than
      60 days prior to any other action. In the absence of any action setting a record date the record
      date shall be determined in accordance with the applicable laws ofTexas.

      Section 7.05 Proxy. At all Meetings of Members, a Member may Vote in person or by Proxy,
      Such pl'Oxy shall be filed with any Member before or at the time of the Meeting, and may be
      filed by facsimile transmission to the principal executive oftice of the Company or such other
      address as may be given by a Majority of Members to the Members for such pm-poses.

      Section 7.06 Jntellectual Property. All copyrights, patent'S, web sites, trade names, trade
      secrets, or other intellectual pmperty rights associated with any ideas, concepts, techniques.
      inventions, pl'Ocesses, or works of authorship developed or created by the Member ot the
      Members during the course of performing Company's wotk shall belong exclusively to
      Company and its Members and/or the third pa1ty end client and shall be considered a work made
      for hire. Each Member herewith assigns, without any requirement of ft1rU1er consideration, any
      right, title, or interest that each such Membe1' may have in such work pmdttct including any
                                                      15



519
      copyrights, patents, trade secrets or other itltellectual prope11y rights pet1aining thereto. Each
      Member wiH provide full information regarding the rights being assigned and will take such
      further actions, including but not limited to, execution and delivery of instruments of
      conveyance, as may be appropriate to give full and proper effect to such assignment.

                ARTICLE Vll. TRANSFERS OF MEMBERSHIP INTERESTS
      Section 8.01 Transfer Restrictions. Each Member acknowledges and agrees that the
      restrictions on the transfer of membership interest contained in this Agreement is a material
      factor in each Member investing in the Company and is necessary to maintain hannony,
      continuity, and success.

      Section 8.02 Withdrawal. A Member- may withdraw from the Company at any tune by giving
      Notice of such Membet·'s intent to withdraw to all other Members, at least 180 calendar days
      before the effective date of withdmwal. Withdrawal shall not release a Member from any
      obligations and liabilities under thls Agreement which were accrued or incuned before the
      effective date of withdl·awal. A withdrawing Member shall divest the Member's entire
      Membership Interest before the effective date of withdrawal in accordance with the transfer
      restrictions and option dgllts set fotih below.

      Section 8.03 Right of First Refusal. Except as otherwise provided herein, no Member shall
      sell, transfer, pledge, encumber or otherwise dispose of her or his Membership Inte1·est to any
      person, fum, Company or other entity, without the consent of the Company as detennined by a
      Supermajority of the Members, unless the Member desiring to make the transfer or
      encumbrance, hereinafter referred to as the "Selling Member," shall have first made the offer to
      sell hereinafter described ("Offer"), and such Offer shall not have been accepted, and such
      transfer or encumbrance is ultimately made on the same tem1s set f011h in the Offer.

                                               (a) The Offer which shall be given to the Company and
                                the other Member shall consist of an offer to sell all of the
                                Membership Interest of the Company O\\'ned by the Selling Member,
                                to which shall be attached a statement of intention to transfer or
                                encumber, as the case may be, the name and address of the prospective
                                purchaser or lien or, the percentage of Membership Interests involved
                                in any such proposed transfer or enculnbrance, and the price and tem1s
                                of any such b·ansfer or encumbrance («Bonafide Offer"), in accordance
                                with the provisions ofSection 8.03(b) hereof.

                                                (b) If any such Selling Member has received a bonafide
                                written offer to purchase all ofher or his Membetsbip Interest which
                                she or he wishes to accept or a bona fide written offer to receive a loan
                                or an advance of money which loan or advance involves an
                                encumbrance upon said Membership Interest to secUI'e the loan or
                                advance as refened to in Section 8.03{a) above, the Selling Member
                                shall submit to the Company within fourteen (14) days after receipt of
                                such Bonafide Offer, a written notice including a copy of such
                                Bonafide Offer~ as re<tuired under Section 8.03(a) above, togetbe1· with

                                                      16



520
      the name and address of the principal or principals if the offer is made
      through an agent (hereinafter collectively referred to as the «Bonafide
      Offerors"), and sufficient fact concerning the Bonafide Offerors to
      enable the Company and other Members of the Company to anive at
      an informed judgment as to the bonafides of such Offer. The Selling
      Member shall then offer, or be deemed to have offered, .in writing to
      sell, first to the Company al1 of the Membership Interest held by the
      Selling Member at the purchase price set forth in the Bonafide Offer
      ("Lifetime Purchase Price"), and upon the terms and conditions set
      forth therein; provided, however, the Selling Member has complied
      with all of the procedural conditions thereof. Within thirty (30) days
      after receipt by the Company of the Bonafide Offer, the Company
      may, at its option, elect to purchase or encumber all of the Membership
      Interest of the Selling Member which is the subject of the Bonafide
      Offer for the Lifetime Pmchase Price. If such offer is not accepted by
      the Company, any other Member of the Company may, within forty-
      five (45) days after the receipt by the Company of the Bonafide Offer,
      or Members pursuant to their pro rata interest in the Company (if mote
      than one Member), elect to purchase or encumber, as the case may be,
      all of the Membership Interest of the Selling Member which is the
      subject of the Bonafide Offer for the Lifetime Purchase Price on the
      terms set forth in the Bonafide Offer. The Company shall exercise its
      election to purchase by giving written notice thereof to the Selling
      Member and the other Members. The other Members shall expose
      their election to purchase by giving written notice thereof to the
      Selling Member and to the Company. In either event, the notice shaH
      specify a date for the closing of the purchase, which shall not be more
      than thit·ty (30) days after the date of the giving of such notice of
      acceptance,

                      (c) If the offer to sell as provided fot• in Section 8.03(b)
      hereof is not accepted by the Company or any ofthe other Members as
      set forth therein, the Selling Member may make a bonafide transfer or
      encumbrance to the ptospective purchaser or lien or named in the
      statement attached to the Bona Fide Offer with such sale or
      encumbrance to be made only in strict accordance with the terms stated
      therein. The Company and the other Members shall be grven full
      access to all closing documents relating to such sale m· encttmbrance to
      the Bonafide Offemrs, so that adherence to the terms and conditions of
      the Bonafide Offer can be demonstrated. However, if the Selling
      Member shall fail to make such transfer or encumbrance within thilty
      (30) days following the expiration of the time hereinabove provided
      for the election to purchase by the othe1· Member, in accordance with
      Section 8.03(b), Ol' if there is any modification in price or any of the
      terms and conditions of the Bonafide Offer, such Membership Interest
      shall again become subject to all the restrictions of this Agreement,
      and the Selling Member shall not have the right to complete the

                            17



521
                                proposed sale of encumbrance without again offering the Membership
                                Intere~    in writing, anew to the Company and the other Member
                                put'suant to the procedures set forth in this Section 8.03.
                                Notwithstanding anything in this Agreement to the contrary, all
                                Membership Interest purchased by the Bonafide Offerors from a
                                Selling Member shall be acquired subject to the terms and conditions
                                of this Agreement and the Bonafide Offerors shall not sell, assign,
                                pledge, encumber, hypothecate, mortgage, or in any other manner
                                transfer 1lhe whole or any part of the Membership Interest purchased, or
                                any other Membership Interest thereafter held or owned, without the
                                prior 'WJritten consent of the other Member of the Company as
                                determii1Led by a Supermajority of the Members, and otherwise except
                                as specifically provided in this Agreement. It shall be the affhmative
                                obligation of the Selling Member to notify the Bona fide Offerors that
                                the Membership Intel'est proposed to be sold by the Selling Member
                                and pumhased by the Bonafide Offerors will remain subject to the
                                terms and provisions of this Agreement following the proposed sale
                                and purchase.

