Preview
LUCINDA L. STORM, ESQ. (State Bar No. 129541)
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lstorm@storm-law.com
2 KENNETH D. HOLLENBECK, ESQ. (State Bar No. 196131) ELECTRONICALLY
khollenbeck@storm-law.com F I L E D
3 LAW OFFICES OF LUCINDA L. STORM, ESQ. Superior Court of California,
County of San Francisco
720 Lombard Street
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San Francisco, California 94133 05/27/2020
Clerk of the Court
5 Telephone: (415) 777-6990 BY: EDNALEEN ALEGRE
Facsimile: (415) 777-6992 Deputy Clerk
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Attorneys for Defendants and Cross-Complainants,
7 LAURA OZYILMAZ and SAYAT OZYILMAZ
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SUPERIOR COURT OF THE STATE OF CALIFORNIA
9 COUNTY OF SAN FRANCISCO
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11 FFG RESTAURANT GROUP, INC., and Case No.: CGC-19-581427
FORWARD FOOD GROUP, LLC,
12 DECLARATION OF LUCINDA L.
STORM DEFENDANT AND CROSS-
Plaintiffs, COMPLAINANT LAURA OZYILMAZ
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AND SAYAT OZYILMAZ’S NOTICE OF
14 vs. MOTION AND MOTION TO COMPEL
MEDIATION/ARBITRATION AND TO
15 STAY CLAIMS
SAYAT OZYILMAZ, LAURA GABRIELA
16 OZYILMAZ, and DOES 1 through 100, Date: June 23, 2020
Time: 9:30 a.m.
Defendants. Dept.: 302
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______________________________________
18 LAURA OZYILMAZ and SAYAT OZYILM Action Filed: November 21, 2019
Trial Date: None Set
AZ,
19 Cross-Complainants,
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vs.
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JOHN LITZ, FORWARD FOOD GROUP,
22 LLC, FFG RESTAURANT GROUP, INC.,
23 YONGJIA SOLLERS, and ROES 1
THROUGH 30,
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25 Cross Defendants.
26 _____________________________________
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DECLARATION OF LUCINDA L. STORM IN SUPPORT OF MOTION TO COMPEL MEDIATION AND 1
STAY ACTION ACTIONS: CGC-19-581427
I, Lucinda L. Storm, Declare and State as follows:
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2 1. I am an attorney licensed to practice before all the courts of the State of California, and
counsel for Defendants and Cross-Complainants Laura Ozyilmaz and Sayat Ozyilmaz
3 (“Defendants”).
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2. I make this declaration of my own personal knowledge, except as to any matters stated on
5 information and belief, and as to those matters I believe them to be true. If called to
testify in Court on these matters, I could do so competently as follows:
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7 3. On November 20, 2019, Plaintiff John Litz Filed case No. CGC-19-580935, against Sayat
Ozyilmaz, Laura Ozyilmaz and FFG Restaurant Group, Inc. [“Litz Action”], and on
8 December 31, 2019, filed a first Amended Complaint alleging causes of action for
ANTICIPATORY BREACH OF WRITTEN CONTRACT (2) RESCISSION OF
9 CONTRACTS (3) BREACH OF ORAL CONTRACT (4) BREACH OF COVENANT
10 OF GOOD FAITH AND FAIR DEALING (5) PROMISSORY FRAUD.[“Litz Action”]
11 4. On December 11, 2020, Plaintiffs FFG Restaurant Group, Inc. and Forward Food Group,
LLC, filed CGC-19-581427, against Sayat Ozyilmaz and Laura Ozyilmaz, and on
12 January 2, 2020, filed a First Amended Complaint alleging causes of action for BREACH
13 OF FIDUCIARY DUTY (2) INTENTIONAL INTERFERENCE WITH PROSPECTIVE
ECONOMIC ADVANTAGE (3) CONVERSION (4) UNFAIR BUSINESS PRACTICES
14 (5) VIOLATION OF PENAL CODE SECTION 502 (6) DECLARATORY RELIEF (7)
INJUNCTIVE RELIEF [“FFGRG Action”].
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16 5. On February 18, 2020, Defendants filed a Cross-Complaint in the FFRG action against
John Litz, FFFG Restaurant Group, Inc, Forward Food Group, LLC and Yongjia Sollers
17 and on April 15, 2020, Defendants filed a First Amended Cross-Complaint in the FFGRG
Action alleging causes of action for: WRONGFUL TERMINATION; WRONGFUL
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DISCHARGE IN VIOLATION OF PUBLIC POLICY CAL. GOV.CODE §12940(h);
19 RETALIATION IN VIOLATION OF LABOR CODE §6310; RETALIATIONIN
VIOLATION OF FEHA; CAL. GOV. CODE §12940(h); FAILURETO PREVENT
20 DISCRIMINATION AND RETALIATION (CAL. GOV. CODE §12940(h);
PROMISSORY FRAUD; FRAUD IN THE INDUCEMENT;BREACH OF WRITTEN
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EMPLOYMENT AGREEMENTS; BREACH OF CONTRACT; BREACH OF
22 FIDUCIARY DUTY; ASSAULT; DEFAMATION (Cal. Civ. Code §45 and Cal. Civ.
Code §46); INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS;
23 CONVERSION; NON-PAYMENT OF WAGES – VIOLATIONS OF LABOR CODE
24 §§ 201, 218; NON-PAYMENT OF MINIMUM WAGE – VIOLATION OF LABOR
CODES §§ 1194,1197; SAN FRANCISCO MINIMUM WAGE ORDINANCE,
25 ADMINISTRATIVE CODE § 12R.1, et seq.; NON-PAYMENT OF OVERTIME
COMPENSATION – VIOLATION OF LABOR CODES §§1194, 1197; BREACH OF
26 COVENANT OF GOOD FAITH AND FAIR DEALING; UNJUST ENRICHMENT;
27 INTENTIONAL INTERFERENCE WITH ECONOMIC ADVANTAGE;
UNLAWFUL/UNFAIR BUSINESS PRACTICES (BUSINESS & PROFESSIONS
28 CODE § 17200 et seq.); DECLARATORY RELIEF; and INJUNCTIVE RELIEF. A
DECLARATION OF LUCINDA L. STORM IN SUPPORT OF MOTION TO COMPEL MEDIATION AND 2
STAY ACTION ACTIONS: CGC-19-581427
similar Cross-Complaint and First Amended Cross-Complaint were filed against John
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Litz in the Litz Action on February 18, 2020, and April 15, 2020, respectively.
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6. All of the causes of action in the FFGRG Action, the Litz Action and the Cross-
3 Complaints in each action arise from the same transaction and occurrence - the
development, formation and operation of Noosh restaurant and disagreements arising
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therefrom, including Plaintiff’s termination of employment of Defendants Laura and
5 Sayat Ozyilmaz from FFGRG and their shareholder interests therein.
6 7. The allegations in both actions relate to the same common, primary and fundamental
7 issue, to wit, the efficacy of the various documents and agreements among the parties,
including the most notably, the Memorandum of Understanding (“MOU”) of the
8 Shareholders of FFGRG, which include Mediation and “Mediate/Arbitrate” provisions.
9 8. Attached hereto as Exhibit A is a complete true and correct copy of the signed MOU
10 with Exhibits.
11 9. Counsel for the parties discussed Defendants request for mediation/arbitration and the
mediation/arbitration requirements in the agreements and in principal agreed to honor
12 those provisions however, Plaintiffs’ counsel in both actions required a written agreement
13 which included unacceptable requirements including a “stay away” agreement whereby
Defendants agreed to stay clear of the Noosh restaurant.
