Plaintiff, Crossroads ABL, LLC and Crossroads Financial Services, LLC (together, "Crossroads"), moves for a preliminary injunction that would enjoin Defendant, Quad-C Funding, LLC ("Quad-C" or, the "Company"), from engaging in any business other than the winding up of its affairs and liquidation of assets, pursuant to the terms of the Quad-C Limited Liability Operating Agreement (the "Operating Agreement"). Plaintiff further seeks to enjoin enforcement of the non-solicitation and non-competition provisions of the Operating Agreement, and seeks to modify my June 3, 2011 Order (the "June 3 Order"), which prevented Crossroads from accessing certain funds, which had been deposited into a Crossroads account.

Defendants, Canaras Capital Management, LLC ("Canaras"), Saranac ABL, LLC ("Saranac"), Canaras Management Limited, Richard Levinson, Anthony Clemente and Simon Airey (collectively, the "Canaras Defendants"), along with Shiloh Bates, Belfar Securities, Richard Bentley, C. Clemente, Peter Clemente, S. Clemente, Peter Kroon, Fred Kulikowski, J.C. Levinson, J.B. Levinson, Ryan Mingo, C. Phair, Sage Group and Ben Steger (collectively, the "Voting Defendants"), and Quad-C, oppose this motion primarily on the ground that the Operating Agreement has been amended in accordance with its plain language, and that Plaintiff is therefore unlikely to succeed on the merits of its claims. Defendants further argue that Plaintiff's application to modify the June 3 Order should be denied as procedurally improper, and that the non-solicitation and non-compete provisions are enforceable.

Briefly, the events giving rise to this action are as follows. In July 2010, Crossroads Financial Services, LLC, a Florida company providing asset-based loans and other forms of financing to small businesses, and Canaras, a Delaware company which is a registered investment advisor specializing in the management of alternative asset portfolios, formed a joint venture. The joint venture, Quad-C, was established to be primarily engaged in making asset-based loans ("ABLs") to manufacturers, wholesalers, retailers, and prospective purchasers of merchandise, and to engage in other associated financing activities. (See Operating Agreement^[FN1] p. 1.) Pursuant to the terms of the Operating Agreement, the Members of Quad-C were to be Crossroads ABL, LLC, a Florida LLC and an affiliate of Crossroads Financial Services, LLC,^[FN2] and Saranac, a Delaware LLC and an affiliate of Canaras. Crossroads ABL, LLC ("Crossroads ABL") was to serve as the Oversight Manager of Quad-C, and Saranac was to serve as its Manager. (Id.)

In accordance with the initial capital contributions of each of the Members, Saranac, which contributed $150,000, held 60% of the 250,000 then-outstanding common units, and Crossroads, which contributed $100,000, received 40%. (See id. § 3.1.) The Operating Agreement set forth several means by which the Members could raise additional equity capital through the sale of "Common Units" or "Preferred Units," either without consent, with notice, or only with the consent of a "Supermajority of Common Members," which is defined as 62.5% of all Common Units. (Id. §1.80.) [*2]

The Operating Agreement also required the consent of a Supermajority of Common Members in order for Quad-C to, inter alia, amend its Certificate of Formation or the Operating Agreement, and to enter into any transaction between Quad-C, its Members, and their Affiliates. (Id. §§ 6.4.5, 6.4.16.) Quad-C further needed Supermajority consent in order to raise additional equity through the sale of Common or Preferred Units, "except as provided in Section 3.3.4." (Id. § 6.4.6.)

Section 3.3.4, as will be discussed further below, permits Saranac, as Manager, "in its sole discretion and without the consent of any Class," to raise up to $200,000 through the sale of Common Units, and $5 million through the sale of Preferred Units, "in accordance with the private placement memorandum dated July, 2010 . . ." (Id. § 3.3.4.)