                                              (d) In the event of any attempted sale, assignment,
                                transfer, hypothecation, pledge, encumbrance or disposition of
                                Membership Interest by any Member not in accordance with the terms
                                of this Agreement, shall be deemed null and void and of no effect.

                                                (e) At the time of closing, as set fotth in this Section
                                8.03, tht~ Selling Member shall deliver to the purchaser, certificates
                                reptesenting all of the Membership Interest owned by the Selling
                                Member, free and clear of all liens, c]aims and encumbrances, duly
                                executed Assignment of Membership Interest with any necessary
                                Membership Interest transf-er chal'ges or stamps affixed, in order to
                                effectuate the sale and purchase.

      Section 8.04 Transfer Condititons. E7lcept as expressly provided in this Agreement, a
      Member shall not transfer any part of the Member's Membership Interest in the Company,
      whether now owned or hereafter acquired, unless (1) the Company and/or other Members have
      exercised, or have declined to exercise, thei1' right to purchase the withdtawing Membet's
      Membership InteJest pursuant to Section 8.03(b) above and (2) the Membership Interest to be
      transferred, when added to the total of all other Membership Interests transferred in the
      preceding 12 months, wi11 not cause the termination of the Company under the Act or revocation
      of the Company's tax election as a pattnersbip St1bchapter "K" ofthe Code. No Member may
      encumber or permit or suffer any encumbrance of all or any part of the Member's Membership
      Interest in the Company tmless such encumbrance has been approved in writing by all the other
      Members. An:y transfer or encumbrance of a Membership Interest in violation of this Section
      shall be void. Notwithstanding any other provision of this Agreement to the contrary, provided
      the transfer does not result in a change in the Company's partnership stat11s, a Member may
      transfer all or any p01tion of his or het Membea·ship Interest to a revocable trust created for the
      benefit of the Member, or any ~combination between or among the Member, the Membet·'s

                                                      18



522
      spouse, and the Member's issue; provided that tlte Member l'etains a beneficial interest in the
      trust and all of the Voting Jnterest included in such Membership lnterest. A transfer of a
      Member's beneficial interest from such trust to another entity, or failure to retain such Voting
      Interest shall be deemed a Transfer of a Membership Interest, unless such later transfer is to the
      grantor of such trust, or to another tntst which would qualify as a revocable trust in a first-time
      transfer.

      Section 8.05 Triggering Events. On the happening of any of the following events
      ("Triggering Events") with respect to a Member, and assuming the remaining Members vote to
      continue the Company per ARTICLE IX below, the Company, first, and the other Members in
      proportion to their respective percentage of Membership Interests, second, shall haYe the option
      to purchase all or any portion of the Membership Interest in the Company of such Member
      ("Selling Membet11 ) at the price and on the terms provided in Section 8.08 of this Agreement:

                                               (a) the bankruptcy of a Member;

                                             (b) the winding up and dissolution of a corporate
                                Member, or merger or other corporate reorganization of a corporate
                                Member as a result of which the corporate Member does not survive as
                                an entity;

                                               (c) the withdrawal of a Member; and

                                              (d) except for the events stated in Section 8.03, the
                                occm1·ence of any other event that is, or that would cause, a transfer of
                                such Member's interest to an Assignee.

      Each Member agrees to promptly give Notice of a Triggering Event to all other Members.

      Section 8.06 Company's E lectiion to Purchase. On the receipt of Notice by the other
      Members as contemplated by Sec1tion 8.03 through Section 8.05, and on receipt of actual notice
      of any Triggering Event, the Company, first, and the othe1· Members in proportion to their
      respective percentage of Membe'J:ship Interests, second, sbaU have the option, but not the
      obligation, for a period ending 30 calendar days following the determination of the p\trchase
      price as provided in Section 8.08, to purchase the Membership Interest in the Company to which
      the option relates, at the price and on the terms provided in Se.ction 8.08, and the other Members,
      pro rata in accordance wit:l1 their }:1rior Membership Interests in the Company, shall then have the
      option, for a period of 30 days th,ereafter, to purchase the Membership Interest in the Company
      not purchased by the Company, on the same terms and conditions as apply to the Company. If aU
      other Members do not elect to purchase the entire remaining Membership Interest in the
      Company, then the Members eleoting to purchase shall have the right, pro rata in accordance
      with their prior Membership Interest in the Company, to purchase the additional Membership
      Interest in the Company available: for purchase. Any Membership Interest in the Company not
      purchased may be transferred to au1 Assignee, but such Assignee shall not become a Substituted
      Member without the approval of atll Members according to Section 7.02 above. The transferee of
      the Membership Interest in the Company that is not ptU·chased shall hold such Membership
      Interest in the Company subject to all ofthe provisions of this Agreement.

                                                      19



523
      Section 8.07 Voting Restriction. No Member shall participate in any Vote or decision in any
      matter pertaining to the disposition of that Member's Membership Interest in the Company under
      thls Agreement.

      Section 8.08 Purchase Price. The purchase price of the Membership Interest that is the
      subject of an option per Section 8.06 above shall be the Fair Market Value of such Membership
      lnterest as determined under this Section 8.08. Each of the selling and purchasing parties shall
      use hjs, her, or its best effotts to mutually agree on the Fair Market Value. If the parties are
      unable to so agree within 30 days of the date on which the option is first exercisable (the Option
      Date), the selling party shall appoint, within 20 days of the Option Date, one appraiser, and the
      purchasing party shall appoint within 20 days of the Option Date, one appraiser. The two
      appraisers shall within a period of five additional days, agree on and appoint an additional
      appraiser. The three appraisers shall, within 30 days after the appointment ofthe third appraiser~
      determine the Fair Market Value of the Membership Interest in writing and submit their report to
      aU the parties. The Fair Market Value shall be determined by dhcegarding the appraisels
      valuation that diverges the greatest fi·om each of the other two appraisers' valuations, and the
      arithmetic mean of the remaining two appraisers' valuations shall be the Fair Market Value. The
      selling and purchasing party shall pay for the services of the appraiser selected by it, plus one-
      half of the fee charged by the third appraiser. The option purchase price as so determined shall be
      payable in cash no later than Uwee (3) months following the determination of the appraisers'
      determination ofthe purchase price.

      Section 8.09 Substituted Member. Except as expressly permitted under Section 8.03, a
      prospective transferee (other than an existing Member) of a Membership Interest may be
      admitted as a Member with respect to such Membership Interest (a "Substituted Member'') only
      (1) on the S·upctmajority Vote of the other Members in favor of the prospective transferee's
      admission as a Member, and (2) on such prospective transferee's executing a counterpart of this
      Agreement as a party hereto. Any prospective transferee of a Membership Interest shall be
      deemed an Assignee, and, therefore, the owner of only an Econoinic Interest nntil such
      prospective transferee has been admitted as a Substituted Member. Any person admitted to the
      Company as a Substituted Member shall be subject to all provisions of this Agreement.