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10. Nevertheless, on December 6, 2019, I sent Plaintiffs’ counsel a letter agreeing to mediate
15 without he conditions and included a list of fourteen (14) mediators agreeable to
16 Defendants. A true and correct copy is attached hereto as Exhibit B.
17 11. Following further attempts to agree on terms failed, in January 2020, I am informed and
believe that Plaintiffs scheduled and held a Board of Directors meeting of FFGRG
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wherein the Board approved a ninety day period before mediation would be considered.
19 There was no discussion regarding the arbitration requirement.
20 12. On December 20, 2019, Plaintiffs responded in apparent agreement for mediation but
subject to conditions in a written pre-mediation even though the MOU or other agreed
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documents do not require any “pre-mediation” concessions or conditions.
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13. In meet and confer discussions with Litz’s personal counsel, Ms. Chung and Mr.
23 Schwartz, regarding Plaintiff’s failure to produce documents in the actions, Ms. Chung
24 stated that they would refuse to produce a single document int he case without a
protective order being in place due to the serious need for confidentiality in the matter,
25 including the need for a provision that includes a legend "FOR ATTORNEY EYES
ONLY”.
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I declare under penalty of perjury that the foregoing is true and correct.
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28 Dated: May 26, 2020
DECLARATION OF LUCINDA L. STORM IN SUPPORT OF MOTION TO COMPEL MEDIATION AND 3
STAY ACTION ACTIONS: CGC-19-581427
By:
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Lucinda L. Storm, Esq.
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DECLARATION OF LUCINDA L. STORM IN SUPPORT OF MOTION TO COMPEL MEDIATION AND 4
STAY ACTION ACTIONS: CGC-19-581427
EXHIBIT A
FFG RESTAURANT GROUP, INC.
SHAREHOLDERS’ AGREEMENT
THIS SHAREHOLDERS’ AGREEMENT (this “Agreement”) is entered into as of
January 20, 2019 (the “Effective Date”) by and between FFG Restaurant Group, Inc., a California
S-corporation (the “Corporation”), John Litz (“John”), an individual, Sayat Ozyilmaz (“Sayat”),
an individual, and Laura Gabriela Ozyilmaz, an individual (“Laura,” each a “Shareholder,” and
collectively with Sayat and John, the “Shareholders”). The Corporation and the Shareholders
agree as follows:
A. The Shareholders are each members of the Board of Directors of the Corporation
and/or are officers of the Corporation, and are actively involved in the business affairs of the
Corporation.
B. The Corporation has made an election under Subchapter S of the Internal Revenue
Code to be an S corporation.
C. The Corporation is the Manager of Forward Food Group, LLC (“Forward Food”),
a California limited liability company which intends to operate a restaurant at 2001 Fillmore Street,
San Francisco, CA 94115 under the trade names “Noosh” and “Kitchen Table” (“Restaurant”),
which names and concepts are owned by the Corporation and being licensed to Forward Food and
other entities managed and controlled by the Corporation (“Affiliates”);
D. In order to promote their mutual interests, and the interests of the Corporation, to
insure continuity and stability in the management and policies of the Corporation, and to provide
an incentive for the Shareholders to use their best efforts in performing duties on behalf of the
Corporation, the Shareholders shall cause the Corporation to convert to a “close corporation” under
California law, appoint a Management Committee that will be responsible for decisions normally
reserved for the Board of Directors, and in connection therewith the Shareholders desire to impose
certain restrictions and obligations on themselves, the Board of Directors, the Management
Committee and the Corporation in accordance with the terms of this Agreement.
AGREEMENTS:
SECTION 1. BOARD OF DIRECTORS; MANAGEMENT COMMITTEE; OFFICERS
1.1 Election. The Shareholders each agree that they will, at the request of any other
Shareholder, vote their stock of the Corporation in such manner as will cause each of the
Shareholders to be elected to the Board of Directors of the Corporation. However, there is no
requirement to vote in favor of any Shareholder who declines to stand for election or to serve.
1.2 Removal of Directors. The Shareholders may not vote their shares in favor of the
removal of any director from office without cause.
1.3 Resignation of Director. Upon a Triggering Event (defined below) affecting a
Shareholder, such Shareholder shall resign as a director, officer and member of the Management
Committee of the Corporation upon the effective Date of the Triggering Event.
EXHIBIT A
1.4. Close Corporation; Management Committee. The Shareholders shall cause the
Corporation to convert to a “close corporation” under California law. In contemplation thereof,
the Shareholders hereby appoint a Management Committee that will be responsible for decisions
normally reserved for the Board of Directors (except to the extent that the Board of Directors is
required to act by law, in order to satisfy the requirements of a formality of parties with whom the
Corporation transacts business or as otherwise provided herein), including but not limited to those
decisions set forth in Section 7 hereof, notwithstanding any provisions to the contrary in the
Corporation's Bylaws. The Management Committee will have authority to act informally;
provided, those decisions set forth in Section 7 hereof shall require either (i) a formal vote at a
meeting of the Management Committee with written minutes thereof or (ii) written consent, which
may be in the form of email. The members of the Management Committee (“Committee
Members”) will consist of the same persons who are Directors of the corporation (accordingly,
the initial members of the Management Committee will be John, Sayat and Laura). Upon the
happening of a Triggering Event defined herein (including a Committee Member’s
termination of employment as set forth herein) that Committee Member shall resign from the
Management Committee as of the effective date of such Triggering Event. If for any reason,
there are fewer than three (3) shareholders of the Corporation, and consequently fewer than
three (3) Directors, the Management Committee will be constituted based on the number of
remaining Directors. Decisions will be made by a majority vote of Management Committee
members; provided that while John is a Committee Member, he must be one of the Committee
Members approving a decision. No Committee Member may be prevented from attending any
meeting of the Management Committee.
1.5. Officers. The officers of the Corporation shall be as follows: John, CEO and
CFO; Sayat, Vice-President and Laura, Secretary.
SECTION 2. PROXY
Each of the Shareholders appoints the other Shareholders as proxy agents for the
Shareholder and authorizes the other Shareholders to vote all the shares of stock of the Corporation
held by the Shareholder to elect and remove members of the board of directors of the Corporation
as required under the terms of this Agreement. This proxy will remain irrevocable during the term
of this Agreement.
SECTION 3. EMPLOYMENT
The Corporation agrees to employ and/or cause its Affiliate(s) to employ John, Sayat and
Laura to perform the Services (defined below) and each Shareholder shall have authority to
conduct its Services in the ordinary course of the Corporation’s or Restaurant’s business, subject
to the limitations set forth in this Agreement (including, without limitation, Section 7), and each
of them agrees to accept that employment on the terms and conditions set forth in this Agreement.
The Shareholders may engage or invest in any business activity so long as such engagement does
not violate the terms of this Agreement (including the restrictions set forth in this Section), and
neither the Corporation, nor any other Shareholder or Affiliates shall have any right in or to such
other ventures or activities even if the opportunity is of a character that if presented to the
Corporation could be taken by the Corporation. During the period of any Shareholder’s
employment with the Corporation, any outside activities undertaken by such Shareholders
(i) shall not materially adversely affect the business of the Restaurant or any other restaurants
using the Concept (defined below) managed by the Corporation or its Affiliates; (ii) shall not
use the Fast-Casual Menu (defined below) or any derivative, improvement, enhancement or
additions to any of the food items or recipes contained therein during their respective
employment with the Corporation, (iii) shall not materially adversely affect the Shareholder’s
ability to perform his or her Services while they are Shareholders of the Corporation, and (iv)
shall comply with any restrictions contained in Forward Food’s Restaurant lease covering
the premises at 2001 Fillmore Street in San Francisco concerning competitive activities. The
Management Committee will develop an Employee Handbook and Code of Conduct, which
the Shareholders will agree to be bound by. Any such Code of Conduct shall include, without
limitation, the non-disparagement requirements set forth in Section 25.11 of this Agreement,
an acknowledgement that yelling is considered non-professional conduct, and an obligation
to attend scheduled meetings approved by the Management Committee.