In contrast to its provisions enabling the Members to raise additional equity capital, the Operating Agreement also gave each Member the right to dissolve the Company within 30 days of the occurrence of certain "Liquidating Events," as defined in Section 13.1. One such Liquidating Event is the election, either by Crossroads or Saranac, to dissolve the Company within 30 days after the occurrence of, respectively, a Crossroads Liquidating Trigger or a Saranac Liquidating Trigger. (Operating Agreement §§ 13.1 (5) and (6).) One such Crossroads Liquidating Trigger is the failure of Quad-C "to hold ABLs in an aggregate principal amount not less than $8,000,000 within 180 days" of the date of the Operating Agreement, or $18,000,000 within 270 days. (Operating Agreement § 1.27.3.)^[FN3]

Finally, the Operating Agreement contains a non-compete provision, which prohibits Members and their Affiliates from engaging in any other business, and prohibits Crossroads ABL from engaging "in any aspect of the Business other than through the Company," until the occurrence of a Liquidating Event, or until Crossroads ABL holds less than 15% of Common Units. (Id. § 6.7.2.)^[FN4] Similarly, Section 6.8 prohibits Crossroads ABL and Saranac, and their Affiliates, from hiring or soliciting any current or past employee, from the date of the Operating Agreement, up until such time as either Crossroads ABL or Saranac, as the case may be, ceases to be a Member of Quad-C. (Id. § 6.8.)

In late March-early April, 2011, Crossroads' Chief Operating Officer, Richard Epstein [*3]("Epstein") learned that Canaras and Saranac had purported to issue Common Units to 16 additional Members of Quad-C, thereby diluting Crossroads' membership interest. (Epstein Aff.^[FN5] ¶ 3.) Epstein avers that this was the first notice he had received of the issuance of additional Units, even though he "had notice of the possibility of the issuance of 1000 preferred units to Canaras and its Affiliates through the July 2010 Private Placement Memorandum." (Id. ¶ 4.)

On April 5, 2011, Canaras CEO, Anthony Clemente ("Clemente"), notified Quad-C investors of Canaras' intent to amend the Operating Agreement. (See Haskin Aff. Ex. 5.) The proposed amendments, inter alia, eliminated the dissolution options contained in Sections 13.1(5) and (6).^[FN6] The April 5 notice from Clemente also contained a ballot by which Members could register their consent or rejection of the proposed amendments. As a Member of Quad-C, Crossroads received this notice and request for consent.

In response, by letter dated April 5, 2011, Crossroads' Managing Member, Lee Haskin ("Haskin"), informed Saranac's Managing Member, Richard Levinson ("Levinson"), of Crossroads' intent to exercise its dissolution right, in accordance with § 1.27.3 of the Operating Agreement, effective as of April 17, 2011. (Haskin Aff. Ex. 2.) In this April 5 letter, Haskin asserted that a Crossroads Liquidating Trigger "will have occurred on April 17, 2011 when Quad-C Funding LLC will fail to hold an aggregate principal amount of ABLs not less than $18,000,000 within 270 days from the date of the Operating Agreement — July 20, 2010." (Id. at 2.) Moreover, Haskin asserted, since Crossroads had never been notified of the addition of any Common Members, "any attempt to remove Crossroads ABL's right to dissolve Quad-C will be in bad faith." (Id. at 1.)

Levinson responded by letter dated April 7, 2011, in which he argued that the Sale of Common Units in September-October, 2010 (the "2010 Sale") had been effectuated in accordance with the Private Placement Memorandum, which had been reviewed by Crossroads and its counsel, and that these "Preferred and Common Units have been outstanding since Quad-C commenced operation and no additional Preferred or Common Units have been issued since the initial closing." (Haskin Aff. Ex. 4 at 1.) Levinson also informed Crossroads that "it would be imprudent to entrust any new assets to [Crossroads ABL]," and that, "Quad-C will approve no new loans, all current credit lines will be frozen at current levels, and all loans will be put into run-off mode," but that, "[n]evertheless, [Crossroads ABL] will remain bound by the exclusivity provisions of sections 6.7.2 of the Operating Agreement and will be barred from originating assets for any entity other than Quad-C." (Id. at 2.) Levinson suggested that Haskin withdraw his letter and replace it with a ballot on the amendments, or for Saranac, Canaras, and Crossroads to begin to explore ways to separate "without prolonged and expensive legal entanglements." (Id.)

