Preview
1 ERIC C. KASTNER (SBN 53858)
J. PHILIP MARTIN(SBN 55100)
2 KASTNER i
KIMLLP
2465 E. Bayshore Road, Suite. 405
3 Palo Alto, CA 94303
Tel.: (650) 967-7854
4 Fax: (650) 320-9640 Gle ie
'i»
Attorneys for Plaintiff By
KENNETH CHIU
6
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SAN MATEO
10
KENNETH CHIU, ) CASE NO. CIV 488342
)
Plaintiff, ) FIRST AMENDED COMPLAINT
12
)
)
1. RECISSION
13 2. DETERMINE VALIDITYOF CORPORATE
STORMS, INC,, MAN-HAY )
"PERRY" TAM, WILLIAMSIU, ELECTION
14 DECLARATORYRELIEF
3,
CHAK MING LI, LAURAHOI SZE 4. IMPOSITION OF CONSTRUCTIVE TRUST
YIP, JEFFREY WINSTON WITT, ) AND ACCOUNTING
ANILDHARNI, GARRETT REMES, ) 5. UNJUST ENRICHMENT
AND DOES 1-10, )
17
Defendants.
18
19 PlaintiffKENNETH CHIU alleges as follows:
20 THE PARTIES
21 1. PlaintiffKENNETH CHIU ("Chiu" or "PlaintifF') is a resident of San Mateo,
22 California.
2. Defendant STORM8, INC. ("Company" or "Defendant" ) is a corporation
purportedly organized under the law of Delaware with its principal office in Redwood City,
California.
3. Defendants Man-Hay "Perry" Tam, William Siu, Chak Ming Li, Laura Hoi Sze
Yip, Jeffrey Winston Witt, Anil Dharni, Garrett Remes are all signatories to the agreement sought
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FIRST AMENDED COMPLAINT
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1 to be rescinded in the First Cause of Action. All Defendants are residents of California.
2 4. Plaintiffis ignorant of the true names and capacities of Does 1through 10,
3 inclusive, and therefore sues each and every Doe by such fictitious names. Plaintiff is informed
4 and believes and thereupon alleges that each defendant designated as a Doe is responsible in some
5 manner for the events and happenings herein referred to, thateach defendant is the agent, servant
6 or employee of the other defendants, and in doing the things therein alleged, was acting within the
7 scope of such agency or employment. Plaintiffwill seek leave of Court to amend this Complaint
8 and insert the true names of such defendants when they are ascertained. Plaintiff is informed and
9 believes and thereon alleges that each individual Doe defendant and/or one or more employees,
10 officers, directors or managing agents of the defendants approved, permitted and ratified the
11 wrongfid acts of all other defendants as did the successors-in-interest.
RKLKVANTFACTS
13 5. The Company was originally founded in March 6, 2009 as a Limited Liability
14 Company ("LLC")and an Operating Agreement formally recognizing the investors in the
15 Company was executed on or about June 30, 2009. A true and correct copy of that Operating
16 Agreement is attached hereto as Exhibit 1,
17 6. The Company creates applications for the Apple iPhone and iPod Touch,
18 principally mobile games. Given the popularity of the iPhones and iPod Touches, the market for
19 mobile games is enormous. The Company was immediately successful in creating mobile games
20 that can be downloaded onto the iPhones and iPod Touches. The Company receives allof its
21 revenue through California based PayPal, Apple and/or Gambit and it has been profitable since
22 May 2009.
23 7. On June 30, 2009, plaintiffhad a 34.94% interest in the LLC. Other investors in
24 the LLC included Man-Hay Tam ("Tam") (29.51%), William Siu ("SIU") (16.06%), Garrett
25 Remes ("Remes") (12.75%), Jeffrey Witt ("Witt")(5.12%), and Laura Hoi Sze Yip ("Yip")
26 (1.62%).
27 8. There were discussions among the members of the LLC and an understanding that
28 ifthere were to be a termination of membership for any reason it would be done by unanimous
FIRST AMENDED COMPLAINT
2
1 consent and a written agreement and that no one could be added as a member without unanimous
2 consent. The only way a member could lose his/her equity interest in the LLC would be ifhe/she
3 voluntarily resigned or was terminated for cause though cause was never defined at that time.
4 Clearly there was an agreement that the traditional "at-will"language was inapplicable to the
5 founding members, Such agreements among the members are supported by a number of
6 conversations and emails.
7 9. In June, 2009 members began discussions among themselves and with new
8 counsel, Wilson, Sonsini, Goodrich and Rosati ("WSGR"). WSGR recommended forming a new
9 corporation under Delaware law although the company would be solely based in California
10 including all subsequent shareholders. Such a change, according to counsel, would permit a pool
11 of stock reserved for stock options to reward new employees to be hired as the Company grew and
12 would facilitate a possible sale of the Company or a public offering at a later time.
13 10. Counsel (Riya Kuo of the Wilson, Sonsini firm) sent to all the investors through
14 Witt, 17 different documents designed to transform the LLC into the Subchapter S Corporation.
15 These documents included: (1) LLC Roll-Up Letter to Members; (2) Form of LLC Roll-Up,
16 Acknowledgment, Consent and Waiver; (3) Certificate of Incorporation; (4) Action by
17 Incorporator; (5) Bylaws; (6) Initial Board Consent; (7) Restricted Stock Purchase Agreement; (8)
18 Indemnification Agreement; (9) At-WillEmployment, Confidential Information, Invention
19 Assignment, and Arbitration Agreement; (10) Equity Incentive Plan; (11) Stock Option
20 Agreement; (12) Certificate of Cancellation; (13) Initial Stockholder Consent; (14) Mutual Non-
21 Disclosure Agreement; (15) One- Way Non-Disclosure Agreement; (16) Form of Consulting
22 Agreement (Individual); and (17) Form of Consulting Agreement (Company).
23 11. The Schedule of Corporation owners attached as Exhibit B to a July 16, 2009 letter
24 from WSGR reflected the number of shares in the new corporation consistent with the LLC
25 ownership shares (e.g.plaintiffwas to receive 20,557,996 shares of stock representing his 34.94'/0
26 of the outstanding shares.)