SECTION 4. COMPENSATION
Each of the Shareholders employed shall not be entitled to any compensation for his or her
services to the Corporation performed as its officer or member of the Board of Directors or
Management Committee. The Shareholders shall be entitled to the compensation for the Services
(defined below) as set forth below and any additional services they provide to the Restaurant or
any other restaurants managed by the Corporation or its Affiliates and approved by the
Management Committee. In connection therewith, commencing as of January 20, 2019, the
Shareholders shall be entitled to the following initial annual compensation for the Services they
provide to Forward Food; provided, however, the parties agree that such compensation shall
increase to industry standard compensation when Forward Food’s cash flow from the Restaurant
is sufficient to sustain such increases:
John: $60,000.00
Sayat: $60,000.00
Laura: $60,000.00
Upon the earlier of (i) January 1, 2020 or (ii) the opening of a second restaurant
incorporating the Concept (defined below), and so long as cash flow from Restaurant
operations (before amortization and depreciation) is positive for three (3) consecutive months,
the base salaries of the three Shareholders shall increase to $80,000 per annum plus bonuses
(not to exceed $20k per year) to be determined by the Management Committee. The parties
acknowledge that the salaries payable by the Restaurant, Corporation and/or any affiliates
may be adjusted as reasonably practicable as and when the Concept expands to additional
locations. Upon the earlier of (x) January 1, 2022 or (y) the investors of Forward Food
having been repaid 100% of their capital contribution, and so long as cash flow from
Restaurant operations (before amortization and depreciation) is positive for three (3)
consecutive months, salaries (and bonuses) will be adjusted to then prevailing rates based
on services actually being provided by the Shareholders at that time.
SECTION 5. TERMINATION
5.1 Termination for Cause. A Shareholder may be terminated from its employment
with the Corporation and the Restaurant by the Corporation “for cause” upon: (i) itsbreach of
fiduciary duty involving personal profit, personal dishonesty, recklessness or willful misconduct
with respect to its obligations or otherwise relating to the business of the Company and the
Restaurant; (ii)a material breach of this Agreement and its failure to cure such breach within
thirty (30) days following written notice from the Corporation or all of the other Shareholders; (iii)
its conviction or entry of a plea of nolo contendere for fraud or embezzlement, or any felony or
crime of moral turpitude; or (iv) its transfer, sale, pledge, hypothecation, assignment, or other
disposition of its shares or other interests in the Corporation in violation of this Agreement. In the
event of such termination, such terminated Shareholder’s interests in the Corporation shall be
subject to purchase and sale as provided in Section 18 below.
5.2 Voluntary Termination. A Shareholder may resign as an employee of the
Corporation and any Affiliates in connection with its obligations to perform its Services upon no
less than three (3) months prior written notice to the Corporation and the other Shareholders. In
the event of such resignation, such Shareholder’s interests in the Corporation shall be subject to
purchase and sale as provided in Section 18 below.
SECTION 6. DUTIES
6.1 Shareholder Services. The Shareholders agree to devote such time, effort and skill
as may be reasonably necessary to effectively perform their Services for the successful operation
of the Corporation’s business, including the Restaurant, and each Shareholder shall reasonably
cooperate with one another to allow each of them to effectively perform their Services. The
Shareholders acknowledge and agree that they each bring certain technical expertise and
experience to various segments the Restaurant and the Corporation’s business, but that it is their
intent to work collaboratively with one another for advice and input notwithstanding their
respective Services. In connection with their respective services, duties and obligations, the
Shareholders each hereby agree to provide the Corporation and its Affiliates with the services set
forth on Exhibit A, attached hereto and made a part hereof (as applicable to each, the “Services”).
The scope of the Services may be revised from time to time by the unanimous approval of the
Shareholders. In connection therewith, subject to Section 7 below, the Shareholders agree that:
(a) John. John will serve as Chief Executive Officer of the Corporation, as well
as itsChief Financial Officer, and in such capacity, subject to Section 7 below, will supervise,
direct, and control the general business and financial operations of the Corporation, although Sayat
and Laura shall have the right to provide advice and input with respect to such matters, and will
perform such specific duties as the Management Committee of the Corporation may from time to
time request. John shall also serve as a member of the Board of Directors and Management
Committee of the Corporation, and shall perform such specific Services as are identified under
Exhibit A. In addition, if John has not identified an expansion location and plan for the second
restaurant to be managed by the Corporation within twelve (12) months following the Restaurant
opening, the Shareholders shall work to together to develop a commercially reasonable expansion
plan or determine whether or not expansion is commercially feasible.
(b) Laura. Laura will serve as Secretary of the Corporation and in such capacity
will the corporate governance of the Corporation and, subject to Section 7 below, will perform
such specific duties as the Management Committee of the Corporation may from time to time
request. Laura shall also serve as a member of the Board of Directors and Management Committee
of the Corporation, and shall perform such specific Services as identified under Exhibit A
(including specific duties related to being Co-Executive Chef of the Restaurant).
(c) Sayat. Sayat shall serve as Vice President of the Corporation and also as a
member of the Board of Directors and Management Committee of the Corporation, and shall
perform such specific Services as are identified under Exhibit A (including specific duties as Co-
Executive Chef).
(d) Culinary Control. While John will have the right to provide advice and
input on such matters, Laura and Sayat shall have the authority to supervise, direct and control
decisions related to the food elements of the “Noosh” and “Kitchen Table” concepts and all back
of house operations of the Restaurant (and any Affiliate restaurants), including, without limitation,
food menus, recipes, methods and means, chef training, staff hiring; provided, however, in the
event that, during any consecutive three-month period, either (i) food and beverage costs at the
Restaurant exceed 25% of gross sales (exclusive of labor and subject to reasonable adjustments
for take-out and catering sales to the extent gross sales are reduced by delivery and similar charges)
or (ii) back of house labor costs at the Restaurant exceed 40% of gross sales, the Shareholders shall
work to agree on how to proceed/make adjustments until food, beverage and/or labor costs at the
Restaurant are reduced to be less than such thresholds for no fewer than three consecutive months.
Furthermore, if food costs or back of house labor exceed budgeted expenses, as approved by the
Management Committee from time to time, during any consecutive three-month period, the
Shareholders shall work to agree on how to proceed/make adjustments until such expenses are at
or lower than so budgeted for no fewer than three consecutive months. Furthermore, if (u) prime
costs (food, beverage and labor) at the Restaurant exceed 65% of gross sales during any
consecutive three-month period, (v) prime costs (food, beverage and labor) at the Restaurant
exceed budgeted expenses, as approved by the Management Committee, during any consecutive
three-month period, (x) the Restaurant’s Concept (namely, fine and fast casual, Mediterranean
inspired California cuisine) does not achieve consumer acceptance, (y) a recipe or method of
production becomes too labor intensive in relation to its customer acceptance and retail cost to
reasonably justify its retention, or (z) a recipe or method of production for the fast casual Noosh
portion of the Concept becomes difficult to scale and replicate in multiple locations, then the
Management Committee shall have the right to modify or refine the Restaurant’s menu, Concept,
recipes and/or methodologies as reasonably necessary to improve the business opportunities and
prospects of the Corporation. In addition, Laura and Sayat will work collaboratively with the
Restaurant’s beverage director to develop and refine beverage offerings and menus, subject to
John’s reasonable approval, and the Management Committee shall have the right to modify or
refine such offerings from time to time based on customer acceptance and cost considerations.
