AFFIDAVIT OF KEITHADWAR IN PARTIAL OPPOSITION TO PETITION

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Lucas Holland
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1 FILED: NEW YORK COUNTY CLERK 06/17/ :33 PM INDEX NO /2016 NYSCEF DOC. NO. 15 RECEIVED NYSCEF: 06/17/2016 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK X MARCADWAR, -and- KEITH ADWAR, GREGG ADWAR, and ADW AR CASTING CO., L TO., Petitioner, Index No /2016 AFFIDAVIT OF KEITHADWAR IN PARTIAL OPPOSITION TO PETITION Respondents x STATE OF NEW YORK ) ) ss.: COUNTY OF NASSAU ) KEITH ADW AR, being duy sworn, deposes and says: I. I am one of the respondents in the above-referenced proceeding. I am fuy famiiar with the facts and circumstances set forth herein and submit this affidavit, and the exhibits submitted herewith, on behaf of mysef and respondents Gregg Adwar ("Gregg") and Ad war Casting Co., Ltd. ("the Company") in partia opposition to the petition dated Apri 21, 2016 (the "Petition") fied by Petitioner Marc Ad war ("Petitioner") seeking to confirm an arbitration award, dated Apri 24, 2015 (the "Award"), rendered in an arbitration proceeding captioned Adwar v. Keith Adwar, Gregg Adwar and Adwar Casting Co., Inc., American Arbitration Association ("AAA") Case Number (the "Arbitration"). For the reasons set forth herein, the Petition shoud be granted in part and denied in part. 2. Respondents do not object to the entry of a judgment confirming the Award and the reief expressy granted by the arbitrators in the Award, however, the Petition goes way beyond the reief awarded and seeks additiona reief (as further set forth beow) to which the Petitioner is not entited. See aso the accompanying affidavit of Mark Godberg, sworn to on June 14, 2016 (the "Godberg Aff.") and the affidavit of Bonnie Greengod, sworn to on June 15, 1 of 11

2 2016, (the "Greengod Aff."), together with the exhibits annexed thereto. 3. It is not disputed by Petitioner that, to date, respondents have compied in a respects with the A ward and in that connection, respondents have made payments and performed as foows: (a) $550, was deivered to Petitioner in accordance with the Award on May 22,2015 (see Award at p. 10, paragraph 1); (b) $27, for interest on the $550, was deivered to Petitioner tn accordance with the Award on May 22, 2015 (see Award at p. 10, paragraph 1); (c) $32, as payment for Petitioner's stock was deivered to Petitioner tn accordance with the Award on May 22, 2015 (see Award at p. 10, paragraph 2); (d) $96, representing the first instament on the oan was deivered to Petitioner in accordance with the Award on May 22, 2015 (see Award at p. 10, paragraph 3); (e) the diamond given to Petitioner by his parents was deivered to Petitioner in accordance with the Award on May 22, 2015 (see Award at p. 10, paragraph 4); (f) $28, representing reimbursement to caimant for amounts paid/to be paid by him to the AAA for arbitration fees and expenses, incuding arbitrator compensation, was deivered to Petitioner in accordance with the Award on May 22, 2015 (see Award at p. 10, paragraph 5); and (g) A etter from Signature Bank, dated May 8, 2015, reeasing Petitioner from that certain Continuing Guaranty dated November 15, 2012 (the ony Company indebtedness) was deivered to Petitioner in accordance with the Award on May 22, 2015 (see Award at p. 9, paragraph 6). See aso Exhibit A annexed hereto, Letter to Mark Weyman, Esq., dated May 22, 2015, encosing/deivering the aforementioned items, aong with acknowedgment of receipt. 4. Thirteen (13) monthy payments, each in the amount of $45,833.33, have aso been deivered to Petitioner as of the date hereof. 1 See Award at p. 10, paragraph 1. In addition, the remaining principa baance on the $ oan, incuding a interest due thereon per 1 As of the date of the fiing of the Petition, ten (10) monthy payments of $45, had been made. Three (3) additiona monthy payments were made after the fiing of the Petition. 2 2 of 11