      Section 8.10 No Registt'ation. The initial sale of Membership Interests in the Company to the
      initial Members has not been qualified or registered under the sectu·ities laws of any state, or
      registered under the Securities Act of 1933, as amended, in reliance upon exemptions from the
      registration provisions of those Jaws. No attempt has been made to qualify the offering and sale
      of Membership Interests to Members under the secttrities or corporate laws of Texas.
      Notwithstanding any other provision of this Agreement, Membership JnteJests may not be
      Transfened or Encumbered unless registered or qualified under applicable state and federal
      securities law or unless, in the opinion of legal cmmsel satisfactory to the Company, such
      qualification or registration is not required. The Member who desires to transfer a Membership
      Interest shall be responsible for all legal fees incurted in connection with said opinion.

      Section 8.11 Orag Along. In the event that a majority of the Members ("Majority Members")
      of the outstanding interest accept an offer to purchase their Interest from a bona fide third party,
      the Majority Members may send a written notice (the "Drag-Along Notice") to the other Interest
      Holders (the "Drag-Along Sellers") specifying the name of the purchaser, the consideration

                                                      20



524
      payable per share and a summary of the material terms of such proposed purchase. Upon receipt
      of a Drag-Along Notice, Each Drag-Along Seller shall be obligated to: (i) seU all of its Interest,
      free of any encumbrat1ces, in the transaction contemplated by the Drag-Along Notice on the
      same terms and conditions as the Majority Members (including payment of its pro-rata shal'e of
      all costs associated with such transaction), and (ii) othetwise take all necessary action to cause
      the consummation of such transaction, including voting its interest in favor of such transaction
      and not exercising any appraisal rights in connection therewith. Each Drag-Along Seller (i)
      further agrees to take aU actions (including executing documents) in connection with
      consummation of the proposed transaction as may be reasonably requested of it by the Majority
      Members, and (ii) hereby appoints the Majority Holders, acting jointly, as its attorney-in-fact to
      do the same on its behalf

      Section 8.12   Transfer by Obdulia, LLC upon Tetmination of tbe EmpJoytnent
      Agreement.

                                                (a) Upon the tenni11ation of the Employment
                                Agreement due to an Involuntary Termination (as defined in Section 7
                                of the Employment Agreement), death of the employee, nonrenewal of
                                the Employment Agreement after expiration of the initial tem1 of
                                employment, Other Than for Cause (as defined in Section 8 of the
                                EmploymeJlt Agreement) or termination by Employee for Good
                                Reason (as defined in Section 8 of the Employment Agreement), then
                                no later than fourteen (14) days ofthe Termination Date (as defined in
                                Section l l of the Employment Agreement), the Company shall buy
                                and Obdulia, LLC shall sell all of its membership interests in the
                                Company at the bjgher of Fair Market Va1ue or the balance ofObdulia,
                                LLC's capital account as of the Termination Date.

                                                 (b) Upon the termination of Employment Agreement
                                due to Termjnation for Cause (as d.efined in Section 9 of the
                                Employment AgTeeroent) or due to Employee electing to terminate his
                                employment other than for Good Reason (as defined in Section 10 of
                                the Employment Agreement), then no later than fourteen (14) days of
                                the Termination Date~ the Company shall buy and Obdulia, LLC shall
                                sell all of its membership interests in the Company at the lower of the
                                Fair Market Value or the balance ofObdulia, LLC's capital accotmt in
                                the Company as of the Termination Date.

                                               (c) In the event the purchase pdce for the sale of
                                Obdulia, LLC's shares exceeds $50,000, the Company shall have the
                                right to pay for the purchase price of the Employee~s membership
                                interests by providing a 25% down payment and financing the
                                remaining portion over five (5) years to be secured by a promissory
                                note. The promissory note shall be fu11y am01tizing and require
                                monthly installments over a period of five (5) years, witl1lnterest being
                                imposed at the annual rate equal to the Prime Rate (as published in the
                                Wall Street Journal) of intetest in effect as of the Closing Date plus

                                                     21



525
                                two (2%) percent, and shall be adjusted annually thereafter on each
                                successive anniversary of the Closirtg Date. The monthly installments
                                shall be due at on the first day of each calendar month and the holder
                                of the Note shall be entitled to prepaid interest at the Closing, if
                                applicable. The promissory note shall provide fur acceleration of the
                                unpaid balance, together with all accrued interest, upon written notice
                                to the Company of a default in the payment of any one monthly
                                installment, which default remains unsecured for a period of thirty (30)
                                days. Tne Company shall possess the uurestdcted right to prepay all
                                or any part of the promissory note, without premium or penalty, and
                                with interest only to "date of payment".

      Section 8.13 Restrictio)tS on Transfer of ObduUa, LLC's Membership Interests. The
      Parties understand and agree that the Company is engaged in a business that is highly regulated,
      that require, inter alia, notice requirements for change of ownership and backgronnd checks of all
      owners. Therefore, Obdulia, LLC agrees that no member of Obdulia, LLC shall be allowed to
      transfer their membership interests in Obdulia, LLC without the prior written consent of the
      Company, which consent shall be withheld only if the proposed transferee will have an adverse
      effect on the Company's licenses and/or qualifications with regulatory authorities and other third
      party payers.



                        ARTICLE IX.             DISSOLUTION AND WINDING UP
      Section9.01 Dissolntiou. The Company shall be dissolved on the fu·st to occur of the
      following events:

                                                (a) The written agreement of all Members to dissolve
                                 the Company.

                                              (b) The sale or other disposition of substantially a11 of
                                 the Company assets.

                                                (c) The entry of a decree of judicial dissolution by any
                                 Texas Court.

      Section 9.02 Winding Up. On the dissoh1tion of the Company, the CmnpruJy shall engage in
      no fmther business other than that necessary to ').r:ind up the business ru1d affairs of the Company.
      The Members who have not caused a Triggering Event shall wind up the affairs of the Company.
      The Persons winding up the affairs of the Company shall give written Notice of the
      commencement of winding tJp by mail to all known creditors and claimants against the Company
      whose addresses appeat in the tecords of the Company. After paying or adequately providing for
      the payment of all known debts of the Company (except loans owing to Members) the remaining
      assets of the Company shaH be distributed or applied in the following order of priority:

                                                (a) To pay the expenses of liquidation.

                                                       22



526
                                                (b) To repay outstanding loans .11-om Members. If there
                                are insufficient funds to pay such loans in full, each Member shall be
                                repaid in the raJio that the Member's respective loan, together with
                                interest accrued and unpaid thereon, bears to the total of all such loans
                                from Members, including all interest accrued and unpaid on those
                                loans. Such repayment shall fu·st be credited to accmed and unpaid
                                interest due and the remainder shaH be credited to principaL

                                               (c) Among the Membet·s iu accordance with the
                                provisions of Section 4.06.