On April 8, 2011, Epstein received, upon request, a list of the purported additional members, and at or around that time, he also received certain Quad-C bank statements, which reflected the [*4]purported 2010 Sale of Preferred and Common Units. (Id. ¶¶ 5-7.) These documents showed that, pursuant to these purported sales, 23,966 Common Units, and 2,396 Preferred Units had been issued, primarily to family members, employees, and other persons and entities appearing to bear some relationship with Saranac and/or Canaras. (Id. ¶¶ 7-8.) Crossroads contends that, prior to this time, it had never consented to, nor even been notified of, any such sale of membership units.

Haskin refused to withdraw his April 5 letter, and instead, by letter dated April 19, 2011, reiterated Crossroads' election to dissolve Quad-C, effective April 17, 2011, and again rejected any attempt to amend the Operating Agreement. (Haskin Aff. Ex. 6.) By letter dated April 26, 2011, Levinson notified Haskin that Crossroads' purported election to dissolve Quad-C was not a valid action under the terms of the Operating Agreement, which was in effect at the time, and that the subsequent purported election, on April 19, 2011, was not a valid action under the terms of the "Operating Agreement, as amended by the First Amendment thereto dated April 13, 2011." (Haskin Aff. Ex. 11.)

Crossroads brought this action in May, 2011, seeking a declaratory judgment that the purported amendments to the Operating Agreement are void, and that Quad-C must begin winding up its affairs and liquidating its assets. Crossroads asserted causes of action against the Canaras Defendants, and Quad-C, for bad faith breach of the duty of good faith and fair dealing, fraud in the inducement, judicial dissolution, and tortious interference. Crossroads also asserted causes of action against the Voting Defendants for bad faith breach of the duty of good faith and fair dealing and judicial dissolution, and, against Levinson, for breach of contract.

Quad-C has interposed counterclaims against Crossroads, for conversion, tortious interference with contract, breach of servicing agreement, and a preliminary injunction, as well as a counterclaim of defamation against Haskin and Epstein. In a third-party complaint, Quad-C has asserted the same claims against Haskin and Epstein, individually.^[FN7]

By Order dated June 3, 2011, I denied Quad-C's motion to attach the repayment proceeds from certain loans (the "Repayment Proceeds"), which, Quad-C alleged, Crossroads had improperly diverted into a Crossroads account. Although I refused to attach the funds, I enjoined Crossroads from accessing any account in which Repayment Proceeds were located. (See June 3, 2011 Order.)

Crossroads then brought the present motion, seeking to enjoin Quad-C from engaging in any business other than winding up its affairs, and to enjoin the operation of the non-compete and non-solicitation provisions contained in the Operating Agreement, as well as modification of the June 3, 2011 Order.

I turn, first, to that part of the motion seeking a preliminary injunction which would enjoin all Defendants from implementing the purported dilution of Crossroads ABL's membership interest in Quad-C, and seeking a declaration that the purported First Amendment to the Operating Agreement is void, and that Crossroads' Notice of Dissolution is valid.

The function of a preliminary injunction "is not to determine the ultimate rights of the parties, but to maintain the status quo until there can be a full hearing on the merits." Residential Bd. of Managers of the Columbia Condominium v. Alden, 178 AD2d 121, 122 (1st Dep't 1991). The standard used to determine a party's entitlement to preliminary injunctive relief is well-known: the [*5]moving party must demonstrate a likelihood of success on the merits, irreparable harm if the relief is not granted, and that the balance of the equities tilts in its favor. See, e.g., Doe v. Axelrod, 73 NY2d 748(1988); Bishop v. Rubin, 228 AD2d 222 (1st Dep't 1996).