(e) Marketing and Promotion. The Shareholders shall mutually agree on the
Corporation’s and the Restaurant’s overall promotional message, including a description of the
Concept (defined below), contributions of all of the Shareholders, reference to all Shareholders as
“founders” of the Restaurant, and the biographical backgrounds and descriptions of development
of the Concept by the Shareholders, to be used for press releases, interviews and other promotional
purposes
(f) Shareholder Right to Perform Services. In the event any Shareholders fail
to perform their respective Services and a successor or replacement employee has not been
appointed to perform such Services, as approved by the Management Committee, the remaining
Shareholders shall have the right (but not the obligation), without waiving any rights hereunder,
upon written notice to the Shareholders, to perform any such Services as reasonably necessary to
operate the Corporation’s business, including the Restaurant. Shareholders should be allowed
reasonable time and condition to perform the service, except in emergencies. A task may be
necessarily postponed or re-prioritized in the event other urgent issues come up; provided,
however, the Shareholders acknowledge and agree that this provision is intended to address
unusual circumstances (e.g. restaurant reviewer visit or emergency repairs).
(g) Shareholder’s obligation to cooperation and support. Shareholders shall
work collaboratively to support the other Shareholders’ Services. Shareholders shall create the
environment and allow the opportunity for each Shareholder to perform its Services and succeed,
subject to input from the other Shareholders as described in Exhibit A. Shareholders shall foster
and shall in their own actions be responsible for a respectful, professional, unified work culture.
[Note: see section 25.11] Any disagreement shall be worked out among the Shareholders in good
faith for the best interests of the Restaurant and other businesses of the Corporation, without the
involved of staff or third parties except as otherwise expressly set forth herein.
SECTION 7. MANAGEMENT
Notwithstanding anything to the contrary in this Agreement, the Shareholders, officers,
directors or employees of the Corporation shall not have authority to cause the Corporation to
engage in the following transactions without first obtaining the approval of a majority consent of
the Committee Members (“Majority Consent”):
(a) To call for capital contributions from the Shareholders;
(b) To issue, grant or sell additional shares in the Corporation or admit
additional Shareholders, except as otherwise expressly set forth herein;
(c) To hire or terminate employees and other personnel of the Corporation and
to determine their compensation and benefits, or to hire and terminate management-level
employees (i.e. General Manager, Beverage Manager, Events Manager, Director of Operations,
Marketing Director and the like) of the Restaurant or any Affiliate, and to determine their
compensation and benefits;
(d) To enter into contracts, or incur any debt or liability, on behalf of the
Corporation where the expenditures to be made by the Corporation are in excess of $1,000.00 in
any one instance or in excess of an aggregate of $5,000 in any calendar month, except to purchase
inventory and other personal property as reasonably necessary and consistent with business
operations, as reasonably necessary for the repair and maintenance of the Restaurant’s furniture,
fixtures or equipment or to perform Forward Food’s obligations under the lease for the Restaurant
the premises. Shareholders, as employees, are authorized to incur reasonable expenses for the
promotion and conduct of the business of the Corporation and the fulfillment of Shareholder’s
duties as employees and officers of the Corporation, including expenses for entertainment, travel,
and similar items; provided however, any expense over $1,000.00 has to be approved in advance
in writing by the Management Committee, and any expense or check written over $5,000 shall
require the written approval of the Management Committee. The Corporation shall reimburse each
Shareholder for all such expenses upon the presentation by a Shareholder, from time to time, of an
itemized account of expenditures made by the Shareholder; provided that no such reimbursement
will be payable for expenses or costs incurred more than one hundred eighty (180) days prior to
the date of the submission of a written request for reimbursement. The Corporation’s bank account
shall be maintained at First Republic Bank and the President’s, Vice President’s or Secretary’s
signature shall be required for withdrawal of funds from said account, and, subject to bank
approval, any expense or check written over $5,000 shall require the signature of two Shareholders,
one of whom shall be the CFO.
(e) To borrow money from a Shareholder or any officer, director or employee
of the Corporation or to loan money to any Shareholders, officer, director or employee of the
Corporation;
(f) To materially alter the business of the Corporation or the “Noosh” or
“Kitchen Table” concepts;
(g) To sell, exchange or otherwise dispose of all, or substantially all, of the
Corporation's assets (including, without limitation, its intellectual property and associated
goodwill) occurring as part of a single transaction or plan, or in multiple transactions over a twelve
(12) month period, except in the orderly liquidation and winding up of the business of the
Corporation upon its duly authorized dissolution;
(h) To approve location of any other restaurant managed by the Corporation or
an Affiliate and the overall structure and financing of any Affiliate formed to operate under the
“Noosh” or “Kitchen Table” concepts;
(i) To sue on, defend, or compromise any and all claims or liabilities in favor
of or against the Company, submit any or all such claims or liabilities to arbitration and confess a
judgment against the Company in connection with any litigation in which the Company is
involved;
(j) To reserve any net profits of the Corporation other than as reasonably
necessary to pay the Corporation’s expenditures in the normal course of its business;
(l) To amend the Corporation's Articles of Incorporation, Bylaws or this
Agreement in a manner that adversely affects any of the rights, privileges and/or preferences of
the Shareholders, except as otherwise set forth herein;
(m) To take any actions not expressly delegated to a Shareholder or Officer,
except as may be approved and delegated by the Management Committee; and
(n) To take any of the foregoing actions on behalf of or with respect to
Forward Food, the Restaurant or any Affiliates.
SECTION 8. CONFIDENTIAL INFORMATION
A Shareholder may not, at any time either during the term of this Agreement or thereafter,
directly or indirectly furnish or divulge to any person, firm, or corporation whatsoever, except as
may be necessary for the fulfillment of Shareholder’s duties as an employee and officer of the
Corporation, the names of any customer or customers of the Corporation or the methods of
conducting the business of the Corporation. In addition, a Shareholder may not disclose any
confidential information to any person, firm, or corporation whatsoever, imparted to a
Shareholder in connection with employment of the Shareholder by the Corporation or any of its
Affiliates. Finally, subject to the terms hereof, a Shareholder may not use for its own benefit any
confidential information imparted to a Shareholder in connection with employment of the
Shareholder by the Corporation. The parties acknowledge and agree that Sayat and Laura have
and will incorporate into the “Noosh” and “Kitchen Table” concepts (collectively the “Concept”)
various pre-existing knowledge, concepts and other intellectual property or proprietary
information, including, without limitation, the trademark and trade name “Istanbul Modern,”
menus, recipes, ingredient profiles, ingredient combinations, methods for food preparation,
service and staffing models, cultural and social formats, know-how, techniques, methods,
compilations, sources, ideas, designs and other general knowledge (collectively, the “Pre-
Existing IP”). The Pre-Existing IP shall include derivatives, improvements, enhancements or
additions to any of the foregoing provided that such derivative, improvement, enhancement or
addition is developed independently by Sayat and/or Laura or their affiliates without use of and
without reference to Company’s Confidential Information. The Corporation agrees that Sayat,
Laura and/or their affiliates, as the case may be, are the sole and exclusive owners of the Pre-
Existing IP, retain all rights, title and interest to the Pre-Existing IP and are free to use, exploit or
dispose of such Pre-Existing IP, in whole or in part, in any way as they may desire, including,
without limitation, in restaurants or other businesses that use adaptations of recipes or menus