      Section 9.03 No Rccom·se against Members. Each Member shall look solely to the assets of
      the Company for the return of the Member's investment, and ifthe Company prope1ty remaining
      after the payment or discharge of all prior debts and obligations is consumed in full, then such
      Member shall have no recourse against any other Members for indemnification, contribution, or
      reimbursement

                              ARTICLE X.              GENERAL PROVISIONS
      Section 10.01 Complete Agl'eemeut. TWs Agreement constitutes the whole and entire
      agreement of the Members with respect to the subject matter of this Agreement, and it shall not
      be modified or amended in any respect ex_cept by a written instrument executed by all the
      Members. Tills Agreement replaces and supersedes all prior written and oral agreements by and
      among the Members or any of them.

      Scctiou 10.02 Counterparts. This Agreement may be executed in one or more counter parts,
      each of which shall be deemed an original~ bttt all of which together shall constitute one and the
      same instrument,

      Section 10.03 Choice of Law; Forum. This Agreement shall be construed and enforced in
      accordance with the intemallaws of the State of Texas. If any provision of tb.is Agreement is
      determined by any court of <:ompetent jurisdiction or arbitrator to be invalid, illegal, or
      unenforceable to any extent, that provision shall~ if possible> be construed as though more
      narrowly drawn, if a nan·ower construction would avoid such invalidity, illegality, or
      unenforceability or, if that is not possible, such provision shall, to the extent of such invalidity,
      illegality or unenforceability, be severed, and the remaining provisions of this Agreement shaH
      remain in effect. The intent of the parties hereto is that the Company is recognized as a limited
      liability company under the Code, and all provisions herein are to be intel'preted under Texas law
      to conform to such intent.

      Section 10.04 Arbitration. Except as otherwise provided in this Agreement, any dispute,
      controversy or claim arising out of or relating to this Agreement, or any breach thereof, including
      without limitation any cl~im that this Agreement, or any part hereof, is invalid, illegal or
      othenvise voidable or void, shall he submitted to binding arbitration by an American Arbitration
      Association ("AAA") arbitrator, or such other arbitrator as may be agreed upon by the parties.
      Hearings on such al'bitration shall be conducted in Bexar County in the State of Texas or jf no
      arbitrator is available in such county, any cotmty in the State of Texas. A single arbitrator shall

                                                       23



527
      arbitrate any such controversy. The arbitrator shall hear and determine the controversy in
      accordance with applicable law and the intention of the parties as expressed in this Agreement,
      upon the evidence produced at an arbitration hearing scheduled at the request of eithex party.
      Judgment on the award of the arbitratortuay be entered in any coutt having jurisdiction thereof.

                                               (a) Power And Authority Of Arbitrator. The arbitrator
                                shall not have any power to alter, amend, modify or change any of the
                                terms of this Agreement nor to grant any remedy which is either
                                prohibited by the tettns of this Agreement, or not available in a court
                                of law.

                                                (b) Goveming Law.        AU questions in respect of
                                procedure to be followed in conducting the arbitration as well as the
                                enforceability of this Agreement to arbitrate which may be resolved by
                                state law shall be resolved according to the laws of the State of Texas.

      Section 10.05 Binding Effect. This Agreement shall be binding on and inure to the beneftt of
      the Members and tbeir heirs, personal representatives, and pem1itted successors and assigns.

      Section 10.06 Protlouns; Statutory References. All pronouns and all variations thereof shall
      be deemed to refer to the masculine, feminine, or neuter, singular or pltu'al, as the context in
      which they are used may require. Any reference to the Act or other statutes or laws will include
      aU amendments, modifications, or replacements of (he specific sections and provisions
      concemed.

      Section 10.07 Notices. Any notice, demand, consent, election, offer, approval, request~ or other
      communication (collectively, "Notice") given under this Agreement shall be in -writing and shall
      be sen,ed personalJy or delivered by first class, registered or certified, retum receipt requested
      U.S. mail, postage prepaid. Notices may also be given by tJ:ansmittal over electronic transmitting
      devices st1ch as Telex, facsimile or telecopy machine, if the party to whom the notice is being
      sent has such a device in its office, provided a complete copy of any notice so transmitted shall
      also be mailed in the same manner as required for a mailed notice. Notices shall be deemed
      received at the earlier of actual receipt or three (3) days following deposit in U.S. mail, postage
      prepaid. Notices shall be directed to the Company at the Company's principal place of business
      as specified in Section 2.04 of this Agreement, and to the Members at the addresses shown in the
      first page of tbis Agreement pmvided a Member may change such Member's address fol' notice
      by giving written notice to all other Members in accordance with this Section 14.15.

      Section 10.08 Additional Documents and Acts. The parties to this Agreement shall promptly
      execute and deliver any and all additional documents~ instnunents, notices, and other assurances,
      and shall do any and all other acts and things, reasonably necessary in cotmection with Lhe
      perfonnance of their respective obligations 1.mder this Agreement and to carry out tl1e intent of
      the Members.

      Section 10.09 No Authority. Except as provided in this Agreement, no provision of this
      Agreement shall be construed to constitute a Member, in the Member's capacity as such. the
      agent of any other Member.


                                                      24


528
      Section 10.10 Severability. If any provision of this Agreement or the application of such
      provision to any person or circwnstance shall be he1d invalid, the remainder of this Agreement or
      the application of such provision to persons or circumstances other than those to which it is held
      invalid shall not be affected thereby.

      Section 10.11 Requisite Authority. Each Member represents and warrants to the othe1•
      Members that the Member has the capacity and authority to enter into this Agreement.

      Section 10.12 Headings. The alticle1 section, and paragraph titles and headings contained in
      this Agreement are inserted as matter of convenience and for ease of reference only and shall be
      disregarded for all other purposes, including the construction or enfmcement of this Agreement
      or any of its provisions.

      Section 10.13 No Third P~rty Beneficiaries. This Agreement is made solely for the benefit of
      the parties to this Agreement and their respective pe1mitted successors and assigns, and no other
      person or entity shall have or acquire any right by virtue of t1)is Agreement.



                                      [Stgnatures.follow on next page]




                                                      25



529
             JN WITNESS, WHEREOFr fhe parfi.es   haveexectlted or .caused to be exe.culed this
      Operating Agreement of CRAWfC)lr~P, .H'UNTL.EIGRMEPlCAL SUPPLIESYLLC on the ·day
      f)i1Qy.e,a:t fL,tSt ~QQVe. Writt¢n.