Where, as here, however, the status quo " is a condition not of rest, but of action, and the condition of rest is exactly what will inflict the irreparable injury upon the complainant,'" a mandatory injunction may be granted "where the complainant presents a case showing or tending to show that affirmative action by the defendant, of a temporary character, is necessary to preserve the status of the parties." Bachman v. Harrington, 184 NY 458, 464 (1906) (quoting Toledo A.A. & N.M. Ry. Co. v. Pennsylvania Company et al, 54 F. 730 (N.D. Ohio 1893); see also Pizer v. Trade Union Service, 276 A.D.1071 (1st Dep't 1950). While courts are often "reluctant" to grant this type of injunctive relief, which requires affirmative action on the part of the non-moving party, and by which "the movant would receive some form of the ultimate relief sought," such relief may be granted in "unusual" situations, where the right thereto is clearly established. Second on Second Café, Inc. v. Hing Sing Trading, Inc., 66 AD3d 255, 264-65 (1st Dep't 2009) (internal quotes and citations omitted).

The injunction sought here is not one that preserves the status quo, but rather, which seeks to return the parties to the status quo ante, and which, in fact, provides Crossroads with some of the ultimate relief sought by this action: the undoing of the First Amendment to the Operating Agreement and the dissolution of the Quad-C joint venture. Crossroads must therefore demonstrate not only clear satisfaction of the familiar three-pronged test, set forth above, but also that this situation is so unusual that the mandatory injunctive relief sought is clearly warranted, and necessary to preserve the parties' rights pending trial on the merits.

Turning, now, to the question of whether Crossroads is likely to succeed on the merits of its claim for a declaratory judgment, Plaintiff argues that Section 6.4.16 of the Operating Agreement clearly prohibits any transaction between "the Company and its Members or their respective Affiliates," without the consent of a Supermajority of Common Members.^[FN8]

Since, Plaintiff contends, the Common and Preferred Units that were purportedly issued in connection with the 2010 Sale, were sold to family members, employees, and entities that are related to Saranac and Canaras, this amounted to a transaction with "Affiliates," which required Supermajority consent, which consent was not obtained. Plaintiff also argues that, in any event, pursuant to Section 3.3.1, any sale of Common and Preferred Units, regardless of the purchaser, requires Supermajority consent. Plaintiff argues that, since Supermajority consent was not obtained, the 2010 Sale of Common and Preferred Units was void. If the 2010 Sale was void, then the First Amendment to the Operating Agreement is a nullity, since Quad-C did not have the consent of a Supermajority of Common Members prior to its purported passage, as required by Section 6.4.5.^[FN9]

[*6]Defendants argue, first, that the 2010 Sale of Common and Preferred Units was not a transaction with Affiliates, since the persons and entities that purchased the Units were not controlling, controlled by, or under common control with Saranac. Defendants further argue that, even if the purchasing persons and entities could be defined as "Affiliates," the 2010 Sale of additional Common and Preferred Units was effectuated in accordance with the terms of the Private Placement Memorandum, and therefore, pursuant to Section 3.3.4 of the Operating Agreement, did not require Supermajority consent.

With respect to Plaintiff's contention that Section 3.3.1 requires Supermajority consent for any and all sales of Common and Preferred Units, this Section provides:

Subject to the terms of section 3.3.2 and 3.3.3 [sic], the Manager may . . . with the consent of a Supermajority of Common Members, elect to raise additional equity capital . . . through the sale of Common Units or Preferred Units and, in connection therewith, admit Common Members or Preferred Members or permit one or more existing Members to increase its Capital Contribution at one or more subsequent closings (each, a "Subsequent Closing") and as consideration therefore issue Common Units or Preferred Units, respectively, to such new or existing Members, as the case may be.

(Operating Agreement § 3.3.1.)

There can be no dispute that this Section is expressly made "subject to the terms of" Sections 3.3.2 and 3.3.3.