27 12. Witt is a law student at UCLA School of Law in Los Angeles. He sent the
28 documents to all the investors with follow up e-mails describing which documents were the "most
FIRST AMENDED COMPLAINT
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1 important" and which did not need to be read by the members of the LLC. None of the members
2 were given any detailed explanation of the effect of the documents (other than they knew they
3 were related to the conversion of the LLC to a corporation) on their employment, their equity, or
4 their rights in the management of the Company. Up to August, 2009 the Company was managed
5 jointly by all the members with plaintiffbeing the most active in directing the Company. The
6 Company was Plaintiff's original idea and he setthe strategy and direction for the Company. For
7 many months Plaintiffworked seven days a week, 15 hours a day while other of the members
8 continued in their regular employment and worked sporadically or part-time. There can be no
9 question that the Company would not have been as successful as it is without Plaintiffs tireless
10 efforts while others minimized their risk by continuing to receive a salary at their full-time job.
11 13. The new corporation was to have a board of directors with only two directors:
12 Plaintiffand Tam. No one ever explained to Plaintiffthat he as the founder whose idea gave rise
13 to the Corporation and who financed the Corporation in its early beginnings could be removed by
14 a simple vote of the majority of the owners of the Corporation. And Tam, the other director,
15 acknowledged that removal of Plaintiffor himself should require votes of at least 60'/0 or 66'/o and
16 2/3'/0 of the shares of the corporation.
17 14. Throughout August, 2009 Plaintiff, Witt and other investors raised questions
18 regarding the terms of various documents to Riya Kuo and Plaintiffis informed and believes, and
19 on that basis alleges, that some changes were made to many of the documents while other
20 questions were unresolved. Plaintiffhad discussions with Witt, among other members, regarding
21 shareholder voting rights and whether 60'ro, or a 2/3 or a unanimous vote of the shareholders
22 would be required to effect management control or other major corporate action, such as
23 termination of employees and/or officers. There was never any agreement among the members
24 that a simple majority vote would be sufficient to make management or other major changes in the
25 operation of the Company. Furthermore there was never any change of the LLC agreement by the
26 members referred to in paragraph 8. The original members could lose their equity interest only in
27 the event they voluntarily resigned or were terminated for cause. Nor was there any change in the
28 members'rior understanding of the need for unanimous action to terminate a member.
FIRST AMENDED COMPLAINT
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1 15. Plaintiff is also informed and believes, and on that basis alleges, that a complete set
2 of finally agreed upon documents were never submitted to all the members for their approval.
3 Instead, blank signature pages were collected from the members who simply signed that page and
4 no final setof approved documents were subsequently provided to or approved by the members.
5 As directed by Witt and given the demands on his time to work on new products, Plaintiffdid not
6 read much of the material sent to him. Per Witt and Kuo's suggestion, Plaintiffsent the signature
7 pages of the documents to Witt without knowing what the pages would be attached to. Plaintiff
8 cannot recall which signature pages he sent as he did not retain copies but Plaintiffdid not execute
9 or deliver the Restricted Stock Purchase Agreement ("RSPA") because there were terms missing,
10 and terms which he did not understand or agree to.
11 16. Plaintiffunderstood his equity in the LLC was fuHy owned (that is it could not be
12 diminished) unless he voluntarily left. Plaintiffnever discussed with Kuo, Witt or anyone else nor
13 did he believe that the effect of the RSPA might cause him to lose all of Plaintiff's stock in the
14 Company for a nominal amount ifhe were terminated without cause. Plaintiffalso understood he
15 and Tam would constitute the sole Board of Directors and no discussion was held or agreement
16 made with anyone about when, and under what circumstances, the Board could change or how any
17 Director could be removed. Finally, Plaintiffwas to be the President and Chief Executive Officer
18 based on his experience managing the Company and in light of his founding of the Company.
19 There were no discussions or agreements about the possibility that Plaintiffcould be terminated at
20 any time by the Board or by shareholders.
21 17. Upon information and belief the Company purportedly registered as a Delaware
22 Corporation based upon execution of some of the "Roll-Up" agreements provided by Kuo,
23 through Witt, to the members. The stock then to be issued by the Company included 20,557,996
24 shares to Plaintiffrepresenting his 34.94'/0 interest in the Company. Such stock was never issued.
25 18. In September, 2009 purporting to act as a Delaware Corporation the Company
26 called for Action by Written Consent of the shareholders without notice to Plaintiff. The
27 Company then purported to elect new Directors (Tam and Chak Ming Li) and terminate Plaintiff
28 as a Director. At the same time Plaintiff's employment as the President and Chief Executive
FIRST AMENDED COMPLAINT
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1 Officer was terminated without cause.
2 19. Plaintiff is informed and believes, and on that basis alleges, that the Company will
3 attempt to enforce the unexecuted and undelivered RPSA and force Plaintiffto sell his 20,557,996
4 shares of stock back to the Company at a nominal price. In such event Plaintiff's interest in the
5 Company he created, founded, and funded willbe lost in its entirety,contrary to the agreements of
6 all the members.
7 20. Plaintiffis informed and believes and on such basis alleges that all the documents
8 necessary to be signed and delivered in order to convert the LLC into a Delaware Corporation
9 have not been signed and delivered to this date.
10 FIRST CAUSE OF ACTION
(Rescission)
12 (Against All Defendants)
13 21. Plaintiffincorporates Paragraphs 1- 20 above.
14 22. There were mistakes in the drafbng of the agreements which were never agreed to
15 by Plaintiff or (he is informed and believes and on that basis alleges) by a majority of the LLC
16 members. There was thus no meeting of the minds as to the critical issues regarding the formation
17 of the corporation. For example:
18 a. Plaintiff, the founder of the Company, was never told or advised (and did
19 not agree) that his vested LLC interest could be completely eliminated after conversion to a
20 corporation by the termination of his employment without cause and the repurchase of his shares
21 at a nominal price;
22 b. Plaintiffwas never advised (and did not agree) he could be fired without
23 cause as President and CEO;
24 c. Plaintiffwas never advised (and did not agree) he could be removed as a
25 member of the Board of Directors;
26 d. Plaintiffwas never advised (and did not agree) that changes in management
27 or the operations of the Company could be undertaken by a simple majority vote
28 21. Consent to the various documents described in Paragraph 10 above by Plaintiffwas
FIRST AMENDED COMPLAINT
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1 based on a mistake thus making the alleged agreement subject to rescission.
2 SECOND CAUSE OF ACTION
(Determine Validity Of Corporate Election)
4 (Against Defendants Storm8, Inc., Man-Hay "Perry" Tam, William Siu, Chak Ming Li,
Laura Hoi Sze Yip)
6 23. Plaintiffincorporates Paragraphs 1- 20 above.