incorporated into the Concept. Notwithstanding the foregoing, Sayat’s and Laura’s ownership
and use of the Pre-Existing IP, (a) shall not materially adversely affect the business of the
Restaurant or any other restaurants using the Concept managed by the Corporation or its
Affiliates, (b) shall not materially adversely affect Sayat’s and Laura’s ability to perform their
Services while they are Shareholders of the Corporation, (c) shall not include the same menus
as those developed for the Concept, as shown on the menu and the associated recipes attached
hereto as Exhibit B and incorporated herein (the “Fast-Casual Menu”); the Fast-Casual Menu
shall include derivatives, improvements, enhancements or additions to any of the food items
or recipes contained therein during their employment with the Corporation or any Affiliate,
and (f) shall not adversely affect the Corporation’s ownership of the Concept or prevent the
Corporation from using Confidential Information developed by Sayat and Laura in connection
with the Services they render for the Corporation even if such Confidential Information is similar
to the Pre-Existing IP. Each of the Shareholders shall sign a standard and commercially
reasonable Confidentiality and Intellectual Property Assignment Agreement, which shall
expressly exclude Laura and Sayat’s Pre-Exit
Preview
LUCINDA L. STORM, ESQ. (State Bar No. 129541) 1 lstorm@storm-law.com 2 KENNETH D. HOLLENBECK, ESQ. (State Bar No. 196131) ELECTRONICALLY khollenbeck@storm-law.com F I L E D 3 LAW OFFICES OF LUCINDA L. STORM, ESQ. Superior Court of California, County of San Francisco 720 Lombard Street 4 San Francisco, California 94133 05/27/2020 Clerk of the Court 5 Telephone: (415) 777-6990 BY: EDNALEEN ALEGRE Facsimile: (415) 777-6992 Deputy Clerk 6 Attorneys for Defendants and Cross-Complainants, 7 LAURA OZYILMAZ and SAYAT OZYILMAZ 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 COUNTY OF SAN FRANCISCO 10 11 FFG RESTAURANT GROUP, INC., and Case No.: CGC-19-581427 FORWARD FOOD GROUP, LLC, 12 DECLARATION OF LUCINDA L. STORM DEFENDANT AND CROSS- Plaintiffs, COMPLAINANT LAURA OZYILMAZ 13 AND SAYAT OZYILMAZ’S NOTICE OF 14 vs. MOTION AND MOTION TO COMPEL MEDIATION/ARBITRATION AND TO 15 STAY CLAIMS SAYAT OZYILMAZ, LAURA GABRIELA 16 OZYILMAZ, and DOES 1 through 100, Date: June 23, 2020 Time: 9:30 a.m. Defendants. Dept.: 302 17 ______________________________________ 18 LAURA OZYILMAZ and SAYAT OZYILM Action Filed: November 21, 2019 Trial Date: None Set AZ, 19 Cross-Complainants, 20 vs. 21 JOHN LITZ, FORWARD FOOD GROUP, 22 LLC, FFG RESTAURANT GROUP, INC., 23 YONGJIA SOLLERS, and ROES 1 THROUGH 30, 24 25 Cross Defendants. 26 _____________________________________ 27 28 DECLARATION OF LUCINDA L. STORM IN SUPPORT OF MOTION TO COMPEL MEDIATION AND 1 STAY ACTION ACTIONS: CGC-19-581427 I, Lucinda L. Storm, Declare and State as follows: 1 2 1. I am an attorney licensed to practice before all the courts of the State of California, and counsel for Defendants and Cross-Complainants Laura Ozyilmaz and Sayat Ozyilmaz 3 (“Defendants”). 4 2. I make this declaration of my own personal knowledge, except as to any matters stated on 5 information and belief, and as to those matters I believe them to be true. If called to testify in Court on these matters, I could do so competently as follows: 6 7 3. On November 20, 2019, Plaintiff John Litz Filed case No. CGC-19-580935, against Sayat Ozyilmaz, Laura Ozyilmaz and FFG Restaurant Group, Inc. [“Litz Action”], and on 8 December 31, 2019, filed a first Amended Complaint alleging causes of action for ANTICIPATORY BREACH OF WRITTEN CONTRACT (2) RESCISSION OF 9 CONTRACTS (3) BREACH OF ORAL CONTRACT (4) BREACH OF COVENANT 10 OF GOOD FAITH AND FAIR DEALING (5) PROMISSORY FRAUD.[“Litz Action”] 11 4. On December 11, 2020, Plaintiffs FFG Restaurant Group, Inc. and Forward Food Group, LLC, filed CGC-19-581427, against Sayat Ozyilmaz and Laura Ozyilmaz, and on 12 January 2, 2020, filed a First Amended Complaint alleging causes of action for BREACH 13 OF FIDUCIARY DUTY (2) INTENTIONAL INTERFERENCE WITH PROSPECTIVE ECONOMIC ADVANTAGE (3) CONVERSION (4) UNFAIR BUSINESS PRACTICES 14 (5) VIOLATION OF PENAL CODE SECTION 502 (6) DECLARATORY RELIEF (7) INJUNCTIVE RELIEF [“FFGRG Action”]. 15 16 5. On February 18, 2020, Defendants filed a Cross-Complaint in the FFRG action against John Litz, FFFG Restaurant Group, Inc, Forward Food Group, LLC and Yongjia Sollers 17 and on April 15, 2020, Defendants filed a First Amended Cross-Complaint in the FFGRG Action alleging causes of action for: WRONGFUL TERMINATION; WRONGFUL 18 DISCHARGE IN VIOLATION OF PUBLIC POLICY CAL. GOV.CODE §12940(h); 19 RETALIATION IN VIOLATION OF LABOR CODE §6310; RETALIATIONIN VIOLATION OF FEHA; CAL. GOV. CODE §12940(h); FAILURETO PREVENT 20 DISCRIMINATION AND RETALIATION (CAL. GOV. CODE §12940(h); PROMISSORY FRAUD; FRAUD IN THE INDUCEMENT;BREACH OF WRITTEN 21 EMPLOYMENT AGREEMENTS; BREACH OF CONTRACT; BREACH OF 22 FIDUCIARY DUTY; ASSAULT; DEFAMATION (Cal. Civ. Code §45 and Cal. Civ. Code §46); INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS; 23 CONVERSION; NON-PAYMENT OF WAGES – VIOLATIONS OF LABOR CODE 24 §§ 201, 218; NON-PAYMENT OF MINIMUM WAGE – VIOLATION OF LABOR CODES §§ 1194,1197; SAN FRANCISCO MINIMUM WAGE ORDINANCE, 25 ADMINISTRATIVE CODE § 12R.1, et seq.; NON-PAYMENT OF OVERTIME COMPENSATION – VIOLATION OF LABOR CODES §§1194, 1197; BREACH OF 26 COVENANT OF GOOD FAITH AND FAIR DEALING; UNJUST ENRICHMENT; 27 INTENTIONAL INTERFERENCE WITH ECONOMIC ADVANTAGE; UNLAWFUL/UNFAIR BUSINESS PRACTICES (BUSINESS & PROFESSIONS 28 CODE § 17200 et seq.); DECLARATORY RELIEF; and INJUNCTIVE RELIEF. A DECLARATION OF LUCINDA L. STORM IN SUPPORT OF MOTION TO COMPEL MEDIATION AND 2 STAY ACTION ACTIONS: CGC-19-581427 similar Cross-Complaint and First Amended Cross-Complaint were filed against John 1 Litz in the Litz Action on February 18, 2020, and April 15, 2020, respectively. 2 6. All of the causes of action in the FFGRG Action, the Litz Action and the Cross- 3 Complaints in each action arise from the same transaction and occurrence - the development, formation and operation of Noosh restaurant and disagreements arising 4 therefrom, including Plaintiff’s termination of employment of Defendants Laura and 5 Sayat Ozyilmaz from FFGRG and their shareholder interests therein. 6 7. The allegations in both actions relate to the same common, primary and fundamental 7 issue, to wit, the efficacy of the various documents and agreements among the parties, including the most notably, the Memorandum of Understanding (“MOU”) of the 8 Shareholders of FFGRG, which include Mediation and “Mediate/Arbitrate” provisions. 9 8. Attached hereto as Exhibit A is a complete true and correct copy of the signed MOU 10 with Exhibits. 11 9. Counsel for the parties discussed Defendants request for mediation/arbitration and the mediation/arbitration requirements in the agreements and in principal agreed to honor 12 those provisions however, Plaintiffs’ counsel in both actions required a written agreement 13 which included unacceptable requirements including a “stay away” agreement whereby Defendants agreed to stay clear of the Noosh restaurant. 14 10. Nevertheless, on December 6, 2019, I sent Plaintiffs’ counsel a letter agreeing to mediate 15 without he conditions and included a list of fourteen (14) mediators agreeable to 16 Defendants. A true and correct copy is attached hereto as Exhibit B. 17 11. Following further attempts to agree on terms failed, in January 2020, I am informed and believe that Plaintiffs scheduled and held a Board of Directors meeting of FFGRG 18 wherein the Board approved a ninety day period before mediation would be considered. 19 There was no discussion regarding the arbitration requirement. 20 12. On December 20, 2019, Plaintiffs responded in apparent agreement for mediation but subject to conditions in a written pre-mediation even though the MOU or other agreed 21 documents do not require any “pre-mediation” concessions or conditions. 22 13. In meet and confer discussions with Litz’s personal counsel, Ms. Chung and Mr. 23 Schwartz, regarding Plaintiff’s failure to produce documents in the actions, Ms. Chung 24 stated that they would refuse to produce a single document int he case without a protective order being in place due to the serious need for confidentiality in the matter, 25 including the need for a provision that includes a legend "FOR ATTORNEY EYES ONLY”. 26 I declare under penalty of perjury that the foregoing is true and correct. 27 28 Dated: May 26, 2020 DECLARATION OF LUCINDA L. STORM IN SUPPORT OF MOTION TO COMPEL MEDIATION AND 3 STAY ACTION ACTIONS: CGC-19-581427 By: 1 Lucinda L. Storm, Esq. 