3 the Award (see Award p. 10, paragraph 3) was paid in fu (and on an acceerated basis) on October 21, In the Petition at paragraph 15, Petitioner caims that he is: [E]ntited to distributions from Adwar Casting that were due and owing prior to the issuance of the Award (see Award, p. 9, Section 6). Pursuant to the Schedue K -1 's for the years 2013, 2014 and 2015, annexed [to the Petition] as Exhibits "B", "C" and "D" respectivey, Petitioner is entited to distributions of $11,148 for 2013, $76,683 for 2014 and $29,027 for 2015 that were aocated but not distributed to him. These amounts are cacuated as the difference between the amounts aocated on the K-1 's and the amount actuay distributed to Petitioner. 6. There are no distributions due and owing to Petitioner for any periods and the socaed "distributions" that Petitioner identifies in paragraph 15 of his Petition were never "aocated but not distributed to him." Indeed, as set forth in the accompanying Godberg Aff., the formua by which Petitioner cacuates so-caed "distributions" to which he caims entitement represents a fundamenta misunderstanding of the K-1 s issued to each of the sharehoders of the Company and the data contained therein. 7. In or about 20 I 0, the Company eected to be treated, for tax purposes, as a Subchapter S corporation ("S-Corp."). In that connection, and for each year thereafter, each of the sharehoders (Petitioner, Gregg and I) received a form K-1 that reported our respective share of the income of the Company for which we each are/were responsibe to pay taxes on. The K- 1 s aso reported the amount of cash distributed to each sharehoder in a given year. As is often the case with many S-Corp. 's, the portion of the profit attributed to each of the sharehoders of the Company, and reported on the K -1, is not the same as the amount of cash distributed to that sharehoder in a given year. 8. Annexed coectivey as Exhibit A to the Godberg Aff. are the Form K-1 s for 3 3 of 11

4 each of the sharehoders of the Company for the year As the Court wi readiy see from a review of these documents, each of the sharehoders in 2013 was attributed the sum of $170,148 as "ordinary business income" (aso known as profits) for that year (see each K-1 at ine 1). Line 160 of each of the K-1 identifies distributions in the amount of $159,000 that were made to each of us for that year. These figures refect that for 2013, each sharehoder was aocated an equa amount of income ($170, 148) and was paid an equa distribution ($159,000). Other than as refected on the 2013 K -1 s, there were no additiona distributions to any of the sharehoders. 9. Annexed coectivey as Exhibit B to the Godberg Aff. are the Form K-s for each of the sharehoders of the Company for the year As the Court wi readiy see from a review of these documents, each of the sharehoders in 2014 was attributed the sum of $125,004 as "ordinary business income" for that year (see each K -1 at ine I). Line 160 of each of the K -1 identifies distributions in the amount of $48,320 that were made to each of the sharehoders for that year. These figures refect that for 2014, each sharehoder was aocated an equa amount of income ($125,004) and was paid an equa distribution ($48,320). Other than as refected on the 2014 K -1 s, there were no additiona distributions to any of the sharehoders Annexed coectivey as Exhibit C to the Godberg Aff. are the Form K-1 s for each of the sharehoders for the year Per the Award, Petitioner ceased being a sharehoder of the Company on or about May 22, For ease of math and to achieve a cean, end-of- 2 To the extent Petitioner argues that after Petitioner was terminated, the Company increased saaries for Gregg and I or otherwise atered distributions imiting them to the $48,320 reported on each of the sharehoders' K-s, these facts and circumstances were testified to and offered as evidence during the Arbitration proceedings. As made cear in the Award, "[t]he Pane arrived at the damages based on the historica compensation data, incuding saary, pension contributions, fringe benefits, and profit and cash distributions as refected in the exhibits and testimony credited by the Pane." See A ward at pp These facts and circumstances do not give rise to the additiona reief requested by Petitioner in the Petition, which were aready considered and factored into the award to Petitioner. 3 The Award at p. II, paragraph 2 provides that "upon receipt of (i) the First Payment, and (ii) the sum of $32,168 as payment for his stock, aso due within 30 days of this Award, Caimant sha tender his shares to Respondents or if he does not have them, the Company may cance his shares or issue them to Greg and Keith, as it sees fit." It is 4 4 of 11