24. In the event the agreements are not rescinded and there is a finding that there was a
8 meeting of the minds by all necessary parties and thus a new corporation was formed Plaintiff
9 pleads in the alternative the following:
10 25. On September 15, 2009, without notice to Plaintiff, the Company apparently
11 circulated to certain stockholders of Defendant an Action by Written Consent purporting to
12 remove plaintiffas a Director of the Company and replacing plaintiffas a Director with Chak
13 Ming Li. In addition to shares owned by Plaintiff other shareholders, who support Plaintiff, own
14 shares when cumulated total more than 10 million. They would have voted to retain plaintiffon
15 the Board of Directors of Defendant.
16 26. The election of Directors on September 15, 2009, was improper in that cumulative
17 voting is required for all directors'lections for companies that do business in California.
18 Cumulative voting permits shareholders, such as Plaintiff, to multiply their voting shares by the
19 number of directors being voted upon and to allocate their votes in the manner the shareholders
20 see fit. As a practical matter, under the facts of thiscase with only two authorized directors such
21 cumulative voting would preclude the removal of any director who has at least 35 '/0 shareholder
22 approval as did Plaintiff.
23 27. The purported removal of Plaintiff as a Director by Defendant is also violative of
24 California Corporations Code Section 303 in that Directors cannot be removed (unless the entire
25 Board is removed) when the votes not consenting to the removal (plaintiff's shares) would have
26 been sufficient to elect plaintiffas a Director.
27 Plaintiff seeks declaration from the Court restoring him as a member of the Board of
28 Directors and as the CEO and President of the Company.
FIRST AMENDED COMPLAINT
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THIRD CAUSE OF ACTION
(Declaratory Relief)
(Against Defendant Storm8, Inc.)
4 28. Plaintiff incorporates the allegations of Paragraphs 1- 20 above.
5 In the event it is held that plaintiffwas not entitled to cumulate his votes in the new corporation, as
6 an alternative theory plaintiffpleads as follows:
29. A dispute has arisen regarding actions of the Company as described above.
8 Plaintiffcontends the Company has no right to force him to sell his stock in the Company to it as,
9 inter alia, he never agreed to the terms of the RPSA. Based on information and belief, Plaintiff
10 alleges that the Company claims a right to purchase all of Plaintiff's stock at a nominal price.
11 30. Alternatively, Plaintiffalleges that the actual terms of the RPSA, which he neither
12 executed nor delivered, does not permit the Company to repurchase his shares ifhe were to be
13 terminated without cause; instead, such shares automatically vest in Plaintiff. Based on
14 information and belief, Plaintiffalleges that the Company will claim a right to repurchase the
15 shares regardless of the circumstances of Plaintiffs termination.
16 Plaintiff seeks a declaration by the Court that the Company has no right to repurchase his
17 stock.
18 FOURTH CAUSE OF ACTION
19 (Imposition of Constructive Trust and Accounting)
20 (Against Defendants StormS, Inc. Man-Hay "Perry" Tam, William Siu, Chak Ming Li,
21 Laura Hoi Sze Vip)
22 31. Plaintiffhereby incorporates all of theforegoing paragraphs.
23 32. Defendants, and each of them, have unlawfully assumed possession and control of
24 Storm8, depriving Plaintiffof his rightful interest in the Company, unlawfully terminating him,
25 and rejecting his requests for information to which he is entitled.
26 33. By virtue of his role in forming Storm8, as alleged herein, Plaintiffhas an interest
27 in the ownership and profits of StormS.
28 34. By virtue of Defendants'ctions, and their resulting wrongful possession of
FIRST AMENDED CO1VIPLAINT
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1 Plaintiffs ownership interest in Storm8, and the financial accounts, Defendants hold such interest
2 and funds as constructive trustees for the benefit of Plaintiff.
35. Further, Defendants, and each of them, have refused to make an accounting to
4 Plaintiffof Storm8's financial condition, income, revenues, or disbursements despite PlaintifFs
5 demand. Therefore, an accounting is necessary to determine the amounts owed to Plaintiff.
FIFTH CAUSE OF ACTION
(Unjust Enrichment)
8 (Against Defendants StormS, Inc. Man-Hay "Perry" Tam,%'illiam Siu, Chak Ming Li,
Laura Hoi Sze Yip)
10 36. Plaintiffhereby incorporates all of the foregoing paragraphs.
37. By their wrongful acts and omissions, defendants, and each of them, were unjustly
12 enriched at the expense of and to the detriment of plaintiffor while plaintiffwas unjustly deprived.
13 38. Plaintiff seeks restitution from defendants, and each of them, and seeks an order of
14 this Court disgorging all profits, benefits, commissions, bonuses, and other compensation obtained
15 by defendants, and each of them, from their wrongful conduct and breaches of fiduciary duty.
16 WHERFORE, PLAINTIFF PRAYS FOR THE FOLLOWING RELIEF:
17 1. A finding that the Acknowledgement, Wavier and Consent Form and all
18 documents associated with the conversion of the LLC to a Delaware Corporation are subject to
19 rescission and are rescinded;
20 2. Alternatively, for a judgment that the Written Consent of Shareholders of the
21 Company seeking to elect new Directors was void as violative of California Corporations Code
22 Sections 303 and 2115 and that Plaintiffremains as the CEO and one of only two Board of
23 Directors members with all rights, compensation, benefits and vesting unimpaired;
24 3. A constructive trust shall be ordered along with an accounting for all assetsof
25 Defendant from September 15, 2009 to the date of the Order;
26 4. The ending that Defendants have been unjustly enriched an amount to be
27 determined at trial;
28 5. For general and special damages in the amount to be proven at trial;
FIRST AMENDED COMPLAINT
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1 6. For costs of suit herein, including attorneys fees; and,
2 7. For such other and further relief as the Court deems just and proper.
3 DATED: October ~, 2009 KAS~R ~
KIMLLP
EIUg C. KASTNER
J. PHILIP MARTIN
Attorneys for Plaintiff
KENNETH CHIU
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FIRST AMENDED COMPLAINT
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PLEASE
SKK
COURT
FILE
FOR
EXHIBITS
EXHIBIT
STORM 8, LLC
OPERATING AGREEMKNT
This QPERAT1NG AGREEMENT (this "Agreement'") of Stormg, LLC, a California limited liability
company (the "Company-') is entered into as of June 30. 2009 by the persons listedon Exhibit A as the
members of the limited liability company (each a"Member," and collectively the"Members").