      COMPANY.:

      CRAWFORDimN'fLEIGHME·DlCAL
      SUPPLIES, Lt-C
                  #.,,   ~·    I
      By:   PRE5s.it~PMIND~r
            P.,uthQt·iz-ed Represei1tafive   ·




      MEMi.lER(S)X




      ANNAPURNAMADDALl




530
                            EXHIBIT A

                      Membership Interest Table




               Name                Capital Contribution   Percentage


      PREM SWAROOP KALIDINDI             $187.50           l8.75%

      ANNAPURNA MADDALI                  $562.50           56.25%

      OBDULIA, LLC                       $250.00            25%




                                 27



531
Tab 3
FILED
3/31/2015 4:07:26 PM
Donna Kay McKinney
Bexar County District Clerk
Accepted By: Anthony Barrow

                                               CAUSE NO. 2013-CI-00404

            HUNTLEIGH HOME MEDICAL, LTD.                         §              IN THE DISTRICT COURT
            AND JANE ELIZABETH FLORES, AND                       §
            MICHAEL FLORES,                                      §
                                                                 §
                     Plaintiffs,                                 §
                                                                 §
            v.                                                   §              57TH JUDICIAL DISTRICT
                                                                 §
            CRAWFORD MEDICAL SUPPLIES, LLC,                      §
            SRINIVAS "SAM" MADDALI,                              §
            PREM SWAROOP KALIDINDI, AND                          §
            MADDALIREALTY,LLC,                                   §
                                                                 §
                     Defendants.                                 §              BEXAR COUNTY, TEXAS

                                    PLAINTIFFS' THIRD AMENDED PETITION

            TO THE HONORABLE COURT:

                     Plaintiffs Huntleigh Home Medical, Ltd., Jane Elizabeth Flores and Michael Flores file

            this third amended petition and would respectfully show:

                                                  DISCOVERY LEVEL

                     The patties are conducting discovery under a Level 3 discovery control plan.

                                                        PARTIES

                     Plaintiff Huntleigh Home Medical, Ltd. ("Huntleigh") is a Texas limited partnership.

                     Plaintiff Jane Elizabeth Flores is an individual resident of Bexar County, Texas.

                     Plaintiff/Counter-plaintiff Michael Flores is an individual resident of Bexar County,

            Texas.

                     Defendant Crawford Medical Supplies, LLC ("CMS") 1s a Texas limited liability

            company and has already entered an appearance in this case.

                     Defendant Sam Maddali is an individual who, upon information and belief, is a resident

            of New Jersey. He has already entered an appearance in this case.



             425
         Defendant Prem Swaroop Kalidindi is an individual who, upon information and belief,

is a resident of Texas. He has already entered an appearance in this case.

         Defendant Maddali Realty, LLC ("Maddali Realty") is a Texas limited liability

company and has already entered an appearance in this case.

                                        JURISDICTION

         This Court has jurisdiction over Defendants CMS and Maddali Realty because they are

both Texas limited liability companies. The Comt has jurisdiction over Defendant Kalidindi

because, upon information and belief, he is a Texas resident, and because he is the managing

member of CMS.

         This Court has personal jurisdiction over Defendants Maddali and Kalidindi because

Plaintiffs' causes of action arise from and relate to their contacts with Texas, and because they

purposefully availed themselves of the privilege of conducting activities in Texas.

         Maddali traveled to Texas on many occasions to meet with Plaintiffs Jane Elizabeth

"Belle" Flores and her son, Michael Flores. All of these meetings concerned Huntleigh and the

assets at issue in this case. Maddali committed wrongful actions complained of in this petition in

Texas.

         Even if Kalidindi were a resident of another state, the same analysis applies to him. He

also traveled to San Antonio on many occasions to meet with Plaintiffs.      All of these meetings

concerned Huntleigh and Huntleigh assets. Kalidindi committed wrongful actions complained of

in this petition in Texas.

         Maddali and Kalidindi have committed torts, in whole or in part, in Texas. This includes

making misrepresentations in Texas that give rise, in whole or in part, to Plaintiffs' claims. They

made these misrepresentations to Michael Flores, who they knew was a Texas resident, and to



                                                 2
 426
Huntleigh, who they knew was a company based wholly in Texas, with the intent to wrongfully

deprive Plaintiffs of assets located in Texas. Maddali also ordered an employee he knew was in

Texas to purposefully interfere with a contract between two Texas companies. Kalidindi signed

an employment contract with Michael on behalf of CMS in Texas, and did so at a time at which

he had no intention (and therefore CMS had no intention) of complying with the agreement.

Maddali and Kalidindi undertook contacts with Texas by purposefully availing themselves of the

privilege of conducting activities here, and their liability arises from or relates to those contacts.

        Maddali and Kalidindi have also subjected themselves to the general jurisdiction of Texas

courts because Maddali owns or controls several Texas companies, including Maddali Realty,

and regularly conducts business in this state. Kalidindi lives in Texas or spends substantial time

here.

        Maddali and Kalidindi have purposefully availed themselves of the privilege of

conducting activities within Texas, and the Court's assertion of jurisdiction over them meets

traditional notions of fair play and substantial justice.

        The damages at stake are within the jurisdictional limits of the Court.

                                               VENUE

        Venue is proper in Bexar County, Texas because that is the county in which:

        a.      all or a substantial part of the events or omissions giving rise to the claims
                occurred;

        b.      CMS has its principal place of business;

        c.      Huntleigh has its principal place of business; and

        d.      Plaintiffs Belle Flores and Michael Flores have their residences.




                                                   3
 427
                                   BACKGROUND FACTS

       Defendants convinced Plaintiffs they wanted to work together to build a new home health

care company. Once Defendants were able to gain Plaintiffs' confidence however, they took

everything they could from Huntleigh and pushed Michael and Belle aside.

       Before Defendants came into the picture, Huntleigh had provided high quality home

health care services to patients in the San Antonio area since 1981. Michael Flores and his

mother, Jane Elizabeth "Belle" Flores, are the principals ofHuntleigh.

       Maddali wanted to get involved in the health care industry in San Antonio and reached

out to Michael and Belle to buy Huntleigh. They expressed interest, and provided Maddali

information about Huntleigh - including the fact that the IRS asserted a tax lien against

Huntleigh. In connection with the negotiations, Plaintiffs provided Maddali, and later Kalidindi,

with valuable trade secrets, including Huntleigh's customer list and customer infonnation, billing

software, customer contracts, pricing data, supplier and vendor lists (the "Trade Secrets").

       Maddali then said he was no longer interested in buying Hunt1eigh 's operations, but

instead proposed to start a new home health care company with Huntleigh, Michael and Belle.

The parties - Maddali, Michael , Belle, and Huntleigh- agreed that they would begin the process

of starting the new home health care company and all that required, such as gaining accreditation

and negotiating contracts with third party payors, while Huntleigh wound down its operations.

Maddali proposed that he and his people be allowed to use Huntleigh's offices to do so, and that

Huntleigh provide employees and other support during the transition period. In tum, Maddali

agreed to provide support for Hunt1eigh to allow it to wind down its operations, including

providing business expertise and, if necessary, financing. Plaintiffs agreed. Maddali told

Plaintiffs they could trust him, saying he "always made a success from [his] business dealings."



                                                 4
 428
       The patties agreed that Michael would be an employee of the new entity, and would help

start the new entity's operations, while continuing to manage Huntleigh 's operations. Before the

new entity was ready to begin operations, Huntleigh would continue to take care of its existing

patients, meet its obligations under existing contracts, bill for its services and collect payments.

       The parties agreed that, when the new entity was ready to begin operations, after it had

gained accreditation and secured contracts from payers, Plaintiffs would assist the new entity in

possibly taking over Huntleigh's existing patients. The patients would have to agree, but if they

did, the new entity would be able to seamlessly transition care to itself from Huntleigh, thereby

ensuring continuous care for the patients. Huntleigh had equipment out on rent to these patients,

and the parties agreed that, for those patients who agreed to transfer their care from Huntleigh to

the new entity, Maddali would simply buy from Huntleigh its equipment that was out on rent to

these patients. The parties agreed that Maddali would pay a reasonable, fair market value for the

equipment and other Huntleigh assets at the time it needed it.