Section 3.3.2,^[FN10] in turn, provides: "Except as provided in Section 3.3.4, in the event the Manager and the Common Members elect, pursuant to Section 3.3.1, to raise additional equity capital . . . the Manager shall give each Member at least ten (10) days' prior written notice . . ." (Id. § 3.3.2.) Each Member then has five days to give notice of its election to maintain its pro rata share in the Company by contributing additional capital. A Member that does not exercise this "preemptive right" is deemed to have waived it. The Company is then permitted to offer to new and existing Members the "Waiving Member's preemptive right hereunder not so exercised (the Waived Portion')," and to accept from such new and existing members, "capital contributions in an aggregate amount up to the Waived Portion." (Id.)

Since this section begins, "Except as provided in Section 3.3.4," it is clear that any transaction effectuated in accordance with Section 3.3.4 is exempted from the requirements of Section 3.3.2.

Finally, Section 3.3.4 provides:

Notwithstanding anything to the contrary contained in Section 3.3.2, the Manager may, from time to time, and after the Initial Capital Contribution from the Common Members of Two Hundred Fifty Thousand Dollars ($250,000) for Two Hundred Fifty Thousand (250,000) Units, in its sole discretion and without the consent of any Class, elect to raise up to an aggregate of (i) Two Hundred Thousand Dollars ($200,000) in additional equity capital for the Company through the sale of Common Units, [*7]and (ii) Five Million Dollars ($5,000,000) in additional equity capital for the Company through the sale of Preferred Units, in accordance with the private placement memorandum dated July, 2010, as amended from time to time (the "Private Placement Memorandum") and, in connection therewith, admit one or more Common Members or Preferred Members at one or more Subsequent Closings and as consideration therefore issue Common Units or Preferred Units to such new Members. For the avoidance of doubt, the issuance of Common Units or Preferred Units at any Subsequent Closing pursuant to this Section 3.3.4 shall not be subject to the preemptive rights procedure set forth in Section 3.3.2.

(Operating Agreement § 3.3.4, emphasis added.)

It is thus clear that, although Supermajority consent is required in order for the Manager to issue additional Common and Preferred Units, pursuant to Section 3.3.1, such consent is not required where the issuance is conducted in accordance with the Private Placement Memorandum. Therefore, if the 2010 Sale was, in fact, completed pursuant to the terms of the PPM, then it is clear that this transaction did not require Supermajority consent. If, however, as Plaintiff contends, the 2010 Sale was outside the contemplation of the PPM, then I must determine whether it amounts to a transaction with Affiliates, pursuant to Section 6.4.16.

The Private Placement Memorandum describes the "private offering (the Offering') to a limited number of qualified investors" of 50,000 Common Units and 5,000 Preferred Units in Quad-C. (PPM at i^[FN11].) Each investor who acquired Preferred Units through the Offering would also receive "the option to acquire Common Units at a purchase price of $1.00 per Common Unit in an amount equal to 1% of the investor's investment in Preferred Units, representing 50,000 Common Units in the aggregate." (Id.) In other words, an investor who purchased 5 Preferred Units, for $5,000, would also receive the option to purchase 50 Common Units (one percent of 5,000), at $1.00 per Unit. (See July 14, 2011 Hr'g Tr. at 27-29.) The PPM further provides that, "Saranac, Canaras and employees of Canaras and their family members plan to purchase an aggregate of 1,000 Preferred Units." (Id. at 2.)

There is no dispute that Plaintiff was aware of the terms of the PPM, and in fact, the Operating Agreement specifically provides:

Each Member hereby acknowledges that, prior to the execution of this Agreement, the Member has received a copy of this Agreement, the Certificate of Formation, the Private Placement Memorandum and the Subscription Agreement attached thereto, and that the Member has examined such documents or caused such documents to be examined by the Member's representative or attorney.

Plaintiff contends, however, that, the PPM permitted Saranac to issue, at most, 1,000 Preferred Units to the family members and employees of Saranac and Canaras, and that, "Even if the issuance and sale of 1,000 preferred units, to Affiliates automatically carried with it the right to buy common units, Saranac and Canaras would not have broken Crossroads' supermajority veto." (Reply Mem.^[FN12] at 4.)