%HEREAS, Jeff %itt formed a limited liabilitv company pursuant to and in accordance with the
Beverly-Killea Limited. Liability Company Act. Title 2.5, California Corporations Code, Section 17000 er
seq.,as amended (the "Aet") on March 6, 2009;
%HEREAS, on March 16, 2009, Garrett Remes contributed $ 1,593.75 to the Company in exchange
fof a membership interest03 tlie
Company'HEREAS,
on March 20, 2009, Kenneth Chiu contributed $ 1,000.00 to theCompany in exchange
for a membership interestin theCompany;
%HEREAS,. ott lvlarch27, 2009, Kenneth Chiu contributed $ 1,000.00 to the Company in exchange
for a greaterme'mbership interestin the Company;
%HEREAS, on April 13, 2009, Kenneth Chiu conttibuted $ 2,367.50 to the Company in exchange for
a greater membership interestin the Company:
%HEREAS, on May 15, 2009, Man-Hay "Perry" Tam co'ntnbuted $ 3,688.75 to the Company in
exchange for tt ntembership interest in theCompany and Laura Yip contributed $ 202.50 to the Company in
exchange fora.ntembership interest inthe Company;
%HEREAS, on June 15, 2009, %llliam Siu contrib'uted $ 2,007.50 to the Company in exchange for a
membership interest,in the Company; and
%11EREAS„ themembers of the Company now wish to adopt a limited liability company operating
agreement.
NQ%, THEREFORE, in considerauon of thc mutual promises cont@r}ed heretn, and other good and
valuable consideration, the receipt and suff}ciency of which is hereby acknowledged, the partieshereto agree
as fol'iowa:
'l. The name of thc Company shall be Stormg, Ll.C,
2. This Agreement shall constitute the "limited liability company operating agreement- of the
Company within the meaning of the Act, The rights and liabilitiesof the Members shall be determined
putsuant to the Act and this Agreement. To the extent that the rights or obligations ol any Member are
dinerent by reason of any provision of thisAgreement than they svould be in theabsence of such provision,
this Agreement extent
shall, to the permitted by the Act, cont}'ol.
3. The Company is formed for the object and purpose ol; and the nature of the business to be
conducted and promoted by the Company is, engaging in any lawful act or activity for vvhichlimited liability
companies may be formed under the Act and engaging in Nly }uhd all activitiesnecessary or incidentalto the
foregoing.
4. The Company shallmaintain a California registered office and agent for the service of process as
the Act. ln the event the registered agent ceases toact as such 'forany reason or the registered
required by
o%ce shall change, the ivlembers shall promptly designate a replacement registered agent or file a notice of
change of address, as the case may be,
5. The term of the Company began as of the date of filing of the
Limited Liability Company Articles
of Organization (the "A.rticles") arming the Company in accordance with Section 17050{c} of the Act on
March 6, 2009, a copy of which are attached hereto as Kxhibit 8. i|nless otherwise specified in acertificate
of cancellation file'dby the Members in respect ol the Company pursuant to Section 17356(b) ofthe Act, the
term of the Company shall be perpetual,
6. Title to al] Company property shallbe held in the name of the Company.
7. Except as required urlder the Act or as expressly set Forth in this Agreement, no Member shall be
personally Viable for any debt, obligation, or liability of the Company, whether that liabiVityor obligation
arises in contract,tortt or otherwis'e,
8. The Compatty and its business shall be managed, controlled and operated exclusively by the
Members, vtrho shallbe'tlte "martagers" of the Company within the meaning of Section 18101(1 0) of the Act
and shall have aB of the powers and authority in respect of the Company permitted to managers under the Act.
As among the Members; the determination by a.majorltv in interestof the Members to take any action or
make any decision of, or on
(for; ijt respect behalf of,the Company) shallcontrol.
9. The Compare shallnot dissolve upon thedeath, bankruptcy, wtthdra@ale retirement„resignauon„
expulsion or dissolution of any Member. The Compariy shall be dissolved, itsassets shall be dispose'd of, and
its affairs wound up only upon the first.to
occur ofthe following; (a)tba alrmative vite or written,consent of
the Members; (0') thehttppeni'ng of any event ot dissolution specified m the the
Articles,-.('c) entry of a decree
of judicial dissolution pursuant to Section 17351 of the Aci; or {d) the sale of all or substantiallyall of the
assets of Company.
10. Each Member has contributed to the Company the amount set Forth opposite such Member's
name on KxhlbB. A het'etoin cash, and no other property.
1l. A Member is not required to make any additional capital contributionto the Company.
12. The Company's pro6ts and losses shall be allocated to the Members in proportion to their capital
contributions.
13, Each Member may assign limited
in whole or in part. his liabilitycompany interest.
14. The Members may not resign from the Company,
l5. One cr more additional members ot the Company may be adinitted to the Company with the
consent of theMembers.
16. This Agreement and the Articles constitute the complete and exclusive statement of agreement
among the Members with respect to the subject matter herein and therein and replace and supersede allprior
written and oral agreements or statements by and among the Membei's or any of them. No representation,
statement, condition or warranty not contained in this Agreement or the Articles will be binding on the
Ir2}otge
IPAI.II)2 4739tIIII
Sttrrmtt- I,N'Opetnttng Agreement
Members or have any force or effect whatsoever. To the extent that anyprovision of'he Articles convict with
any provision of this Agreement, the Articles shallcontrol,
17. This Agreement shall be governed by, and construed under„ the laws of the State of Caiilornia
vvithout regard to therules of connict. ofla%'s thereof.
Ig. ll any provision of this Agreement or the application of such provision to any person or
circumstance shall be beld invalid, the remainder of thisAgreement or the applic'ationof such provision to
persons or circumstances olher than those to which itisheld invalidsha0 not be affected thereby,
l9. Each Member agrees to execute and deliver such additional.documents and instruments and to
perform such additional actsas may be necessary or appropriate to effectuate,carry out and perform allof the
terms, provisions, and conditions o'f this Agreement and the trmsactions contemplated hereby.
20. All amendm'ants to this Agreement must be in writing and signed by ail 4f the Members,
21. This Agreeinent tnt be executed in two or more counterparts,.each of which.shall be deemed an
original, but all of'4ieh shall constittiteone and the same instrurrrent„
j5 %ITNKSS 'tpl}IBKRE~OF, the undersigned have duly executed this Operating Agreement as of the
date and year first written above.