       As an employee, Michael would help the new entity ramp up its back office operations,

including using setting up billing software and other requirements for the new entity to bill for its

services and collect payments. In the meantime, Huntleigh was to continue providing care and

collecting for its work.

       In December 2011, the new entity, Crawford Huntleigh Medical Supplies, LLC 1

("CMS"), came into existence. Michael became an employee of CMS as the parties had agreed.

       Maddali brought several people in to Huntleigh's facility, including Kalidindi and Nanda

Katepalli, to work on CMS' preparations, and Michael began helping them as the parties agreed.



       Maddali later dropped "Huntleigh" from the name of the entity, changing it to Crawford Medical Supplies,
LLC.



                                                      5
 429
       For instance, Michael was successful in getting accreditation for CMS from the

Accreditation Commission for Health Care, Inc. , a vital step for doing business in the home

health care field. Maddali also provided Michael a template contract for Huntleigh to "share"

staff with CMS.

       Also in March 2012, Michael began working on Huntleigh's Medicare Part B

Competitive Bidding application. CMS could not patiicipate in the Competitive Bidding process

because it did not have a Medicare Provider number, and it could only begin to pursue a

Medicare Provider number after it was accredited. On March 9, 2012, due in large part to

Michael's expertise and efforts, CMS passed its accreditation.      But Defendants still needed

Plaintiffs' help, because it would still take months for CMS's Medicare Provider Number

application to be processed. CMS could not bill Medicare until it acquired this number.

       While they were happy to accept the benefits of Michael 's efforts on behalf of CMS,

Maddali and Kalidindi began to interfere with Michael's ability to wind down the operations of

Huntleigh as the parties had agreed. Instead, they set about to force Huntleigh to pay the bills,

keep the revenues for themselves, and simply take Huntleigh's assets.

       Defendants ruin the Hospice Source deal

       In December 2011, Huntleigh Home Medical received notice that it was losing a contract

with Odyssey Hospice. The new company taking over the contract, Hospice Source, offered to

buy the Huntleigh equipment that was out on rent to over 300 patients.           Hospice Source

conducted due diligence on the equipment by riding with Huntleigh delivery personnel to review

the brand and quality of the Huntleigh equipment.

       On January 13, 2012, Huntleigh and Hospice Source agreed that Hospice Source would

buy the equipment being used by those patients. Hospice Source agreed to pay $110,000 for the



                                                6
 430
equipment.

        Soon thereafter, Maddali teamed of the Huntleigh equipment sale to Hospice Source and

had to figure out a way to kill it, because he planned on simply taking the Huntleigh equipment

for CMS. On Maddali's orders, a CMS employee cancelled the Hospice Source contract. This

cost Huntleigh $110,000, but more importantly to Defendants, allowed them to keep the

equipment.

       Defendants take Huntleigh equipment and assets

       After stopping the Hospice Source deal , Maddali ordered CMS employees to take the

Huntleigh labels and other identifying information off of the equipment and put on CMS labels.

Maddali said this would fool the banks and the IRS, and would allow CMS to simply take them

free and clear.

       In April 2012, Maddali again came to San Antonio with the intent to solidify his hold on

the Huntleigh assets.   He told Huntleigh employees that revenues coming in for Huntleigh

patients using Huntleigh equipment now belonged to CMS.         He prevented employees from

paying Huntleigh expenses.

        Defendants take over the Frost Bank account

        Huntleigh had for years held its operating account at Frost Bank. In April 2012, Maddali

asked Michael for access to the Frost Bank account. Michael agreed because Maddali told him

he would have his manager Nanda Katepalli handle office matters, and that Michael was more

valuable as a salesman generating business.

        lt did not take Maddali long to take advantage of his control over the Frost account. In

August 2012, the account became perilously low for payroll.       Kalidindi demanded Michael

deposit Huntleigh funds to cover payroll, even though CMS was now using former Huntleigh



                                               7
 431
employees to carry out its business.

       Huntleigh negotiated with the IRS to settle the tax lien for a relatively small amount. The

IRS settlement was only available as long as Huntleigh paid all current taxes as they came due.

       Now that they had control over the Frost Bank account however, Defendants simply took

the money that would and should have gone to pay the IRS agreement and current taxes.

Michael asked Defendants to leave at least enough funds in the account to cover the taxes, but

they refused.

       Defendants interfered with Huntleigh's ability to satisfy not only the IRS settlement, but

also its ability to make current tax payments, by taking Huntleigh's money and receivables.

       Defendants push Michael and Belle out

       By September 2012, Maddali had gained enough levers of control over Huntleigh to start

moving Michael and Belle out. He told Michael he was not to be involved in any negotiations

for CMS. He also directed Michael to stay out of any negotiations on behalf ofHuntleigh.

       On September 17, 2012, Michael expressed concern to Kalidindi that he was taking

revenues owed to Huntleigh and using them to pay CMS bills.

       Kalidindi assured Michael that CMS would take over payroll starting on September 17,

2012. Michael agreed to have Huntleigh issue payroll checks covering payroll up until that date,

and that was supposed to be Huntleigh's last payroll processing.

       On October 3, 2012, Nanda demanded Michael have Huntleigh process payroll under

Huntleigh. CMS had already agreed it would cover payroll starting September 17, so Michael

refused Nanda's demand. Kalidindi became incensed. He told Michael that CMS would not

process payroll, and that Michael needed to tell "his" staff that they are not getting paid. CMS

also refused to pay Michael his salary.



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       A few weeks after forwarding Huntleigh's mail to his house, Michael noticed he was

receiving an unusually low volume of mail for Huntleigh.   After checking with the post office,

he discovered CMS had falsely told the postal carrier the change of address fonn was invalid,

and demanded that Huntleigh mail be delivered to CMS. While Michael was eventually able to

get the Huntleigh mail forwarded to him, Defendants had received Huntleigh mail, including

checks for Huntleigh.

       On October 5, 2012, Defendants had completed their plan to gut Huntleigh, and ban·ed

Michael and Belle from the premises.

       Since Defendants' takeover, they have acted in concert to launder funds belonging to

Plaintiffs. Maddali Realty is a limited liability company owned and controlled by Sam Maddali

and his wife.   Defendants transferred to Maddali Realty at least $37,000 in 2013, with over

$23,000 transferred in December 20 13 alone.

                                   CAUSES OF ACTION

BREACH OF CONTRACT/QUANTUM MERUIT- The Maddali Agreement - all Plaintiffs
against Maddali

       Huntleigh, Michael and Belle agreed with Maddali to start a new home health care

company, which eventually became CMS. Michael would help with the start-up, such as helping

gain accreditation and negotiating contracts with third party payors. Plaintiffs would allow

Maddali to use Huntleigh's offices while CMS was starting the paperwork necessary to become a

home health care company, and Maddali would allow Huntleigh to continue its business while it

wound down its operations. Maddali agreed to provide Huntleigh support, both business

expertise and financing, in exchange for use of the Huntleigh facility and for assistance in

transferring operations to CMS.