I cannot accept Plaintiff's reading of the PPM. First, contrary to Plaintiff's contention, the issuance and sale of 1,000 Preferred Units does automatically carry with it the right to buy Common Units, as set forth above. The purchase of 1,000 Preferred Units entitled the investor to an option to purchase 10,000 Common Units. The PPM therefore clearly contemplates the purchase, by entities related to Saranac, Canaras and their employees, of 10,000 Common Units. Such a purchase would have left Crossroads with 100,000 Common Units, and Saranac and related entities with 160,000, which would have shifted Crossroads' ownership interest from 40% to 38.46%. While it may be that Crossroads would have maintained its supermajority veto if these were the only new Units issued, the PPM provides for the issuance of up to 50,000 Common Units. The issuance of 40,000 additional Common Units to anyone other than Crossroads — regardless of the nature or identity of the purchasing entity — clearly has the capacity to further dilute Crossroads' ownership interest. Since Section 3.3.4 of the Operating Agreement permits Saranac to issue such additional Units, and admit new Members, "in its sole discretion and without the consent of any Class," Crossroads was on notice of the possibility that its membership interest would be diluted, without its consent, to a level below 37.5%.

However, Crossroads argues, Saranac issued more than 23,000 Common Units to its family members and friends, which number is more than double the 10,000 contemplated by the PPM, and that this issuance therefore required the Consent of a Supermajority of Common Members, pursuant to Section 6.4.16. (Reply Mem. at 4.) Plaintiff thus reads into the PPM a limitation on the number of additional Units which might be issued, and to whom they might be issued. But, the PPM does not contain such a limitation. And, although Section 6.4.16 of the Operating Agreement prohibits transactions with Affiliates in the absence of supermajority consent, Section 3.3.4 provides for Saranac, as Manager, to issue new Units and admit new Members, without consent, in accordance with the PPM. The question, thus, is whether the supermajority consent required by Section 6.4.16 extends to any transaction completed pursuant to Section 3.3.4.

It is well-settled that, when tasked with the interpretation of a contract, I am obligated to read the entire agreement in such a way as to avoid rendering any, seemingly contradictory provisions, illusory or meaningless. See, e.g. O'Brien v. Progressive Northern Insurance Co., 785 A.2d 281 , 287 (Del.2001).^[FN13] It seems to me that the purpose of Section 3.3.4 was to permit the Manager [*9](Saranac) to issue additional units in accordance with the PPM , and without obtaining the consent of any other Members. If Section 6.4.16 required Saranac to obtain supermajority consent for the issuance of additional Units pursuant to the PPM, then Saranac's ability, set forth in Section 3.3.4, to act in its sole discretion and without consent, would be rendered meaningless. If, on the other hand, Section 3.3.4 permits Saranac to sell additional Units and admit additional Members without the consent of any Class, so long as the issuance/admittance is done in accordance with the PPM, then Section 6.4.16 may still be read to require supermajority consent for any other transaction with Affiliates. Under this reading, neither provision is rendered illusory, and I thus conclude that the issuance of additional Common and Preferred Units, effectuated in connection with the PPM, does not require the Consent of a Supermajority of Common Members.

I therefore decline to address the question of whether the 2010 Sale amounts to a transaction with Affiliates, under Section 6.4.16.

Defendants contend that the additional Common and Preferred Units were issued in September-October 2010, and the bank records and membership list annexed to Richard Epstein's Affidavit support this contention. (See Epstein Aff. Exs. 1 and 2.) Moreover, the "Draft Quad-C Member Report," dated November 10, 2010, which contains the announcement that, "We closed with initial Preferred and Common Unit subscriptions of approximately $2.6 million," also supports the conclusion that the 2010 Sale was completed prior to that date.^[FN14] Although the PPM provides that the Offering would terminate if the "Initial Closing does not take place on or before 90 days from [July 20, 2010]," and Plaintiff argues that there is no evidence showing that the closing was completed by October 20, 2010, the PPM also provides that, "the Company may, in its sole discretion, extend the Offering Termination Date for an indefinite period of time." (Levinson Aff. Ex. 2 at 1.) I am therefore satisfied that the issuance closed within the timeframe contemplated by the PPM, and that, pursuant to Section 3.3.4, the consent of a Supermajority of Common Members was not required.