~Ca Win
Garrett cremes Man-Hay "'per~~'Tarn
Laura Yip William Siu~
IPA}}82 47390}0
Siorm}i - LI C O} aaunsiii srcemenl }}2}IXX:
I
Exhibit A
SCHEOULK OF STORMS, LLC MEMBERS
LLC Member Name Contribution Amount Oe'nership interest in LLC
Kenneth Chiu $ 4,367.50 34 94/o
Man-Hay "Perry" Tam H,688.75 29,51o/o
William Siu $ 2.007.50 16.06'/o
Garrett Remes $ 1,593.75 12,75o/o
Jeff Witt 5.12o/o
LNtra Ylp 1,62o/o
TOTAL
Exhibit 8
LIMITEDf lASII ITY COMPANY ARTICLKS GP ORGANIZATION
Preview
1 ERIC C. KASTNER (SBN 53858) J. PHILIP MARTIN(SBN 55100) 2 KASTNER i KIMLLP 2465 E. Bayshore Road, Suite. 405 3 Palo Alto, CA 94303 Tel.: (650) 967-7854 4 Fax: (650) 320-9640 Gle ie 'i» Attorneys for Plaintiff By KENNETH CHIU 6 SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN MATEO 10 KENNETH CHIU, ) CASE NO. CIV 488342 ) Plaintiff, ) FIRST AMENDED COMPLAINT 12 ) ) 1. RECISSION 13 2. DETERMINE VALIDITYOF CORPORATE STORMS, INC,, MAN-HAY ) "PERRY" TAM, WILLIAMSIU, ELECTION 14 DECLARATORYRELIEF 3, CHAK MING LI, LAURAHOI SZE 4. IMPOSITION OF CONSTRUCTIVE TRUST YIP, JEFFREY WINSTON WITT, ) AND ACCOUNTING ANILDHARNI, GARRETT REMES, ) 5. UNJUST ENRICHMENT AND DOES 1-10, ) 17 Defendants. 18 19 PlaintiffKENNETH CHIU alleges as follows: 20 THE PARTIES 21 1. PlaintiffKENNETH CHIU ("Chiu" or "PlaintifF') is a resident of San Mateo, 22 California. 2. Defendant STORM8, INC. ("Company" or "Defendant" ) is a corporation purportedly organized under the law of Delaware with its principal office in Redwood City, California. 3. Defendants Man-Hay "Perry" Tam, William Siu, Chak Ming Li, Laura Hoi Sze Yip, Jeffrey Winston Witt, Anil Dharni, Garrett Remes are all signatories to the agreement sought 28 FIRST AMENDED COMPLAINT 1 1 to be rescinded in the First Cause of Action. All Defendants are residents of California. 2 4. Plaintiffis ignorant of the true names and capacities of Does 1through 10, 3 inclusive, and therefore sues each and every Doe by such fictitious names. Plaintiff is informed 4 and believes and thereupon alleges that each defendant designated as a Doe is responsible in some 5 manner for the events and happenings herein referred to, thateach defendant is the agent, servant 6 or employee of the other defendants, and in doing the things therein alleged, was acting within the 7 scope of such agency or employment. Plaintiffwill seek leave of Court to amend this Complaint 8 and insert the true names of such defendants when they are ascertained. Plaintiff is informed and 9 believes and thereon alleges that each individual Doe defendant and/or one or more employees, 10 officers, directors or managing agents of the defendants approved, permitted and ratified the 11 wrongfid acts of all other defendants as did the successors-in-interest. RKLKVANTFACTS 13 5. The Company was originally founded in March 6, 2009 as a Limited Liability 14 Company ("LLC")and an Operating Agreement formally recognizing the investors in the 15 Company was executed on or about June 30, 2009. A true and correct copy of that Operating 16 Agreement is attached hereto as Exhibit 1, 17 6. The Company creates applications for the Apple iPhone and iPod Touch, 18 principally mobile games. Given the popularity of the iPhones and iPod Touches, the market for 19 mobile games is enormous. The Company was immediately successful in creating mobile games 20 that can be downloaded onto the iPhones and iPod Touches. The Company receives allof its 21 revenue through California based PayPal, Apple and/or Gambit and it has been profitable since 22 May 2009. 23 7. On June 30, 2009, plaintiffhad a 34.94% interest in the LLC. Other investors in 24 the LLC included Man-Hay Tam ("Tam") (29.51%), William Siu ("SIU") (16.06%), Garrett 25 Remes ("Remes") (12.75%), Jeffrey Witt ("Witt")(5.12%), and Laura Hoi Sze Yip ("Yip") 26 (1.62%). 27 8. There were discussions among the members of the LLC and an understanding that 28 ifthere were to be a termination of membership for any reason it would be done by unanimous FIRST AMENDED COMPLAINT 2 1 consent and a written agreement and that no one could be added as a member without unanimous 2 consent. The only way a member could lose his/her equity interest in the LLC would be ifhe/she 3 voluntarily resigned or was terminated for cause though cause was never defined at that time. 4 Clearly there was an agreement that the traditional "at-will"language was inapplicable to the 5 founding members, Such agreements among the members are supported by a number of 6 conversations and emails. 7 9. In June, 2009 members began discussions among themselves and with new 8 counsel, Wilson, Sonsini, Goodrich and Rosati ("WSGR"). WSGR recommended forming a new 9 corporation under Delaware law although the company would be solely based in California 10 including all subsequent shareholders. Such a change, according to counsel, would permit a pool 11 of stock reserved for stock options to reward new employees to be hired as the Company grew and 12 would facilitate a possible sale of the Company or a public offering at a later time. 13 10. Counsel (Riya Kuo of the Wilson, Sonsini firm) sent to all the investors through 14 Witt, 17 different documents designed to transform the LLC into the Subchapter S Corporation. 15 These documents included: (1) LLC Roll-Up Letter to Members; (2) Form of LLC Roll-Up, 16 Acknowledgment, Consent and Waiver; (3) Certificate of Incorporation; (4) Action by 17 Incorporator; (5) Bylaws; (6) Initial Board Consent; (7) Restricted Stock Purchase Agreement; (8) 18 Indemnification Agreement; (9) At-WillEmployment, Confidential Information, Invention 19 Assignment, and Arbitration Agreement; (10) Equity Incentive Plan; (11) Stock Option 20 Agreement; (12) Certificate of Cancellation; (13) Initial Stockholder Consent; (14) Mutual Non- 21 Disclosure Agreement; (15) One- Way Non-Disclosure Agreement; (16) Form of Consulting 22 Agreement (Individual); and (17) Form of Consulting Agreement (Company). 23 11. The Schedule of Corporation owners attached as Exhibit B to a July 16, 2009 letter 24 from WSGR reflected the number of shares in the new corporation consistent with the LLC 25 ownership shares (e.g.plaintiffwas to receive 20,557,996 shares of stock representing his 34.94'/0 26 of the outstanding shares.) 