5 month cacuation, Petitioner was ony aocated 1/3 of the ordinary business income of the Company through Apri 30, 2015 (not through May 22, 2015, the actua date of the canceation of his stock). 4 For 2015, Petitioner was attributed the sum of $29,027 as "ordinary business income" (see K-1 at ine 1), whie I and Gregg were each aocated $113,973 for the entire year. No distributions were made by the Company in 2015 to any of the sharehoders as refected by the absence of Line 16D on each of the K -1 s. 11. The Award at p. 1 0 expressy enumerates what Petitioner is entited to in connection with the outcome of the Arbitration. At p. 6 of the Award, the Pane concuded that "Petitioner is entited to be compensated for ost income dating from his termination to the present, and for future ost income... The Pane arrived at the damages based on the historica compensation data, incuding saary, pension contributions, fringe benefits, and profit and cash distributions as refected in the exhibits and testimony credited by the Pane." See Award at pp The Award makes cear that "Petitioner is to receive no distributions from the Company that are not due and owing before the issuance of this Award." See Award at p. 9. Notaby, no appication was ever made to the arbitrators to attempt to modify their A ward to provide for the so-caed "distributions" that Petitioner now seeks in paragraph 15 of the Petition. There being no "due and owing" distributions for the period before the issuance of the Award (prior to Apri 24, 20 15), that portion of the Petition that seeks additiona distributions shoud be denied. 12. In the Petition at paragraph 16, Petitioner caims that he: [D]id not receive the benefits due to him under the Adwar Casting 401(K) and Profit Sharing Pans. Unike in prior years, for the year 2014 Marc did not receive the Empoyer Contribution of undisputed that the First Payment was made and the sum of $32, 168 was deivered to Petitioner as payment for his stock on May 22, Had Petitioner been aocated his actua share of the ordinary business income for the Company through May 22, 2015 (the date of the canceation of his stock), Marc woud have been aocated an additiona $33,154 to pay tax on. 5 5 of 11

6 $23,300 for the Profit Sharing Pan or the Empoyer Matching Contribution of $1 0,200 for the 40 I (K) pan which remain due and payabe to him. 13. As set forth in the accompanytng Greengod Aff., pursuant to Section 5.02 ( c )(iii)( )(A) of the Ad war Casting Co., Ltd. 40 I (K)/Profit Sharing Pan (the "Pan"), a copy of which, aong with an amendment, is annexed to the Greengod Aff. as Exhibit A, each year, the Company wi contribute to the Pan on behaf of any empoyee, a fuy vested safe harbor matching contribution equa to I 00% of the first 4% of compensation which the participant defers to the Pan. This is aso known as the empoyer matching contribution. For a participant to receive an empoyer matching contribution, that participant must make an eection for the deferra of compensation into the Pan. 14. Petitioner did not eect to defer any compensation that he received in the 2014 caendar year into the Pan. Accordingy, pursuant to the terms of the Pan, there was no empoyer contribution due for Petitioner for Whie Petitioner's empoyment from the Company was terminated in March 2014, the Company continued to pay him through June 27, At no time during this period did Petitioner request that any of the monies being paid to him be contributed to the Pan. In addition, neither before, during or ev~n after the Arbitration (via an appication for modification) did Petitioner (or his counse) seek to have any damages awarded to him in the Arbitration aocated to his deferred compensation such that a matching contribution woud be due and owing from the Company. Accordingy, pursuant to the terms of the Pan, no empoyer matching contribution is due and owing to Petitioner for As further set forth in the Greengod AfL, pursuant to Section 5.02(b) of the Pan, each year, the Company may aso contribute to the Pan, a discretionary profit sharing 6 6 of 11