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 DECLARATION OF LUCINDA L. STORM IN SUPPORT OF MOTION TO COMPEL MEDIATION AND 4 STAY ACTION ACTIONS: CGC-19-581427 EXHIBIT A FFG RESTAURANT GROUP, INC. SHAREHOLDERS’ AGREEMENT THIS SHAREHOLDERS’ AGREEMENT (this “Agreement”) is entered into as of January 20, 2019 (the “Effective Date”) by and between FFG Restaurant Group, Inc., a California S-corporation (the “Corporation”), John Litz (“John”), an individual, Sayat Ozyilmaz (“Sayat”), an individual, and Laura Gabriela Ozyilmaz, an individual (“Laura,” each a “Shareholder,” and collectively with Sayat and John, the “Shareholders”). The Corporation and the Shareholders agree as follows: A. The Shareholders are each members of the Board of Directors of the Corporation and/or are officers of the Corporation, and are actively involved in the business affairs of the Corporation. B. The Corporation has made an election under Subchapter S of the Internal Revenue Code to be an S corporation. C. The Corporation is the Manager of Forward Food Group, LLC (“Forward Food”), a California limited liability company which intends to operate a restaurant at 2001 Fillmore Street, San Francisco, CA 94115 under the trade names “Noosh” and “Kitchen Table” (“Restaurant”), which names and concepts are owned by the Corporation and being licensed to Forward Food and other entities managed and controlled by the Corporation (“Affiliates”); D. In order to promote their mutual interests, and the interests of the Corporation, to insure continuity and stability in the management and policies of the Corporation, and to provide an incentive for the Shareholders to use their best efforts in performing duties on behalf of the Corporation, the Shareholders shall cause the Corporation to convert to a “close corporation” under California law, appoint a Management Committee that will be responsible for decisions normally reserved for the Board of Directors, and in connection therewith the Shareholders desire to impose certain restrictions and obligations on themselves, the Board of Directors, the Management Committee and the Corporation in accordance with the terms of this Agreement. AGREEMENTS: SECTION 1. BOARD OF DIRECTORS; MANAGEMENT COMMITTEE; OFFICERS 1.1 Election. The Shareholders each agree that they will, at the request of any other Shareholder, vote their stock of the Corporation in such manner as will cause each of the Shareholders to be elected to the Board of Directors of the Corporation. However, there is no requirement to vote in favor of any Shareholder who declines to stand for election or to serve. 1.2 Removal of Directors. The Shareholders may not vote their shares in favor of the removal of any director from office without cause. 1.3 Resignation of Director. Upon a Triggering Event (defined below) affecting a Shareholder, such Shareholder shall resign as a director, officer and member of the Management Committee of the Corporation upon the effective Date of the Triggering Event. EXHIBIT A 1.4. Close Corporation; Management Committee. The Shareholders shall cause the Corporation to convert to a “close corporation” under California law. In contemplation thereof, the Shareholders hereby appoint a Management Committee that will be responsible for decisions normally reserved for the Board of Directors (except to the extent that the Board of Directors is required to act by law, in order to satisfy the requirements of a formality of parties with whom the Corporation transacts business or as otherwise provided herein), including but not limited to those decisions set forth in Section 7 hereof, notwithstanding any provisions to the contrary in the Corporation's Bylaws. The Management Committee will have authority to act informally; provided, those decisions set forth in Section 7 hereof shall require either (i) a formal vote at a meeting of the Management Committee with written minutes thereof or (ii) written consent, which may be in the form of email. The members of the Management Committee (“Committee Members”) will consist of the same persons who are Directors of the corporation (accordingly, the initial members of the Management Committee will be John, Sayat and Laura). Upon the happening of a Triggering Event defined herein (including a Committee Member’s termination of employment as set forth herein) that Committee Member shall resign from the Management Committee as of the effective date of such Triggering Event. If for any reason, there are fewer than three (3) shareholders of the Corporation, and consequently fewer than three (3) Directors, the Management Committee will be constituted based on the number of remaining Directors. Decisions will be made by a majority vote of Management Committee members; provided that while John is a Committee Member, he must be one of the Committee Members approving a decision. No Committee Member may be prevented from attending any meeting of the Management Committee. 1.5. Officers. The officers of the Corporation shall be as follows: John, CEO and CFO; Sayat, Vice-President and Laura, Secretary. SECTION 2. PROXY Each of the Shareholders appoints the other Shareholders as proxy agents for the Shareholder and authorizes the other Shareholders to vote all the shares of stock of the Corporation held by the Shareholder to elect and remove members of the board of directors of the Corporation as required under the terms of this Agreement. This proxy will remain irrevocable during the term of this Agreement. SECTION 3. EMPLOYMENT The Corporation agrees to employ and/or cause its Affiliate(s) to employ John, Sayat and Laura to perform the Services (defined below) and each Shareholder shall have authority to conduct its Services in the ordinary course of the Corporation’s or Restaurant’s business, subject to the limitations set forth in this Agreement (including, without limitation, Section 7), and each of them agrees to accept that employment on the terms and conditions set forth in this Agreement. The Shareholders may engage or invest in any business activity so long as such engagement does not violate the terms of this Agreement (including the restrictions set forth in this Section), and neither the Corporation, nor any other Shareholder or Affiliates shall have any right in or to such other ventures or activities even if the opportunity is of a character that if presented to the Corporation could be taken by the Corporation. During the period of any Shareholder’s employment with the Corporation, any outside activities undertaken by such Shareholders (i) shall not materially adversely affect the business of the Restaurant or any other restaurants using the Concept (defined below) managed by the Corporation or its Affiliates; (ii) shall not use the Fast-Casual Menu (defined below) or any derivative, improvement, enhancement or additions to any of the food items or recipes contained therein during their respective employment with the Corporation, (iii) shall not materially adversely affect the Shareholder’s ability to perform his or her Services while they are Shareholders of the Corporation, and (iv) shall comply with any restrictions contained in Forward Food’s Restaurant lease covering the premises at 2001 Fillmore Street in San Francisco concerning competitive activities. The Management Committee will develop an Employee Handbook and Code of Conduct, which the Shareholders will agree to be bound by. Any such Code of Conduct shall include, without limitation, the non-disparagement requirements set forth in Section 25.11 of this Agreement, an acknowledgement that yelling is considered non-professional conduct, and an obligation to attend scheduled meetings approved by the Management Committee. SECTION 4. COMPENSATION Each of the Shareholders employed shall not be entitled to any compensation for his or her services to the Corporation performed as its officer or member of the Board of Directors or Management Committee. The Shareholders shall be entitled to the compensation for the Services (defined below) as set forth below and any additional services they provide to the Restaurant or any other restaurants managed by the Corporation or its Affiliates and approved by the Management Committee. In connection therewith, commencing as of January 20, 2019, the Shareholders shall be entitled to the following initial annual compensation for the Services they provide to Forward Food; provided, however, the parties agree that such compensation shall increase to industry standard compensation when Forward Food’s cash flow from the Restaurant is sufficient to sustain such increases: John: $60,000.00 Sayat: $60,000.00 Laura: $60,000.00 Upon the earlier of (i) January 1, 2020 or (ii) the opening of a second restaurant incorporating the Concept (defined below), and so long as cash flow from Restaurant operations (before amortization and depreciation) is positive for three (3) consecutive months, the base salaries of the three Shareholders shall increase to $80,000 per annum plus bonuses (not to exceed $20k per year) to be determined by the Management Committee. The parties acknowledge that the salaries payable by the Restaurant, Corporation and/or any affiliates may be adjusted as reasonably