Having concluded that the Operating Agreement permitted the 2010 Sale of Common and Preferred Units, I must also conclude that the Plaintiff is unlikely to succeed on the merits of its claim for a declaratory judgment that the 2010 Sale is void and the subsequent amendments to the Operating Agreement a nullity. Plaintiff's application for a preliminary injunction is therefore denied, and I need not reach the other two prongs. See, e.g., Doe v. Axelrod, 73 NY2d 748, 751(1988).

Turning, next, to the question of whether the non-compete and non-solicitation provisions are enforceable as a matter of law, I conclude that they are not. As set forth above, Section 6.7.2 [*10]prohibits "Crossroads ABL and its Affiliates" from engaging "in any aspects of the Business^[FN15] other than through the Company." (Operating Agreement § 6.7.2.) This restriction is to remain in place from the date of the Operating Agreement until, either

"(i) Crossroads ABL no longer holds a Percentage of Common Units in excess of fifteen percent (15%) or (ii) the occurrence of a Liquidating Event pursuant to Section 13.1," whichever is earlier. (Id.) Since there is no practical temporal limitation contained in the provision, this covenant would prohibit Crossroads from competing with Quad-C indefinitely, so long as its membership interest remained above 15%. Furthermore, there is no geographic limitation provided. There has been no request to modify, or "blue-pencil" this provision, and I decline to do so sua sponte. (See July 14, 2011 Hr'g Tr. at 31-32.^[FN16]) I cannot conclude that enforcement of such an unlimited and overbroad noncompete provision would advance a legitimate business interest of Quad-C, nor can I conclude that the balance of the equities would fall in favor of Quad-C. As such, the restrictive covenant set forth in Section 6.72 is unenforceable under Delaware law. See, e.g., Hough Associates, Inc. v. Hill, No. Civ. A. 2385-N, 2007 WL 148751 at *14 (Del.Ch. January 17, 2007) ("a covenant not to compete must be reasonable in geographic scope and temporal duration, must advance a legitimate economic interest of the party seeking its enforcement, and must survive a balancing of the equities in order to be enforceable").

Since the non-solicitation provision set forth in Section 6.8 of the Operating Agreement likewise contains no limitation in terms of geographic scope or temporal duration, I conclude that it, too, is unenforceable. (Id.)

Finally, with respect to the portion of Crossroads' application which seeks to modify my June 3 Order, Crossroads contends that, once the dissolution of Quad-C is underway, the Repayment Proceeds subject to the June 3 Order will need to be released and applied to winding up the affairs of Quad-C. (See Supp. Mem. at 22.) Since this is the only argument offered in support of Crossroads' application to modify, and since I have concluded that Crossroads is not entitled to a preliminary injunction that would act to dissolve Quad-C, this portion of Plaintiff's motion is denied without prejudice.

Accordingly, it is

ORDERED that Plaintiff's motion for a preliminary injunction is DENIED insofar as it seeks to enjoin the dilution of Crossroads' 40% ownership interest by virtue of the 2010 Sale, and also insofar as it seeks a declaration that the First Amendment to the Operating Agreement is void and that the April 5, 2011 Notice of Dissolution is valid; and it is further [*11]

ORDERED that the motion is GRANTED insofar as it seeks to enjoin the operation of Sections 6.7.2 and 6.8 of the Operating Agreement; and it is further

ORDERED that the motion is DENIED without prejudice, insofar as it seeks to modify the June 3 Order.

Dated: November2011

ENTER:

_____________________________

J.S.C.