7 contribution. Pursuant to Section 5.12 of the Pan, to be entited to an aocation of the discretionary profit sharing contribution, the empoyee must be credited with a Year of Service (Pan Section 2.54) and be empoyed on the ast day of the Pan Year. 17. It cannot be disputed that Petitioner's empoyment was terminated in March, 2014 (see Award at p.5-- "Marc was formay terminated by etter on March 18, 2014"). Therefore, Petitioner was not empoyed on the ast day of the Pan Year (December 31, 2014 ). Petitioner, ikewise, did not perform a Year of Service, as defined by the Pan. Accordingy, pursuant to the terms of the Pan, Petitioner was not eigibe to receive an aocation of a discretionary profit sharing contribution for Moreover, the Award makes cear that the Arbitration Pane based its cacuation of the damages it awarded to Petitioner on, among other things, "pension contributions... refected in the exhibits and testimony credited by the Pane." Based upon this, the additiona empoyer matching and discretionary profit sharing contributions which Petitioner seeks in the Petition, both of which are in the nature of "pension contributions," have aready been incuded within the amounts previousy awarded. Accordingy, that portion of the Petition that seeks these additiona pension-reated contributions shoud be denied. 19. In the Petition at paragraph 17, Petitioner caims that: The A ward aocated the fees and expenses of the arbitration to the parties with 25% aocated to Marc. Foowing the Award, Marc received another invoice from the American Arbitration Association dated Juy 24, 2015 in the amount of $7, for increased fees (Exhibit "E" hereto). He shoud ony be responsibe for 25o/o of this pursuant to the A ward and Ad war Casting shoud reimburse him for $5, It is not disputed that the Pane aocated to Petitioner 25% of the arbitration fees and expenses, however, contrary to the statements made by Petitioner in paragraph 17 of the 7 7 of 11

8 Petition, a carefu review of the Juy 24, 2015 Detai Invoice/Statement that Petitioner received from the AAA (Exhibit E to the Petition) demonstrates that Petitioner was, in fact, aready reimbursed by respondents for any amounts he may have paid to the AAA above and beyond the 25o/o aocation when respondents made the $28, payment to Petitioner on May 22, 2015 in accordance with the Award (see Award at p. 10, paragraph 5). 21. Per the A ward, the administrative fees and expenses of the AAA and arbitrator compensation for the Arbitration totaed $96, ($21, for fees/expenses and $75, for arbitrator compensation). Petitioner's 25% aocation of these amounts was $24, See Award at p. 10, paragraph 5. Exhibit E to the Petition-- the Juy 24,2015 Detai Invoice/Statement sent to Petitioner from AAA - - indicates that Petitioner was invoiced $52, by the AAA (see Exhibit E, sum tota of coumn "Amount"). Petitioner paid the AAA $44, (see Exhibit E, sum tota of coumn "Credits"), eaving a baance due of $7, Had Petitioner paid the "Amount Currenty Due" as refected on the Juy 24, 2015 Detai Invoice/Statement-- $7, he woud have paid to AAA the fu amount invoiced to him by AAA - - $52, The payment made by respondents to Petitioner on May 22, 2015 in the amount of $28, represents fu reimbursement to Petitioner for any and a amounts he paid, or shoud have paid to, AAA in excess of his aocated share [$28, (reimbursement by respondent to Petitioner per Award) + 24, (Petitioner's 25% aocation)= $52, (amount invoiced to Petitioner)]. Accordingy, the $7, set forth on the Juy 24, 2015 Detai Invoice/Statement sent to Petitioner from AAA does not represent any increased fees to Petitioner, but rather, was part of the amount the arbitrators anticipated Petitioner had paid AAA, for which reimbursement was provided for in the A ward and was aready remitted to Petitioner (on May 22, 2015). Accordingy, the reief Petitioner seeks in 8 8 of 11

9 paragraph 17 of the Petition shoud be denied. 22. Finay, in the ad damnum cause of the Petition, Petitioner seeks a judgment that: Respondents sha deiver to Marc Adwar his persona beongings remaining at Adwar Casting incuding, but not imited to, (a) items from Garage (Ground Leve): Sony Bue Ray Payer, Harmon Karden Receiver, (b) items from Garage (Loft): suit case with cothes, empty suit case, duffe bag (with garment bag inside), tennis racket, (c) Sante [sic] Fe Symposium Books (approximatey 24 voumes), (d) book about jewery casting that was a gift to Marc from his father, (e) persona books and magazines that were in back bookcase in Marc's office, and (t) misceaneous items from Marc's office and desk and from the safe, within 30 days of the entry of this Order and Judgment. 23. The Award at p. 9, paragraph 6 provides that: "Caimant is entited to the diamond given to him by his parents (and to any other persona beongings sti remaining at Adwar). A such items sha be deivered to Marc within 30 days of the issuance of this award. Caimant's request for his one-third of the items in the Company vaut is denied." See aso Award at p. 10, paragraph 4 ("[t]he diamond given to Caimant by his parents sha be deivered to him with the First Payment"). 24. It cannot be disputed that respondents deivered to Petitioner the diamond in accordance with the Award on May 22, See Acknowedgment of Receipt, Exhibit A hereto. 25. In addition, on May 21, 2015, in an emai to counse for the Petitioner, Mark Weyman, Esq., respondent's counse identified the foowing persona items sti remaining at the Company and offered to deiver them to Petitioner at his home in Long Beach: (a) Items from Garage (Ground Leve): Sony Bue Ray Payer and Harmon Karden Receiver, and (b) Items from Garage (Loft): Suit case with cothes; empty suit case, duffe bag (with garment bag inside); and tennis racket. See Emai to Mark Weyman, Esq., dated May 21, 2015, a copy of 9 9 of 11