27 12. Witt is a law student at UCLA School of Law in Los Angeles. He sent the 28 documents to all the investors with follow up e-mails describing which documents were the "most FIRST AMENDED COMPLAINT 3 1 important" and which did not need to be read by the members of the LLC. None of the members 2 were given any detailed explanation of the effect of the documents (other than they knew they 3 were related to the conversion of the LLC to a corporation) on their employment, their equity, or 4 their rights in the management of the Company. Up to August, 2009 the Company was managed 5 jointly by all the members with plaintiffbeing the most active in directing the Company. The 6 Company was Plaintiff's original idea and he setthe strategy and direction for the Company. For 7 many months Plaintiffworked seven days a week, 15 hours a day while other of the members 8 continued in their regular employment and worked sporadically or part-time. There can be no 9 question that the Company would not have been as successful as it is without Plaintiffs tireless 10 efforts while others minimized their risk by continuing to receive a salary at their full-time job. 11 13. The new corporation was to have a board of directors with only two directors: 12 Plaintiffand Tam. No one ever explained to Plaintiffthat he as the founder whose idea gave rise 13 to the Corporation and who financed the Corporation in its early beginnings could be removed by 14 a simple vote of the majority of the owners of the Corporation. And Tam, the other director, 15 acknowledged that removal of Plaintiffor himself should require votes of at least 60'/0 or 66'/o and 16 2/3'/0 of the shares of the corporation. 17 14. Throughout August, 2009 Plaintiff, Witt and other investors raised questions 18 regarding the terms of various documents to Riya Kuo and Plaintiffis informed and believes, and 19 on that basis alleges, that some changes were made to many of the documents while other 20 questions were unresolved. Plaintiffhad discussions with Witt, among other members, regarding 21 shareholder voting rights and whether 60'ro, or a 2/3 or a unanimous vote of the shareholders 22 would be required to effect management control or other major corporate action, such as 23 termination of employees and/or officers. There was never any agreement among the members 24 that a simple majority vote would be sufficient to make management or other major changes in the 25 operation of the Company. Furthermore there was never any change of the LLC agreement by the 26 members referred to in paragraph 8. The original members could lose their equity interest only in 27 the event they voluntarily resigned or were terminated for cause. Nor was there any change in the 28 members'rior understanding of the need for unanimous action to terminate a member. FIRST AMENDED COMPLAINT 4 1 15. Plaintiff is also informed and believes, and on that basis alleges, that a complete set 2 of finally agreed upon documents were never submitted to all the members for their approval. 3 Instead, blank signature pages were collected from the members who simply signed that page and 4 no final setof approved documents were subsequently provided to or approved by the members. 5 As directed by Witt and given the demands on his time to work on new products, Plaintiffdid not 6 read much of the material sent to him. Per Witt and Kuo's suggestion, Plaintiffsent the signature 7 pages of the documents to Witt without knowing what the pages would be attached to. Plaintiff 8 cannot recall which signature pages he sent as he did not retain copies but Plaintiffdid not execute 9 or deliver the Restricted Stock Purchase Agreement ("RSPA") because there were terms missing, 10 and terms which he did not understand or agree to. 11 16. Plaintiffunderstood his equity in the LLC was fuHy owned (that is it could not be 12 diminished) unless he voluntarily left. Plaintiffnever discussed with Kuo, Witt or anyone else nor 13 did he believe that the effect of the RSPA might cause him to lose all of Plaintiff's stock in the 14 Company for a nominal amount ifhe were terminated without cause. Plaintiffalso understood he 15 and Tam would constitute the sole Board of Directors and no discussion was held or agreement 16 made with anyone about when, and under what circumstances, the Board could change or how any 17 Director could be removed. Finally, Plaintiffwas to be the President and Chief Executive Officer 18 based on his experience managing the Company and in light of his founding of the Company. 19 There were no discussions or agreements about the possibility that Plaintiffcould be terminated at 20 any time by the Board or by shareholders. 21 17. Upon information and belief the Company purportedly registered as a Delaware 22 Corporation based upon execution of some of the "Roll-Up" agreements provided by Kuo, 23 through Witt, to the members. The stock then to be issued by the Company included 20,557,996 24 shares to Plaintiffrepresenting his 34.94'/0 interest in the Company. Such stock was never issued. 25 18. In September, 2009 purporting to act as a Delaware Corporation the Company 26 called for Action by Written Consent of the shareholders without notice to Plaintiff. The 27 Company then purported to elect new Directors (Tam and Chak Ming Li) and terminate Plaintiff 28 as a Director. At the same time Plaintiff's employment as the President and Chief Executive FIRST AMENDED COMPLAINT 5 1 Officer was terminated without cause. 2 19. Plaintiff is informed and believes, and on that basis alleges, that the Company will 3 attempt to enforce the unexecuted and undelivered RPSA and force Plaintiffto sell his 20,557,996 4 shares of stock back to the Company at a nominal price. In such event Plaintiff's interest in the 5 Company he created, founded, and funded willbe lost in its entirety,contrary to the agreements of 6 all the members. 7 20. Plaintiffis informed and believes and on such basis alleges that all the documents 8 necessary to be signed and delivered in order to convert the LLC into a Delaware Corporation 9 have not been signed and delivered to this date. 10 FIRST CAUSE OF ACTION (Rescission) 12 (Against All Defendants) 13 21. Plaintiffincorporates Paragraphs 1- 20 above. 14 22. There were mistakes in the drafbng of the agreements which were never agreed to 15 by Plaintiff or (he is informed and believes and on that basis alleges) by a majority of the LLC 16 members. There was thus no meeting of the minds as to the critical issues regarding the formation 17 of the corporation. For example: 18 a. Plaintiff, the founder of the Company, was never told or advised (and did 19 not agree) that his vested LLC interest could be completely eliminated after conversion to a 20 corporation by the termination of his employment without cause and the repurchase of his shares 21 at a nominal price; 22 b. Plaintiffwas never advised (and did not agree) he could be fired without 23 cause as President and CEO; 24 c. Plaintiffwas never advised (and did not agree) he could be removed as a 25 member of the Board of Directors; 26 d. Plaintiffwas never advised (and did not agree) that changes in management 27 or the operations of the Company could be undertaken by a simple majority vote 28 21. Consent to the various documents described in Paragraph 10 above by Plaintiffwas FIRST AMENDED COMPLAINT 6 1 based on a mistake thus making the alleged agreement subject to rescission. 2 SECOND CAUSE OF ACTION (Determine Validity Of Corporate Election) 4 (Against Defendants Storm8, Inc., Man-Hay "Perry" Tam, William Siu, Chak Ming Li, Laura Hoi Sze Yip) 6 23. Plaintiffincorporates Paragraphs 1- 20 above. 