practicable as and when the Concept expands to additional locations. Upon the earlier of (x) January 1, 2022 or (y) the investors of Forward Food having been repaid 100% of their capital contribution, and so long as cash flow from Restaurant operations (before amortization and depreciation) is positive for three (3) consecutive months, salaries (and bonuses) will be adjusted to then prevailing rates based on services actually being provided by the Shareholders at that time. SECTION 5. TERMINATION 5.1 Termination for Cause. A Shareholder may be terminated from its employment with the Corporation and the Restaurant by the Corporation “for cause” upon: (i) itsbreach of fiduciary duty involving personal profit, personal dishonesty, recklessness or willful misconduct with respect to its obligations or otherwise relating to the business of the Company and the Restaurant; (ii)a material breach of this Agreement and its failure to cure such breach within thirty (30) days following written notice from the Corporation or all of the other Shareholders; (iii) its conviction or entry of a plea of nolo contendere for fraud or embezzlement, or any felony or crime of moral turpitude; or (iv) its transfer, sale, pledge, hypothecation, assignment, or other disposition of its shares or other interests in the Corporation in violation of this Agreement. In the event of such termination, such terminated Shareholder’s interests in the Corporation shall be subject to purchase and sale as provided in Section 18 below. 5.2 Voluntary Termination. A Shareholder may resign as an employee of the Corporation and any Affiliates in connection with its obligations to perform its Services upon no less than three (3) months prior written notice to the Corporation and the other Shareholders. In the event of such resignation, such Shareholder’s interests in the Corporation shall be subject to purchase and sale as provided in Section 18 below. SECTION 6. DUTIES 6.1 Shareholder Services. The Shareholders agree to devote such time, effort and skill as may be reasonably necessary to effectively perform their Services for the successful operation of the Corporation’s business, including the Restaurant, and each Shareholder shall reasonably cooperate with one another to allow each of them to effectively perform their Services. The Shareholders acknowledge and agree that they each bring certain technical expertise and experience to various segments the Restaurant and the Corporation’s business, but that it is their intent to work collaboratively with one another for advice and input notwithstanding their respective Services. In connection with their respective services, duties and obligations, the Shareholders each hereby agree to provide the Corporation and its Affiliates with the services set forth on Exhibit A, attached hereto and made a part hereof (as applicable to each, the “Services”). The scope of the Services may be revised from time to time by the unanimous approval of the Shareholders. In connection therewith, subject to Section 7 below, the Shareholders agree that: (a) John. John will serve as Chief Executive Officer of the Corporation, as well as itsChief Financial Officer, and in such capacity, subject to Section 7 below, will supervise, direct, and control the general business and financial operations of the Corporation, although Sayat and Laura shall have the right to provide advice and input with respect to such matters, and will perform such specific duties as the Management Committee of the Corporation may from time to time request. John shall also serve as a member of the Board of Directors and Management Committee of the Corporation, and shall perform such specific Services as are identified under Exhibit A. In addition, if John has not identified an expansion location and plan for the second restaurant to be managed by the Corporation within twelve (12) months following the Restaurant opening, the Shareholders shall work to together to develop a commercially reasonable expansion plan or determine whether or not expansion is commercially feasible. (b) Laura. Laura will serve as Secretary of the Corporation and in such capacity will the corporate governance of the Corporation and, subject to Section 7 below, will perform such specific duties as the Management Committee of the Corporation may from time to time request. Laura shall also serve as a member of the Board of Directors and Management Committee of the Corporation, and shall perform such specific Services as identified under Exhibit A (including specific duties related to being Co-Executive Chef of the Restaurant). (c) Sayat. Sayat shall serve as Vice President of the Corporation and also as a member of the Board of Directors and Management Committee of the Corporation, and shall perform such specific Services as are identified under Exhibit A (including specific duties as Co- Executive Chef). (d) Culinary Control. While John will have the right to provide advice and input on such matters, Laura and Sayat shall have the authority to supervise, direct and control decisions related to the food elements of the “Noosh” and “Kitchen Table” concepts and all back of house operations of the Restaurant (and any Affiliate restaurants), including, without limitation, food menus, recipes, methods and means, chef training, staff hiring; provided, however, in the event that, during any consecutive three-month period, either (i) food and beverage costs at the Restaurant exceed 25% of gross sales (exclusive of labor and subject to reasonable adjustments for take-out and catering sales to the extent gross sales are reduced by delivery and similar charges) or (ii) back of house labor costs at the Restaurant exceed 40% of gross sales, the Shareholders shall work to agree on how to proceed/make adjustments until food, beverage and/or labor costs at the Restaurant are reduced to be less than such thresholds for no fewer than three consecutive months. Furthermore, if food costs or back of house labor exceed budgeted expenses, as approved by the Management Committee from time to time, during any consecutive three-month period, the Shareholders shall work to agree on how to proceed/make adjustments until such expenses are at or lower than so budgeted for no fewer than three consecutive months. Furthermore, if (u) prime costs (food, beverage and labor) at the Restaurant exceed 65% of gross sales during any consecutive three-month period, (v) prime costs (food, beverage and labor) at the Restaurant exceed budgeted expenses, as approved by the Management Committee, during any consecutive three-month period, (x) the Restaurant’s Concept (namely, fine and fast casual, Mediterranean inspired California cuisine) does not achieve consumer acceptance, (y) a recipe or method of production becomes too labor intensive in relation to its customer acceptance and retail cost to reasonably justify its retention, or (z) a recipe or method of production for the fast casual Noosh portion of the Concept becomes difficult to scale and replicate in multiple locations, then the Management Committee shall have the right to modify or refine the Restaurant’s menu, Concept, recipes and/or methodologies as reasonably necessary to improve the business opportunities and prospects of the Corporation. In addition, Laura and Sayat will work collaboratively with the Restaurant’s beverage director to develop and refine beverage offerings and menus, subject to John’s reasonable approval, and the Management Committee shall have the right to modify or refine such offerings from time to time based on customer acceptance and cost considerations. (e) Marketing and Promotion. The Shareholders shall mutually agree on the Corporation’s and the Restaurant’s overall promotional message, including a description of the Concept (defined below), contributions of all of the Shareholders, reference to all Shareholders as “founders” of the Restaurant, and the biographical backgrounds and descriptions of development of the Concept by the Shareholders, to be used for press releases, interviews and other promotional purposes (f) Shareholder Right to Perform Services. In the event any Shareholders fail to perform their respective Services and a successor or replacement employee has not been appointed to perform such Services, as approved by the Management Committee, the remaining Shareholders shall have the right (but not the obligation), without waiving any rights hereunder, upon written notice to the Shareholders, to perform any such Services as reasonably necessary to operate the Corporation’s business, including the Restaurant. Shareholders should be allowed reasonable time and condition to perform the service, except in emergencies. A task may be necessarily postponed or re-prioritized in the event other urgent issues come up; provided, however, the Shareholders acknowledge and agree that this provision is intended to address unusual circumstances (e.g. restaurant reviewer