10 which is annexed hereto as Exhibit B. As of that date, there were no other persona items beonging to Petitioner remaining at the Company. 26. Since May 21, 2015, respondents have made repeated efforts to coordinate deivery of the aforementioned items to Petitioner, through counse and directy, in order to ensure confirmation of receipt, however, these efforts remain unresponded to. Respondents remain ready, wiing and abe to deiver the aforementioned items to Petitioner whenever and wherever, provided respondents can secure confirmation of receipt from Petitioner. 27. However, Petitioner is not entited to a judgment that respondents deiver to Petitioner the foowing items: (a) Santa Fe Symposium Books (approximatey 24 voumes), (b) book about jewery casting that was a gift to Marc from his father, (c) persona books and magazines that were in back bookcase in Marc's office, and (d) misceaneous items from Marc's office and desk and from the safe. 28. Any books that the Company has from the Santa Fe Symposium (there are not 24 voumes) are Company property and are not persona beongings of the Petitioner. The Santa Fe Symposium is a conference dedicated to jewery manufacturing technoogy that Petitioner attended, from time to time, on behaf of the Company. It cannot be disputed that any and a costs attendant to Petitioner's participation at the conference were aways borne by the Company. The reference materias provided by the conference are Company property to which Petitioner is not entited. 29. As of the date of the Award, none of the foowing remained at the Company: book about jewery casting that was a gift to Petitioner from his father, persona books and magazines that were in back bookcase in Petitioner's office, and misceaneous items from of 11

11 Petitioner's otice and desk and from the safe. 5 Any and a persona items beonging to Petitioner (with the exception of the diamond which was deivered on May 22, 2015) were deivered to Petitioner foowing his termination in To the extent Petitioner beieved the Award shoud have particuarized any other persona items beonging to Petitioner, Petitioner J I 1 1 ~ ") i 1 t f j! f ; t ~ had the opportunity to make an appication to the arbitrators to modify the A ward to provide for such particuarization. No such appication was made. Accordingy, except with respect to (a) Items from Garage (Ground Leve): Sony Bue Ray Payer and Hannon Karden Receiver, and (b) Items from Garage (Loft): Suit case with cothes; empty suit case, duffe bag (with gannent bag inside); and tennis racket, Petitioner is not entited to a judgment as to any other items. WHEREFORE, for a the reasons set forth herein and in the accompanying Verified Answer to Petition, Godberg Aff., Greengod Aff., together with the exhibits annexed thereto, and memorandum of aw, it is respectfuy requested that consistent therewith, the Petition shoud be granted in part and denied in part and that the Court enter the counter-proposed Order and Judgment proffered by respondents. Sworn to before me this.!.! _day of June, 2016 ~~~ ELLEN II. ROTH NOTARY PUBLIC STATE OF N.Y. 01Ra.anoJ1 QUAiFIED IN NAIMU COUNU Ca.ta&ION DPIIE811101~ KEITHADWAR ; j i i \ 5 At p. 9, paragraph 6 of the Award, the Pane made cear that "Caimant's request for his one-third share of the items in the Company vaut is denied." There is no separate "safe." II 11 of 11

) ) ) ) ) ) CONSENT ORDER. The Louisiana Professional Engineering and Land Surveying Board [hereinafter the

) ) ) ) ) ) CONSENT ORDER. The Louisiana Professional Engineering and Land Surveying Board [hereinafter the Received LOUISIANA PROFESSIONAL ENGINEERING AND LAND SURVEYING BOARD 9643 BROOKLINE AVENUE, SUITE 121 BATON ROUGE, LOUISIANA 70809-1443 (225 925-6291 IN THE MATTER OF: C3E GEOMATICS LLC RESPONDENT MAR