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        Michael would be an employee of the new entity, and would help start the new entity's

operations, while continuing to manage Huntleigh's operations. Before the new entity was ready

to begin operations, Huntleigh would continue to take care of its existing patients, meet its

obligations under existing contracts, bill for its services and collect payments.

        The parties agreed that, when the new entity was ready to begin operations, after it had

gained accreditation and secured contracts from payors, Plaintiffs would assist the new entity in

possibly taking over Huntleigh's existing customers. The customers would have to agree, but if

they did, the new entity would be able to seamlessly transition care to itself from Huntleigh,

thereby ensuring continuous care for the patients. CMS would pay a reasonable price for the

Huntleigh equipment, inventory, and other assets.

        As an employee, Michael would help the new entity ramp up its back office operations,

including using setting up billing software and other requirements for the new entity to bill for its

services and collect payments. Belle would also provide her business expertise in helping start

the new entity. In the meantime, Huntleigh was to continue providing care and collecting for its

work.

        Maddali breached this contract (the "Maddali Agreement") by refusing to allow Plaintiffs

to wind down the operations. Instead, he took or ordered the other Defendants to simply take

Huntleigh's assets. He also refused to pay for the Huntleigh equipment and its other assets.

        Maddali' s breach caused damages to Plaintiffs.

        In the alternative, Maddali is liable to Plaintiffs under quantum meruit.

BREACH OF CONTRACT/QUANTUM MERUIT - The Employment Agreement - Michael
against CMS

        CMS entered into an employment contract with Michael, under which it agreed to pay




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him an annual salary.        Michael perfotmed his part of the bargain, but never received any

payment for his services. CMS breached the contract by failing to pay, and owes Michael under

the contract.

       In the alternative, CMS is liable to Michael under quantum meruit.

PROMISSORY ESTOPPEL - all Plaintiffs against Maddali

       Maddali is also liable for promissory estoppel. He promised to provide support for

Huntleigh, both financial and business consulting expertise, in continuing and winding down its

operations. He promised to allow Michael and Belle to continue winding down Huntleigh

operations if they allowed him to use Huntleigh office space and if they helped statt the new

health care entity. He also promised to pay Huntleigh a reasonable cost for its equipment and

other property that it would use. All Plaintiffs relied on these promises to their detriment.

Plaintiffs allowed Maddali to use Huntleigh's offices, and provided material support in starting

the new health care entity. Plaintiffs also provided Maddali access to Huntleigh's Trade Secrets.

       Maddali should have known that Plaintiffs would rely on these statements, and injustice

can be avoided only by enforcing Maddali 's promises.

CONVERSION - Huntleigh against all Defendants

        Defendants are liable for conversion. Huntleigh owned, possessed and had a right to

immediate possession of its property (the "Property"), including:

        a.      equipment;

        b.      inventory;

        c.      bank accounts and accounts receivable; and

        d.      Trade Secrets.

        Defendants have wrongfully exercised dominion or control over the Property, and



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Huntleigh has suffered damages due to Defendants' wrongful actions.

TORTIOUS INTERFERENCE WITH CONTRACT - The Maddali Agreement - Plaintiffs
against CMS and Kalidindi

          These Defendants' interference with Plaintiffs' agreement with Maddali constitutes

tortious interference.    Their interference was will:ful and intentional, and their actions

proximately caused damages to Plaintiffs.

TORTIOUS INTERFERENCE WITH CONTRACT - The Hospice Source Agreement -
Huntleigh against all Defendants

          Defendants' interference with Huntleigb's contract with Hospice Source constitutes

tortious interference with contract. Defendants' interference was willful and intentional, and its

actions proximately caused Huntleigb to lose that contract. Huntleigh suffered damages as a

result.

MISAPPROPRIATION OF TRADE SECRETS - Huntleigh against Maddali. Kalidindi, and
CMS

          These Defendants' actions and representations shown in this petition also constitute

common-law misappropriation of Huntleigh 's Trade Secrets.

          These Trade Secrets, including its customer list and customer information, customer

contracts, billing software, pricing data, supplier and vendor lists. Defendants used or disclosed

this proprietary information without authorization after acquiring it by improper means or

through breach of a confidential relationship. Huntleigh provided Defendants with access to its

trade secrets because Maddali said he wanted to buy Huntleigh or its assets, or because

Defendants represented they wanted to use Huntleigh's facility only to start CMS. Instead,

Defendants wrongfully used the trade secrets to take over Huntleigh's existing operations and to

profit themselves. Huntleigh suffered damages as a result.




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       Huntleigh used and had the right to use this proprietary infonnation in its business of

home health care.

FRAUD/FRAUD BY NONDISCLOSURE/FRAUDULENT INDUCEMENT - all Plaintiffs
against Maddali, Kalidindi and CMS

       These Defendants are liable for common-law fraud. Defendants made representations

that were materially false. These statements included Maddali telling Plaintiffs and Michael he

wanted to work with them to start a new home health care company, and that he would allow

Huntleigh to wind down its operations while the new entity got started. He also told them that,

when the new entity was ready to begin operations, Huntleigh would be paid for the equipment

and other assets it would use in its operations. He also told them they could ttust Maddali.

Kalidindi assured Plaintiffs CMS would start making payroll on September 17, 2012. They also

misrepresented that they would pay reasonable value for Huntleigh equipment and inventory.

They made these statements both before and after CMS was formed, and before and after they

began using the Huntleigh offices. These statements were false.

       Maddali and Kalidindi (and therefore CMS) knew these representations were false, and

that they were simply using Michael and Belle to gain access to, and ultimately take, Huntleigh's

Property. In the alternative, they made these representations recklessly, as positive assertions,

and without knowledge of their truth.

       Plaintiffs relied on these representations to their detriment and they suffered damages.

       In the alternative, Defendants concealed certain facts from Plaintiffs that they had a duty

to disclose, including the fact they had no intention of starting a new home health care company

with Michael and Belle, and simply wanted to use them to gain access to, and to ultimately take,

Huntleigh's Property without paying for it.




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          Defendants were deliberately si lent when they had a duty to speak on these issues, and by

failing to disclose these facts, intended to induce Plaintiffs to take some action or refrain from

acting. Plaintiffs relied on these nondisclosures and suffered injuries as a result.

NEGLIGENT MISREPRESENTATION- all Plaintiffs against Maddali, Kalidindi, and CMS

          Defendants' actions and representations shown in this petition also constitute negligent

misrepresentations.

CIVIL CONSPIRACY- all Plaintiffs against all Defendants

          Defendants conspired to defraud Plaintiffs, take Huntleigh's Property, and commit the

acts outlined in this petition. They agreed to steal Huntleigh's Property to the detriment of

Plaintiffs.

          Additionally, Belle is the assignee of a UCC granted in favor of Jefferson State Bank

against Huntleigh and its assets, and is therefore a secured creditor of Huntleigh. Defendants'

actions constitute civil conspiracy to defraud Belle as a secured creditor, by taking Huntleigh

assets. This is a conspiracy to commit fraud, to hinder, delay or defraud creditors, and to commit

fraudulent conveyance, among others.