24. In the event the agreements are not rescinded and there is a finding that there was a 8 meeting of the minds by all necessary parties and thus a new corporation was formed Plaintiff 9 pleads in the alternative the following: 10 25. On September 15, 2009, without notice to Plaintiff, the Company apparently 11 circulated to certain stockholders of Defendant an Action by Written Consent purporting to 12 remove plaintiffas a Director of the Company and replacing plaintiffas a Director with Chak 13 Ming Li. In addition to shares owned by Plaintiff other shareholders, who support Plaintiff, own 14 shares when cumulated total more than 10 million. They would have voted to retain plaintiffon 15 the Board of Directors of Defendant. 16 26. The election of Directors on September 15, 2009, was improper in that cumulative 17 voting is required for all directors'lections for companies that do business in California. 18 Cumulative voting permits shareholders, such as Plaintiff, to multiply their voting shares by the 19 number of directors being voted upon and to allocate their votes in the manner the shareholders 20 see fit. As a practical matter, under the facts of thiscase with only two authorized directors such 21 cumulative voting would preclude the removal of any director who has at least 35 '/0 shareholder 22 approval as did Plaintiff. 23 27. The purported removal of Plaintiff as a Director by Defendant is also violative of 24 California Corporations Code Section 303 in that Directors cannot be removed (unless the entire 25 Board is removed) when the votes not consenting to the removal (plaintiff's shares) would have 26 been sufficient to elect plaintiffas a Director. 27 Plaintiff seeks declaration from the Court restoring him as a member of the Board of 28 Directors and as the CEO and President of the Company. FIRST AMENDED COMPLAINT 7 THIRD CAUSE OF ACTION (Declaratory Relief) (Against Defendant Storm8, Inc.) 4 28. Plaintiff incorporates the allegations of Paragraphs 1- 20 above. 5 In the event it is held that plaintiffwas not entitled to cumulate his votes in the new corporation, as 6 an alternative theory plaintiffpleads as follows: 29. A dispute has arisen regarding actions of the Company as described above. 8 Plaintiffcontends the Company has no right to force him to sell his stock in the Company to it as, 9 inter alia, he never agreed to the terms of the RPSA. Based on information and belief, Plaintiff 10 alleges that the Company claims a right to purchase all of Plaintiff's stock at a nominal price. 11 30. Alternatively, Plaintiffalleges that the actual terms of the RPSA, which he neither 12 executed nor delivered, does not permit the Company to repurchase his shares ifhe were to be 13 terminated without cause; instead, such shares automatically vest in Plaintiff. Based on 14 information and belief, Plaintiffalleges that the Company will claim a right to repurchase the 15 shares regardless of the circumstances of Plaintiffs termination. 16 Plaintiff seeks a declaration by the Court that the Company has no right to repurchase his 17 stock. 18 FOURTH CAUSE OF ACTION 19 (Imposition of Constructive Trust and Accounting) 20 (Against Defendants StormS, Inc. Man-Hay "Perry" Tam, William Siu, Chak Ming Li, 21 Laura Hoi Sze Vip) 22 31. Plaintiffhereby incorporates all of theforegoing paragraphs. 23 32. Defendants, and each of them, have unlawfully assumed possession and control of 24 Storm8, depriving Plaintiffof his rightful interest in the Company, unlawfully terminating him, 25 and rejecting his requests for information to which he is entitled. 26 33. By virtue of his role in forming Storm8, as alleged herein, Plaintiffhas an interest 27 in the ownership and profits of StormS. 28 34. By virtue of Defendants'ctions, and their resulting wrongful possession of FIRST AMENDED CO1VIPLAINT 8 1 Plaintiffs ownership interest in Storm8, and the financial accounts, Defendants hold such interest 2 and funds as constructive trustees for the benefit of Plaintiff. 35. Further, Defendants, and each of them, have refused to make an accounting to 4 Plaintiffof Storm8's financial condition, income, revenues, or disbursements despite PlaintifFs 5 demand. Therefore, an accounting is necessary to determine the amounts owed to Plaintiff. FIFTH CAUSE OF ACTION (Unjust Enrichment) 8 (Against Defendants StormS, Inc. Man-Hay "Perry" Tam,%'illiam Siu, Chak Ming Li, Laura Hoi Sze Yip) 10 36. Plaintiffhereby incorporates all of the foregoing paragraphs. 37. By their wrongful acts and omissions, defendants, and each of them, were unjustly 12 enriched at the expense of and to the detriment of plaintiffor while plaintiffwas unjustly deprived. 13 38. Plaintiff seeks restitution from defendants, and each of them, and seeks an order of 14 this Court disgorging all profits, benefits, commissions, bonuses, and other compensation obtained 15 by defendants, and each of them, from their wrongful conduct and breaches of fiduciary duty. 16 WHERFORE, PLAINTIFF PRAYS FOR THE FOLLOWING RELIEF: 17 1. A finding that the Acknowledgement, Wavier and Consent Form and all 18 documents associated with the conversion of the LLC to a Delaware Corporation are subject to 19 rescission and are rescinded; 20 2. Alternatively, for a judgment that the Written Consent of Shareholders of the 21 Company seeking to elect new Directors was void as violative of California Corporations Code 22 Sections 303 and 2115 and that Plaintiffremains as the CEO and one of only two Board of 23 Directors members with all rights, compensation, benefits and vesting unimpaired; 24 3. A constructive trust shall be ordered along with an accounting for all assetsof 25 Defendant from September 15, 2009 to the date of the Order; 26 4. The ending that Defendants have been unjustly enriched an amount to be 27 determined at trial; 28 5. For general and special damages in the amount to be proven at trial; FIRST AMENDED COMPLAINT 9 1 6. For costs of suit herein, including attorneys fees; and, 2 7. For such other and further relief as the Court deems just and proper. 3 DATED: October ~, 2009 KAS~R ~ KIMLLP EIUg C. KASTNER J. PHILIP MARTIN Attorneys for Plaintiff KENNETH CHIU 10 12 13 14 15 16 17 18 20 21 22 23 24 25 26 27 FIRST AMENDED COMPLAINT 10 PLEASE SKK COURT FILE FOR EXHIBITS EXHIBIT STORM 8, LLC OPERATING AGREEMKNT This QPERAT1NG AGREEMENT (this "Agreement'") of Stormg, LLC, a California limited liability company (the "Company-') is entered into as of June 30. 