visit or emergency repairs). (g) Shareholder’s obligation to cooperation and support. Shareholders shall work collaboratively to support the other Shareholders’ Services. Shareholders shall create the environment and allow the opportunity for each Shareholder to perform its Services and succeed, subject to input from the other Shareholders as described in Exhibit A. Shareholders shall foster and shall in their own actions be responsible for a respectful, professional, unified work culture. [Note: see section 25.11] Any disagreement shall be worked out among the Shareholders in good faith for the best interests of the Restaurant and other businesses of the Corporation, without the involved of staff or third parties except as otherwise expressly set forth herein. SECTION 7. MANAGEMENT Notwithstanding anything to the contrary in this Agreement, the Shareholders, officers, directors or employees of the Corporation shall not have authority to cause the Corporation to engage in the following transactions without first obtaining the approval of a majority consent of the Committee Members (“Majority Consent”): (a) To call for capital contributions from the Shareholders; (b) To issue, grant or sell additional shares in the Corporation or admit additional Shareholders, except as otherwise expressly set forth herein; (c) To hire or terminate employees and other personnel of the Corporation and to determine their compensation and benefits, or to hire and terminate management-level employees (i.e. General Manager, Beverage Manager, Events Manager, Director of Operations, Marketing Director and the like) of the Restaurant or any Affiliate, and to determine their compensation and benefits; (d) To enter into contracts, or incur any debt or liability, on behalf of the Corporation where the expenditures to be made by the Corporation are in excess of $1,000.00 in any one instance or in excess of an aggregate of $5,000 in any calendar month, except to purchase inventory and other personal property as reasonably necessary and consistent with business operations, as reasonably necessary for the repair and maintenance of the Restaurant’s furniture, fixtures or equipment or to perform Forward Food’s obligations under the lease for the Restaurant the premises. Shareholders, as employees, are authorized to incur reasonable expenses for the promotion and conduct of the business of the Corporation and the fulfillment of Shareholder’s duties as employees and officers of the Corporation, including expenses for entertainment, travel, and similar items; provided however, any expense over $1,000.00 has to be approved in advance in writing by the Management Committee, and any expense or check written over $5,000 shall require the written approval of the Management Committee. The Corporation shall reimburse each Shareholder for all such expenses upon the presentation by a Shareholder, from time to time, of an itemized account of expenditures made by the Shareholder; provided that no such reimbursement will be payable for expenses or costs incurred more than one hundred eighty (180) days prior to the date of the submission of a written request for reimbursement. The Corporation’s bank account shall be maintained at First Republic Bank and the President’s, Vice President’s or Secretary’s signature shall be required for withdrawal of funds from said account, and, subject to bank approval, any expense or check written over $5,000 shall require the signature of two Shareholders, one of whom shall be the CFO. (e) To borrow money from a Shareholder or any officer, director or employee of the Corporation or to loan money to any Shareholders, officer, director or employee of the Corporation; (f) To materially alter the business of the Corporation or the “Noosh” or “Kitchen Table” concepts; (g) To sell, exchange or otherwise dispose of all, or substantially all, of the Corporation's assets (including, without limitation, its intellectual property and associated goodwill) occurring as part of a single transaction or plan, or in multiple transactions over a twelve (12) month period, except in the orderly liquidation and winding up of the business of the Corporation upon its duly authorized dissolution; (h) To approve location of any other restaurant managed by the Corporation or an Affiliate and the overall structure and financing of any Affiliate formed to operate under the “Noosh” or “Kitchen Table” concepts; (i) To sue on, defend, or compromise any and all claims or liabilities in favor of or against the Company, submit any or all such claims or liabilities to arbitration and confess a judgment against the Company in connection with any litigation in which the Company is involved; (j) To reserve any net profits of the Corporation other than as reasonably necessary to pay the Corporation’s expenditures in the normal course of its business; (l) To amend the Corporation's Articles of Incorporation, Bylaws or this Agreement in a manner that adversely affects any of the rights, privileges and/or preferences of the Shareholders, except as otherwise set forth herein; (m) To take any actions not expressly delegated to a Shareholder or Officer, except as may be approved and delegated by the Management Committee; and (n) To take any of the foregoing actions on behalf of or with respect to Forward Food, the Restaurant or any Affiliates. SECTION 8. CONFIDENTIAL INFORMATION A Shareholder may not, at any time either during the term of this Agreement or thereafter, directly or indirectly furnish or divulge to any person, firm, or corporation whatsoever, except as may be necessary for the fulfillment of Shareholder’s duties as an employee and officer of the Corporation, the names of any customer or customers of the Corporation or the methods of conducting the business of the Corporation. In addition, a Shareholder may not disclose any confidential information to any person, firm, or corporation whatsoever, imparted to a Shareholder in connection with employment of the Shareholder by the Corporation or any of its Affiliates. Finally, subject to the terms hereof, a Shareholder may not use for its own benefit any confidential information imparted to a Shareholder in connection with employment of the Shareholder by the Corporation. The parties acknowledge and agree that Sayat and Laura have and will incorporate into the “Noosh” and “Kitchen Table” concepts (collectively the “Concept”) various pre-existing knowledge, concepts and other intellectual property or proprietary information, including, without limitation, the trademark and trade name “Istanbul Modern,” menus, recipes, ingredient profiles, ingredient combinations, methods for food preparation, service and staffing models, cultural and social formats, know-how, techniques, methods, compilations, sources, ideas, designs and other general knowledge (collectively, the “Pre- Existing IP”). The Pre-Existing IP shall include derivatives, improvements, enhancements or additions to any of the foregoing provided that such derivative, improvement, enhancement or addition is developed independently by Sayat and/or Laura or their affiliates without use of and without reference to Company’s Confidential Information. The Corporation agrees that Sayat, Laura and/or their affiliates, as the case may be, are the sole and exclusive owners of the Pre- Existing IP, retain all rights, title and interest to the Pre-Existing IP and are free to use, exploit or dispose of such Pre-Existing IP, in whole or in part, in any way as they may desire, including, without limitation, in restaurants or other businesses that use adaptations of recipes or menus incorporated into the Concept. Notwithstanding the foregoing, Sayat’s and Laura’s ownership and use of the Pre-Existing IP, (a) shall not materially adversely affect the business of the Restaurant or any other restaurants using the Concept managed by the Corporation or its Affiliates, (b) shall not materially adversely affect Sayat’s and Laura’s ability to perform their Services while they are Shareholders of the Corporation, (c) shall not include the same menus as those developed for the Concept, as shown on the menu and the associated recipes attached hereto as Exhibit B and incorporated herein (the “Fast-Casual Menu”); the Fast-Casual Menu shall include derivatives, improvements, enhancements or additions to any of the food items or recipes contained therein during their employment with the Corporation or any Affiliate, and (f) shall not adversely affect the Corporation’s ownership of the Concept or prevent the Corporation from using Confidential Information developed by Sayat and Laura in connection with the Services they render for the Corporation even if such Confidential Information is similar to the Pre-Existing IP. Each of the Shareholders shall sign a standard and commercially reasonable Confidentiality and Intellectual Property Assignment Agreement, which shall expressly exclude Laura and Sayat’s Pre-Exit