          Defendants were members of a combination of two or more persons, the object of which

was to accomplish an unlawful purpose or a lawful purpose by unlawful means. The members

had a meeting of the minds on the object or course of action, and one of the members committed

an unlawful, overt act to further the object or course of action. These acts include:

          a.      changing the identification numbers and other identifiers on Huntleigh's
                  equipment;

          b.      obtaining Huntleigh's mail by deception or other unlawful means, violating 18
                  U .S.C. 1701 and 1708;2

2
          Plaintiffs make no claims under federal law.



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    438
       c.      defrauding the IRS by converting or transferring assets that otherwise could be
               used to satisfy the IRS lien;

       d.      unlawfully interfering with Huntleigh's contract with Hospice Source;

       e.      unlawfully interfering with the Maddali Agreement;

       f.       unlawfully interfering with Michael's employment agreement;

       g.       taking or converting Huntleigh's Property;

       h.      transferring to themselves funds that belonged to Huntleigh or were generated
               using Huntleigh assets;

       1.       other unlawful actions shown in this petition.

        In a civil conspiracy, each defendant is liable for his or her own acts and for acts done by

coconspirators in furtherance of the unlawful combination. Defendants are jointly and severally

liable for all damages suffered by Plaintiffs.

FRAUDULENT TRANSFER ACT- Belle against all Defendants

       Defendants' actions in taking or conveying Huntleigh's assets are fraudulent transfers

under the Unifonn Fraudulent Transfer Act, Texas Business & Commerce Code Chapter 24.

Belle is entitled to all relief under section 24.008 of that chapter.

        Defendants transfened assets of Huntleigh with the actual intent to hinder, delay, or

defraud Belle, who was a creditor of Huntleigh, or without receiving a reasonably equivalent

value in exchange for the transfer or obligation. Defendants intended to have Huntleigh incur, or

believed or reasonably believed that Huntleigh would incur, debts beyond its ability to pay as

they became due.

        Defendants took Huntleigh's Propetty, or conveyed it to themselves, including cash,

accounts receivable, equipment, and Trade Secrets. Defendants knew that Huntleigh was

winding down its business and that these actions would cause Huntleigh to incur debts beyond its




                                                   15

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ability to pay as they came due. Huntleigh did not receive a reasonably equivalent value in

exchange for these transfers.

       Belle's claim arose in October 2012, and these transfers occmTed after this time. Ful1her,

Huntleigh did not receive reasonably equivalent value in exchange for the transfer and Huntleigh

was either insolvent at the time of these transactions or became insolvent as a result of these

transactions.

       For instance, Defendants changed the identification labels on Huntleigh's equipment in

January 2013. Defendants transferred to Maddali Realty at least $37,000 in 2013, with over
                                   -
$23,000 transferred in December 2013 alone. Because they have conspired to commit the actions

outlined in this petition, each Defendant is jointly and severally responsible for all such actions.

ASSISTING AND ENCOURAGING/ASSISTING AND PARTICIPATING/AIDING AND
ABETTING - all Plaintiffs against all Defendants

       All Defendants were aware that they would take Huntleigh's Property, and all intended

to, and did, assist. Defendants' actions were a substantial factor in causing the hann to Plaintiffs.

Defendants are jointly and severally liable for all damages suffered by Plaintiffs.

UNJUST ENRICHMENT - all Plaintiffs against all Defendants

       Defendants were unjustly enriched when they obtained benefit from Plaintiffs by fraud,

duress, or the taking of an undue advantage. All Defendants wrongly secured or passively

received benefits through the taking of Plaintiffs' assets and business.

MONEY HAD AND RECEIVED - Huntleigh against all Defendants

       Defendants hold money that in equity and good conscience belongs to Huntleigh. They

should be required to return it.




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                                   RESPONDEAT SUPERIOR

       CMS and Maddali Realty are fully responsible for the actions of its employees,

representatives, and agents, including Kalidindi and Maddali.

                                           DAMAGES

       Defendants are general and special damages, including lost profits of Huntleigh and/or

reasonable royalties for the unlawful use of its Trade Secrets. Plaintiffs request consequential

damages and restitution damages. Defendants are jointly and severally liable. Pursuant to Texas

Rule of Civil Procedure 47, Huntleigh and Belle specify that $2 million is the maximum amount

of damages claimed by each, and Michael specifies that $200,000 is the maximum amount of

damages claimed by him.

                                   EXEMPLARY DAMAGES

       Defendants are jointly and severally liable for exemplary damages under Plaintiffs'

claims for or under fraud or tortious interference with contract, or because their conduct was

conducted with malice. Defendants are jointly and severally liable for exemplary damages under

Plaintiffs' claims for or under:

        a.     tortious interference with contract;

        b.     the Theft Act;

        c.     consptracy;

        d.     fraud;

        e.     negligent misrepresentation; and

        f.      trade-secret misappropriation.

        Any exemplary damages in this case are not subject to the statutory caps. TEX. Crv.

PRAC. & R EM. CODE § 41.008(c)(10),(11),(12),(13). Defendants misapplied the Trade Secrets



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 441
provided by Plaintiffs in the course of negotiations for the potential purchase of Huntleigh, and

these are fiduciary property. Defendants also secured by deception the execution of documents

including Michael's employment agreement and the Aug. 23, 2012 letter signed by Michael.

                                      ATTORNEYS' FEES

       Defendants are liable for Plaintiffs' attorneys' fees under Texas Civil Practice &

Remedies Code section 38.001. Defendants are liable for Belle's attorneys' fees under the

Uniform Fraudulent Transfer Act, section 24.013 of the Texas Business & Commerce Code.

Maddali is liable for Plaintiffs' attorneys' fees under promissory estoppel.

                                    CONDITIONS PRECEDENT

       All conditions precedent have been performed, have occurred or are excused.

                                             PRAYER

       Plaintiffs ask the Court to enter a judgment against Defendants, jointly and severally, for:

       a.      Actual damages;

       b.      Exemplary damages;

       c.      Prejudgment and postjudgment interest;

       d.      Costs of suit; and

       e.      Attorney's fees , both at trial and on appeal.

       They also ask for all other relief to which they may be entitled.




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Dated: March    3/ <;)· , 2015.
                                                       Respectfully submitted,

                                                       DAVIS & SANTOS
                                                       ATTORNEYS & COUNSELORS, P.C.



                                                 By: ?Ja~~
                                                        State Bar No. 24002667
                                                        mmurphy@dslawpc. com
                                                        Guillermo "Jeff' Benavides
                                                        State Bar No. 24087160
                                                       j benavides@dslawpc. com
                                                        112 E. Pecan Street, Suite 900
                                                        San Antonio, Texas 78205
                                                        Tel: (210) 853-5882
                                                        Fax: (21 0) 200-8395

                                                       ATTORNEYS FOR PLAINTIFFS




                                  CERTIFICATE OF SERVICE

         I hereby certify that a true and correct copy of this document will be sent to the following
by:

       Elliott S. Cappuccio                                            Regular Mail
       Leslie Sara Hyman                                               Certified Mail, RRR
       P ULMAN, CAPPUCCIO, P ULLEN, BENSON &                           Hand Delivery
       J ONES, LLP                                                     Facsimile
       2161 N.W. Military Highway, Suite 400                           Email
       San Antonio, Texas 78213

       Attorneys for Defendants

on the   3\~   day of March, 2015.




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