2009 by the persons listedon Exhibit A as the members of the limited liability company (each a"Member," and collectively the"Members"). %HEREAS, Jeff %itt formed a limited liabilitv company pursuant to and in accordance with the Beverly-Killea Limited. Liability Company Act. Title 2.5, California Corporations Code, Section 17000 er seq.,as amended (the "Aet") on March 6, 2009; %HEREAS, on March 16, 2009, Garrett Remes contributed $ 1,593.75 to the Company in exchange fof a membership interest03 tlie Company'HEREAS, on March 20, 2009, Kenneth Chiu contributed $ 1,000.00 to theCompany in exchange for a membership interestin theCompany; %HEREAS,. ott lvlarch27, 2009, Kenneth Chiu contributed $ 1,000.00 to the Company in exchange for a greaterme'mbership interestin the Company; %HEREAS, on April 13, 2009, Kenneth Chiu conttibuted $ 2,367.50 to the Company in exchange for a greater membership interestin the Company: %HEREAS, on May 15, 2009, Man-Hay "Perry" Tam co'ntnbuted $ 3,688.75 to the Company in exchange for tt ntembership interest in theCompany and Laura Yip contributed $ 202.50 to the Company in exchange fora.ntembership interest inthe Company; %HEREAS, on June 15, 2009, %llliam Siu contrib'uted $ 2,007.50 to the Company in exchange for a membership interest,in the Company; and %11EREAS„ themembers of the Company now wish to adopt a limited liability company operating agreement. NQ%, THEREFORE, in considerauon of thc mutual promises cont@r}ed heretn, and other good and valuable consideration, the receipt and suff}ciency of which is hereby acknowledged, the partieshereto agree as fol'iowa: 'l. The name of thc Company shall be Stormg, Ll.C, 2. This Agreement shall constitute the "limited liability company operating agreement- of the Company within the meaning of the Act, The rights and liabilitiesof the Members shall be determined putsuant to the Act and this Agreement. To the extent that the rights or obligations ol any Member are dinerent by reason of any provision of thisAgreement than they svould be in theabsence of such provision, this Agreement extent shall, to the permitted by the Act, cont}'ol. 3. The Company is formed for the object and purpose ol; and the nature of the business to be conducted and promoted by the Company is, engaging in any lawful act or activity for vvhichlimited liability companies may be formed under the Act and engaging in Nly }uhd all activitiesnecessary or incidentalto the foregoing. 4. The Company shallmaintain a California registered office and agent for the service of process as the Act. ln the event the registered agent ceases toact as such 'forany reason or the registered required by o%ce shall change, the ivlembers shall promptly designate a replacement registered agent or file a notice of change of address, as the case may be, 5. The term of the Company began as of the date of filing of the Limited Liability Company Articles of Organization (the "A.rticles") arming the Company in accordance with Section 17050{c} of the Act on March 6, 2009, a copy of which are attached hereto as Kxhibit 8. i|nless otherwise specified in acertificate of cancellation file'dby the Members in respect ol the Company pursuant to Section 17356(b) ofthe Act, the term of the Company shall be perpetual, 6. Title to al] Company property shallbe held in the name of the Company. 7. Except as required urlder the Act or as expressly set Forth in this Agreement, no Member shall be personally Viable for any debt, obligation, or liability of the Company, whether that liabiVityor obligation arises in contract,tortt or otherwis'e, 8. The Compatty and its business shall be managed, controlled and operated exclusively by the Members, vtrho shallbe'tlte "martagers" of the Company within the meaning of Section 18101(1 0) of the Act and shall have aB of the powers and authority in respect of the Company permitted to managers under the Act. As among the Members; the determination by a.majorltv in interestof the Members to take any action or make any decision of, or on (for; ijt respect behalf of,the Company) shallcontrol. 9. The Compare shallnot dissolve upon thedeath, bankruptcy, wtthdra@ale retirement„resignauon„ expulsion or dissolution of any Member. The Compariy shall be dissolved, itsassets shall be dispose'd of, and its affairs wound up only upon the first.to occur ofthe following; (a)tba alrmative vite or written,consent of the Members; (0') thehttppeni'ng of any event ot dissolution specified m the the Articles,-.('c) entry of a decree of judicial dissolution pursuant to Section 17351 of the Aci; or {d) the sale of all or substantiallyall of the assets of Company. 10. Each Member has contributed to the Company the amount set Forth opposite such Member's name on KxhlbB. A het'etoin cash, and no other property. 1l. A Member is not required to make any additional capital contributionto the Company. 12. The Company's pro6ts and losses shall be allocated to the Members in proportion to their capital contributions. 13, Each Member may assign limited in whole or in part. his liabilitycompany interest. 14. The Members may not resign from the Company, l5. One cr more additional members ot the Company may be adinitted to the Company with the consent of theMembers. 16. This Agreement and the Articles constitute the complete and exclusive statement of agreement among the Members with respect to the subject matter herein and therein and replace and supersede allprior written and oral agreements or statements by and among the Membei's or any of them. No representation, statement, condition or warranty not contained in this Agreement or the Articles will be binding on the Ir2}otge IPAI.II)2 4739tIIII Sttrrmtt- I,N'Opetnttng Agreement Members or have any force or effect whatsoever. To the extent that anyprovision of'he Articles convict with any provision of this Agreement, the Articles shallcontrol, 17. This Agreement shall be governed by, and construed under„ the laws of the State of Caiilornia vvithout regard to therules of connict. ofla%'s thereof. Ig. ll any provision of this Agreement or the application of such provision to any person or circumstance shall be beld invalid, the remainder of thisAgreement or the applic'ationof such provision to persons or circumstances olher than those to which itisheld invalidsha0 not be affected thereby, l9. Each Member agrees to execute and deliver such additional.documents and instruments and to perform such additional actsas may be necessary or appropriate to effectuate,carry out and perform allof the terms, provisions, and conditions o'f this Agreement and the trmsactions contemplated hereby. 20. All amendm'ants to this Agreement must be in writing and signed by ail 4f the Members, 21. This Agreeinent tnt be executed in two or more counterparts,.each of which.shall be deemed an original, but all of'4ieh shall constittiteone and the same instrurrrent„ j5 %ITNKSS 'tpl}IBKRE~OF, the undersigned have duly executed this Operating Agreement as of the date and year first written above. ~Ca Win Garrett cremes Man-Hay "'per~~'Tarn Laura Yip William Siu~ IPA}}82 47390}0 Siorm}i - LI C O} aaunsiii srcemenl }}2}IXX: I Exhibit A SCHEOULK OF STORMS, LLC MEMBERS LLC Member Name Contribution Amount Oe'nership interest in LLC Kenneth Chiu $ 4,367.50 34 94/o Man-Hay "Perry" Tam H,688.75 29,51o/o William Siu $ 2.007.50 16.06'/o Garrett Remes $ 1,593.75 12,75o/o Jeff Witt 5.12o/o LNtra Ylp 1,62o/o TOTAL Exhibit 8 LIMITEDf lASII ITY COMPANY ARTICLKS GP ORGANIZATION